The Ministry of Planning and Investment (MPI) is in a hurry to draw up a decree to provide for the transformation of state enterprises into one-member limited liability companies to speed up the process of restructuring state enterprises which is said to be “too slow”.
According to the MPI, the draft decree, which is made to replace Decree No. 95/2006/ND-CP of September 8, 2006, would abolish many of the restrictions in the current decree and include more business friendly regulations.
Compared to Decree No. 95/2006/ND-CP, the draft decree has a broader scope of application, governing independent state companies; parent companies of state corporations and state economic groups; state corporations and economic groups as well as their independent cost-accounting member companies; and state-owned forestry companies and agricultural farms.
Note worthily, the draft decree underlines that each one-member limited liability company transformed from a state economic group, state corporation or state company of large size and great importance would have only one owner. This owner may be a ministry, a provincial-level People’s Committee or a specialized organization as decentralized by the Government.
To avoid local agencies’ interference into business activities of enterprises, the draft decree stipulates that state management agencies other than owners of one-member limited liability companies would perform only the state management in the domain under their management.
To accelerate the transformation process, the draft decree does not provide for the conditions on charter capital levels, therefore, public-utility enterprises with a charter capital of less than VND 30 billion would be no longer required to seek Prime Minister permission on a case-by-case basis as currently prescribed. Instead, the draft decree specifies the conditions for each type of enterprises.
The draft paper also contains specific provisions on the order of and procedures for transformation, principles for the handling of capital, assets and the arrangement of labor upon transformation, and organizational model and state supervision of one-member limited-liability companies.-