Corporate Law 2014 to facilitate development conditions for enterprises

Corporate Law 2014, coming into full force from and on July 1, includes new regulations to create a more favorable business environment for enterprises.

New features

As informed by Mr. Mai Ba Tuoc, Director of Business Registration Division under Department of Planning and Investment, the Corporate Law 2014 has excluded requirements on temporary business conditions at the time of registration for incorporation by changing from preliminary checks to post checks. At the time registering for incorporation, the registering enterprise does not need to satisfy the business conditions for those businesses requiring conditions. After the business registration certificate is issued, the enterprise is allowed to work on the registered businesses from the moment of meeting the business conditions by professional law.

Corporate Law 2014 facilitates development of enterprises. In this photo: Production operations are ongoing at Dai Tay Duong Corporation in Vietnam Singapore Industrial Park 1 in Thuan An Town. Photo: P.An.

The secondly major feature is that the Corporate Law 2014 has separated registration procedures from those of investment registration. Accordingly, on implementing the procedures for obtaining Investment Registration Certificate, foreign investors are allow to incorporate in the same position as domestic enterprises. The regulation distinguishes legal entities and particular investments while reducing burden for investors on their adjustment of entity-related information.

Besides, Corporate Law 2014 has helped to reduce registration time for enterprises down to 3 working days. To realize the regulations, Ministry of Planning and Investment coordinates with Ministry of Finance to construct a joint circular guiding the information exchanges of business registration and operations including financial statements of the enterprises. Accordingly, tax registration system will automatically create tax identification numbers without the needs of a tax officer working on inspection and consideration.

The enterprises to decide formalities, quantities and contents of their seals

Tuoc added that the Article 44 of Corporate Law 2014 has let the enterprises decide the formalities, quantities and contents of their seals. Under Corporate Law 2005 and Decree No. 58/2001/ND-CP, the State’s managing authority will decide the formalities, quantities and contents of the corporate seals. Thus, the operating enterprises should apply for their seals and can only obtain such seals by approval of the authority. The enterprises are obliged to notify of and introduce their seals on national portal of corporate registration. The regulation rules that the seals of enterprises are designed by enterprises as a recognition mark. The regulation also approves free sales of the enterprises including their creative seals. And, the State will not fall for tight and strict management of the seals as before the Corporate Law 2005.

The Corporate Law 2014 frees up the management and preservation of the enterprise seals by approving charter of association to rule on such management and preservation.

Business Registration Certificate is shortened to 4 items from 10 items by excluding business lines, founding shareholders, branches, representative offices, and business location). The items are significantly removed realize the free will businesses making the enterprises the truly safe and multifunctional businesses.

Experts asserted that Corporate Law 2014 is expected to facilitate favored conditions for enterprises and attract investments to the strongly developing province.

To put the law into practice

According to Department of Planning and Investment, the Document No. 4211-BKHDT-DKKD dated June 26, 2015 of Ministry of Planning and Investment on guiding the application of business registration regulations.

Currently, business registration form is publicly available at document reception unit on Floor 1 of Binh Duong Provincial Administrative Center to enterprises. In the meantime, organizations and individuals can access http://sokhdt.binhduong.gov.vn or http://dangkykinhdoanh.gov.vn to download the form.

Reported by Phuong An – Translated by Vi Bao