Organizational forms of state-owned enterprises according to legal regulations

What kind of organization is a state-owned enterprise? In what forms can state-owned enterprises be organized? In case a state-owned enterprise needs to buy land to build a company headquarters, can it be done?

1. What kind of organization is a state-owned enterprise?

According to Clause 11, Article 4 of the Law on Enterprises 2020, the regulations on state-owned enterprises are as follows:

State-owned enterprises include enterprises in which the State holds more than 50% of charter capital, the total number of shares with voting rights as prescribed in Article 88 of the Law this.

2. In what form are state-owned enterprises organized and what is their organizational structure?

State-owned enterprises can be organized in the forms specified in Article 88 of the Law on Enterprises 2020 as follows:

– State-owned enterprises are organized and managed in the form of limited liability companies, joint stock companies, including including:

+ Enterprises in which 100% of charter capital is held by the State;

+ Enterprises in which the State holds more than 50% of charter capital or the total number of shares with voting rights, except for enterprises specified in Point a, Clause 1 of this Article.

– Enterprises in which 100% of charter capital is held by the State as prescribed in Point a, Clause 1 of this Article. 1 This includes:

+ One-member limited liability company with 100% charter capital held by the State is the parent company of a state-owned economic group, parent company of a state-owned corporation, parent company in the group of parent companies – subsidiaries;

+ One-member limited liability company is an independent company with 100% charter capital held by the State charter.

– Enterprises in which the State holds more than 50% of the charter capital or the total number of shares with voting rights as prescribed in Point b, Clause 1 of this Article include:

+ Limited liability companies with two or more members, joint stock companies in which the State holds more than 50% of the charter capital, the total number of shares with voting rights is the parent company of the economic group, the parent company of State corporations, parent companies in the parent company – subsidiary group;

+ A limited liability company with two or more members, a joint stock company is an independent company in which the State holds more than 50% of the charter capital and the total number of shares with voting rights.

According to Article 90 of the Law on Enterprises 2020, regulations on the organizational structure of state-owned enterprise management are as follows:

“Article 90. Management organization structure

The owner’s representative agency decides to organize the management of the state-owned enterprise in the form of a one-member limited liability company according to one of the following two models:

1. Company President, Director or General Director, Supervisory Board;

2. Board of members, Director or General Director, Supervisory Board.”

3. Can state-owned enterprises buy land to build their headquarters?

Pursuant to Article 21 of Decree 91/2015/ND-CP (amended by Clause 12, Article 2 and Clause 2, Article 6, Decree 140/2020/ND-CP) stipulates:

– Enterprises with 100% charter capital held by the State have the right to use assets and capital under the management and use of the enterprise to invest outside the enterprise, including investments abroad of enterprises whose charter capital is 100% held by the State, implemented in accordance with the provisions of Article 28 and Article 29 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.

+ Investment outside the enterprise must comply with the provisions of law and be consistent with the main business lines, without affecting the production and business activities of enterprises whose charter capital is 100% held by the State, ensuring efficiency, preservation and development of investment capital.

+ Enterprises with 100% charter capital held by the State are not allowed to use assets, capital, or land use rights assigned or leased to contribute capital or invest in real estate (except for enterprises with 100% charter capital held by the State whose main business line is real estate business as prescribed by the Law on Real Estate Business), and are not allowed to contribute capital or buy shares in banks, insurance companies, securities companies, venture capital funds, or investment funds. securities investment companies, securities investment companies and securities investment fund management companies, except for cases decided by the Prime Minister at the request of the owner’s representative agency.

For the State Capital Investment and Trading Corporation, capital investment outside the enterprise is carried out in accordance with the Government’s Decree on the functions, tasks and operating mechanisms of the State Capital Investment and Trading Corporation, without limitation in the fields of real estate, banking, insurance, securities, and investment funds.

+ In case of enterprises with 100% capital held by the State. Those who have contributed capital and invested in the fields specified in Point b of this Clause are not in the case of being allowed to invest by the Prime Minister and must implement a plan to restructure and transfer the entire amount of invested capital according to regulations.

– The owner’s representative agency is responsible for inspecting and supervising the management and use of capital invested outside the enterprise according to regulations. In case an enterprise has capital investment activities abroad in the fields specified in Clause 1 of this Article but does not restructure the investments, the owner’s representative agency is responsible for coordinating with the Ministry of Finance to report to the Prime Minister for consideration, decision and handling of responsibilities of the Board of Members or the Chairman of the company according to the provisions of current law.

– Enterprises are not allowed to use assets leased by the enterprise. operate, borrow, hold on behalf of, receive processing, receive agent sales, deposit to invest outside the enterprise.

– The management of capital of enterprises in which 100% of the charter capital is held by the State and invested outside the enterprise in joint stock companies, limited liability companies with two or more members shall comply with the provisions of Section 2 Chapter III of this Decree.

According to the above regulations, We see that state-owned enterprises are limited in the following activities: KNot allowed to use assets, capital, or land use rights assigned or leased to contribute capital or invest in real estate (except for enterprises with 100% charter capital held by the State whose main business line is real estate business as prescribed by the Law on Real Estate Business), not allowed to contribute capital or buy shares in banks, insurance companies, securities companies, venture capital funds, securities investment funds securities, securities investment companies and securities investment fund management companies, except for cases decided by the Prime Minister at the request of the owner’s representative agency; Do not use assets leased, borrowed, held, processed, sold through agents, or consigned by the enterprise to invest outside the enterprise.

And based on Clause 1, Article 3 of the Law on Real Estate Business 2014, which stipulates:

“Article 3. Interpretation of terms

In this Law, The terms below are understood as follows:

1. Real estate business is the investment of capital to carry out construction, purchase, transfer for sale, transfer, leasing, subleasing, and leasing of real estate; real estate brokerage services; real estate consulting services or real estate management for profit purposes.”

According to According to the above regulations, state-owned enterprises are restricted from investing in the real estate business (except for state-owned enterprises whose main business is real estate according to the provisions of the Law on Real Estate Business). If your business wants to buy land to build its headquarters, it is not doing real estate business for profit purposes, so it is not restricted according to the above regulations.

Thus, a state-owned enterprise is an enterprise in which the State holds more than 50% of charter capital and the total number of shares with voting rights according to regulations. State-owned enterprises can be organized in the form of joint stock companies or limited liability companies. State-owned enterprises are restricted from performing a number of activities, including real estate investment and business activities (except for other cases prescribed by law). The fact that a state-owned enterprise wants to buy land to build a headquarters for the enterprise does not fall under the provisions of the Real Estate Business Law 2014, so state-owned enterprises are not restricted from this activity.