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Understanding Business Cooperation Contracts in Vietnam (BCC). What are the mandatory terms in a business cooperation contract in Vietnam?
Business Cooperation Contracts in Vietnam
A Business Cooperation Contract in Vietnam is a legal agreement between two or more parties to jointly execute a business project, sharing profits and associated risks. This contract clearly outlines the obligations, rights, and responsibilities of each participating party. The objective of the BCC is to maximize the resources, skills, and market opportunities of the parties involved to achieve common benefits.
Key Contents of a Business Cooperation Contract in Vietnam:
Parties Involved in the Contract
Clearly identify the individuals or organizations participating in the contract. The contract should include the full names, addresses, contact information, and other legal details of the parties involved.
Objectives of the Cooperation
Clearly state the business goals that the parties aim to achieve through cooperation. The contract should describe the common business objectives and the ultimate purpose of the cooperation.
Contributions of Each Party
Specify the capital, resources, skills, technology, and other inputs that each party will contribute to the project.
Detail the capital, resources, skills, and other contributions of each party, including the timing and method of contributions.
Project Structure and Management
Outline the project management methods and decision-making processes during the cooperation.
Describe the project management structure, including specific roles and responsibilities of each party and the rights and obligations in managing and operating the business activities.
Profit and Risk Sharing
Define how profits and risks will be shared among the parties:
- The method of calculating and distributing profits among the parties.
- The method of sharing risks and losses, if any.
Contract Duration
- Specify the start and end dates of the contract.
- Conditions and procedures for contract renewal.
Termination Terms
Define the conditions under which the contract can be terminated prematurely, including breaches of contract or failure to achieve the set objectives.
Include the notice period required before contract termination.
Dispute Resolution Clause
Outline measures for resolving disagreements or disputes between the parties, such as mediation, arbitration, or litigation in court.
Business Cooperation Contract Between Three Individuals in Vietnam
A Business Cooperation Contract between three individuals in Vietnam is a legal agreement where three individuals agree to jointly conduct business, sharing profits, resources, skills, and risks. This contract serves as a crucial legal basis to ensure that each party fulfills their commitments and obligations during the cooperation.
The terms of a Business Cooperation Contract between three individuals in Vietnam are similar to the contents mentioned above.
Business Cooperation Contract with Fixed Profit Sharing in Vietnam
A Business Cooperation Contract with fixed profit sharing in Vietnam is a type of contract in which the parties agree to share profits by a predetermined fixed amount, regardless of the business operation results, whether profitable or not. This ensures that one party in the contract reduces risk and is not dependent on market fluctuations or business performance.
Currently, BCCs with fixed profit sharing are often used as a measure to avoid signing a lease agreement. Specifically, one party contributes capital through the right to use premises, while the other party contributes assets and manages operations. The party contributing capital through the right to use premises receives a fixed monthly amount equivalent to the monthly rent, regardless of business results.
However, if disputes arise and are brought before the People’s Court for resolution, the court may view this as a sham contract to conceal a lease agreement. Many cases have seen courts rule based on the determination that this is a lease agreement rather than a business cooperation contract.
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