The Vietnam Chamber of Commerce and Industry (VCCI) and the Central Institute for Economic Management (CIEM) have recently organized a seminar to gather comments from legal experts and businesspersons on a draft decree to replace Decree No. 139/2007/ND-CP of September 5, 2007, guiding the 2005 Enterprise Law’s provisions on establishment, management, operation, re-organization and dissolution of enterprises.
Most participants in the seminar voiced their worries about the draft amendments which delegate power to business registration agencies to oversee the operation of enterprises.
Clause 9, Article 19 of the draft decree stipulates that business registration agencies may inspect the progress of capital contribution to a company if finding it necessary or at the request of one or several member(s) of the company who own at least 25% of the charter capital of the company. Clause 2, Article 20 says that company members may lodge complaints or denunciations with business registration agencies or initiate an administrative lawsuit against the director general or the chairperson of the Members’ Council. Meanwhile, Clause 5, Article 40 specifies that representatives of business registration agencies or competent state management agencies are responsible for overseeing the convening of shareholders’ meetings and making of decisions.
According to legal experts, once the decree is enacted with those provisions, business registration agencies would be empowered to deeply interfere into enterprises’ operations, thus going counter to the country’s efforts to create a more favorable and attractive business environment. They opined that business registration agencies would be assigned to perform their only duty, i.e., conducting business registration, rather than performing the state management of enterprises’ operation.
Another matter of concern was a provision in Article 17 stipulating that if the representative at law of an enterprise is not present in Vietnam for more than 30 days, his/her authorized person will continue acting as the representative at law. Legal experts argued that this provision is contrary to the principle of single representation set down in the Civil Code and the Enterprise Law. The draft decree, therefore, should provide that “The authorized person will continue exercising rights and performing obligations of the representative at law” instead.
Regarding the transformation of private enterprises into limited-liability companies provided in Article 38 of the draft, legal experts pointed out that because such a transformation is not specified in the Enterprise Law, the inclusion of this case into the draft decree may lead to inconsistency in the legal system.
The draft decree is now available at the VCCI’s website vibonline.com.vn.-