Business registration under Vietnam Enterprise Law - Current situation and some recommendations

HANOI NATIONAL UNIVERSITY FACULTY OF LAW

LE THE PHUC

BUSINESS REGISTRATION UNDER VIETNAMESE ENTERPRISE LAW – CURRENT SITUATION AND SOME RECOMMENDATIONS

MAJORITY: ECONOMIC LAW CODE: 60 38 50

MASTER'S THESIS SUMMARY IN LAW

HANOI - 2006

The project was completed at: Faculty of Law - Vietnam National University, Hanoi.

SCIENTIFIC INSTRUCTOR: Dr. Nguyen Thi

Orchid

Objection 1: ............................................................................

Objection 2:.................................................................

The thesis will be defended before the master's thesis examination board meeting at:.................................................

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at......hour........day......month......year 200

Thesis can be found at the library: Library Information Center - Vietnam National University, Hanoi

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INDEX

Page

Cover page 1

Pledge 2

Thanks 3

Table of Contents 4

List of symbols and abbreviations 7

List of tables 8

Opening 9

Chapter 1. Theoretical basis of business registration and law on business registration 15

1.1. Business registration is a method of exercising the right to freedom of business 15

1.2. Some features of the history of business registration law in Vietnam 16

1.3. Concept of business registration and business registration law 18

1.3.1. Concept of business registration 18

1.3.2. Legal concept of business registration 20

1.4. Basic principles of law on business registration 22

1.4.1. Principles of ensuring freedom of business 22

1.4.2. Principle of ensuring equal rights among business entities 22

1.4.3. Principle of publicity and transparency 23

1.4.4. Principles of transition from pre-control to post-control 24

1.4.5. Principles of reducing market entry costs 25

1.5. Characteristics of the law on business registration 26

1.5.1. The law on business registration is deeply territorial in nature 26

1.5.2. The law on business registration has the characteristics of administrative procedures 26

1.5.3. Laws on business registration are judicial in nature 27

1.5.4. Law on business registration for economic purposes 27

1.5.5. Law on business registration has social characteristics 28

1.6. Purpose and meaning of the law on business registration 28

1.6.1. Purpose of the law on business registration 28

1.6.2. The meaning of the law on business registration 31

Chapter 2. Current legal status of business registration under the Enterprise Law in Vietnam 34

2.1. Overview of current legal content on business registration in Vietnam 34

2.1.1. Business registration authority 37

2.1.2. Conditions for business registration 39

2.1.3. Procedures for business registration 43

2.1.4. Resolving disputes regarding business registration 44

2.2. Achievements of the law on business registration 45

2.2.1. Pioneering innovations of the 1999 Enterprise Law 46

2.2.2. Continuing to recognize positive innovations in the 2005 Enterprise Law 48

2.3. Some problems arising in the process of building and implementing the current law on business registration 50

2.3.1. About business registration location 51

2.3.2. Regarding business registration content 54

2.3.3. Regarding business registration subjects 62

2.3.4. About business registration documents 65

2.3.5. Regarding the order and procedures for business registration 66

2.3.6. About business licenses and conditions 70

2.3.7. About the business registration agency 72

2.1.8. Dispute resolution on business registration 76

2.4. Factors affecting the current legal status of business registration in Vietnam 79

2.4.1. The political foundation is not really supportive of private enterprises 79

2.4.2. Underdeveloped and unstable economy 80

2.4.3. Cultural characteristics that hinder the birth and development of businesses 80

2.4.4. The legal system is not consistent and has many shortcomings 82

2.4.5. The capacity of the apparatus and human resources still has many weaknesses 83

Chapter 3. Some recommendations to improve the law on business registration in current conditions in Vietnam 85

3.1 From the limitations of the law on business registration to the improvement of policies and laws 85

3.2. Recommendations on Business Registration Authority 87

3.3. Recommendations on business registration subjects 91

3.4. Recommendations on business registration procedures 91

3.5. Recommendations on business licenses and conditions 94

3.6. Recommendations on the mechanism for resolving disputes regarding business registration 96

Conclusion 98

References 101

LIST OF SYMBOLS AND ABBREVIATIONS

State-owned enterprises State-owned enterprises Private enterprises Private enterprises Business registration Business registration LDN Law on enterprises Limited liability Limited liability

LIST OF TABLES
	Page
Table 2.1.	Business registration agency	37
Table 2.2.	General conditions for business registration	40
Table 2.3.	Entities not allowed to register for business	40
Table 2.4.	Conditions for business registration documents	41
Table 2.5.	Conditions on business registration location	42
Table 2.6.	Conditions on business registration content	43
Table 2.7.	General procedures for business registration	44
Table 2.8.	Business registration type of enterprise	52
Table 2.9.	Business name, why is it so difficult!	54
Table 2.10.	Business name and tradition	58
Table 2.11.	Business and freedom of enterprise	60
Table 2.12.	Business license tax, a new barrier to entrepreneurship	64
Table 2.13.	Post-business registration loopholes	74
Table 2.14.	Resolving disputes about business registration	77

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INTRODUCTION

1. Urgency of the topic

Business registration is an important institution of the Law on Enterprises (LOE). Business entities wishing to conduct business under the legal forms stipulated in the LOE must register their business (BRE) according to the provisions of the LOE. Based on the provisions of the LOE, BRE activities have been carried out quite quickly in terms of procedures and with open conditions for establishment. Along with the simplification of procedures is the reduction of costs for establishing a new enterprise, the abolition of conditions that are difficult for enterprises to meet, and at the same time, the requirements and responsibilities of state agencies towards enterprises are enhanced. Therefore, currently, establishing a new enterprise according to the provisions of the LOE is theoretically very simple.

However, in addition to the achievements, the actual application of regulations on business registration sometimes brings about contradictory results, including undesirable results, contrary to the purpose of the Law on Enterprises. Regulations related to business registration and the actual practice of business registration activities nationwide in recent times have begun to arise many problems, manifested in aspects such as: lax management of business registration activities; business registration procedures and business conditions are sometimes unclear and inconsistent; businessmen do business without business registration; business activities are not in accordance with business licenses; especially, many localities and sectors have also set many strict barriers to market entry for businessmen through the issuance of business licenses, business practice certificates, etc. as an additional requirement for business conditions applicable to a number of industries and services. The persistence of these phenomena in our country's economy has made it difficult for many entrepreneurs to access business activities in a formal and fair manner.

Faced with the reality arising in business registration activities in recent times, it is necessary to have truly in-depth and comprehensive studies on the nature of business registration activities in general as well as the legal content regulating this issue in particular, in order to be able to provide explanations both in terms of theoretical basis and in terms of meeting practical requirements.

The results obtained from comprehensive and systematic studies on business registration activities on both theoretical and practical levels will bring correct conclusions on many issues such as: What is the nature of business registration? Why do entrepreneurs have to register their businesses? How should the law on business registration be improved to meet the needs of encouraging all people to do business? What solutions are needed to further improve the quality of legal regulations on business registration as well as the effectiveness of applying these regulations in practice?

On the other hand, within the framework of the Master of Law training program - Major in Economic Law. The author finds that the choice of the topic "Business registration under the Law on Enterprises of Vietnam - Current situation and some recommendations" is suitable for the Economic Law major code and can be completely carried out and completed by a graduate student within a research period of about six months.

The above are the reasons that prompted the author to choose the above content as the research topic in his master's thesis.

2. Research status of the topic

In general, business registration activities in general and the law on business registration in particular have been studied and implemented since before the promulgation of the Law on Enterprises. Many programs have been conducted to survey the start-up activities of entrepreneurs as well as the business management activities of state agencies. In particular, after six years of implementing the Law on Enterprises, there have been many

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