BUSINESS LAW. Lecturer: Ms. Ta Diu Thuong

Transcription

1 BUSINESS LAW Lecturer: Ms. Ta Diu Thuong

2 OUTLINE 1. Introduction about Law on Enterprises LLC (One member AND two or more members) 3. SOEs

3

4 Law on enterprises 2005 LoEs 2005 was admitted at 8 th Meeting of National Assembly 6 th Term November 29, This law has had effect since July 1, 2006 This law shall replace the 1999 Law on Enterprises; the 2003 Law on State Owned Enterprises, except for the cases specified in clause 2 of article 166 of this Law LoEs 2005 consists of 172 articles and 8 chapters Limited Liability Companies : Art State Owned Enterprises: Art. 4, 13, 57, 166, 167, 168, 169

5 Law on enterprises 2005 Governing scope This Law provides for the establishment, management organization and operation of limited liability companies, shareholding companies, partnerships and private enterprises in all economic sectors; provides for corporate groups. Applicability 1. Enterprises of all economic sectors. 2. Organizations and individuals involved in the establishment, management organization and operation of the enterprises.

6

7 LLC with 2 or more members LLC with 1 member A member may be an organization or an individual Liable for debts and others obligations Issue share 2 50 Only 1 of the enterprise within the amount of capital that it has undertaken to contribute to the enterprise. The share of capital contribute of each members may only assign in accordance with Art. 43,44,45 of LOE 2005 Is not permitted of the company within the amount of the charter capital of the company

8 LLC with 2 or more members LLC with 1 member Have legal entity status From the date of issuance of the business registration certificate Organizational and management structure Company s legal representative: must be permanent resident in VN -Members Council -A chairman of the Members Council -A director or general director -An Inspection is compulsory (>=11 members) Owner is an organization +appoint one or several persons as authorized representatives If >= 2 authorized representatives the organizational and management structure of the company will include the Members' council, the director or general director and inspectors

9 LLC with 2 or more members LLC with 1 member. if only one person is appointed as the authorized representative, such person shall be the chairman of the company; in this case, the organizational and management structure of the company shall comprise the chairman of the company, the director or general director and inspectors

10 LLC with 2 or more members LLC with 1 member Capital -Is contributed by members -Redemption, assignment and dealing of shares of capital contribution followed Art. 43, 44, 45 of LOE 2005-Is contributed by members -Changes in the undertaken type of asset contributed as capital: approval of the remaining members must be obtained, notify the business registration body of this in writing within 7 working days from the date of approval of the change- Assignment of shares: Members can assign a part or all of its share of capital contribution to other persons in accordance with provisions: -Is contributed by the owner -Must be follow Art. 66 of LOE A company owner may only withdraw capital by way of assignment of a part or all of the charter capital to other organizations and individuals; in the case of withdrawal of all or part of its contributed capital from the company in another form, [the company owner] must be jointly liable for debts and other property obligations of the company.

11 LLC with 2 or more members Must offer tosell such share of capital contribution to all other members in proportion to their shares of capital contribution in the company on the same terms; Assignment to non-members shall only be permitted where the other members of thecompany do not purchase or do not purchase in full within thirty (30) days from the offeringdate.-where a member uses its share of capital contribution to pay a debt, the payee may usesuch share of capital contribution in either of the two manners: To become a member of the company upon approval of the Members Council; To offer for sale and assign such share of capital contribution in accordance with the law of assignment above LLC with 1 member In case of assignment of part of the charter capital to other organizations or individuals, the company must register for conversion into a limited liability company with two or more members within a period of 15 days from the date of assignment. 2. The company owner may not withdraw profits of the company when the company has not paid in full all debts and other property obligations which become due.

12 LLC with 2 or more members LLC with 1 member Rights and obligations Members have rights and obligations followed Art. 41 & 42 of LOE Obligation - To comply with the charter of the company. - To observe decisions of the Members Council. - To bear personal responsibility when performing these acts in the name of the company: breach the law;. -Rights of company owner is different depended on the owner being an organization or an individual followed Art. 64 of LOE Obligations followed Art. 65 of LOE To contribute capital in full and on time as undertaken; in the case of failure to contribute capital in full and on time, the owner is responsible for debts and other property obligations of the company. 2. To comply with the charter of the company.

13 LLC with 2 or more members conduct business or other transactions not for the interest of the company and [thereby] causing damage to other persons; pay premature debts where the company is likely to be in financial danger LLC with 1 member 3. To identify and separate assets of the company owner from assets of the company. A company owner being an individual must separate his or her personal and family expenditures from the expenditures for him or her as the chairman of the company and the director or general director of the company. 4. To comply with the law on contracts and relevant legislation with respect to any purchase, sale, borrowing, lending, lease or rent and other transactions between the company and the company owner;

14 LLC with 2 or more members LLC with 1 member Increases and reductions of charter capital Art. 60 of LOE 2005 By resolution of the Members Council Increasing by: -contributed capital of members -the charter capital relative to the increased value of assets of the company -Raising contributed capital from new members( agreement from members). The additional contributed capital shall be allocated to each member in proportion to its share of capital contribution A member who objects to the resolution to increase the

15 LLC with 2 or more members charter capital may not contribute additional capital such amount of additional contributed capital shall be divided amongst other members in proportion to their respective shares of contributed capital unless otherwise agreed by the members. Reducing by: -Returning part of the contributed capital to members in proportion to their respective shares of contributed capital in the charter capital of the company if business operation has been carried out continuously for more than two years from the date of business registration; LLC with 1 member Article 76 Increases and reductions of charter capital 1. A one member LLC may not reduce its charter capital. 2. A one member LLC increases its charter capital by making additional investment or raising additional capital contributed by other people.

16 LLC with 2 or more members and at the same time ensuring that debts and other property obligations may be paid in full after returning to members; -Redeeming shares of capital contribution as stipulated in article 44 of LOE2005; -Reducing the charter capital corresponding to the reduced value of assets of the company. LLC with 1 member 3. The company owner decides on the way and amount of increase of the charter capital. If the charter capital is increased by raising additional capital contributed by other people, the company must register to convert into a limited liability company of two or more members within 15 days from the date the new member undertakes to contribute capital to the company

17 LLC with 2 or more members LLC with 1 member Bankruptcy and Dissolution Art In respect of decisions relating to the sale of assets valued at fifty (50) or more per cent of the total value of assets recorded in the most recent financial statement of the company, or a smaller percentage as stipulated in the charter of the company, the amendment of and addition to the charter of the company, the reorganization or dissolution of the company, the approval by a number of votes representing at least seventy five (75) per cent of the capital of the attending members shall be required; the specific percentage shall be stipulated in the charter of the company. Art A meeting of the Members Council shall be conducted where there are at least two thirds of the members attending. Where it is not stipulated in the charter of the company, each member shall have an equal vote. The Members Council may pass a resolution by way of collection of written opinions.

18 LLC with 2 or more members LLC with 1 member Bankruptcy and Dissolution - A resolution of the Members Council shall be passed by way of collection of written opinions if it is approved by members representing at least seventy five (75) per cent of the charter capital; the specific percentage shall be stipulated in the charter of the company. - A resolution of the Members Council shall be passed when approved by over a half of the attending members. Any amendment of, addition to the charter of the company, re-organization of the company, assignment of a part or all of the charter capital of the company must be approved by at least three quarters of the attending members. A resolution of the Members Council shall take legal effect from the date of passing, except where approval of the company owner is required as stipulated in the charter of the company.

19 Art 4 LOE 2005: -Charter capital means the amount of capital contributed or undertaken to be contributed by members or shareholders in a certain period and stated in the charter of the company. - Legal capital means the minimum amount of capital required by law for the establishment of an enterprise.

20 EXAMPLE LLC 2 MEMBERS OR MORE LG VINA Cosmetics Co., Ltd Company is coordinated between LG Household & Health Care and National Company for Vegetable Oils Aromas and Cosmetics of Vietnam, officially established in LG VINA Cosmetics manufactures skin care products, cosmetics and fragrant; hair cleaning and care products; oral care products; soaps and some household cleaning products under the brand of The history of Whoo, OHUI, Isa KNOX, Essance, E"Zup, Lacvert, Cathy Cat, and household goods as Double Rich, Maxman, Elastine..

21 EXAMPLE ONE MEMBER LLC

22

23 1. History and development In 1986, Vietnam applied Doi moi policy, State economy had a huge influence on the economy In 1995, the first Law on Enterprises was established In 2003, the 1995 Law on Enterprises was amended and supplemented Since 11/1/2007, Vietnam has become a member of World Trade Organization (WTO). In 2005, the 2005 Law on Enterprises was established in order to meet WTO s requirements. According to 2005 version, many SOE must re-organize their structure to continue surviving on there own way.

24 Note Under the provisions of LOEs 2005, 2003 Law on State Enterprises expired on 01/7/2006 (LOEs 2005 effective date). However, some provisions of Law on State Enterprises 2003 still have legal value on SOEs which are not apply to the conversion of fouryear transition period (the time of restructuring). Therefore, we can say this bill is really terminate to exist after all SOEs has been converted to the Law on Enterprise model company in 2005.

25 Situation of Equitization in VN In 2001, there was 5655 SOEs In 2010, 4000 SOEs was equitized. Until before the 1/7/2010,the State also owns 100% of capital in 1206 enterprises, of which about 900 were converted into limited liability company business a member. The remaining approximately 300 businesses, or will continue to be equitized in 2010 as planned, or will be converted into onemember limited liability company in July / 2010

26 Some SOEs which are not eligible will switch debt restructuring proceed to turn into joint stock company or 2 or more members limited liability companies, otherwise the arrangement is in the form of conduct on the sale or bankruptcy without additional capital.

27 2. Definition State owned enterprise means an enterprise in which the State owns over fifty (50) percent of the charter capital. Part 22 of Article 4 Law on Enterprise Owner State is the owner of State owned enterprises. The government implements the rights and obligations of the owner for the enterprises under the law stipulation. Article 62 - Law on Enterprises 2003

28 4. Rights and obligations Rights and obligation of the SOEs on capital and assets Article 13, 14 Law on Enterprise 2003 Rights and obligation of the SOEs on carrying out business Article 15, 16 Law on Enterprise 2003 Rights and obligation of the SOEs on finance Article 17, 18 Law on Enterprise 2003 Rights and obligation of the SOEs on participating in public utility Article 19 Law on Enterprise 2003 Rights and obligations of the SOEs holding dominant powers over other enterprises Article 20 Law on Enterprise

29 5. Types of SOEs According to the capital owned by State, we have: 1 member LLC owned by State is a LLC in which State wholly owns all charter capital 2 or more members LLC owned by State is a LLC which has all members belonging to State and State wholly owns all charter capital in. State Joint Stock company is a shareholding company which has all shareholders belonging to State and State wholly owns all charter capital in. Joint Stock Company 2 or more members LLC which has share or contribution capital of State over 50% charter capital

30 According to Operation, we have: State Enterprises have optional choices to establish Board of Directors decided by owner Joint Stock Companies have the General Assembly of Shareholders, and a Board of Directors by the General Meeting of Shareholders elected 1 member LLC has Members Council or Chairman of Company

31 6. Legal entity status State companies are enterprises which the State owns the entire capital, establishment, management organization, registration under the provisions of this Law. State companies are organized in the form of independent state companies, state corporations Part 1 Article 3 Law on Enterprise 2003 Enterprises with a share capital of the state is that the business of the state capital in the capital accounts for 50% or less Part 6 Article 3 Law on Enterprise 2003 Independent state companies are state companies which do not belong to the state organizational structure of state corporations Part 9 Article 3 Law on Enterprise 2003 SOEs have legal entity status from the date of issuance of the business registration certificate.

32 7. The Re-organization of SOEs 2003 Law on Enterprises Article 73: Some ways to re-organize SOEs without changing the equity proportion 1)Merge to another SOE 2)Consolidation of SOEs 3)Division of SOE 4)Separation of SOE 5)Convert SOE into LLC 6)Other conditions which are under the stipulation of Vietnamese law

33 Petro Vietnam Drilling and Well Services Joint Stock Company (Công Ty cổ phần khoan và dịch vụ dầu khí)

34 Occupation: Equip and Distribute petroleum Trade Code: PVD Established: 1994 Parent Corp: VIETNAM OIL AND GAS GROUP

35 Development 1994: Petrovietnam Technical Services Corporation (PTSC Offshore) 20/10/2005: Equitization of PTSC offshore -> PV Drilling (3477/QĐ-Vietnam Ministry of Industry) 5/12/2006: PV Drilling shares were listed in Ho Chi Minh City Security Exchange according to Business Registration No issued by Hochiminh city 's Department on Planning and investment

36

37 Shares Profile Date: issued on 15/2/2006 Listed: HOSE Starting Price: VND 10,000 Current price: ~ VND 39,000 Weight: 210,508,215

38 Founding Shareholder Share holder s name Portion (%) State (Vietpetro),represented by 50.38% Mr Đỗ Đình Luyện 14.83% Dr Đỗ Văn Khạnh 11.85% Mr Trần Văn Hoạt 11.85% Mr Phạm Tiến Dũng 11.85% Petro Vietnam Financial Corp,represented by Mr Nguyễn Xuân Sơn Vietcombank,represented by Mr Đàm Hải Giang Saigon Securities Inc.,represented by Mr Nguyễn Hồng Nam 6.81% 4.36% 0.76% 62.31%

39 In 2008, PVD Invest Joint Stock Company merged PV Drilling ->The first merger case of Vietnam stock market PVD Invest PV Drilling

40 Summary

41 Refercence LOE 2003 LOE 2005 White book of PV Drilling

42 Thank you