Partnership Contracts: Amendment, Establishment, Termination

Must amending a cooperation contract be approved by all members of the partnership?

Under Clause 1, Article 21 of Decree 77/2019/ND-CP, which provides as follows:

Voting in partnerships

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Commercial Contracts

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1. Amendments and supplements to a cooperation contract must be approved by one hundred percent (100%) of the partnership’s members and expressed in writing, unless the cooperation contract provides otherwise.

2. Disposal of common assets of the partnership’s members that are land use rights, houses, production workshops, or other main production means; or assets valued at more than fifty percent (50%) of the total value of the common assets of the partnership’s members, must be approved by one hundred percent (100%) of the partnership’s members and expressed in writing, unless the cooperation contract provides otherwise.

3. Other matters not falling under Clauses 1 and 2 of this Article are passed when approved by at least more than fifty percent (50%) of the total number of the partnership’s members, unless the cooperation contract provides otherwise.

Under the above provision, amending or supplementing a cooperation contract must be approved by one hundred percent (100%) of the partnership’s members and expressed in writing, unless the cooperation contract provides otherwise.

Therefore, amending a cooperation contract must be approved by all (100%) members of the partnership and expressed in writing, unless the cooperation contract provides otherwise.

May matters relating to the establishment of a partnership be recorded in the cooperation contract?

Under Article 12 of Decree 77/2019/ND-CP, which provides as follows:

Establishment of partnerships

1. The establishment of a partnership is initiated by individuals and legal entities in need who campaign for its establishment and organise its operation.

2. The main contents on the establishment, organisation, and operation of the partnership are discussed and agreed upon by the partnership’s members and recorded in the cooperation contract.

3. After the partnership’s members sign the cooperation contract, the head of the partnership sends a notice of the partnership’s establishment (Form I.01) together with the cooperation contract (Form I.02) to the commune-level People’s Committee where the partnership intends to be established and operate, within 05 working days.

4. Where the partnership changes one or more contents regarding its name, address, production and business lines, total value of contributed portions, representative, or number of members, the partnership shall send a notice (Form I.01) to the commune-level People’s Committee where the partnership was established and operates, within 05 working days from the change.

5. The commune-level People’s Committee shall keep a register monitoring the establishment and operation of partnerships in its area (Form II.01); and update changes and fluctuations of partnerships as prescribed by law.

Accordingly, under the above provision, the main contents on the establishment of a partnership are discussed and agreed upon by the partnership’s members and recorded in the cooperation contract.

When the term stated in the cooperation contract expires, must the partnership terminate?

Under Clause 1, Article 14 of Decree 77/2019/ND-CP, which provides as follows:

Termination of a partnership’s operation

1. A partnership terminates its operation in the following cases:

a) Expiry of the term stated in the cooperation contract;

b) The cooperation purpose has been achieved;

c) Failure to maintain the minimum number of members prescribed in Clause 1, Article 3 of this Decree;

d) Pursuant to a decision of a competent state authority;

dd) Pursuant to the cooperation contract and relevant laws;

e) Pursuant to the agreement of the partnership’s members.

2. Termination of a partnership’s operation under point e, Clause 1 of this Article must be approved by one hundred percent (100%) of the total number of the partnership’s members, expressed in the partnership meeting minutes, with confirming signatures of the partnership’s head (or the person authorised by the partnership’s members) and the partnership’s members, unless the cooperation contract provides otherwise.

3. Within 05 working days from the date of termination, the partnership’s head (or the person authorised by the partnership’s members) shall send a written notice of termination (Form I.03), together with the partnership members’ meeting minutes, to the commune-level People’s Committee where the partnership operates.

Accordingly, under the above provision, when the term stated in the cooperation contract expires, the partnership must terminate its operation.