Decree No. 144/2006/NĐ-CP On Ho, Hui, Bieu, Phuong

DECREE

On Ho, Hui, Bieu, Phuong

___________

THE GOVERNMENT

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

BASED ON THE CIVIL CODE dated June 14, 2005;

CONSIDERING the proposal of the Minister of Justice.

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of application

THIS DECREE REGULATES THE FORMS OF HO, HUI, BIEU, PHUONG (HEREINAFTER REFERRED TO AS HO COLLECTIVELY), RIGHTS, OBLIGATIONS, AND RESPONSIBILITIES OF PARTICIPANTS IN HO.

Article 2. STATE POLICY ON HO

1. The lawful rights and interests of participants in ho aimed at mutual assistance among the people, as stipulated in this Decree and other relevant legal documents, shall be protected by law.

2. It is strictly prohibited to organize ho for usurious lending, fraud, abuse of trust, or other illegal acts to appropriate property from others.

Article 3. Definitions

In this Decree, the following terms are understood as follows:

1. The share of ho is the amount of money or other assets that has been determined according to the agreement which members must contribute in each opening period of ho. The share of ho must be tradable assets.

2. The opening period of ho is the timepoint determined according to the agreement of participating members during which each member receives their share of ho.

Article 4. TYPES OF HO

The forms of ho include interest-free ho and interest-bearing ho. Interest-bearing ho includes head-taker ho and commission ho.

Article 5. HEAD OF HO

The head of ho is the person who organizes and manages ho, collects shares of ho, and distributes those shares to members entitled to receive ho in each opening period until the end of ho, except where otherwise agreed. The head of ho must have full capacity for civil conduct.

Article 6. Member

MEMBER

Article 7. A member is a participant in ho who contributes shares of ho and is entitled to receive ho. A member may contribute one or more shares of ho in one ho.

FORM OF AGREEMENT ON HO

Article 8. The agreement on ho can be expressed orally or in writing. Written agreements on ho may be notarized or certified if the participants request it.

CONTENT OF THE AGREEMENT ON HO

Article 9. Depending on the type of ho, participants may agree on the following contents: head of ho, number of participants, share of ho, opening period of ho, method of contributing and receiving ho, rights and obligations of participants, liability for breach of obligations, transfer of shares of ho, withdrawal from ho, termination of ho, and other related matters.

BOOK OF HO

1. The head of ho must establish and keep the book of ho. In cases where there is no head of ho, participants may authorize one member to establish and keep the book of ho.

2. Depending on the type of ho, the book of ho may include the following contents:

a) Name and address of the head of ho and members in ho;

b) Share of ho, opening period of ho, method of contributing and receiving ho;

d) Transfer of chain share;

c) Amount of money or other assets contributed or received;

d) Withdrawal from ho and termination of ho;

e) Signature or thumbprint of members when contributing or receiving ho;

Article 10. f) Other contents related to the operation of ho.

INTEREST RATE

Chapter II

In the case of interest-bearing ho, the interest rate applicable to the share of ho shall be implemented in accordance with Article 476 of the Civil Code.

Article 11. INTEREST-FREE HO

Interest-free ho is ho wherein, according to the agreement between participants, the member entitled to receive ho receives their share of ho at the opening period without having to pay interest to other members. The member who has received ho is obligated to continue contributing ho so that other members can receive it until the last member receives ho.

Article 12. DETERMINATION OF ORDER OF RECEIVING HO

The order of receiving ho in interest-free ho is determined by drawing lots, unless otherwise agreed.

Article 13. OBLIGATIONS OF MEMBERS

1. To contribute their share of ho to the head of ho, if there is a head of ho, or to the member entitled to receive ho, as agreed.

2. To compensate for damages caused to other participants due to violation of obligations.

3. Other obligations as agreed.

4. In the absence of a head of ho, the member authorized to establish and keep the book of ho shall have the obligations stipulated in Clause 1 and Clause 5 of Article 15 of this Decree.

Article 14. RIGHTS OF MEMBERS

1. When the opening period arrives, the member entitled to receive ho has the right to receive their share of ho from the head of ho or other members in ho.

2. To protect their lawful rights and interests in cases where such rights and interests are violated.

3. To transfer their share of ho in accordance with Articles 309 to 317 of the Civil Code.

4. To withdraw from ho according to the agreement.

5. To request the head of ho or the keeper of the book of ho to allow them to view the book of ho and provide related information about ho.

6. Other rights as agreed.

Article 15. OBLIGATIONS OF THE HEAD OF HO

1. To establish and keep the book of ho and related documents.

2. To collect the shares of ho from members.

3. To distribute the shares of ho to members entitled to receive ho.

4. To pay on behalf of a member who fails to contribute their share of ho at the opening period, if so agreed.

5. To allow members to view the book of ho and provide related information about ho upon request.

6. Other obligations as agreed.

Article 16. RIGHTS OF THE HEAD OF HO

1. To require members in ho to contribute their share of ho.

2. To require the member entitled to receive ho to receive their share of ho at the opening period.

3. To require a member who failed to contribute their share of ho to repay it if the head of ho had paid on their behalf.

4. Other rights as agreed.

Chapter III

INTEREST-BEARING HO

Article 17. INTEREST-BEARING HO

Interest-bearing ho is ho wherein, according to the agreement between participants, the member entitled to receive ho receives their share of ho at the opening period and must pay interest to other members. The member who has received ho is obligated to continue contributing shares of ho so that other members can receive it until the last member receives ho.

ARTICLE 18. DETERMINATION OF THE MEMBER ENTITLED TO RECEIVE HO IN INTEREST-BEARING HO

1. The member entitled to receive ho in each opening period is the one who pays the highest interest, unless otherwise agreed.

2. In a single opening period, if multiple members pay the same level of interest and that level is the highest, these members will draw lots to determine who is entitled to receive ho, unless otherwise agreed.

3. A member who has received ho is not allowed to participate in paying interest in subsequent opening periods, except as provided in Clause 4 of this Article.

4. If a member has multiple shares of ho in one ho, that member has the right to pay interest until they have received ho corresponding to the number of shares they participated in within one ho.

Article 19. HEAD-TAKER HO

Head-taker ho is ho wherein, according to the agreement between participants, the head of ho receives all shares of ho in one opening period without having to pay interest to other members. In other opening periods, the member who pays the highest interest is entitled to receive ho and must pay interest to other members.

Article 20. Obligations of members in a rotating savings and credit association (ROSCA)

1. Contribute to the ROSCA.

2. Pay interest to other members when receiving their share.

3. Compensate participants if their breach causes damage.

4. Other obligations as agreed.

Article 21. Rights of members in a ROSCA

1. Propose the interest rate for each ROSCA period, except as provided in Clause 3, Article 18 of this Decree.

2. Receive interest from members who receive their share.

3. Rights as stipulated in Article 14 of this Decree.

Article 22. Obligations of the administrator in a ROSCA

The administrator in a ROSCA has obligations as prescribed in Article 15 of this Decree.

Article 23. Rights of the administrator in a ROSCA

1. Receive shares during one ROSCA period.

2. Require members who have not contributed their share to repay it if the administrator has contributed on their behalf.

3. Not pay interest to other members.

Article 24. Commission-based ROSCA

A commission-based ROSCA is one where, according to the agreement among participants, the administrator is responsible for collecting shares from contributing members to hand over to the member receiving their share. The member receiving their share must pay interest to other members and a commission to the administrator. The commission rate is agreed upon by the participants.

Article 25. Obligations of members in a commission-based ROSCA

1. Pay the commission to the administrator.

2. Obligations as stipulated in Article 20 of this Decree.

Article 26. Rights of members in a commission-based ROSCA

Members in a commission-based ROSCA have rights as stipulated in Article 21 of this Decree.

Article 27. Obligations of the administrator in a commission-based ROSCA

The administrator in a commission-based ROSCA has obligations as stipulated in Article 15 of this Decree.

Article 28. Rights of the administrator in a commission-based ROSCA

1. Receive commissions from members receiving their share.

2. Require members to contribute their shares.

3. To require a member who failed to contribute their share of ho to repay it if the head of ho had paid on their behalf.

Chapter IV

LIABILITY FOR BREACH OF OBLIGATIONS

Article 29. Liability of the administrator for failing to deliver shares to the member entitled to receive them

If the administrator collects shares from members but fails to deliver them to the member entitled to receive them, at the request of the entitled member, the administrator must deliver the collected shares and compensate for any damages incurred.

The administrator must pay interest on delayed delivery of shares at the agreed rate, or if there is no agreement or agreement cannot be reached, the basic interest rate published by the State Bank shall apply corresponding to the delay period at the time of delivery of the shares.

Article 30. Liability of members for failing to contribute

1. If a member fails to contribute their share when due, they must pay the outstanding amount until the end of the ROSCA and compensate for any damages incurred.

2. If a member fails to contribute their share and the administrator contributes on their behalf, the member must repay the delayed share and interest on the delayed share. The interest rate is agreed upon, or if there is no agreement or agreement cannot be reached, the basic interest rate published by the State Bank shall apply corresponding to the delay period at the time of repayment.

Article 31. Dispute Resolution

In case of disputes regarding the ROSCA or arising from the ROSCA, such disputes shall be resolved through negotiation, mediation, or at the request of one or more participants, the dispute shall be resolved by the court in accordance with civil procedural law.

Chapter V

IMPLEMENTING PROVISIONS

Article 32. Effectiveness

This Decree takes effect fifteen days from the date of publication in the Official Gazette./.