The right to establish enterprises, contribute capital, purchase shares/stakes, and manage enterprises

Article 18. The right to establish enterprises, contribute capital, purchase shares/stakes, and manage enterprises

bookkeeping-vinasc31. Every organization and individual is entitled to establish and manage enterprises in Vietnam in accordance with this Law, except for the cases in Clause 2 of this Article.

2. The following entities are not permitted to establish and manage enterprises in Vietnam:

a) Government agencies, armed force units using state-owned property to establish enterprises for self-seeking purposes.

b) Officials and civil servants defined by regulations of law on officials and civil servants;

c) Commissioned officers, non-commissioned officers, workers and civil servants working at units of the army; commissioned officers, non-commissioned officers working at police units, except for those appointed as authorized representatives to manage state capital contributed to other enterprises;

d) Executive officers of state-owned companies, except for those appointed as authorized representatives to manage state capital contributed to other enterprises;

dd) Minors; people that are legally incompetent; organizations without legal status;

e) Any person facing criminal prosecution, serving a prison sentence, undergoing drug rehabilitation, sent to a reform school; or banned from doing business, holding a certain title or doing a certain job by the court; and other cases prescribed by regulations of law on bankruptcy and anti-corruption.

The applicant for enterprise registration must submit the criminal record to the business registration authority at its request.

3. Every organization and individual is entitled to contribute capital, buy shares/stakes in joint-stock companies, limited liability companies, and partnerships in accordance with this Law, except in the following cases:

a) Government agencies, armed force units using state-owned property to establish enterprises for self-seeking purposes;

bookkeeping-vinasc1b) The entities banned prohibited from contributing capital to enterprises as prescribed by regulations of law on officials and civil servants.

4. Self-seeking purpose mentioned in Point a Clause 2 and Point a Clause 3 of this Article means the use of income, in any shape or form, earned from doing business, capital contribution, purchase of shares/stakes for any of the purposes below:

a) The income is distributed, in any shape or form, among some or all of the persons mentioned in Point b and Point c Clause 2 of this Article;

b) The income is used to increase the budget of the organization/unit against regulations of law on government budget;

c) The income is added to a fund serving private interests of the organization/unit.

Article 19. Contracts prior to business registration

1. The founder of the enterprise may sign contracts serving the establishment and operation of the enterprise before and during the process of business registration.

2. If the enterprise establishment is permitted, the enterprise shall keep performing the duties and rights under the concluded contracts, unless otherwise agreed by the parties.

3. If the enterprise registration is not granted, the person who enters into the contract prescribed in Clause 1 of this Article shall take responsibility, or the founder of the enterprise shall take joint responsibility for the implementation of the contract.