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The concept of “legal entity” is no longer unfamiliar in Vietnam and around the world. However, different countries have varying regulations regarding entities or legal persons through their national laws. This article aims to provide information about the general regulations regarding legal entities in Vietnam.
What is a legal entity?
A legal entity is an organization that meets specific conditions as stipulated by the law, is recognized by the law, has legal capacity, can engage in transactions, and can exercise rights and obligations as prescribed by the law.
Conditions for becoming a legal entity in Vietnam
An organization is recognized as a legal entity in Vietnam when it meets the following criteria:
– It is legally established according to the regulations of Vietnamese law.
– It has a well-defined and organized structure. A legal entity must have a governing body, with its tasks and authority defined in its charter or establishment decision.
– It possesses its own assets, separate from the assets of individuals or other legal entities, and is responsible for its liabilities with its own assets.
– It acts in its own legal name to participate in legal relationships independently.
Types of legal entities in Vietnam
Legal entities in Vietnam include two types: commercial legal entities and non-commercial legal entities.
– Commercial legal entities operate for profit, and any profits earned are distributed among the members of the legal entity. Commercial legal entities are primarily businesses and economic organizations.
– Non-commercial legal entities operate not for profit but for political, social, or public benefits. If a non-commercial legal entity generates profits, these profits are used for common purposes and are not distributed to its members. Non-commercial legal entities include state agencies, armed forces units, political organizations, social organizations, professional associations, charitable foundations, social enterprises, and other non-profit organizations.
The charter of legal entities in Vietnam
Legal entities in Vietnam must have an organizational and operational charter. The charter of a legal entity typically includes the following main elements:
– The name of the legal entity.
– The purpose and scope of activities of the legal entity.
– The main office address, branch addresses, and representative offices (if any).
– The charter capital (if applicable).
– The legal representative of the legal entity.
– The organizational structure of the legal entity.
– The conditions for becoming a member of the legal entity.
– The rights and obligations of the members.
– The procedures for making decisions within the legal entity, principles for resolving internal disputes, and charter amendments.
– Conditions for merging, consolidating, dividing, converting, or dissolving the legal entity.
The name of legal entities in Vietnam
The name of a legal entity must be in the Vietnamese language and should reflect the organizational form of the legal entity to distinguish it from other entities in the same field of operation. The name of a legal entity can be used as a trade name in business activities and is protected under the intellectual property laws of Vietnam, subject to the conditions specified in Vietnamese Intellectual Property Law.
Branches and representative offices of legal entities
A legal entity can have one or more branches and representative offices in Vietnam. Branches and representative offices are dependent units of the legal entity and are not separate legal entities.
Branches are allowed to perform some or all of the functions of the legal entity, based on the authorization of the legal entity.
Representative offices do not engage in business activities on behalf of the legal entity; their primary function is to promote and represent the legal entity in certain activities.
Reorganization and restructuring of legal entities in Vietnam
Reorganization and restructuring of legal entities in Vietnam can take several forms, including merging, consolidating, dividing, separating and converting.
– Merging involves combining two or more original legal entities into a new legal entity. The original legal entities cease to exist, and the new entity inherits their rights and obligations.
– Consolidating is when one or more legal entities merge into another legal entity. The legal entities being consolidated cease to exist, and the receiving entity assumes all their rights and obligations.
– Division is the process of splitting one legal entity into two or more new legal entities. The original entity continues to operate, and the new entities inherit a portion of its rights and obligations.
– Separating legal entity is a term that refers to one or more new legal entities being separated from an original legal entity. The original legal entity continues to operate, while the separated legal entity inherits some of the rights and obligations of the original legal entity.
– Conversion involves changing the legal form of a legal entity, for example, converting a limited liability company into a joint-stock company.
Legal services for establishing and organizing the activities of legal entities in Khanh Hoa, Vietnam
With a team of skilled lawyers who have many years of experience in the business sector, we provide our valued clients with packages of consulting services and assistance in the registration procedures for establishing legal entities in Khanh Hoa province, Vietnam. By using our services, you will feel satisfied with the professionalism, speed, and convenience we offer.
