Decree No. 151/2007/NĐ-CP On the organization and operation of cooperative groups

DECREE

Regarding the organization and operation of cooperative groups

____________________

THE GOVERNMENT

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

Based on the Civil Code 2005;

Considering the proposal of the Minister of Agriculture and Rural Development,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of regulation and applicable subjects

This Decree stipulates the organization and operation of cooperative groups formed on the basis of partnership contracts certified by the People's Committee of communes, wards, towns (hereinafter referred to collectively as the People's Committee of communes) involving three or more individuals, who contribute assets and labor to carry out specific tasks, share benefits, and jointly bear responsibility.

Article 2. Principles of organization and operation

Cooperative groups organize and operate according to the following principles:

1. Voluntary, equality, democracy, and mutual benefit;

2. Majority voting;

3. Financial autonomy, covering all operational expenses, and bearing responsibility with the group’s assets and members.

Article 3. Name and Emblem of the Cooperative Group

The cooperative group has the right to choose its name and emblem in accordance with the provisions of the law and without duplication with other cooperative groups' names and emblems within the commune, ward, or town.

Article 4. Establishment of a Cooperative Group

1. The establishment of a cooperative group is organized by individuals with the need to do so.

2. When establishing, the cooperative group discusses and agrees on the main contents as follows:

a) The purpose and activity plan of the cooperative group;

b) The content of the partnership contract;

c) The name and emblem (if any) of the cooperative group;

d) List of members;

đ) Electing a group leader and forming a management board (if deemed necessary);

e) Other related issues.

Article 5. Partnership Contract

1. The partnership contract is a written agreement between members, named as a partnership contract or another name but must comply with the provisions of Clause 2 of this Article.

2. Main contents of the partnership contract

a) Purpose, term of the partnership contract;

b) Surname, name, place of residence, signature of the group leader and members;

c) Contributed assets (if any); method of dividing profits among members;

d) Rights, obligations, and responsibilities of members, group leader, and management board (if any);

đ) Conditions for admitting new members and members leaving the cooperative group;

e) Conditions for dissolving the cooperative group;

g) Other agreements.

3. The content of the partnership contract may be amended or supplemented upon the consent of the majority of members.

Article 6. Certification of the Partnership Contract 

1. The People's Committee of the commune certifies or re-certifies (signs confirmation, stamps) the partnership contract or the amended and supplemented partnership contract and records it in the tracking book within no more than five working days from the date of receiving the partnership contract of the group that complies with the provisions of Article 5 of this Decree.

In case the People's Committee of the commune does not certify the partnership contract, it must respond in writing and clearly state the reasons for refusal.

2. In case the cooperative group operates and functions across communes, the group has the right to choose a place to certify the partnership contract that is convenient for the organization and operation of the cooperative group.

Chapter II

COOPERATIVE GROUP MEMBERS

Article 7. Conditions and procedures for admitting cooperative group members

1. Conditions for admitting members:

a) Individuals aged eighteen years or older, having full capacity for civil acts, voluntarily participating and agreeing with the contents of the partnership contract can become members of the cooperative group. An individual may be a member of multiple cooperative groups;

b) The partnership contract may specify additional criteria for cooperative group members.

2. Procedures for admitting new members:

a) Individuals submit an application to the group leader, stating their willingness to participate and commitment to implement the group's partnership contract;

b) The members' meeting examines, votes, and recognizes new members when the majority of members agree, except in cases where there are other agreements.

Article 8. Rights of Members

Members have the following rights:

1. Members have equal rights in participating in decisions regarding the cooperative group's affairs, regardless of the level of asset contribution by each member;

2. To enjoy profits and income derived from the cooperative group's activities according to the agreement;

3. To conduct inspections of the cooperative group's activities;

4. To leave the cooperative group under agreed conditions;

5. Other rights as agreed in the partnership contract, provided they do not contravene the law.

Article 9. Obligations of Members

Members have the following obligations:

1. To cooperate according to the principle of equality, mutual benefit, mutual assistance, and ensuring the common interests of the cooperative group;

2. To compensate the cooperative group for losses caused by their own fault;

3. To fulfill other obligations as agreed in the partnership contract, provided they do not contravene the law.

Article 10. Rights and Obligations of Members When Leaving the Cooperative Group

1. When leaving the cooperative group, members have the right to request the return of assets they contributed to the cooperative group, to receive their share of the group's common assets, except for non-divisible assets agreed by the majority of members. If dividing assets in kind affects the continued operation of the group, the assets will be valued in money for distribution;

2. When leaving the cooperative group, members must fulfill their obligations to the cooperative group as agreed.

Chapter III

ORGANIZATION AND OPERATION OF THE COOPERATIVE GROUP

Article 11. Meetings of the Cooperative Group

1. The cooperative group decides on its own to hold a general meeting of members once a year or more frequently.

2. The leader of the cooperative group convenes an extraordinary meeting when:

a) There are issues that require a meeting to resolve;

b) There is a request from the majority of members or the majority of management board members (if any).

Article 12. Rights of the Cooperative Group

1. The cooperative group has the right to choose industries and businesses that the law does not prohibit, operating without geographical administrative limitations within the commune where the cooperative group's partnership contract is certified. If the cooperative group operates in fields requiring a business license or a certificate of business eligibility, it must comply with the regulations on business licenses or certificates of business eligibility as prescribed by law.

2. Directly export, import, or engage in joint ventures and collaborations with domestic organizations and individuals, and foreign organizations and individuals to expand production and business operations in accordance with the law.

3. Enjoy support policies and participate in building and implementing plans, programs, and projects to support collective economic development; plans, programs, and projects for socio-economic development, job creation, and poverty reduction at the local level.

4. Entitled to open a separate account at a bank in accordance with the provisions of the law and the mechanism of the representative as stipulated in the cooperation agreement.

5. Entitled to conclude civil contracts.

6. To decide on the distribution of profits and revenues and the handling of losses of the cooperative group.

7. Other rights as recorded in the cooperation agreement but not contrary to the provisions of the law.

Article 13. Civil liability of the cooperative group

1. The cooperative group shall bear civil liability for the performance of civil rights and obligations established and performed by the representative acting on behalf of the cooperative group.

2. The cooperative group shall bear civil liability with the common assets of the group; if the assets are insufficient to fulfill the group's common obligations, the members shall be jointly and severally liable corresponding to their individual contributions of personal assets.

3. To implement agreements committed to members, organizations, and other individuals.

4. To fulfill responsibilities towards workers hired by the cooperative group in accordance with labor laws.

5. Other responsibilities as stipulated by law.

Article 14. Dispute resolution

1. Disputes among members of the cooperative group within the scope of the cooperation agreement shall be resolved through mediation at the cooperative group; if mediation fails, the dispute shall be resolved through the village community, the commune-level conciliation board, or by filing a lawsuit.

2. Disputes between the cooperative group and other individuals or organizations shall be resolved in accordance with the provisions of the law.

Article 15. Dissolution of the cooperative group

1. The cooperative group shall dissolve in the following cases:

a) Expiration of the term specified in the cooperation agreement;

b) Achievement of the purpose of cooperation;

c) Agreement among members to dissolve the cooperative group;

d) Dissolution of the cooperative group pursuant to a decision of the competent state authority in cases prescribed by law.

2. Within seven working days from the date of cessation of operations, the cooperative group must notify in writing about the cessation of its activities to the People's Committee of the commune where the cooperation agreement was certified.

3. Upon dissolution, the cooperative group must settle the group's common debts; if the group's common assets are insufficient to cover the debts, the members' personal assets will be used to settle the debts in accordance with Clause 2, Article 13 of this Decree. If all debts have been settled and there are remaining assets, these remaining assets shall be distributed among the members according to the proportionate value of their contributions to the group, except in cases where there are other agreements.

Chapter IV

MANAGEMENT OF THE COOPERATIVE GROUP

Article 16. Management of the cooperative group

1. The head of the cooperative group manages the common work of the cooperative group. Members of the cooperative group agree on the criteria and method for electing the head of the cooperative group.

2. In necessary cases, the cooperative group may elect a management board. The head of the cooperative group serves as the chairman of the management board. The number, criteria, and election method of the management board are carried out according to the agreement of the cooperative group members.

3. Any change in the head of the cooperative group must be recorded in the meeting minutes and notified in writing to the People's Committee of the commune that certified the cooperation agreement.

Article 17. Responsibilities of the head and management board of the cooperative group

1. The head of the cooperative group has the following responsibilities:

a) To represent the cooperative group in establishing civil transactions for the purposes of the cooperative group's activities;

b) To organize and manage the activities of the cooperative group.

2. Members of the management board have the following responsibilities:

a) To assist the head in managing the activities of the cooperative group;

b) To perform tasks assigned by the head.

Article 18. Representative of the cooperative group

1. The representative of the cooperative group in civil transactions is the head of the cooperative group. The head of the cooperative group may delegate certain tasks to members of the management board or members of the cooperative group in accordance with the law on delegation.

2. Civil transactions established and performed by the representative of the cooperative group for the purposes of the cooperative group's activities, based on the decision of the majority of cooperative group members, give rise to rights and obligations of the cooperative group.

3. Civil transactions established by persons without the right to represent the cooperative group shall be subject to the provisions of Article 145 of the Civil Code.

4. Civil transactions established and performed by the representative of the cooperative group beyond the scope of representation shall be subject to the provisions of Article 146 of the Civil Code.

Chapter V

ASSETS AND FINANCES OF THE COOPERATIVE GROUP

Article 19. Assets of the cooperative group

1. The assets of the cooperative group are formed from the following sources:

a) Contributions of cooperative group members including: tangible assets, money, negotiable instruments, and property rights;

b) Portion allocated from profits and revenues after tax for capital increase;

c) Jointly created assets and gifts or donations;

d) Other assets as prescribed by law.

The cooperative group needs to record separately those assets in kind that are not converted into value, distinguishing them into two types: assets contributed by each member and returned when that member leaves the cooperative group, and assets not distributed to members when they leave the cooperative group.

2. The management and use of the cooperative group's assets shall be carried out according to the agreed method. The disposal of production assets of the cooperative group must be agreed upon by all members; for other types of assets, it must be agreed upon by the majority of members.

3. The cooperative group's assets shall be inventoried and appraised periodically and recorded in the inventory report or the cooperative's accounting records according to the agreement.

Article 20. Financial and accounting work of the cooperative group

The financial work of the cooperative group must ensure transparency so that members can know, monitor, and check; the form and content of financial reports are decided by the members. Cooperative groups with common assets and joint financial activities need to maintain accounting records regarding the assets, capital, and business activities of the cooperative group in accordance with the guidance of the finance authority.

Article 21. Distribution of profits and revenues and handling of losses

1. Profits and revenues of the cooperative group are distributed to members and retained for the common accumulation of the group according to the agreement.

The cooperation contract specifies in detail the distribution of profits and income from the organization's activities after fulfilling tax obligations to the State (if any).

In the event of a loss, the members shall agree to contribute to cover the loss if the accumulated funds of the organization from previous years are insufficient to offset it.

The cooperation contract specifies in detail the handling of loss cases and risks.

Chapter VI

IMPLEMENTING PROVISIONS

Article 22. Effectiveness

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

Article 23. Responsibility for Implementation

The Ministry of Planning and Investment is responsible for monitoring and guiding the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for implementing this Decree./.