Tiếng Việt
中文 (中国)Distinguishing between business households and enterprises is legal content that readers often need to check carefully before implementing it in practice. This article has been systematized by ANT Legal in an easy-to-understand way, helping individuals and businesses understand the main problems, common risks and appropriate solutions.
Currently, an individual who wants to start a business will intend to establish a company or business household. These are two very popular types of businesses, but many people do not clearly understand these two types. This article will help you understand the difference between Business Households and Enterprises, the advantages and disadvantages so you can choose the type that suits your business needs.
CONCEPTS
a) Household Businesses
Article 66 of Decree No. 78/2015/ND-CP On September 14, 2015, the guidance on business registration procedures of the Enterprise Law 2014 stipulates the concept of Business Household under the Enterprise Law 2014 as follows
“A business household owned by an individual or a group of individuals who are Vietnamese citizens at least 18 years old, have full civil act capacity, or a household, can only register to do business in one location, employ less than ten employees and are responsible for all of their assets for business activities.”
b) Enterprise
Clause 10, Article 4 of the Law on Enterprises 2020 states that the concept of an enterprise is
“an organization with its own name, assets, transaction office, established or registered for establishment in accordance with the law for business purposes”
| Enterprise | BUSINESS HOUSEHOLDS | |
| Registration procedures | Complicated when needing to prepare many company documents (charter), submitted to the Department of Planning & Investment where the headquarters is located main
| Easy to just submit documents at the District/District People’s Committee
The initial form of registration for establishment of business households is simpler, implementation time is faster.
|
| About how to manage operations | Management is based on charters, many members need to vote and meet to make decisions regulations | Easy, based on basic regulations, managed directly from the business owner |
| Export invoices | Export electronic invoices easily | Must register to buy VAT invoices at the People’s Committee if you want to export |
| Number of employees | For joint stock companies, there is no limit on members, for limited liability companies with 2 members, there is a maximum of 50 people. | Maximum 10 people |
| Income tax | 20% of total actual trading profit | From 3 – 7% of revenue is self-declared at the beginning of the fiscal year |
| Annual license tax | Minimum 2,000,000 VND – Maximum 3,000,000 VND | Minimum 300,000 VND – Maximum 1,000,000 VND |
| Bank account | It is required to have a separate company account from the business owner’s account | Usually combined with personal accounts. Business household assets are often mixed with the household owner |
| Ability to expand business operations | There is no limit to opening branches, representative offices, or affiliated business locations. It is possible to open many companies and businesses at the same time to do business. | 1 person only holds 1 business household nationwide |
Above is an article about the distinction betweenBusiness households and Enterprises. Through the above article,ANT LegalWe hope to bring you a clear view and choose the right type of business for you.
Note on Applying Current Legal Regulations
This article belongs to the Business & M&A group and is presented for reference purposes, helping readers understand the legal issue at an overview level before preparing a dossier or carrying out a transaction.
Legal regulations may vary depending on the timing, locality, type of dossier and specific circumstances. If you need to determine the exact legal basis applicable to your case, you should contact ANT Legal’s lawyers at 0966.475.966 for review and advice before proceeding.
Common Legal Risks to Note
- Applying legal instruments that have been amended, supplemented or replaced.
- Preparing an incomplete set of documents, materials or necessary evidence.
- Misunderstanding the conditions, procedure, timeline or competent authority.
- Signing, submitting a dossier or carrying out a transaction before fully assessing legal risks.
How Can ANT Legal Support You?
ANT Legal can review the specific circumstances, examine the dossier, identify the applicable legal basis, advise on an appropriate handling plan and represent clients in working with individuals, organizations or competent authorities where necessary.
For prompt advice, you may contact a lawyer at 0966.475.966.
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