Regulations on level 1 state-owned enterprises according to Vietnamese law

What are the level 1 state-owned enterprises? In what forms is supervision of level 1 state-owned enterprises carried out?

1. What are level 1 state-owned enterprises?

Level 1 state-owned enterprises are specified in Clause 1, Article 2 of Decree 49/2014/ND-CP as follows:

Applicable subjects

1. State-owned enterprises (hereinafter referred to as level 1 enterprises), include:

a) One-member limited liability company is the parent company of an economic group; parent company of a state corporation; parent company in the parent company – subsidiary model; independent single-member limited liability companies established by the Prime Minister’s decision or established by Ministries, ministerial-level agencies, Government agencies (hereinafter collectively referred to as sector management ministries), People’s Committees of provinces and centrally run cities (hereinafter collectively referred to as Provincial People’s Committees);

b) Joint stock companies, limited liability companies with two or more members in which the State holds more than 50% charter capital is invested in the enterprise by the Ministries managing the industry and the Provincial People’s Committee.

2. Limited liability companies and joint stock companies in which level 1 enterprises are the capital owners investing in the enterprise and holding more than 50% of the charter capital (hereinafter collectively referred to as level 2 enterprises).

3. Ministries, ministerial-level agencies, Government agencies, and Provincial People’s Committees; owners, organizations, and individuals authorized, decentralized, or assigned by the owner to exercise the rights and obligations of the owner, controller, or authorized representative with respect to the capital invested in the enterprise and other agencies, organizations, and individuals related to the supervision, inspection, and inspection of state-owned enterprises.

Thus, according to regulations, level 1 state-owned enterprises include including:

(1) A one-member limited liability company is:

The parent company of an economic group;

The parent company of a state-owned corporation;

Parent company in the parent company – subsidiary model;

(2) Independent single-member limited liability company established by decision of the Prime Minister or established by Ministries, ministerial-level agencies, Government agencies, People’s Committees of provinces and centrally run cities;

(3) Joint stock company, liability company limited liability company with two or more members in which the State holds more than 50% of the charter capital because the Ministries managing the industry and the Provincial People’s Committee are the owners of capital invested in the enterprise.

2. Who has the authority to supervise the observance of the law and compliance with the decisions of the owner for level 1 enterprises?

The authority to supervise the owner for level 1 enterprises is specified in Clause 1, Article 10 of Decree 49/2014/ND-CP as follows:

The authority to supervise observation

1. The owners are industry-managing ministries and provincial-level People’s Committees with the authority to supervise the observance of the law and comply with the decisions of the owners for level 1 and level 2 enterprises.

2. Owners are level 1 enterprises with the authority to monitor law compliance and compliance with the owner’s decisions for level 2 enterprises.

3. Within the scope of their state management, ministries, ministerial-level agencies, and provincial-level People’s Committees that are not the owner are responsible for coordinating with the owner to monitor the observance of the law and compliance with the owner’s decisions according to the assignment and decentralization of state management and exercise of owner’s rights towards the enterprise.

Thus, according to regulations, the owners are the Ministries Industry management, Provincial People’s Committee is the person with authority to supervise the compliance with the law and compliance with the owner’s decisions for level 1 enterprises.

3. Supervision of level 1 state-owned enterprises is carried out through what form?

The form of supervision of state-owned enterprises is specified in Article 15 of Decree 49/2014/ND-CP as follows:

Form of supervision

1. For level 1 enterprises in which the State holds 100% of the charter capital, the owner is the industry management ministry and the Provincial People’s Committee to carry out supervision through the following forms:

a) Review, synthesize and evaluate the self-monitoring report of the enterprise;

b) Review, synthesize and evaluate the controller’s report;

c) Summarize recommendations, assessments, handling measures and the implementation of inspection, inspection, investigation conclusions and supervision and audit reports;

d) Receive, review and resolve related recommendations, feedback, complaints and denunciations to businesses according to authority.

2. For level 1 enterprises in which the State holds more than 50% of the charter capital, the owner is the industry management ministry and the provincial People’s Committee who carry out supervision through reports of representatives at the enterprise and the forms of supervision specified in Point c, Point d, Clause 1 of this Article.

3. For level 2 enterprises, the level 1 enterprise and the Ministry managing the industry, the Provincial People’s Committee is the owner of the level 1 enterprise and carries out supervision through the report of the representative at the enterprise.

Thus, the form of supervision for level 1 state-owned enterprises is specifically regulated as follows:

(1) For level 1 enterprises that the State holds 100% of charter capital, the owner is the Ministry of Industry Management, the Provincial People’s Committee carries out supervision through the following forms:

– Review, synthesize and evaluate self-monitoring reports of enterprises;

– Review, synthesize and evaluate reports of controllers;

– Synthesize recommendations, assessments and measures management and implementation of inspection, inspection, investigation conclusions and supervision and audit reports;

– Receive, consider and resolve recommendations, feedback, complaints and denunciations related to enterprises according to authority.

(2) For level 1 enterprises in which the State holds more than 50% of charter capital, the owner is the industry-managing Ministry and the People’s Committee. The province carries out supervision through:

– Report of the representative at the enterprise;

– Summary of recommendations, assessments, handling measures and implementation status of inspection, inspection, investigation conclusions and supervision and audit reports;

– Receive, consider and resolve recommendations, feedback, complaints and denunciations related to businesses according to authority.