On August 23rd 2018, the Government issued Decree No 108/2018/ND-CP amends Decree No 78/2015/ND-CP in connection with registration of enterprise (“Decree 108”), accordingly, there are some amendments for simplification of enterprise registrations, however existing some regulations need to be clarified.

 

1. The important amendments

  • The enterprise is not required to fix the seal on application for enterprise registration, notice for changes in enterprise registration content, resolution, decision, meeting minutes in the enterprise registration dossier.
  • POA for individual to implement procedures in relation to enterprise registration is not required to make notary or certification.
  • The copy of charter or the other equivalent of the company owner, in case of the company owner is organization, is not required in the enterprise registration dossier as for the company limited with one member.
  • Decree 108 also supplements regulation on establishing enterprise from conversion of business household. Specifically, the application file including the original of business registration certification, the true copy of tax registration certification and the other documents corresponding to each of enterprise model. The enterprise registration certification shall be issued within 02 working days.
  • Moreover, the enterprise entitled to establish business location anywhere out of head office. A written notice of new business location must be submitted by enterprise to Provincial Business Agency where existing business location newly within 10 working days from the date of establishing.

Content of notice, including:

+ Business code;

+ The name and address of the head office of the enterprise or the name and address of the branch (where the business location is located in the province or centrally run city where the branch is placed);

+ Name and address of the business location; The business lines of ​​the business location;

+ Full name, place of residence, number of the people’s identity card or passport of the head of the location of business;

+ The full name and signature of the legal representative of the enterprise, for the case where the location of business belongs to the enterprise or the full name and signature of the head of the branch in case the place of business Affiliated.

2. Regulations needed to be clarified:

In Clause 6, Article 25 of Decree 108, it is not allowed to change the legal representative at the same time with the registration of enterprise conversion, this regulation is not reasonable. The reason for not being able to change the legal representative at the same time with the registration of the change of type of business may be that the legislator wants to bind the legal representative, but the fact is now a question has arisen as to how the change of legal representative of the enterprise will take effect from the date from the date stipulated in the decision of the Board of Directors/Board of Members (usually this the date is day of such decision was passed) or has to wait until the new business registration certificate issued by Business Agency certifying such change? If enterprise must wait until obtaining new business registration certificate, then, during this waiting period the enterprise does not have a legal representative because normally replacement of the legal representative shall be effect from the date of the decision of the BOD/BOM is passed. So, it is difficult for enterprises to decide on and/or sign contracts, transactions, documents and papers with the State agencies, partners and customers, there is no legal representative, so who will sign these papers and whether such actions are lawful?!

Meanwhile, in Clauses 1 and 2, Article 4 of Decree No. 78/2015/ND-CP regulated that “Enterprises shall declare themselves enterprise registration dossiers and take responsibility before law for their legality, truthfulness and reliability” and “The business registration body shall be responsible for the validity of the enterprise registration dossier, and shall not be liable for the violation of the law of the enterprise and shall not be liable for any breach of the law by founder of the enterprise”, as such, the business registration body is only responsible for the validity of the registration dossier and the enterprise shall be responsible for the accuracy, truthfulness and legality of the information in the business registration dossier and application for the change of the business.

Therefore, we suppose should remove the regulation that does not permit the registration of change of legal representative at the same time with registration of change of type of business, in addition to clearly stipulate the change of legal representative of the enterprise shall be effective from the time of the decision of the BOM/BOD on the change of legal representative comes to effective, this regulation shall create the initiative for the enterprise in the course of operation then the legal representative which new replacement will have full authority of the legal representative for the business without having to wait until the business registration agency issued new business certificate to the enterprise, this regulation is also consistent with the principle of responsibility is stipulated in Clause 1 and 2, Article 4 of Decree 78 above.

Another point to be clarified is that Article 38 of Decree 108 needs to add specific provisions on the time limit for business agency to:

– Provide the receipt of the enterprise’s online application file to the enterprise. (clause 3 of Article 38).

– Provide electronic notices to enterprises for requesting the amendment or supplementation of dossiers in cases where dossiers are invalid (clause 4 of Article 38).

– Issue a business registration certificate to the enterprise if the contents of application file is valid and supplement the specific time limit for the business registration agency must send a notice requesting the enterprise to amend or supplement the dossier in case of the dossier in the form of papers and documents sent via the internet are inconsistent (clause 6 of Article 38).

Specifying time limits in the cases above aims to raise the sense of responsibility of business registration agencies and prevent enterprises from passive position when they have to wait for business registration agencies to reply but do not know the exact date.

 

 

If you have any questions or would like more information on the above issues please contact lawyer Bui Van Son at email address
[email protected]. Attorney Bui Van Son has nearly 20 years of experience in legal consulting in various fields ranging from 
corporate law, investment, contract issues.