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The document outlines the characteristics, financial regulations, and business structure of Sole Proprietorships and Partnership Companies under Vietnam's Enterprise Law. A Sole Proprietorship is owned by an individual with full control and personal liability, while a Partnership involves two or more individuals sharing management and responsibilities. Financial regulations for both structures include limitations on capital raising and liability obligations, with specific rules for profit sharing and financial transparency.

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Nguyễn Huỳnh Quốc Huy
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14 views

Presentation

The document outlines the characteristics, financial regulations, and business structure of Sole Proprietorships and Partnership Companies under Vietnam's Enterprise Law. A Sole Proprietorship is owned by an individual with full control and personal liability, while a Partnership involves two or more individuals sharing management and responsibilities. Financial regulations for both structures include limitations on capital raising and liability obligations, with specific rules for profit sharing and financial transparency.

Uploaded by

Nguyễn Huỳnh Quốc Huy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 25

BUSINESS LAW

Sole Proprietorship

Group 3
Table of
1
contents 2
Characteristics Financial
regulations
3 3
4

Business Illustration
Structure
1
Characteristics
How many ...
characteristics?
Definition:
According to Clause 1, Article 188 in Vietnam’s Enterprise
Law in 2020, a sole proprietorship is a business owned by an
individual who is personally responsible for the business with
their entire assets.

Characteristics:
• Full control of business decisions (Clause 1, Article 190)
• Lack of legal personality (Article 74 of Civil Code in 2013)
• Limitation in ability to raise capital (Clause 2, Article 188)
• The owner is personally liable for all debts and obligations (Clause 1 ,Article
2
Financial
regulations
How about Financial
Regulations?
Limitation Financial Liability
• The owner cannot issue securities • The owner must use personal and
(Clause 2, Article 188) business assets to meet liabilities.

• Not allowed to invest in or hold • Required to maintain proper


shares in other businesses. (Clause accounting records and submit
4 Article 188) fi nancial reports.(Clause 1 Article
189)

• Subject to corporate income tax on


business profi ts.
(Clause 2 Article 190)
3
Business structure
Business Structure
*According to Article 190,...
• Owner has full decision-making
control (Clause 1).
• Can hire and appoint a Director or
General Director (Clause 2).
• Sole proprietor is the legal
representative (Clause 3).

*According to Article 191,...


• Owner can lease the entire
business with written notice and
contract copy.
+Remains legally
responsible during the lease
*According to Article 192,...Be suitable for Small business, individual entrepreneurship:
• The sole proprietorship owner has you want to manage and run a business on your own
the right to sell the business to Examples: grocery store, small coff ee shop, freelancer
another individual or organization (developer, graphic designer, consultant, etc.)
Business Structure
Sole Proprietorship is
suitable
•
for
“Small-Scale Businesses” - local retailers, small
restaurants...
• “Service-Based Businesses” - freelancers, hair salons,
tutors...
• “Home-Based Businesses” - online stores, blogging...

• “Low-Capital Investment Businesses” - minimal setup


costs
4
Illustration
Trung Nguyen
Coffee
Before 1999
Trung Nguyên Coff ee was initially established in 1996
as a sole proprietorship by Đặng Lê Nguyên Vũ.
Operating in coff ee production and business with the
Trung Nguyên café chain.
Some disadvantages
Facing funding limits and lacks legal status for major
contracts and global expansion.
From 1999 to 2010
Converted into Trung Nguyên Coff ee Limited Liability
Company.

After 2010
Converted into Trung Nguyên Group Joint Stock
Company to expand and raise capital.
BUSINESS LAW

Partnership Company

Group 3
Table of
1
contents 2
Characteristics Financial
regulations
3 3
4

Business Illustration
Structure
1
Characteristics
How many...characteristics?
Definition:
A business entity where two or more individuals manage and operate a business
under a common name, governed by the Enterprise Law of Vietnam (Law No.
59/2020/QH14 on Enterprises)
Characteristics
1.Two Types of Partners (Article 177.2):
• General Partners: Have full management rights with unlimited liability.
->Mustn’t hire a Director or General Director
• Limited Partners: Invest capital with liability restricted to their
contribution..
1.No Share Issuance (Article 177.4):
• A partnership cannot issue shares to raise capital.
1.Restrictions on General Partners (Article 180.1):
• Cannot own a sole proprietorship or become general partners in another
partnership
->A business withunless
two oragreed upon by other
more partners, sharingpartners
capital and
responsibilities. Belief
2
Financial
regulations
How about Financial Regulations?

Capital Contribution
(Article
• General Partners: 178)
Contribute capital and participate in company

management.
• Limited Partners: Contribute capital but do not engage in management.

• Failure to contribute: May result in fi nes or expulsion (Article 180.3).


How about Financial Regulations?

Liability and Debt Obligations (Article


179.1 & 179.2)
If the company is unable to pay its

obligations >> must use personal assets


General Partners
to cover debts.

Personally liable for all company debts.

Limited Partners Liable only up to their contributed capital.


How about Financial Regulations?

Profit and Loss Sharing (Article 181)

Profi ts and losses are divided based on capital contributions, unless

otherwise agreed

Financial Transparency (Article 182.1)

General partners must regularly report fi nancial status to all partners.


3
Business structure
ARTICLE 182
BUSINESS
STRUCTUR
E
President of Director/General Other partners
Board of Director
Partners

Could be the same or diff erent


ARTICLE 182
BUSINESS
STRUCTUR
E

Limited partner General partner


• Represent the company in • Cannot participate in
business transactions. management.
• Sign contracts and manage • Can inspect fi nancial records
daily operations. but have no executive power.
4
Illustration
Law Company YKVN

Leader of the Strategic decisions


Partnership Board and fi rm's direction

...And 13 other partners


BUSINESS LAW

Tha for
nk liste
you ning
Group 3

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