DECREE NO. 111/2007/ND-CP ON THE ORGANIZATION AND MANAGEMENT OF STATE ENTERPRISE GROUPS AND THE TRANSITION TO THE FORM OF A PARENT COMPANY - SUBSIDIARY CORPORATION OPERATING UNDER THE BUSINESS LAW

 

 

DECREE

Regarding the organization and management of state-owned holding corporations and the transformation of state-owned holding corporations,

independent state-owned companies, parent companies as state-owned companies under the parent company - subsidiary structure,

operate according to the Enterprise Law

THE GOVERNMENT

Based on the Law on the Organization of the Government dated December 25, 2001;

Based on the State Enterprise Law dated November 26, 2003;

Pursuant to the Enterprise Law dated November 29, 2005;

Considering the proposal of the Minister of Planning and Investment.

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of application

This Decree provides for:

1. The organization and management of state-owned holding corporations established by the State's decision to invest, and holding corporations established by companies investing themselves during the period before transitioning to operate under the Enterprise Law.

2. Transformation of state-owned holding corporations established by the State's decision to invest, holding corporations established by companies investing themselves, and independent accounting subsidiaries of state-owned holding corporations established by the State's decision to invest into the parent company - subsidiary structure operating under the Enterprise Law.

3. The parent company - subsidiary structure with the parent company being a limited liability company with one member owned by the State.

Article 2. Applicability

1. Công ty trách nhiệm hữu hạn một thành viên do Nhà nước làm chủ sở hữu.

1. State-owned holding corporations established by the State's decision to invest.

2. Holding corporations established by companies investing themselves.

3. Independent state-owned company acting as the parent company of the holding corporation under the parent company - subsidiary structure and economic group.

4. Parent company as a limited liability company with one member owned by the State.

Article 3. State management and management by the State owner for state-owned holding corporations, parent companies owned by the State

State-owned holding corporations, parent companies owned by the State in the form of parent company - subsidiary structure, parent companies belonging to economic groups are subject to state management by state agencies at all levels as prescribed by law and management by the State owner's representative as assigned and delegated by the Government.

Chapter II

STATE-OWNED HOLDING CORPORATION

DECIDED TO INVEST AND ESTABLISH

Article 4. State-owned holding corporation decided to invest and establish

1. State-owned holding corporation decided to invest and establish is a form of association and consolidation of independent accounting subsidiaries and other affiliated units as prescribed by law, having a close relationship with each other in terms of economic interests, technology, market, and other business services, operating in one or several main economic-technical sectors to enhance capital accumulation, concentration, and specialization of business operations of affiliated units and the entire holding corporation.

2. State-owned holding corporation has legal personality, a specific name, a seal, a management and operation system, a headquarters within the country; it has the rights and obligations of a state-owned company as stipulated by the State Enterprise Law, operates according to the charter of the holding corporation and relevant laws.

3. State-owned holding corporation decided to invest and establish includes holding corporations reorganized from those established under the State Enterprise Law of 1995 and newly established holding corporations under the State Enterprise Law of 2003. The reorganization of holding corporations is carried out in accordance with the Government's regulations on the reorganization and dissolution of state-owned enterprises.

Article 5. Conditions for organizing state-owned holding corporations decided to invest and establish

Conditions for organizing state-owned holding corporations decided to invest and establish as prescribed in Article 48 of the State Enterprise Law and regulations issued by the Government.

Article 6. Affiliated units of the holding corporation

1. State-owned holding corporation decided to invest and establish includes affiliated units invested entirely with the registered capital by the holding corporation, and affiliated units held with controlling shares or contributions by the holding corporation.

2. Affiliated units invested entirely with the registered capital include:

a) Independent accounting subsidiaries operating according to the State Enterprise Law, this Decree, and the holding corporation's charter during the period before transitioning to operate under the Enterprise Law;

b) Dependent affiliated units and public service units operating according to the分级翻译如下，但请注意，应保持整体输出格式的统一和完整：

c) A single-member limited liability company owned by the holding corporation organized and operated according to the Enterprise Law;

d) Enterprises invested entirely with the registered capital by the holding corporation established abroad, organized and operated according to the laws of the host country;

đ) Depending on the scale and business needs, the holding corporation may have a financial company organized and operated according to the Law on Credit Institutions and guidelines of the State Bank, in accordance with the holding corporation's charter and relevant laws.

3. Affiliated units held with controlling shares or contributions by the holding corporation include:

a) Joint-stock companies and limited liability companies with controlling shares or contributions by the holding corporation operating according to the Enterprise Law;

b) Enterprises held with controlling shares or contributions by the holding corporation established abroad, organized and operated according to the laws of the host country;

In addition to the affiliated units specified in Clause 2 and Clause 3 of this Article, the holding corporation may contribute non-controlling capital to joint-stock companies with two or more members, joint-stock companies, and foreign companies.

Article 7. Capital, assets, and finance of the holding corporation

1. Capital, assets, and finance of the holding corporation:

a) The capital of the holding corporation includes capital invested by the State in the holding corporation, capital self-raised by the holding corporation, and other types of capital as prescribed by law;

b) The registered capital of the holding corporation is the amount of State capital invested and recorded in the holding corporation's charter, including: initial State investment, additional investment, and accumulated capital centrally accounted for by the holding corporation; State capital in independent accounting subsidiaries; State capital invested by the holding corporation and directly invested by the State in joint-stock companies, limited liability companies, foreign companies, and managed by the holding corporation. When there is an increase or decrease in registered capital, the holding corporation must adjust promptly in the consolidated asset statement and register supplementary capital;

c) The assets of the holding corporation include: fixed assets and current assets formed from the registered capital of the holding corporation, borrowed capital, and other lawful sources of capital managed and used by the holding corporation;

d) The value of land use rights is included in the capital of the holding corporation according to the provisions of the law;

d) State budget capital may only be invested through the holding company. Based on business needs and effectiveness, the holding company has the right to decide on investment, adjust investment capital, or decide not to invest in subsidiary units and other enterprises;

e) The profit of the holding company includes: profit from business operations, profit from financial investment activities, and profit from other activities of the holding company;

g) The funds of the holding company include: financial reserve fund, development investment fund, reward fund, welfare fund, and other funds as prescribed by law;

2. Specific regulations regarding capital, assets, and finance of the holding company shall be implemented according to the financial charter of state-owned enterprises and the management of state capital invested in other enterprises issued by the Government;

Article 8. Organizational structure of the holding company's management

1. The holding company has a management organizational structure consisting of: Board of Directors, Supervisory Board, General Director, Deputy General Directors, Chief Accountant, and supporting staff;

2. Independent accounting member companies have a management organizational structure consisting of: Director, Deputy Directors, Chief Accountant, and supporting staff. The functions, responsibilities, authorities, and standards for Directors, Deputy Directors, Chief Accountants, and supporting staff are stipulated in Section I Chapter IV of the Law on State-Owned Enterprises and this Decree;

3. Public service units and dependent accounting units of the holding company have a management organizational structure according to the charter approved by the holding company's Board of Directors;

4. Financial companies have a management organizational structure in accordance with relevant laws on financial companies and the articles of operation adopted by the holding company's Board of Directors, which are ratified by the Governor of the State Bank;

5. Subsidiary units are limited liability companies with one shareholder where the holding company is the sole owner, limited liability companies with two or more shareholders, joint-stock companies, which have a management organizational structure in accordance with the laws governing the type of subsidiary unit;

Article 9. Board of Directors of the Holding Company

1. The Board of Directors has functions as prescribed in Article 29 of the Law on State-Owned Enterprises; represents the sole shareholder of the limited liability company owned by the holding company, independent accounting member companies; represents the share capital contribution of the holding company in other enterprises;

2. The Board of Directors uses the office, specialized departments, and business units of the holding company and a permanent part with no more than five personnel to advise and assist itself. The permanent part implements tasks assigned by the Chairman of the holding company's Board of Directors;

3. The specific duties and authorities of the Board of Directors are as follows:

a) Implementing the duties and authorities stipulated in Clause 1, Points b, c, d, e, g Clause 2, Clauses 3, 4, and 5 Article 30 of the Law on State-Owned Enterprises;

b) Deciding on the strategy, long-term plans, annual business plans, business sectors of the holding company, independent accounting member companies, dependent accounting units, public service units, limited liability companies with one shareholder owned by the holding company, financial companies (if any); deciding on the business cooperation plan among subsidiary units wholly owned by the holding company or having controlling shares or contributions;

c) Deciding on the use of the holding company's capital to establish wholly-owned subsidiary units and purchase shares or contribute capital to other enterprises but not exceeding the investment capital within the authority of the Board of Directors as stipulated in Point b Clause 2 Article 30 of the Law on State-Owned Enterprises and related laws; deciding on restructuring, dissolution, ownership conversion of independent accounting member companies and limited liability companies with one shareholder owned by the holding company with capital not exceeding the limit set for the Board of Directors in establishing enterprises under the law; deciding to accept enterprises voluntarily joining as subsidiary units of the holding company in accordance with the law;

d) Deciding to increase the registered capital, transfer part or all of the registered capital of the limited liability company with one shareholder owned by the holding company to other organizations or individuals as prescribed in Article 64 of the Law on Enterprises;

đ) Deciding on the management organizational structure of independent accounting member companies, financial companies (if any) as prescribed in the Law on Credit Organizations. Deciding on the application of the management organizational structure of the Board of Members or the Chairman of the company for limited liability companies with one shareholder, the number and composition of members of the Board of Members; deciding on the appointment, dismissal, removal, and determining the level of remuneration or salary for members of the Board of Members, the Chairman of the company, and supervisors of limited liability companies with one shareholder owned by the holding company;

e) Deciding on the dispatch of representatives of the holding company's share capital contribution in other enterprises based on the proposal of the General Director. The Board of Directors does not exercise rights and obligations of the owner towards the share capital contribution of member companies in other companies;

g) Approving the charter of independent accounting member companies, limited liability companies with one shareholder owned by the holding company; approving the operational charter of dependent accounting units, public service units; adopting draft charters of financial companies (if any) for submission to the Governor of the State Bank for approval;

h) Adopting the annual financial reports of the holding company, independent accounting member companies, limited liability companies with one shareholder owned by the holding company, and the consolidated financial report of the entire holding company; approving the profit utilization plan after tax of independent accounting member companies, limited liability companies with one shareholder owned by the holding company;

i) Examine and supervise the Chairman and members of the Board of Members or the Chairman and General Director (Director) of the state-owned enterprise, the supervisory board member of a single-member limited liability company owned by a corporation, the Directors of independent accounting units, dependent accounting units, public service units, financial companies (if any), and representatives of the corporation's share capital in other enterprises in performing their functions and duties as prescribed by the Law on State-Owned Enterprises, the Enterprise Law, and this Decree;

k) Perform tasks and powers as stipulated in the Charter of the corporation and relevant laws;

4. The Chairman of the Board of Directors has the rights and responsibilities as provided for in Article 33 of the Law on State-Owned Enterprises. The Chairman and members of the Board of Directors have obligations and responsibilities as provided for in Article 43 of the Law on State-Owned Enterprises; they may participate in managing other companies when meeting the conditions specified in Article 36 of the Law on State-Owned Enterprises;

5. The working regime of the Board of Directors is regulated as provided for in Article 34 of the Law on State-Owned Enterprises;

6. The standards, composition of members, appointment, removal, and replacement of Board of Directors members are carried out in accordance with Articles 31 and 32 of the Law on State-Owned Enterprises and relevant legal provisions. The process of appointing and removing the Chairman and members of the Board of Directors is implemented according to the Prime Minister's Decision;

7. The salary and bonus system of the Board of Directors is implemented in accordance with Article 35 of the Law on State-Owned Enterprises, government regulations, and other legal provisions regarding the salary system, bonuses, and responsibility system for Board of Directors members, Supervisory Board, General Director, and Directors of state-owned enterprises; legal provisions on the salary system and labor management, salaries, and income in state-owned enterprises, and related legal provisions;

Article 10. Supervisory Board of the Corporation

1. The Board of Directors establishes a Supervisory Board consisting of three to five members. The Board of Directors decides to appoint one member of the Board of Directors as the Head of the Supervisory Board. The Chairman of the Board of Directors, General Director, and Deputy General Director shall not concurrently hold the position of Head of the Supervisory Board. Other members of the Supervisory Board are selected, appointed, and removed by the Board of Directors, including one member appointed by the Trade Union of the corporation;

Supervisory Board members must meet the standards prescribed in Clause 4, Article 37 of the Law on State-Owned Enterprises;

2. The term of office of Supervisory Board members is the same as that of the Board of Directors. Supervisory Board members receive salaries and bonuses decided by the Board of Directors in accordance with legal provisions on the salary system, bonuses, and the Law on State-Owned Enterprises;

3. The Supervisory Board operates under a charter approved by the Board of Directors, with the following duties, powers, and responsibilities:

a) Examine and monitor the legality, accuracy, and honesty in management and operation, in accounting records, financial reports, and compliance with the Charter of the corporation, resolutions, decisions of the Board of Directors, and decisions of the Chairman of the Board of Directors concerning wholly-owned subsidiaries;

b) Carry out tasks assigned by the Board of Directors, report to the Board of Directors monthly, quarterly, annually, and ad hoc on the results of examinations and monitoring; promptly identify and report to the Board of Directors on abnormal activities contrary to corporate governance regulations or showing signs of legal violations;

c) Shall not disclose examination and monitoring results without permission from the Board of Directors; bear responsibility before the Board of Directors and the law for intentional neglect or cover-up of violations;

d) Bear responsibility before the Board of Directors and the law for all activities of the Supervisory Board;

Article 11. General Director, Deputy General Director, Chief Accountant, and Supporting Staff

1. The General Director is the legal representative who manages the daily operations of the corporation in accordance with objectives, plans, consistent with the Charter of the corporation and resolutions, decisions of the Board of Directors; bears responsibility before the Board of Directors and the law for the performance of assigned rights and duties;

The General Director has duties and powers as stipulated in Article 41 of the Law on State-Owned Enterprises and the following duties and powers over subsidiary units:

a) Develop business cooperation schemes between subsidiary units for approval by the Board of Directors; organize the implementation of joint business plans and investment plans among subsidiary units;

b) Inspect subsidiary units' compliance with internal norms, standards, and unit prices within the corporation;

c) Decide on the selection, signing of contracts, termination of contracts, or appointment, removal, commendation, disciplinary action, determination of salary levels, and allowances for: Directors and Chief Accountants of independently accounting subsidiary companies and public service units of the corporation after approval by the Board of Directors; Deputy Directors of independently accounting subsidiary companies and public service units of the corporation based on proposals from the Directors of these units;

d) Propose the Board of Directors to decide on appointing representatives of the corporation's share capital in other enterprises;

2. The Deputy General Director is proposed by the General Director for appointment, removal, dismissal, or signing of contracts, termination of contracts, commendation, disciplinary action, and determination of salary levels by the Board of Directors. The Deputy General Director assists the General Director in managing the corporation according to delegated tasks and authority; bears responsibility before the General Director and the law for delegated tasks or authority.

3. The Chief Accountant of the holding company shall be proposed for appointment, dismissal, removal from office, signing of contracts, termination of contracts, rewards, disciplinary actions, and determination of salary levels by the General Director, subject to approval by the Board of Directors. The Chief Accountant is responsible for organizing and implementing accounting work at the holding company; assisting the General Director in financial oversight at the holding company in accordance with laws on finance and accounting; being accountable to the General Director and the law for assigned tasks or delegated authority.

4. The criteria for the General Director; the selection, appointment, dismissal, signing of contracts, termination of contracts with the General Director, Deputy General Director, and Chief Accountant; the duties and responsibilities of the General Director; and the relationship between the Board of Directors and the General Director in managing and operating the holding company shall be implemented in accordance with Articles 24, 40, 42, and 43 of the State Enterprise Law.

5. The Office and specialized departments have the function of advising and assisting the Board of Directors and the General Director in management and operation.

6. The salary and bonus system for the General Director, Deputy General Director, and Chief Accountant shall be implemented according to the provisions of Clause 11, Article 41 of the State Enterprise Law; regulations of the Government on the wage and bonus system and responsibility regime for members of the Board of Directors, Supervisory Board, General Director, and State Enterprise Managers; laws on wage systems, labor management, wages, and income in state enterprises; and related legal provisions. The settlement and payment system for the General Director, Deputy General Director, and Chief Accountant's salaries and bonuses shall be carried out according to the provisions of Clause 10, Article 26 of the State Enterprise Law and related legal provisions.

The responsibility regime linked to the salary and bonus of the General Director shall be implemented according to the provisions of Clauses 3 and 5, Article 43 of the State Enterprise Law.

Article 12. Independent-accounting member companies and the relationship between the holding company and independent-accounting member companies

An independent-accounting member company is a subsidiary unit of the holding company, having legal personality, autonomy in business operations, and being bound by rights and obligations to the holding company as follows:

1. The capital of an independent-accounting member company includes: capital invested by the holding company in the company, capital raised by the company itself, and other sources of capital as prescribed by law.

For independent-accounting member companies established under the State Enterprise Law of 1995 that were restructured and converted into independent-accounting member companies, the state-owned capital in these companies shall be transferred to become capital invested by the holding company in the company, and the holding company shall be the owner of the independent-accounting member company.

2. An independent-accounting member company has the following rights over its capital and assets: managing and actively using the capital of the company and the holding company's investment; possessing and using the capital and assets of the company for business purposes and realizing lawful benefits from the capital and assets of the company; disposing of the capital and assets of the company in accordance with the State Enterprise Law, this Decree, and related laws; using and managing state assets such as land and natural resources in accordance with laws on land and natural resources.

The holding company shall not transfer its own investment in the independent-accounting member company and the capital and assets of this company through无偿方式，除非决定重组独立核算成员公司或实施提供公共产品和服务的目标。

3. When requested by the State to undertake public service activities, place orders, or participate in tenders, the company shall have rights and obligations as stipulated in Article 19 of the State Enterprise Law.

4. An independent-accounting member company is bound by rights and obligations to the holding company as follows:

a) Implementing the holding company’s overall business plan; carrying out production and business tasks assigned by the holding company based on economic contracts with the holding company; being responsible for the effectiveness of joint business activities with the holding company; having the autonomy to sign economic contracts and implement economic contracts delegated by the holding company;

b) Deciding on investment projects within the company and investing in or contributing capital to other companies according to the holding company's classification; participating in joint investment forms with the holding company or being entrusted by the holding company to organize the implementation of investment projects according to the holding company's plan based on signed contracts with the holding company;

c) Being responsible to the holding company for the efficiency of capital usage and other resources invested by the holding company; ensuring the preservation and development of the holding company's investment capital and self-raised capital; being responsible to the holding company for the use of capital to establish other businesses; bearing civil liability with all of the company's assets; periodically evaluating the company's assets according to government regulations and the holding company's charter;

The holding company is responsible for the debts and other property obligations of the independent-accounting member company within the scope of the company's registered capital.

d) Having the right to request the holding company to decide or be authorized by the holding company to decide on the establishment, restructuring, dissolution, and merger of dependent accounting units and determine the organizational structure of dependent accounting units;

đ) Establishing and applying labor norms, material consumption standards, wage rates, and other costs based on ensuring the business efficiency of the company, complying with legal provisions, and the holding company's charter;

e) After completing tax obligations, transferring losses in accordance with the Law on Corporate Income Tax, fulfilling other financial obligations as prescribed by law, setting up financial reserve funds, the remaining profit shall be distributed according to the total investment capital of the holding company and the self-raised capital of the company. The portion of profit distributed according to the total investment capital of the holding company shall be used for reinvestment to increase state capital at the company or to form a centralized fund of the holding company as prescribed by the Government. The portion of profit distributed according to the self-raised capital of the company shall be allocated a part into the company's development investment fund at the ratio prescribed by the Government; the remainder shall be decided by the company itself for distribution into the reward fund and welfare fund.

g) The company has the obligation to operate profitably, ensuring the target rate of return on the total investment capital of the holding company assigned by the holding company; registering, declaring and paying taxes fully; fulfilling obligations to the holding company and other financial obligations as prescribed by law.

Implement accounting, auditing, and financial reporting systems, statistical reports as prescribed by law and as required by the holding company; subject to supervision and inspection by the holding company; regularly report accurately and comprehensively information about the company and the company's financial statements to the holding company; comply with regulations on inspection by financial authorities and competent state agencies as prescribed by law.

i) Other rights and obligations as prescribed by the Law on State-Owned Enterprises and related laws.

Article 13. Relationship between the holding company and public service units, dependent accounting units, and the finance company of the holding company

1. Public service units implement the decentralized accounting system prescribed by the holding company; they generate revenue from implementing contracts for providing services, scientific research, and technology transfer training with units within and outside the holding company. Public service units operate according to the charter or regulation approved by the Holding Company’s Board of Directors.

2. Dependent accounting units of the holding company have the right to independently conclude economic contracts, conduct business activities, financial operations, and personnel management as prescribed by the holding company in the charter or organizational and operational regulations of these units approved by the Holding Company’s Board of Directors. The holding company is responsible for the financial obligations arising from the commitments of these units.

3. The finance company of the holding company is organized, operates, and relates to the holding company in accordance with the law on credit institutions, guidelines of the Ministry of Finance, the State Bank, and the operational charter approved by the Holding Company’s Board of Directors and ratified by the Governor of the State Bank.

Article 14. Relationship between the holding company and the limited liability company with one member owned by the holding company

The holding company implements the rights and obligations of the owner towards the limited liability company with one member owned by the holding company as stipulated in Clause 1 of Article 64, Article 65, and Article 66 of the Enterprise Law, the company’s charter, government regulations, and other relevant laws.

Article 15. Relationship between the holding company and companies with controlling shares or contributions

1. Companies with controlling shares or contributions of the holding company are established, organized, and operated in accordance with the Enterprise Law and related legal provisions and the company’s charter. The holding company exercises the rights and fulfills the obligations of a controlling shareholder or contributor at the company as prescribed by the Enterprise Law.

2. The holding company manages its controlling shares or contributions at other enterprises in accordance with Article 58 of the Law on State-Owned Enterprises and government regulations on managing controlling shares or contributions and state capital invested in other enterprises.

Article 16. Relationship between the holding company and companies with non-controlling shares or contributions

1. Joint-stock companies, limited liability companies with two or more members, and foreign companies where the holding company's shares or contributions account for 50% or less of the registered capital are not considered subsidiary units of the holding company and are not controlled by the holding company.

2. Companies with non-controlling shares or contributions of the holding company are established, organized, and operated in accordance with the Enterprise Law and related legal provisions and the company’s charter. The holding company manages its shares or contributions at these companies in accordance with Article 59 of the Law on State-Owned Enterprises, the Enterprise Law, and government regulations on managing state capital invested in other enterprises.

Article 17. Responsibilities of the holding company

1. The holding company may not abuse its position as the holder of the entire registered capital or as a controlling shareholder of independent accounting subsidiaries, limited liability companies with one member owned by the holding company, or companies with controlling shares or contributions, thereby harming the interests of these subsidiaries, creditors, and related parties.

The holding company may not include provisions in the charters of independent accounting subsidiaries or limited liability companies with one member owned by the holding company that harm the interests of those companies, their creditors, and related parties.

2. In cases where the following actions are carried out without agreement with the subsidiaries referred to in Clause 1 of this Article, causing damage to those subsidiaries, the holding company must bear responsibility for compensating the damage to the subsidiaries and related parties:

a) Compelling subsidiaries to sign and perform unequal and disadvantageous economic contracts;

b) Transferring capital and assets of subsidiaries, causing damage to the subsidiaries being transferred;

c) Transferring some profitable business activities from one subsidiary to another without agreement with the subsidiary being transferred, leading to significant losses or reduced profits for the subsidiary being transferred.

d) Deciding production and business tasks for member units contrary to the charter and laws; assigning tasks to member units without basing on the signing of economic contracts with these units;

đ) Compelling member units to lend funds to the holding company or another member unit at low interest rates, with unreasonable lending conditions and repayment terms, or requiring them to provide loan amounts for the holding company or another member unit to implement economic contracts that pose significant risks to the business operations of the member units;

Chapter III

ORGANIZATION OF ENTERPRISES IN THE FORM OF

HOLDING COMPANY - SUBSIDIARY COMPANY

Section 1

FORM OF HOLDING COMPANY - SUBSIDIARY COMPANY WITH A HOLDING COMPANY

AS A STATE OWNED COMPANY

Article 18. OBJECTS AND TIME LIMIT FOR APPLYING THE FORM OF HOLDING COMPANY - SUBSIDIARY COMPANY WITH A HOLDING COMPANY AS A STATE OWNED COMPANY

The provisions regarding the form of holding company - subsidiary company with a state owned holding company set forth in this Section shall only apply to state-owned holding companies, independent accounting member companies of state-owned holding companies, and independent state-owned companies that have converted to the holding company - subsidiary company model pursuant to Decree No. 153/2004/NĐ-CP dated August 9, 2004 of the Government on the organization and management of state-owned holding companies and the conversion of state-owned holding companies and independent state-owned companies to the holding company - subsidiary company model. The application period runs from the date this Decree takes effect until July 1, 2010.

Article 19. HOLDING COMPANY IN THE FORM OF HOLDING COMPANY - SUBSIDIARY COMPANY WITH A HOLDING COMPANY AS A STATE OWNED COMPANY

1. A holding company in the form of a holding company - subsidiary company is a form of linkage and control between enterprises with legal personality through investment, capital contribution, technology secrets, brand, or market, wherein there is one state-owned company exercising control over other member enterprises (referred to as the holding company) and other member enterprises being controlled by the holding company (referred to as subsidiaries) or having a non-controlling shareholding stake from the holding company (referred to as associated companies).

2. The combination of a holding company and its subsidiaries does not have legal personality. The holding company has legal personality, a separate name, a seal, a management and operation system, and a main office within the country.

Article 20. STRUCTURE OF A HOLDING COMPANY IN THE FORM OF HOLDING COMPANY - SUBSIDIARY COMPANY WITH A HOLDING COMPANY AS A STATE OWNED COMPANY

A holding company operating under this Decree has the following structure:

1. The holding company is a state-owned company, operating under the Law on State-Owned Enterprises and this Decree; it is formed from the restructuring, reorganization of state-owned holding companies, independent accounting member companies of state-owned holding companies, or independent state-owned companies, or based on the investment, purchase of shares, capital contributions, and other resources into subsidiaries and associated companies.

2. Subsidiaries:

a) Companies with controlling equity stakes from the holding company include limited liability companies with two or more shareholders, joint-stock companies, and foreign companies;

b) Limited liability company with one shareholder wholly owned by the holding company.

If the structure of a holding company in the form of a holding company - subsidiary company includes a subsidiary that is a limited liability company with one shareholder, then there must be another type of subsidiary as stipulated in point a, Clause 2, Article 2 of this Decree.

3. The holding company may have associated companies which are companies with non-controlling equity stakes from the holding company, organized in the form of limited liability companies with two or more shareholders, joint-stock companies, and foreign companies.

Article 21. FUNCTIONS AND MANAGEMENT STRUCTURE OF THE HOLDING COMPANY AS A STATE OWNED COMPANY

1. The holding company directly engages in production and business activities and invests financially in other enterprises or solely implements financial investments in other enterprises. The holding company has the rights and obligations of a state-owned enterprise as prescribed in Chapter III of the Law on State-Owned Enterprises; it fulfills the rights and obligations of the owner, member, or shareholder at subsidiaries and associated companies.

2. The holding company's management structure comprises the Board of Directors, Supervisory Board, General Director, Deputy General Directors, Chief Accountant, and supporting staff. The management structure of the holding company is the management structure of the holding company.

Article 22. BOARD OF DIRECTORS OF THE HOLDING COMPANY AS A STATE OWNED COMPANY

1. The Board of Directors of the holding company has functions, duties, and powers similar to those of the Board of Directors of a state-owned holding company established by the State; it operates according to the working regime, member structure, and implementation of duties and powers prescribed in Clause 1, Point a, Clause 3, Clauses 4, 5, and 6 of Article 9 of this Decree, and the specific duties and powers as follows:

a) Deciding on the strategic plan, long-term plans, annual business plans, industries, and businesses of the holding company, dependent accounting units, and affiliated institutions of the holding company; deciding on the business cooperation plan of the holding company with subsidiaries;

b) Deciding on the use of the holding company's capital to establish subsidiaries as limited liability companies with one shareholder and to purchase shares and contribute capital to other enterprises but not exceeding the capital investment limit within the authority of the Board of Directors as stipulated in Point b, Clause 2, Article 30 of the Law on State-Owned Enterprises and relevant laws; deciding on the restructuring, dissolution, and ownership transfer of subsidiaries as limited liability companies with one shareholder with a capital scale not exceeding the limit prescribed for the Board of Directors in establishing enterprises under the law;

c) Deciding on increasing the registered capital, transferring part or all of the registered capital of limited liability companies with one shareholder wholly owned by the holding company to other organizations or individuals as prescribed in Article 64 of the Law on Enterprises;

d) Deciding on the organizational structure of the Management Board or Chairman of the limited liability company with one shareholder, the number and member structure of the Management Board; deciding on the appointment, dismissal, removal, and determination of remuneration or salary levels for members of the Management Board, Chairman, and supervisors of the limited liability company with one shareholder. The Management Board does not exercise the rights and obligations of the owner towards the equity stake of subsidiaries in other companies;

d) Exercise rights and obligations of shareholders, members in joint stock companies and companies with capital contributions from the parent company;

e) Approve the annual financial reports of the parent company, of the single-member limited liability company; consolidated financial statements, annual business results report, and comprehensive management and operation report of enterprises under the parent-subsidiary structure; approve the profit distribution plan after tax of the single-member limited liability company;

g) Inspect and supervise the Chairman and members of the Board of Members or the Chairman and General Director (Director) of the subsidiary single-member limited liability company, the Directors of dependent units, public service units; representatives of the parent company's capital contribution in other enterprises in performing their functions and tasks as stipulated by the Law on State-Owned Enterprises, the Law on Enterprises, and this Decree;

h) Perform other rights and duties as prescribed in the charter of the parent company and relevant laws;

2. The salary and bonus system for the Board of Management shall be implemented according to the provisions of Clause 7, Article 9 of this Decree;

Article 23. The Audit Board of the parent company is a state-owned enterprise;

The Audit Board is established by the Board of Management of the parent company, with its organizational structure, functions, tasks, and operational regime as prescribed in Article 10 of this Decree;

Article 24. General Director, Deputy General Director, Chief Accountant, and Supporting Staff

1. The General Director, Deputy General Director, Chief Accountant, and the supporting machinery of the parent company have duties and powers as prescribed in Article 11 of this Decree;

2. The salary and bonus system for the General Director, Deputy General Director, and Chief Accountant shall be implemented according to the provisions of Clause 6, Article 11 of this Decree;

Article 25. Relationship between the parent company as a state-owned enterprise and the subsidiary as a single-member limited liability company;

1. The parent company is the owner of the single-member limited liability company newly established by the parent company or converted from an independent state-owned enterprise or an independent accounting unit of a holding company. The parent company exercises the rights and obligations of the owner towards the single-member limited liability company as prescribed in Articles 64, 65, and 66 of the Enterprise Law, the Company Charter, and government regulations on converting state-owned enterprises into single-member limited liability companies;

2. The single-member limited liability company is organized and operates according to the Enterprise Law, government regulations on converting state-owned enterprises into single-member limited liability companies, and related laws;

Article 26. Relationship between the parent company as a state-owned enterprise and the subsidiary as a joint stock company, a limited liability company with two or more members, and a foreign company;

1. The subsidiary as a joint stock company, a limited liability company with two or more members, or a foreign company with controlling shares or capital contributions from the parent company is established, organized, and operates according to the Enterprise Law, foreign laws, and related laws;

2. The parent company performs the rights, obligations, and responsibilities of shareholders, members, joint venture parties, and controlling contributors according to the law and the Company Charter of the company with controlling shares or capital contributions from the parent company;

3. The parent company directly manages the controlling shares or capital contributions in joint stock companies, limited liability companies, and foreign companies; it has rights and obligations over controlling shares or capital contributions as prescribed in Article 58 of the Law on State-Owned Enterprises;

Article 27. Relationship between the parent company as a state-owned enterprise and associated companies;

The parent company manages its capital contributions in associated companies according to the provisions of Article 59 of the Law on State-Owned Enterprises;

Article 28. Responsibilities of the parent company as a state-owned enterprise;

In cases where the parent company abuses its position of holding all registered capital or controlling shares, causing harm to the interests of subsidiaries, creditors, and related parties, the parent company shall bear responsibility as prescribed for holding companies in Article 17 of this Decree;

Section 2

FORM OF HOLDING COMPANY - SUBSIDIARY COMPANY WITH A HOLDING COMPANY

IS A SINGLE-MEMBER LIMITED LIABILITY COMPANY OWNED BY THE STATE;

THE STATE AS THE OWNER;

Article 29. Application of the parent-subsidiary form with the parent company being a single-member limited liability company owned by the State;

1. State holding companies, independent accounting units of state holding companies, and independent state enterprises reorganized and converted into the parent-subsidiary form, in which the parent company is a single-member limited liability company owned by the State;

2. State enterprises required to convert into a single-member limited liability company owned by the State, currently serving as the parent company of: holding companies formed and established by self-investment and establishment, parent-subsidiary groups, economic groups decided to establish by the Prime Minister;

3. A single-member limited liability company owned by the State implements investment, purchases shares, contributes capital to other enterprises, and plays the role of a parent company of those enterprises according to Clause 15, Article 4 of the Enterprise Law;

Article 30. Parent company as a single-member limited liability company;

1. The parent company exercises the rights and obligations of a single-member limited liability company organization as prescribed in Section II, Chapter III of the Enterprise Law;

2. The parent company has the function of direct production and business operations and financial investment in other enterprises or only performs financial investment in other enterprises;

3. Based on the characteristics, scale, number of subsidiaries operating domestically and internationally, the owner of the company decides the organizational management structure of the parent company according to the Board of Members, General Director (Director), Auditor model or the Chairman of the company, Director, Auditor model;

Article 31. Subsidiaries, associated companies;

1. Subsidiaries are companies that meet one of the following conditions:

a) Controlled by the parent company with 100% of the registered capital;

b) Controlled by the parent company with controlling shares or capital contributions (more than 50% of the registered capital or the total number of ordinary shares issued by the company);

c) Appointed by the parent company directly or indirectly the majority or all members of the Board of Management, General Director (Director) of the company;

d) The Articles of the company are amended and supplemented by the parent company.

2. Subsidiaries may be organized in the form of a single-member limited liability company, a limited liability company with two or more members, a joint-stock company, or a subsidiary abroad; they operate under the Enterprise Law, foreign laws, relevant legal provisions, and the Articles of the company.

3. The parent company may have associated companies organized in the form of a limited liability company with two or more members, a joint-stock company, or a company abroad according to the Enterprise Law, foreign laws, and relevant legal provisions. Associated companies are those not covered by Clause 2 of Article 2 of this Decree but have long-term economic, technological, market, and other business service ties with the parent company.

Article 32. Relationship between the parent company and subsidiaries, associated companies

1. The parent company performs the rights and obligations of the owner towards the single-member limited liability company owned by the parent company as stipulated in Clause 1 of Article 39, Clause 1 of Article 64, Article 65, and Article 66 of the Enterprise Law, the Articles of the company, and the Government's regulations on converting state-owned enterprises into single-member limited liability companies.

2. The parent company directly exercises the rights and obligations of shareholders or members at subsidiaries and associated companies of the parent company. The exercise of controlling rights by the parent company at subsidiaries that are joint-stock companies, limited liability companies with two or more members, or subsidiaries abroad is carried out according to the Enterprise Law, the Articles of the company with controlling shares or capital contributions from the parent company, and the guidance of the state owner on managing state controlling shares or capital contributions.

3. Companies without capital contributions from the parent company, voluntarily participating in the parent company-subcompany structure, are bound by the rights and obligations with the parent company and other subsidiaries according to the association agreement or the agreement between the parent company and the voluntarily participating company.

Article 33. Obligations of the parent company, subsidiaries

1. The parent company and subsidiaries have the obligation to implement financial reports of the group of companies as provided for in Article 148 of the Enterprise Law; to perform contracts, transactions, and other relationships as stipulated in Clause 2 of Article 147 of the Enterprise Law and other relevant legal provisions.

2. In cases where the parent company abuses its position, intervenes beyond the authority of the owner, member, or shareholder, causing harm to the interests of the subsidiary, related parties, the parent company and those involved must bear responsibility as provided for in Clauses 3, 4, 5, and 6 of Article 147 of the Enterprise Law and other relevant legal provisions.

Chapter IV

REORGANIZATION AND TRANSFORMATION OF ENTERPRISES

IN THE FORM OF A PARENT COMPANY-SUBSIDIARY STRUCTURE

Article 34. Purpose of reorganization and transformation

1. Reorganizing and transforming state-owned holding companies into a parent company-subcompany structure aims to shift from administrative linkage with capital transfer mechanisms to a strong linkage through financial investment mechanisms primarily; clearly defining the rights and responsibilities regarding capital and economic benefits between the parent company and subsidiaries and associated companies; enhancing business capabilities for participating units; creating conditions for developing into economic groups.

2. Reorganizing and transforming independent state-owned companies and independently accounting subsidiaries of holding companies into a parent company-subcompany structure aims to create conditions for developing the capability, scale, and scope of business operations of the company; promoting capital accumulation, utilizing the company's financial resources and other resources to invest, contribute capital, and participate in linkages with other enterprises; accelerating shareholding and diversification of ownership of the company's constituent units.

Converting state-owned parent companies into the form of a single-member limited liability company or a joint-stock company as stipulated in Clause 1 of Article 166 of the 2005 Enterprise Law.

Article 35. Objectives of reorganization and transformation

The following entities meeting the conditions specified in Article 36 of this Decree shall be reorganized and transformed into a parent company-subcompany structure with the parent company being a single-member limited liability company owned by the State:

1. State-owned holding corporations established by the State's decision to invest.

2. State-owned companies that are subsidiaries within holding companies that have decisions to transform into a parent company-subcompany structure but have not completed the transformation.

3. Independent accounting subsidiaries of holding companies established by the State's decision to invest in and establish.

4. Independent state-owned companies.

Article 36. Conditions for restructuring and conversion

1. For state-owned corporations, they must meet the following conditions:

a) All subsidiaries that have been, are currently undergoing conversion, or have been approved by competent authorities with a list and plan for shareholding reform or conversion to a single-member limited liability company to form a structure consisting of a parent company, subsidiaries, and affiliated companies;

b) The proposed parent company must meet all conditions for converting to a single-member limited liability company as stipulated in Decree No. 95/2006/NĐ-CP dated September 8, 2006, of the Government and the Prime Minister's Decision on criteria for classifying state-owned enterprises;

c) The parent company has a large capital scale, capable of utilizing the actual capital of the company or has a feasible plan to raise funds and invest sufficient capital in subsidiaries and affiliated companies to control them, using technological know-how, brand, and market to control subsidiaries;

d) The corporation has the ability to develop and operate in multiple industries, including a main industry, with many dependent units both domestically and internationally.

2. For independent state-owned companies and independent accounting subsidiaries of state-owned corporations, they must meet the following conditions:

a) Possess the capability to organize as a parent company with a large capital scale or the parent company has the ability to utilize financial strength, technological know-how, brand, and market to implement capital investment and control other enterprises;

b) The proposed parent company must meet all conditions for converting to a single-member limited liability company as stipulated in Decree No. 95/2006/NĐ-CP dated September 8, 2006, of the Government and the Prime Minister's Decision on criteria for classifying state-owned enterprises;

c) Currently holding controlling shares or contributions in multiple other enterprises, or having approval from the Prime Minister (if it is a subsidiary of a corporation established by the Prime Minister's decision) or the Minister, Provincial People's Committee (if it is an independent state-owned company) for plans to convert parts of the company (excluding parts forming the parent company) into shareholding reforms, or plans to invest more than 50% of the charter capital of the company in other companies to hold controlling shares or contributions in those companies.

Article 37. Methods for restructuring and conversion for state-owned corporations and independent accounting subsidiaries of state-owned corporations

1. State-owned corporations meeting the conditions specified in Clause 1 of Article 36 of this Decree, depending on the nature of the industry, technology, business relationship, capital investment, and mutual dependency between the corporation and its subsidiaries and among subsidiaries, may be restructured according to the following methods:

a) The office, management agency of the corporation, dependent accounting units, and public service units together with one or several key independent accounting subsidiaries operating in the main business area of the corporation can be reorganized into a parent company. In cases where the conversion and restructuring of a large-scale corporation do not require merging one or several independent accounting subsidiaries into the parent company, the office, management agency, dependent accounting units, and public service units of the corporation can be organized into a parent company;

Enterprises meeting the provisions of Clause 1 of Article 31 of this Decree become subsidiaries, while enterprises with non-controlling contributions from the corporation become affiliated companies.

b) In cases where the corporation operates under a full-industry accounting system, the office, management agency of the corporation, and key dependent accounting subsidiaries operating in the main business area of the corporation can be reorganized into a parent company;

Enterprises meeting the provisions of Clause 1 of Article 31 of this Decree become subsidiaries, while enterprises with non-controlling contributions from the corporation become affiliated companies.

c) In cases where the corporation is currently operating under a parent company-subsidiary model and still has state-owned parent and subsidiary companies, only the parent and subsidiary companies will be converted into single-member limited liability companies or joint-stock companies based on the conditions specified in Clause 1 of Article 36 of this Decree.

2. Independent accounting subsidiaries of state-owned corporations meeting the conditions specified in Clause 2 of Article 36 of this Decree, depending on their technological characteristics, dependency, and investment relationships formed with the corporation, may be separated into independent parent companies or continue within the corporation's structure.

Public service units, institutes, and schools under the corporation, depending on the degree and requirements of integration with the parent company regarding capital, finance, technology, market, research, and training, may be transferred to become dependent accounting units of the parent company or converted into subsidiaries or affiliated companies.

In cases where research institutes under the corporation regularly apply research results and transfer technology for production and business operations and hold contributions in enterprises applying research results from the institute, if they meet the conditions for parent companies specified in Clause 2 of Article 36 of this Decree, they may be converted into independent parent companies or continue within the corporation's structure.

4. The parent company formed after conversion must be organized as a single-member limited liability company. The procedures for converting to a single-member limited liability company are carried out according to the provisions of Decree No. 95/2006/NĐ-CP dated September 8, 2006, of the Government.

In cases where the parent company is converted into a joint-stock company, it shall be implemented according to the provisions of Clause 3 of Article 47 of this Decree.

Article 38. Methods for restructuring and conversion for independent state-owned companies

1. Independent state-owned companies meeting the conditions specified in Clause 2 of Article 36 of this Decree convert into parent companies; dependent accounting units, depending on the scale and nature of capital investment of the independent state-owned company, the importance and strategy of the independent state-owned company, may be converted into one of the types of subsidiaries specified in Clause 2 of Article 31 or affiliated companies specified in Clause 3 of Article 31 of this Decree.

2. The form of the parent company is regulated in Clause 4 of Article 37 of this Decree.

Article 39. Authority and procedures for establishing, approving lists, and conversion plans

1. The Ministry, People's Committee of provinces shall prepare lists and plans for converting state-owned corporations and independent state-owned companies established by their decisions. The Board of Directors of state-owned corporations established by the Prime Minister's decision shall prepare plans for converting such corporations and lists for converting independent accounting member companies of those corporations.

2. Based on the conditions stipulated in Article 36 of this Decree and the current status of state-owned corporations and independent accounting member companies of state-owned corporations:

a) The Ministry, People's Committee of provinces shall decide to approve lists, plans, and the conversion of state-owned corporations and independent accounting member companies of state-owned corporations established by themselves;

b) The Board of Directors of state-owned corporations established by the Prime Minister's decision shall submit to the Prime Minister for approval the plans for converting state-owned corporations and lists for converting independent accounting member companies of those corporations.

Article 40. Responsibilities of converted state-owned corporations

1. State-owned corporations and independent accounting member companies of state-owned corporations (hereinafter referred to as state-owned corporations) selected and approved for conversion into a holding company structure shall be responsible for:

a) Reviewing each member unit, the entire corporation, comparing with the conversion conditions, determining the structure, method, and legal form of the holding company and each type of subsidiary;

b) Inventorying, classifying, identifying various types of capital, assets, debts, and labor currently available; determining the expected capital of the holding company, the expected capital of the holding company invested in each single-member limited liability company it owns and at enterprises with controlling or non-controlling stakes of the holding company; preparing financial statements up to the conversion date;

c) Developing a restructuring plan for converting the state-owned corporation into a holding company structure and proposals for handling capital, assets, finances, and labor during the conversion;

The restructuring plan must include at least the following contents: the current business organization, management structure, production and business results of the state-owned corporation and each member unit; financial situation, investment, and capital contributions of the state-owned corporation and each member unit in other enterprises; anticipated structure, number, and type of subsidiaries and associated companies; model, organizational structure, functions, and tasks of the holding company; methods of restructuring and conversion, anticipated plans for conversion into a holding company structure; anticipated plans for transferring rights, obligations, assets, debts, and labor to the holding company and each subsidiary; changes in production and business operations after conversion;

d) Drafting articles of association for the holding company and subsidiaries, clearly defining the relationship between the holding company and its subsidiaries.

2. State-owned corporations that have already formed a member unit structure meeting the conditions specified in Article 55 of the Law on State-Owned Enterprises do not need to develop a restructuring plan but only implement the provisions of point d, Clause 1 of this Article.

Article 41. Submission and Approval of the Restructuring Plan and Conversion Decision

The submission and approval of the restructuring plan and conversion decision shall follow the procedures and formalities as follows:

1. The person deciding to establish the state-owned corporation, independent state-owned company, and independent accounting member company of the state-owned corporation is the one who approves the restructuring plan, decides on the timeline and process of converting the state-owned corporation and company; approves the articles of association of the holding company.

2. The conversion decision must include at least the following contents: name, address, legal form of the holding company and subsidiaries, associated companies; objectives, industry, business activities, registered capital of the holding company; number and proportion of capital of the holding company in each subsidiary and associated company; responsibilities of the holding company and each subsidiary regarding the succession of rights and obligations and the resolution of existing and emerging issues during the conversion process.

In cases where the conversion is carried out under the holding company - subsidiary structure with the holding company being a single-member limited liability company, the conversion decision must also include the following content: name and address of the entity that is the owner and individuals appointed as authorized representatives to exercise the rights and obligations of the holding company owner.

Article 42. Principles for Handling Capital, Assets, Finances, and Labor During Conversion

1. All assets of state-owned corporations, independent accounting member companies, and independent state-owned companies when undergoing conversion shall be valued based on their value.

2. Existing assets belonging to state-owned corporations, independent accounting member companies, and independent state-owned companies shall be inventoried, classified, and identified in terms of quantity and condition. Assets currently held directly managed by the holding company and transferred to single-member limited liability subsidiaries do not require revaluation. In cases of ownership transfer, asset values must be reassessed according to market prices as prescribed by laws on ownership conversion.

3. Leased, borrowed, entrusted, and consigned assets: the newly formed company after conversion and restructuring shall be responsible for continuing to lease, borrow, entrust, and consign according to agreements with the owners of leased, borrowed, and consigned assets.

4. Surplus, unused, stagnant assets awaiting liquidation, lost, missing assets, and other asset losses shall be handled according to current laws.

5. Principles for handling debts:

a) For debts owed by state-owned corporations, independent state-owned enterprises, and independently-accounted subsidiaries of state-owned corporations that have been converted into parent companies, and for debts owed by units under state-owned corporations, independent state-owned enterprises, and independently-accounted subsidiaries of state-owned corporations that have been reorganized, restructured, or converted: the parent company and reorganized, restructured, or converted units under state-owned corporations, independent state-owned enterprises, and independently-accounted subsidiaries of state-owned corporations shall be responsible for receiving and recovering receivables due and collectible. For receivables that cannot be recovered, after identifying the cause and responsibility of the collective and individuals, the company shall be responsible for receiving and recovering the receivables, which will be recorded as a reduction in the owner's equity for the difference between the loss value and the compensation amount from the collective and individuals.

b) For debts owed: newly established parent companies and reorganized, restructured, or converted units under state-owned corporations, independent state-owned enterprises, and independently-accounted subsidiaries of state-owned corporations shall be responsible for assuming debts owed to creditors according to commitments, including tax debts, budget debts, debts to employees; paying off due debts according to the approved plan. Debts owed without claimants and assets with undetermined ownership shall be included in the owner's equity at the parent company and newly established subsidiaries after conversion. The handling of debts owed by subsidiaries converted into joint-stock companies shall be carried out in accordance with the regulations on the shareholding transformation of state-owned enterprises.

6. The parent company and subsidiaries established based on the conversion, restructuring of units under state-owned corporations or independent state-owned enterprises, and independently-accounted subsidiaries of state-owned corporations shall continue to employ existing labor, assume all rights and obligations towards employees according to the approved plan and the provisions of the law on restructuring, reorganization, shareholding transformation, and conversion of state-owned enterprises into limited liability companies with one member; surplus labor shall be handled according to the general policy during the process of reforming and reorganizing state-owned enterprises. Employees who voluntarily terminate their employment contracts shall enjoy benefits as stipulated by the labor law.

Article 43. Principles for determining the registered capital of the parent company

1. The registered capital of the parent company formed from the conversion of state-owned corporations, independently-accounted subsidiaries of state-owned corporations, and independent state-owned enterprises is the state investment capital recorded in the Articles of Association of the parent company, including:

a) Actual state capital on accounting books at the time of conversion, centrally accounted for at the state-owned corporation, independently-accounted subsidiaries of state-owned corporations, and independent state-owned enterprises;

b) Registered capital of a single-member limited liability company owned by the state-owned corporation, independently-accounted subsidiaries of state-owned corporations, and independent state-owned enterprises;

c) State capital contributed by the state-owned corporation, independently-accounted subsidiaries of state-owned corporations, and independent state-owned enterprises to joint-stock companies, limited liability companies with two or more members, and foreign investments;

d) Additional state capital invested in the parent company (if applicable) in the case of converting a state-owned corporation or an independent state-owned enterprise; additional capital invested by the state-owned corporation in the parent company (if applicable) in the case of converting an independently-accounted subsidiary of a state-owned corporation;

đ) Portion of post-tax profits reinvested and added to the registered capital.

2. The registered capital of the parent company must not be lower than the capital level set by the Prime Minister based on the criteria and classification list of state-owned enterprises and state-owned corporations:

a) For parent companies converted from state-owned corporations: it must not be lower than the capital level specified for state-owned corporations;

b) For parent companies converted from independently-accounted subsidiaries of state-owned corporations or independent state-owned enterprises: it must not be lower than the capital level specified for state-owned enterprises.

3. When increasing or decreasing the registered capital, the parent company must promptly adjust the balance sheet and register with the business registration authority.

Article 44. Business Registration and Re-registration of Assets

1. The parent company and each subsidiary must re-register according to the relevant laws corresponding to the legal form of the company after the conversion.

2. A member company that was previously a single-member limited liability company or a joint-stock company does not need to re-register before the conversion.

3. Naming for the parent company converted from a state-owned corporation, a parent company in the parent-subsidiary structure, or a parent company in an economic group shall be carried out in accordance with the provisions of Decree No. 88/2006/NĐ-CP dated August 29, 2006 on business registration.

After obtaining the business registration certificate, the parent company and each subsidiary must complete the procedures to register ownership rights for assets transferred from the corporation or member companies at the competent state agency. All assets transferred in ownership from the corporation or member companies to the parent company and subsidiaries are exempt from stamp duty.

Article 45. Acceptance of Rights and Obligations of Converted State-Owned Corporation

The parent company and units reorganized from the conversion of a state-owned corporation established and invested in by the State shall be responsible for inheriting all legitimate rights, interests, and obligations of the corporation and converted member companies.

Article 46. Rights and Obligations of the State Owner towards the Parent Company after Conversion

For enterprises converted into a single-member limited liability company where the State is the owner, the organization entrusted as the owner shall exercise the rights and fulfill the obligations of the owner towards the parent company in accordance with Articles 64, 65, and 66 of the Enterprise Law and related laws.

Chapter V

IMPLEMENTING PROVISIONS

Article 47. Effectiveness

1. This Decree takes effect fifteen days after its publication in the Official Gazette and replaces Decree No. 153/2004/NĐ-CP dated August 9, 2004 of the Government on the organization, management of state-owned corporations, and the conversion of state-owned corporations and independent state-owned enterprises into a parent-subsidiary model.

2. State-owned corporations established and invested in by the State, independent state-owned enterprises, independent accounting member companies of state-owned corporations, parent companies of state-owned enterprises in the parent-subsidiary model, and parent companies in economic groups established by the Prime Minister's decision, which meet the conditions stipulated in Clause 3, Article 74 of the State Enterprise Law 2003 and the conditions stipulated in Article 36 of this Decree, must convert to the parent-subsidiary model before July 1, 2010.

3. State-owned corporations or independent state-owned enterprises, independent accounting member companies of state-owned corporations meeting the conditions specified in point a and point c, Clause 1, Article 36 or point a and point c, Clause 2, Article 36 of this Decree but not falling under the category of enterprises where the State holds 100% of the charter capital can convert to the parent-subsidiary model with the parent company being a joint-stock company; the procedures and steps for converting into a joint-stock company shall follow the current regulations on the shareholding reform of state-owned enterprises. The restructuring methods and conversion into the parent-subsidiary model may apply the provisions of Articles 37 and 38 of this Decree.

4. Enterprises stipulated in Clauses 2 and 3 of this Article currently undergoing the process of converting to the parent-subsidiary model shall continue to operate in accordance with the State Enterprise Law, this Decree, and related laws until June 30, 2010.

5. State-owned corporations established and invested in by the State that do not meet the conditions for conversion into the parent-subsidiary model must be restructured, change ownership, or dissolved; measures and deadlines for restructuring, changing ownership, or dissolution shall be in accordance with the Government's regulations on the establishment, restructuring, dissolution, and change of ownership of state-owned enterprises.

6. For state-owned corporations, independent state-owned enterprises, and independent accounting member companies of state-owned corporations that meet the conditions for conversion and restructuring into the parent-subsidiary model, where the parent company is held 100% by the State, when implementing the conversion, a single-member limited liability company must be formed as the parent company.

7. For state-owned corporations, independent state-owned enterprises, and independent accounting member companies of state-owned corporations that have been approved for conversion plans where the parent company is a state-owned enterprise but have not yet registered their business and re-registered their assets, they must adjust the formation plan for the parent company and register their business under the form of a single-member limited liability company owned by the State.

Article 48. Responsibilities for implementation and enforcement

1. The Ministries of Planning and Investment, Finance, Labor - Invalids and Social Affairs, and Home Affairs shall be responsible for guiding the implementation of this Decree.

The Ministry of Planning and Investment shall be responsible for monitoring the enforcement of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Committees of provinces and centrally governed cities, Chairpersons of Management Boards, and General Directors of state-owned economic groups and corporations shall be responsible for enforcing this Decree./.