Mid (day 9 - day 10): 10% group presentation and report + 20% MCQ (20ph 25 questions)
Final: 60% Open-book written exam
CHAPTER 1: INTRODUCTION TO CORPORATE LAW
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Charter capital: vốn điều lệ
Dissolution: giải thể
Legal representative: người đại diện pháp lý
Merger & Acquisition: hoạt động sáp nhập và mua lại doanh nghiệp
Decree: nghị định
Circular: thông tư
Legal entity: pháp nhân
Social enterprise: doanh nghiệp xã hội
Prosecution decision: quyết định khởi tố vụ án
-​ 4 main types of company in Vietnam
+​ Shareholding companies (join-stock company)
+​ LLC
+​ Partnership (Công ty hợp danh)
+​ Proprietorship
1.​ Enterprises
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1.1. Definitions
Enterprise is another name for a business
(Article 4.10 - Law on Enterprise 2020) Enterprise means an organization
having its own name, having assets and a transaction office, and
established or registered for establishment in accordance with law for
business/trading purposes.
Key differences between Enterprise and Company:
+​ Basic requirements for enterprise: name - assets - transaction office
+​ Profit: making profit is the prime purpose of enterprises (except social
enterprise)
+​ Established/ registered for establishment => need to be recognized
by the state (Department of planning and investment - Sở kế hoạch và
đầu tư) or (Business registration office - văn phòng đăng ký kinh
doanh in HCMC/HN)
+​ Company is narrower - Enterprise is broader
Not every company is considered a legal entity
Why do we use enterprise law not company law?
-​ We use "Enterprise Law" instead of just "Company Law" because the term
"enterprise" covers a broader range of business entities than "company".
ENTERPRISE
Company, Sole proprietorship
COMPANY
LLC, JSC, Partnership
=> The term “enterprise” is much broader than the term “company”.
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1.2. Features of an enterprise
Has its own name
Has its own assets (separated from others’)
Has a permanent registered office
Has to be registered in accordance with law to do business
+​ Business: means the continuous conduct of one, several or of all of the
stages of a process, from investment, production to sale of products or
provision of services on the market for profit-making purposes.
Differentiate Business and Commerce:
Business
Commerce
Definition
Systematic process: Covers all Specific/Separated
of the stages of the process to activity: Only focus on
generate profits or the activity transactional activities
of enterprises to generate profits
Parties
Enterprises
Emphasize
Continuous
process
Companies
and other
parties,
including
the
stakeholder
conduct
of
the Separate activities
Obligations of business registration
-​ Can we do business without registration?
=> No. The consequences:
●​ Art 16. LoE 2020
●​ Art 46.4 Decree No. 122/2021/ND-CP: A fine from VND 50,000,000 100,000,000 with respect to business activities in the form of
enterprises without Certificate of Enterprise registration as
prescribed.
=> How about household business? (hộ kinh doanh cá thể)
-​ No
-​ Can be charged 5M - 10M VND.
Case study: Criminal Charge against “Xin Chào” Cafe owner
What goes wrong in this case?
He’d already paid 17M and got the license.
He also stopped selling food at that time so it was inappropriate to be charged for
“Food-safety laws”
1.3. Classification
a.​ Based on ownership
+​ Public sector enterprises (DN nhà nước)
+​ Private sector enterprises
●​ State-owned enterprise under Vietnamese law: State owned enterprises
comprise enterprises in which State holds above 50% of the charter capital
and/or the total number of voting shares as prescribed in article 88 of this
Law (Art 4.11 LoE 2020)
●​ 2 types of state-owned enterprises:
+​ 100% of the charter capital → owned by only 1: the State (EVN, PVN)
+​ above 50% (not fully owned by the State like LLC or joint-stock
company (VD: VNPT, Vinamilk, VN airlines)
b.​ Based on the objectives
+​ Business/commercial enterprises: Run to make a profit
+​ Social enterprises: to resolve social, environmental problems, or to
serve public interests
●​ Social enterprise under Vietnamese law (Art 10.1 LoE 2020)
-​ A social enterprise must satisfy the following criteria:
(a) It is registered for establishment in accordance with this Law;
(b) Its operational objective is to resolve social or environmental issues
in the interests of the community;
(c) It uses at least fifty one (51) per cent of its total annual after-tax
profit to conduct re-investment for the purpose of implementing the
registered objectives.
→ Not just objectives but also profit allocation that is the difference
between social enterprises and other enterprises
c.​ Based on the owner’s personal liability
+​ Limited liability: LLC, Joint stock company/corporation
+​ Unlimited liability: sole proprietorship, general partnership
-​ Differentiate limited liability and unlimited liability:
+​ Unlimited liability: the owner(s) is/are liable without limit for the debts
of the entity.
+​ Limited liability: the liability of the members to contribute to the debts
of the entity is limited. (debt 20bil, you invested 9mil → no one will pay
for the remaining debt → bankruptcy)
Principle for case study Solomon: Separate Legal Entity or in Vietnamese: legal
entity
→ What is your understanding about 'separate legal entity'?
The company once registered is a separate legal entity distinct from its members
and those who manage its operations. As a legal person:
-​ A company is separate from the people that own the company
-​ A company's obligations its own and not those of its participants
-​ A company's property is its own and not the property of its participants
-​ A company can sue and be sued in its own name (the owner in case of sole
proprietorship)
-​ A company's existence continues unchanged
-​ A company can contract with its participants
2. Law on Enterprises
-​ Include all legal regulations, provisions
-​ Governing activities of enterprises
+​ Establishment
+​ Rights and obligations
+​ Governance/organization
+​ Re-structure
+​ Termination of the enterprises (dissolution, bankruptcy)
-​ Sources of law
+​ Law on enterprises 2020 and its implementation documents (main
sources)
+​ Law on investment 2020 and its implementation documents
+​ Civil Code 2015
+​ Law on Commerce 2005
+​ Specialized Law (Luật chuyên ngành): Law on Securities, Law on
Credit Institutions, ...
●​ If specialized laws contain regulations on establishment,
organization, restructuring, dissolution, and relevant activities
of enterprises, such regulations shall apply. (Art 3)
+​ International treaties
+​ Case law
Public company (công ty đại chúng): công ty cổ phần, but not all JSC is public
company, but need to niêm yết trên sàn chứng khoán
→ Public company, which law to base on:
1.​ Law on Securities (Luật chứng khoán). If there is a conflict between LoE and
LoS → LoS will prevail
2.​ Law on Enterprise 2020
Joint-stock commercial bank: under the form of joint-stock company → Law
governing:
1.​ Law on Credit institutions 2024 (Luật các tổ chức tín dụng)
2.​ Law on Enterprise
Which law principally governing the activities State-owned company:
a.​ Law on Enterprises 2020
b.​ Law on state-owned enterprises (already expired)
c.​ None of them
d.​ Both of them
3. Common business forms in the worlds
-​ Sole proprietorship
+​ One person engaged in business for profit: only 1 PERSON own the
company, different from 1 member LLC, which can be owned by 1
person OR an organization
+​ Easy and cheap to create
+​ No double taxation → In a sole proprietorship, there’s only one tax
event, the owner’s personal tax — so no “double” taxation occurs (only
pay PIT, do not pay CIT because the asset of the owner and asset of
the company is the same)
+​ Owner has complete control
+​ Unlimited personal liability
-​ General Partnership
+​ More than one person engaged in business for profit => partnership
agreements
+​ Flow-through taxation: The partnership itself does not pay income
tax. Instead, profits “flow through” to the partners, and each partner
reports their share of profits on their personal tax return. This avoids
corporate double taxation.
+​ Partners’ liability: joint and several liability: a creditor can sue 1 partner
to pay the debt, if that partner has money, they have to pay the debt,
and later on that partner can split the debt with their partners, if
partners have money, they have to pay, but if not, it’s the paid
partner’s suffering
-​ Special forms of partnerships
+​ Limited Liability Partnership (LLP):
●​ Like a general partnership, but no personal liability for partners
●​ Only limited to certain industries
+​ Limited partnership (LP): general partners and limited partners
●​ General partners (thành viên hợp danh): Unlimited liability, but
have managing/voting rights
●​ Limited partners (thành viên góp vốn): Limited liability, but
cannot manage/vote => basically investors
Pty Ltd (Proprietary Limited) - Công ty trách nhiệm hữu hạn tư nhân (không biết gọi
sao :)))) - Đối chọi với công ty đại chúng => công ty không có niêm yết
-​ Corporations
+​ Most common form of limited liability business entity q
+​ Have separate existence from their owners (legal personality)
+​ Limited liability for owners (shareholders)
+​ Free transferability of shares
+​ Centralized management
-​ Taxation of corporations:
+​ C –corp: Double taxation (pay both PIT and CIT)
+​ S- corp: Flow-through taxation (even without distributions) (member
only pays CIT)
Quiz:
Q1. Which of the following is considered only persuasive, not a binding source of
company law of VN
-> scholarly articles in legal journal, law textbook, court decision
Q2: Which statement about sources of company law in VN is correct?
A.​ Court opinions automatically form binding legal precedent
B.​ Scholarly writings may guide interpretation but are not binding law
C.​ Only ministerial circulars are sources of company law
D.​ Company charters are always binding on the public
Only case law automatically form binding legal precedent, not court opinions
Q3: A joint-stock company intends to make a public offering of shares. Which legal
framework applies to the approval and offering process?​
A. Only the Law on Enterprises 2020
B. Only the Law on Securities (LoS)
C. LoE and LoS, with the latter prevailing on public offering
D. Neither of the two laws
Q4: Which of the following is NOT a specialised law overriding in the Law on
Enterprises to certain types of organisations?
=> Law on environmental protection 2020
-​ Law on credit institution: JSC
-​ Law on Securities: public company
-​ Law on Insurance Business: operating business
-​ Luật công chứng
-​ Law on Pharmacy: luật dược
-​ Law on lawyer: luật luật sư
-​ Law civil on civil aviation: Luật hàng không dân dụng
Q5: Which of the following is a mandatory condition for an enterprise to be
recognised as a social enterprise under the LoE 2020?
=> Having social and environmental objectives stated in the charter
Q6: Which of the following is NOT a form of State-owned enterprise under the LoE
2020?
A.​ 1 member LLC with 100% charter capital held by the state
B.​ JSC with more than 50% of voting shares hold by the state
C.​ JSC with exactly 50% of voting shares held by the State
D.​ LLC where the state hold more than 50% of charter capital
Q7: The Salomon case established which fundamental principle of company law?
=> The separate high personality of the company
Q8: Under common law, the wrongful act of one partner in the ordinary course of
partnership business
A.​ Creates liability only for that partner
B.​ Creates liability for all partners jointly and severally
C.​ Creates liability only if all partners consented
D.​ Creates no liability if the partnership agreement is silent