Social enterprises according to current legal regulations

Social Enterprise established under one of the types of businesses specified in the Law on Enterprises 2020. However, instead of operating to earn profits, these businesses aim to solve one or several certain social problems. This article shares in detail the legal regulations surrounding Social Enterprises according to current legal regulations. 

CSPL: Articles 7, 8, 10 of the Law on Enterprises 2020

1. Social Enterprise

– Social enterprises must meet the following criteria:

+ Be an enterprise registered for establishment under the provisions of this Law;

+ Operational objectives are to solve social and environmental problems for the benefit of the community;

+ Use at least 51% of total profit after tax every year of the enterprise to reinvest to realize the registered goals.

2. Rights of social enterprises

– Freedom to conduct business in industries and professions that are not prohibited by law.

 – Business autonomy and choice of business organization form; proactively choose industries, occupations,  locations, and forms of business; proactively adjust the scale and business lines.

– Choose forms and methods of mobilizing, allocating and using capital.

– Freely search for markets, customers and sign contracts.

– Export and import business.

– Recruit, hire and use labor according to regulations provisions of labor law.

– Proactively apply science and technology to improve business efficiency and competitiveness; protected intellectual property rights according to the provisions of the law on intellectual property.

– Possession, use, and disposition of enterprise assets.

– Refuse requests from agencies, organizations, and individuals to provide resources not according to the provisions of law.

– Complain and participate in proceedings according to the provisions of law.

– Owners and managers of social enterprises are considered, facilitated and supported in granting relevant licenses, certificates and permits according to the provisions of law;

– Mobilize and receive sponsorship from individuals, businesses, non-governmental organizations and other Vietnamese and foreign organizations to offset management costs and operating costs of the business;

3. Obligations of social enterprises

– Satisfy business investment conditions when doing business in conditional business investment sectors; Sectors and occupations have conditional market access for foreign investors according to the provisions of law and ensure that such conditions are maintained throughout the course of business operations.

– Fully and promptly fulfill obligations regarding business registration, registration of changes to business registration content, publicizing information on establishment and operation of enterprises, reporting and other obligations according to the provisions of this Law.

– Responsible for the truthfulness and accuracy of information declared in business registration documents and reports; In case the declared or reported information is discovered to be inaccurate or incomplete, such information must be promptly amended and supplemented.

– Organize accounting work, pay taxes and perform other financial obligations according to the provisions of law.

– Ensure the legal and legitimate rights and interests of employees according to the provisions of law; Do not discriminate or insult the honor and dignity of employees in the enterprise; Do not abuse labor, force labor or use underage labor illegally; Support and create favorable conditions for workers to participate in training to improve their qualifications and vocational skills; Implement policies and regimes of social insurance, unemployment insurance, health insurance and other insurance for employees according to the provisions of law.

– Maintain operating objectives and prescribed conditions throughout the operation process.

– Don’t use mobilized grants for purposes other than offsetting management and operating costs to solve social and environmental issues that the business has registered.

– In case of receiving incentives and support, social enterprises must annually report to competent authorities on the business’s operations.