Partnership Auction Companies: Partners, Branches, Timing

Must all general partners of a partnership auction company be auctioneers?

Requirements for general partners of a partnership auction company are prescribed in Clause 3, Article 23 of the 2016 Law on Asset Auction as follows:

Asset auction enterprises

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1. Asset auction enterprises are established, organised, and operated in the form of private enterprises or partnerships under this Law and other relevant laws.

2. The name of a private auction enterprise is chosen by the enterprise owner; the name of a partnership auction company is chosen by agreement of the members and in accordance with the Enterprise Law, but must include the phrase “private auction enterprise” or “partnership auction company”.

3. Conditions for operation registration of asset auction enterprises:

a) A private auction enterprise has its owner as an auctioneer who is also the enterprise’s Director; a partnership auction company has at least one general partner who is an auctioneer, and the General Director or Director of the partnership auction company is an auctioneer;

b) Has offices, material facilities, and necessary equipment ensuring asset auction operations.

4. Matters relating to the establishment, organisation, operation, and termination of asset auction enterprises not prescribed in this Law shall follow the laws on enterprises.

Accordingly, one of the operation registration conditions for a partnership auction company is that the partnership auction company has at least one general partner who is an auctioneer, and the General Director or Director of the partnership auction company is an auctioneer.

Therefore, the law only requires a partnership auction company to have at least one general partner who is an auctioneer; not all general partners of the partnership auction company must be auctioneers.

May a partnership auction company establish branches?

Branches of partnership auction companies are prescribed in Clause 1, Article 29 of the 2016 Law on Asset Auction as follows:

Branches of asset auction enterprises

1. Branches of asset auction enterprises may be established within or outside the province or centrally-run city where the asset auction enterprise registers its operation. The asset auction enterprise is responsible for the branch’s operations. The asset auction enterprise shall appoint an auctioneer of the enterprise as the branch head.

2. The asset auction enterprise shall submit one set of branch operation registration dossiers to the Department of Justice where the branch is located. The dossier includes:

a) Application for branch operation registration;

b) Branch establishment decision;

c) Certified copy or copy accompanied by the original for comparison of the enterprise’s Operation Registration Certificate;

d) Certified copy or copy accompanied by the original for comparison of the branch head’s auction practice certificate;

dd) Documents proving the branch’s office.

Accordingly, under the above provision, a partnership auction company may establish branches within or outside the province or centrally-run city where the company registers its operation.

The dossier for registering a branch of a partnership auction company includes:

• Application for branch operation registration;
• Branch establishment decision;
• Certified copy or copy accompanied by the original for comparison of the enterprise’s Operation Registration Certificate;
• Certified copy or copy accompanied by the original for comparison of the branch head’s auction practice certificate;
• Documents proving the branch’s office.

From when may a branch of a partnership auction company operate?

The operation time of a branch is prescribed in Clause 4, Article 29 of the 2016 Law on Asset Auction as follows:

Branches of asset auction enterprises

…

3. Within 07 working days from receipt of a complete and valid dossier, the Department of Justice shall issue the Operation Registration Certificate to the branch; in case of refusal, the reason must be notified in writing. A refused enterprise has the right to complain or sue in accordance with the law.

4. A branch operates from the date it is issued the Operation Registration Certificate. Within 07 working days from the date the branch is issued the Operation Registration Certificate, the enterprise must notify in writing, together with a copy of the branch’s Operation Registration Certificate, the Department of Justice where the enterprise registers its operation.

Accordingly, under the provision, a branch of a partnership auction company operates from the date it is issued the Operation Registration Certificate.

Note: Within 07 working days from the date the branch is issued the Operation Registration Certificate, the partnership auction company must notify in writing, together with a copy of the branch’s Operation Registration Certificate, the Department of Justice where the partnership auction company registers its operation.