DECREE NO. 125/2004/ND-CP Amending and Supplementing Certain Provisions of Decree No. 03/2000/ND-CP dated February 3, 2000 guiding the implementation of certain provisions of the Enterprise Law.

DECREE

Regarding amendments and supplements to some Articles of Decree No. 03/2000/NĐ-CPdated February 3, 2000 guiding the implementation of certain provisions of the Enterprise Law

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THE GOVERNMENT

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

Pursuant to the Enterprise Law dated June 12, 1999;

At the proposal of the Minister of Planning and Investment,

DECREE:

Article 1. Amending and supplementing some articles of Decree No. 03/2000/NĐ-CP dated February 3, 2000 of the Government guiding the implementation of certain provisions of the Enterprise Law as follows:

1. Article 2 shall be supplemented with Point 9a as follows:

"9a) The Insurance Business Law on December 9, 2000".

2. Article 3 shall be supplemented with point (m) in Clause 1 as follows:

"m) Engaging in marriage brokerage services involving foreign elements".

3. Article 4 shall be amended and supplemented with the end of Clause 3 as follows:

"The founders of the enterprise and the legal representative of the enterprise shall be responsible for complying with the business conditions as prescribed. If the enterprise conducts business without meeting the required conditions, then the members of the limited liability company with two or more members, the Chairman of the company or member of the Board of Management of the single-member limited liability company, member of the Board of Management of the joint-stock company, partner of the partnership, owner of the individual enterprise, and the legal representative of the enterprise shall jointly and severally bear responsibility under the law for such business activities".

4. Clause 2 of Article 5 shall be amended and supplemented as follows:

"2. Members of the limited liability company with two or more members, the Chairman of the company or member of the Board of Management of the single-member limited liability company, member of the Board of Management of the joint-stock company, partner of the partnership, owner of the individual enterprise, and the legal representative of the enterprise shall jointly and severally be responsible for the truthfulness and accuracy of the registered capital when establishing the enterprise and during its business operations".

5. Article 6 shall be supplemented as follows:

a) Supplement Points g, h, and i in Clause 2 as follows:

"g) Production, processing, bottling, packaging, buying and selling plant protection chemicals." "h) Operating design services for transportation means." "i) Buying and selling cultural relics, state secrets".

b) Supplement Clauses 4 and 5 as follows:

"4. The Ministries of Justice, Health, Fisheries, Agriculture and Rural Development, Construction, Finance, Transport, and the Ministry of Culture, Sports and Tourism shall guide the procedures, conditions, deadlines, and authorities for issuing practice certificates as stipulated in Clause 2 of this Article; they shall implement state management over the issuance of such practice certificates".

"5. A person holding a practice certificate may only register in the business registration dossier of one business establishment and must be responsible for adhering to professional and ethical standards in the business activities of that establishment".

6. Article 8 shall be supplemented with Clauses 3 and 4 as follows:

"3. An individual may only be the owner of one sole proprietorship or a partner in one partnership".

"4. Foreign organizations, foreigners who are not permanent residents in Vietnam have the right to contribute capital or purchase shares according to the Domestic Investment Promotion Law.

Capital contribution or share purchase shall be agreed upon and decided by the relevant parties and must be registered for changes in the charter capital and membership at the business registration authority where the enterprise has registered.

Foreign organizations, foreigners contributing capital or purchasing shares of enterprises operating under the Enterprise Law have the right to authorize Vietnamese citizens to serve as members of the Board of Directors corresponding to their shareholding or nominate individuals to the Board of Management in accordance with the law or the company's articles of association."

7. Article 9 is amended and supplemented as follows:

a) Add a paragraph at the end of Clause 1 as follows:

"The Ministry of Planning and Investment shall take the lead and coordinate with relevant agencies to compile a list of entities prohibited from establishing enterprises nationwide as provided for in Clauses 6 and 7 of Article 9 of the Enterprise Law. This list must be regularly updated and notified to the business registration authority".

b) Amend Clause 6 as follows:

"6. Leaders and professionals in state-owned enterprises have the right to manage other enterprises as representatives authorized by the state-owned enterprise or competent state agency; if they personally invest in another enterprise, they shall not manage that enterprise".

8. Article 10 is amended and supplemented as follows:

a) Point d Clause 2 shall be amended and supplemented as follows:

"d) Name, address, identification number, passport number, business registration certificate number, or establishment decision number of each member and the amount of capital contributed for limited liability companies with two or more members; name, address, business registration certificate number, or establishment decision number of the owner of a single-member limited liability company".

b) Point o Clause 3 shall be amended and supplemented as follows:

"o) Name, address, identification number, passport number, business registration certificate number, or establishment decision number, and signature of all founding shareholders and the legal representative of the company. Shareholders may agree to include other contents in the company’s articles of association that do not contravene the law".

c) Add a paragraph at the end of Clause 4 as follows:

"Partners may agree to include other contents in the company’s articles of association that do not contravene the law".

9. Article 11 shall be amended and supplemented as follows:

a) Point a Clause 2 shall be amended and supplemented as follows:

"a) Name, address, identification number, passport number, business registration certificate number, or establishment decision number of each member".

b) Point a Clause 3 shall be amended and supplemented as follows:

"a) Name, address, identification number, passport number, business registration certificate number, or establishment decision number of each founding shareholder."

10. Supplement Article 11a and 11b as follows:

"Article 11a. Detailed guidance on certain rights and obligations of members of a limited liability company.

1. For a limited liability company with two members, if the member who is the legal representative is criminally prosecuted, detained, has fled from their place of residence, suffers from mental illness, or suffers from other diseases that prevent them from recognizing and controlling their actions, or is deprived of their professional qualifications by the Court for committing crimes such as smuggling, producing counterfeit goods, illegal business operations, tax evasion, defrauding customers, and other crimes as prescribed by law, then the remaining member shall automatically become the legal representative of the company until a new decision is made.

2. In cases where an individual member of a limited liability company is criminally prosecuted, detained, sentenced to imprisonment, or deprived of their professional qualifications by the Court for committing crimes such as smuggling, producing counterfeit goods, illegal business operations, tax evasion, defrauding customers, and other crimes as prescribed by law, that member must authorize another person to participate in the Management Board to manage the company.

3. In cases where the company does not repurchase shares, cannot pay for the repurchased shares, or cannot agree on the price for repurchasing shares as stipulated in Article 31 of the Enterprise Law, the member requesting the company to repurchase shares has the right to transfer their shares to another person. In this case, the transfer does not necessarily have to be carried out according to the provisions of Article 32 of the Enterprise Law.

4. In cases where one or more members die or are declared dead by the Court and own at least 65% of the charter capital of the company, the remaining members have the right to request the convening of a meeting of the Management Board to decide whether the heirs of the deceased member or those declared dead will become members of the company or whether the company will repurchase or transfer the shares of the deceased member according to the law.

5. A member who has not fully paid and on time the committed capital contribution must pay interest on the unpaid capital contribution to the company at the highest lending rate of commercial banks until the full payment is made.

Article 11b. Convening a Meeting of the Management Board.

1. For a limited liability company with one member owning more than 65% of the charter capital of the company, the Company Charter must specify a different ratio less than 35% of the charter capital that minority members must hold to have the right to request the convening of a meeting of the Management Board to resolve issues within their authority.

2. In cases where a member or group of members specified in Clause 2 of Article 29 of the Enterprise Law requests the convening of a meeting of the Management Board, the request must be in writing and include the following main contents:

a) The name, address of the main office or the name, place of permanent registration of the member or group of members making the request; the share capital contribution of the member, each member in the group.

b) The reason for requesting the convening of a meeting of the Management Board and the issue to be resolved.

c) Suggestions for the agenda of the meeting.

d) Signature of each member or authorized representative of the member organization.

3. The Chairman of the Management Board prepares the content, convenes, and chairs the meeting of the Management Board. The Chairman of the Management Board may convene a meeting of the Management Board at any time if deemed necessary for the management and operation of the company's business activities.

In cases where there is a request from a member or group of members specified in Clause 2 of Article 29 of the Enterprise Law, the Chairman of the Management Board must convene a meeting of the Management Board within 15 days from the date of receipt of the written request, if the request contains all the required contents as prescribed and the issue proposed for resolution falls within the authority of the Management Board.

If the request does not meet the above conditions, the Chairman of the Management Board must notify in writing the member or group of members making the request and other members within 7 days from the date of receipt of the request.

If the request meets the conditions prescribed but the Chairman of the Management Board does not convene a meeting of the Management Board as prescribed, the member or group of members making the request has the right to convene a meeting of the Management Board.

All reasonable costs for convening and conducting the meeting of the Management Board will be reimbursed by the company.

4. Invitations to meetings can be made by postal mail, fax, email, or telephone; invitations must clearly announce the agenda, time, and location of the meeting.

5. Each member has the right to propose additional items to the agenda, if approved by the representatives of at least 51% of the votes of all attending members.

11. Clause 4 of Article 14 is amended as follows:

''4. The General Confederation of Labor of Vietnam, industry-level trade union organizations, and provincial-level trade unions directly under the central government'';

12. Add Article 18a as follows:

''Article 18a. Disclosure of Related Interests of Members and Managers in Limited Liability Companies and Joint Stock Companies.

1. Members of limited liability companies with two or more members, representatives of organizational members in the Management Board, the Chairman of the company, members of the Board of Directors, General Director (Managing Director) must declare:

a) Enterprises, including the enterprise name, main office, business registration certificate number, in which they personally hold shares or stocks; the proportion and time of holding those shares or stocks.

b) Enterprises, including the enterprise name, main office, business registration certificate number, business sectors, run by their spouse, children, adopted children.

c) Enterprises, including the enterprise name, main office, business registration certificate number, business sectors, in which their spouse, children, adopted children hold more than 40% of the charter capital.

Those required to declare under this clause must supplement or change the declaration within 7 days from the date the supplemented or changed information becomes effective.

2. Declarations prescribed in Clause 1 of this Article must be kept at the main office of the enterprise. All members, representatives of organizational members of limited liability companies, members of the Board of Directors, Supervisory Board, Managing Director, and General Director have the right to view the declarations at any time if deemed necessary''.

13. ADD Article 21a and 21b as follows:

"Article 21a. The share capital of founding shareholders must be fully contributed immediately after receiving the business registration certificate. Founding shareholders are liable for the company's debts and other financial obligations within the scope of the value of their shares registered in the list of founding shareholders filed with the business registration authority."

"Article 21b. Implementing the rights of shareholders or groups of shareholders as stipulated in Clause 2 of Article 53 of the Enterprise Law.

1. Shareholders voluntarily forming a group meeting the conditions specified in Clause 2 of Article 53 of the Enterprise Law (hereinafter referred to as shareholders or groups of shareholders under Clause 2 of Article 53) to nominate individuals to the Board of Directors must notify all attending shareholders at the opening of the General Meeting of Shareholders.

2. The General Meeting of Shareholders decides on the number of individuals that shareholders or groups of shareholders under Clause 2 of Article 53 have the right to nominate to the Board of Directors and the Supervisory Board. In cases where the number of candidates nominated by the groups of shareholders is lower than the number of candidates they are entitled to nominate according to the decision of the General Meeting of Shareholders, the remaining candidates will be nominated by the Board of Directors, the Supervisory Board, and other shareholders.

3. Shareholders or groups of shareholders under Clause 2 of Article 53 have the right to request the convening of a General Meeting of Shareholders in cases where the Board of Directors seriously breaches its management duties as stipulated in Article 86 of the Enterprise Law; makes decisions exceeding the granted authority or other cases specified in the Company’s Articles of Association. The request must be in writing and include the following main contents:

a) Name, principal place of business or name, place of permanent residence registration of the shareholder.

b) Number of shares and the time of registration of each shareholder, total number of shares of the entire group of shareholders and the ownership ratio in the total number of shares of the company.

c) Violations and specific obligations breached by the Board of Directors, the extent of the violations or decisions made by the Board of Directors exceeding its authority.

d) Suggestions for issues to be resolved. Attached to the request must be documents and evidence regarding the violations of the Board of Directors, the extent of the violations or decisions exceeding its authority.

4. Shareholders or groups of shareholders under Clause 2 of Article 53 have the right to propose issues to be included in the agenda of the General Meeting of Shareholders. The convener of the General Meeting of Shareholders includes this proposed issue in the planned agenda and content of the meeting if the proposal meets the conditions stipulated in Clauses 2 and 3 of Article 73 of the Enterprise Law; the proposal is officially added to the agenda and content of the meeting if approved by the General Meeting of Shareholders.

5. Shareholders or groups of shareholders under Clause 2 of Article 53 have the right to request the Supervisory Board to inspect specific issues related to the management and operation of the company when deemed necessary. The request must be in writing and include the following main contents:

a) Name, principal place of business or name, place of permanent residence registration of the shareholder.

b) Number of shares and the time of registration of each shareholder, total number of shares of the entire group of shareholders and the ownership ratio in the total number of shares of the company.

c) Issues to be inspected and the purpose of the inspection.

The Supervisory Board must conduct the inspection within seven days from the date of receipt of the request if the requesting shareholders or group of shareholders meet the shareholding requirements as stipulated in Clause 2 of Article 53 and the request contains the required contents as stipulated herein.

After completing the inspection, the Supervisory Board must notify in writing the results of the inspection to the Board of Directors and the requesting shareholders or group of shareholders; the notification must clearly state the legality, rationality, and errors, and suggest corresponding solutions to address them, if any, in the inspected issue; report all shareholders at the nearest General Meeting of Shareholders.

14. ADD Article 36a as follows:

"Article 36a. Implementing state management over enterprises.

1. Ministries, ministerial-level agencies, and government agencies within the scope of their assigned tasks and powers are responsible for:

a) Issuing guiding documents within their authority regarding the conditions for conducting business in regulated industries and professions, statutory capital, and professional certificates; managing compliance with business conditions for regulated industries and professions within their state management authority.

b) Promoting and disseminating laws and regulations concerning regulated industries and professions and their business conditions, laws and regulations concerning professional certificates, and laws and regulations concerning statutory capital.

c) Developing and guiding methods of organizing management for regulated industries and professions, industries and professions requiring professional certificates, and industries and professions requiring statutory capital; supervising and inspecting the implementation of management by provincial People's Committees and their affiliated agencies for business conditions in regulated industries and professions.

d) Developing and guiding methods of environmental protection, pollution control, and treatment.

đ) Developing national standards, product quality standards, and service standards; supervising and inspecting the management of national standards and product quality standards and service standards.

e) Developing and guiding methods of organizing food safety management, occupational safety, and health.

2. People's Committees of provinces and centrally governed cities shall be responsible for:

a) Organizing coordination between Departments, specialized agencies directly under them, and district-level People's Committees in providing information about enterprises, resolving investment and development difficulties and obstacles within their jurisdiction; in inspecting and auditing enterprises as prescribed by law;

b) Registering businesses and directing the management of enterprises and individual business households based on their business registration content.

c) Directing Departments, specialized agencies directly under them, and district-level People's Committees to implement legal provisions and corresponding guidance from ministries, ministerial-level agencies, and government agencies on taxation, management of business conditions, product quality, service quality, food safety, occupational safety and health, environmental pollution control; directly handling or recommending competent authorities to handle violations of state management regulations in these areas."

d) Business registration agency organization; deciding the staffing of provincial business registration agencies; organizing business registration in accordance with the provisions of the law and the guidance of the Ministry of Planning and Investment; directing and guiding the People's Committees of districts and towns to handle administrative violations in business registration.

Article 2. Effectiveness

This Decree shall take effect fifteen days after its publication in the Official Gazette.

All previous regulations contrary to this Decree are hereby abolished.

The Minister, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of People's Committees of provinces and centrally governed cities shall be responsible for implementing this Decree./.