Are civil servants allowed to establish cooperatives?

Pursuant to regulations Clause 2, Article 20 of the Law on Prevention and Combat of Corruption 2018 Regulations on rules of conduct for people with positions and powers are as follows:

Rules of conduct for people with positions and powers
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2. People with positions and powers in agencies, organizations, and units are not allowed to do the following things:
a) Harassment in handling work;
b) Establishing, participating in the management and operation of private enterprises, limited liability companies, joint stock companies, partnerships, cooperatives, unless otherwise prescribed by law other;
c) Consulting other businesses, organizations, and individuals domestically and abroad on work related to state secrets, work secrets, work under the authority to resolve or participate in the resolution;
d) Establishing, holding positions, management positions, operating private enterprises, limited liability companies, joint stock companies, partnerships, cooperatives under fields that I was previously responsible for managing within a certain period of time according to the Government’s regulations;
dd) Illegally using information of agencies, organizations, units;
e) Other things that people with positions and powers are not allowed to do according to the provisions of the Law on Cadres and Civil Servants, the Law on Public Employees, the Law on Enterprises and other relevant laws.
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Thus, according to the regulations on the code of conduct for people with positions and powers, people with positions and powers in agencies, organizations and units are not allowed to establish, participate in the management and operation of cooperatives, unless otherwise prescribed by law.

Therefore, civil servants are not allowed to establish cooperatives.

What conditions must members of the Board of Directors of a cooperative meet?

Pursuant to the provisions of Clause 1, Article 62 of the Law on Cooperatives 2023 (effective from July 1, 2024), the conditions for becoming a member of the Board of Directors, Director (General Director), member of the Supervisory Board or controller, accountant are as follows:

Conditions to become a member of the Board of Directors, Director (General Director), member of the Supervisory Board or controller, accountant
1. A member of the Board of Directors of a cooperative or cooperative union must meet the following conditions:
a) Be an official member or a legal or authorized representative of the organization that is an official member;
b) Not concurrently be a member of the Supervisory Board or controller, chief accountant, treasurer of the same cooperative or cooperative union Commune;
c) Must not be a person who has a family relationship with another member of the Board of Directors, Supervisory Board or controller, chief accountant, treasurer of the same cooperative or union of cooperatives.
…..

Thus, members of the Board of Directors of the cooperative need to meet the following conditions:

– Be an official member or legal or authorized representative of an organization that is an official member;

– Not concurrently being a member of the Supervisory Board or controller, chief accountant, treasurer of the same cooperative or union of cooperatives;

– Must not be a person who has a family relationship with another member of the Board of Directors, Supervisory Board or controller, chief accountant, treasurer of the same cooperative or union of cooperatives.

When does the cooperative’s Board of Directors hold an extraordinary meeting?

Pursuant to the provisions of Clause 4, Article 65 of the Cooperative Law 2023 (effective from July 1, 2024), the regulations on the board of directors are as follows:

Board of Directors
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4. The Board of Directors holds an extraordinary meeting at the request of one of the following subjects:
a) Chairman of the Board of Directors;
b) Director (General Director);
c) Head of the Supervisory Board;
d) At least one-third of the total number of members of the Board of Directors value.
….

Thus, the cooperative’s board of directors holds an extraordinary meeting when requested by one of the following entities:

– Chairman of the Board of Directors;

– Director (General Director);

– Head of the Supervisory Board;

– At least one-third of the total number of members of the Board of Directors.