Joint stock company under the 2005 Vietnamese Enterprise Law in comparison with joint stock company under Japanese commercial law

FOREIGN TRADE UNIVERSITY

FACULTY OF FOREIGN TRADE ECONOMICS

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GRADUATION THESIS

TOPIC:

JOINT STOCK COMPANY UNDER VIETNAM ENTERPRISE LAW 2005 IN COMPARISON WITH JOINT STOCK COMPANY UNDER JAPANESE COMMERCIAL LAW

Student name: Duong Thi Men Class: A14

Course : 41

Instructor: Prof. Dr. Nguyen Thi Mo

HANOI – November 2006

ACKNOWLEDGEMENTS

During the process of researching and completing my graduation thesis, I received enthusiastic guidance and instruction from Professor Nguyen Thi Mo. I would like to send her my most sincere thanks.

I would also like to express my deep gratitude to the teachers of Hanoi Foreign Trade University, especially the teachers of the Faculty of Foreign Trade Economics who have taught and guided me during the past four years at the school.

Finally, I would like to thank all my friends, family and relatives who have encouraged and helped me throughout my studies and thesis completion.

Hanoi, November 2006 Duong Thi Men

INDEX

List of abbreviations 04

Foreword 05

Chapter 1: Some general issues on joint stock companies and the law on joint stock companies of Vietnam and Japan 08

I/ Overview of joint stock companies and the law on joint stock companies 08

1. Concept of joint stock company 08

1.1. Vietnam's economy and the formation and development of joint stock companies. 08

1.2. Joint stock companies and characteristics of joint stock companies in Vietnam 15

1.3. Position and role of joint stock companies in Vietnam 18

2. Law on joint stock companies 20

2.1. The need to promulgate laws regulating the operations of joint stock companies 20

2.2. Main contents of the law on joint stock companies 21

II/ Law on joint stock companies according to the 2005 Vietnamese Enterprise Law and the Japanese Commercial Code 22

1. Vietnamese law on joint stock companies 22

1.1. From the 1990 Company Law to the 2005 Enterprise Law 22

1.2. Main regulations on joint stock companies 26

2. Japanese Joint Stock Company Law 30

2.1. Characteristics of Japanese governing law 30

2.2. Main regulations on joint stock companies 31

Chapter 2: Some differences between joint stock companies under the 2005 Vietnamese Enterprise Law and the 2002 revised Japanese Commercial Code 32

I. Differences in procedures for establishing a joint stock company 33

1. Differences in regulations related to founders 33

2. Differences in provisions related to Article 38

3. Differences in steps involved in the establishment procedure 41

II. Differences in organizational structure and apparatus of joint stock companies 42

1. General Meeting of Shareholders - the governing body of a joint stock company 43

2. Differences in regulations related to the Board of Directors 48

3. Differences in regulations related to the Board of Supervisors 56

III. Some other differences 58

1. Differences in governing law 58

2. Differences in the regulations on issuing shares of joint stock companies 58

3. Differences in shareholder rights 62

IV. Comments on some shortcomings of the 2005 Vietnamese Enterprise Law in the regulations on joint stock companies 64

Chapter 3: Some solutions to strengthen the implementation of regulations on joint stock companies under the 2005 Law on Enterprises of Vietnam 67

I. Group of solutions for the State 67

1. Continue to amend and supplement regulations on joint stock companies in

Law on Enterprises of Vietnam 2005 67

2. Urgently issue documents guiding the implementation of the 2005 Enterprise Law on joint stock companies 69

3. Strengthen dissemination of joint stock companies and the Enterprise Law in 2015.

2005 about joint stock company 70

II. Solution groups for joint stock companies 71

1. Raising awareness of equitization issues and corporate law

stock 71

2. Innovation in management mechanism of operations 71

III. Other solution groups 72

1. Improving the efficiency of stock market operations 72

2. Correctly evaluate the actual performance of joint stock companies 75

Conclusion 76

Reference 78

Appendix 80

LIST OF ABBREVIATIONS

Socialism

Socialism
State-owned enterprises	State-owned enterprise
TBCN	Capitalism
Ltd.	Limited liability
WTO	World Trade Organization
Socialism	Socialism

Maybe you are interested!

First of all

1. Urgency of the topic

The renovation policy initiated and led by the Communist Party of Vietnam since the 6th Congress has aroused and promoted the great material and spiritual potentials of the entire nation, bringing about achievements of extremely important significance, creating socio-economic premises to bring our country into a new period - promoting industrialization and modernization. In the Party's viewpoints, economic renovation is one of the top priority issues because it is considered a stepping stone, a lever for the process of profound and comprehensive renovation in all fields. Therefore, the transformation of the Vietnamese economy from operating under a centralized bureaucratic subsidy mechanism to a multi-sector economy, operating under a market mechanism, with State management proposed at the 6th Party Congress is considered a completely reasonable step. The practice of nearly 20 years of renovation in Vietnam also shows that we must apply many forms of capitalist economy, considering it as a transitional intermediate economic form, the most effective path to lead small-scale production to socialism.

The joint stock company model is a popular form of economic organization of the capitalist economy when the productive forces reach a high level of socialization. First established in the United Kingdom in the early 17th century, with its advantages in mobilizing and using capital effectively, joint stock companies are becoming increasingly popular in many countries around the world, playing an important role in the economy of each country. Recognizing the necessity of building a joint stock company model in the economy, the 1990 Law on Enterprises of Vietnam was promulgated to regulate the operations of all types of enterprises, including joint stock companies. This was followed by the promulgation of the Enterprise Law in 1999 and 2005, to amend and supplement the limitations of previously promulgated laws. However, because this form of business is still quite new,

Compared with the laws on joint stock companies of many countries, the laws on joint stock companies of Vietnam still have certain limitations, not completely creating a favorable legal basis for this type of enterprise in Vietnam. Therefore, learning from the experiences of developed countries in building a legal corridor for joint stock companies to operate can be considered a very necessary task.

Japan, a country also in the Asia-Pacific region, has some similarities in natural conditions, history and society with Vietnam but is one of the world's largest economic powers. To achieve the prosperity of the Japanese economy, there is a significant contribution from joint-stock companies. However, for this type of company to have the conditions to develop, it is necessary to mention the clear and reasonable legal regulations in the Commercial Code of Japan issued in 1899, regulating the operations of joint-stock companies for over 100 years. Therefore, it is advisable to review, research and compare to recognize the good points in this code to apply to the construction of Vietnamese law. Especially at a time when the 2005 Vietnamese Enterprise Law has only been effective since July 1, 2006, we should look at it in relation to the Japanese Commercial Code to find out the progress that Vietnamese law has achieved as a follower as well as what needs to be further amended and supplemented so that the Vietnamese Enterprise Law can be effectively implemented.

Based on those grounds, I chose the issue: " Joint stock companies under the 2005 Vietnamese Enterprise Law in comparison with joint stock companies under the Japanese Commercial Law " as the topic for my graduation thesis.

2. Research purpose