DECREE OF THE GOVERNMENT

Implementing detailed provisions of certain articles of

Law on Cooperatives 2003

 

THE GOVERNMENT

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

Pursuant to the Law on Cooperatives dated November 26, 2003;

At the proposal of the Minister of Planning and Investment,

                                           

DECREE:

Article 1. Scope of Regulation and Applicability

1. This Decree specifies detailed implementation of certain Articles of the Law on Cooperatives 2003.

2. This Decree applies to:

a) Cooperatives and cooperative unions in various sectors and fields of the national economy established, organized, and operated according to the Law on Cooperatives 2003;

b) Cooperatives and cooperative unions established, organized, and operated according to the Law on Cooperatives 1996 now transition to operating under the Law on Cooperatives 2003.

Article 2. Principles of organization and operation of cooperatives

1. Voluntary:

a) Individuals, households, legal entities, state officials meeting the conditions stipulated in Article 10 of this Decree, agree with the Charter of the cooperative and submit applications for joining or leaving the cooperative;

For members of cooperatives registered and operating under the Law on Cooperatives 1996, applications for joining the cooperative are exempted, but if they wish to leave, they must submit an application; 

b) The participation of a cooperative in a cooperative union must be approved by the General Assembly of Members through voting;

2. Democratic, equality, and transparency:

a) All members participate in managing the cooperative through voting and deciding issues of the cooperative. Each member's vote has equal value;

b) Members have the right to raise issues and request explanations from the Management Board and Supervisory Board regarding matters of concern. If not answered, members may bring the matter to the General Assembly for resolution;

c) The cooperative publicly discloses information to members at the General Assembly or periodically informs each member or group of members living in the same area directly or posts daily updates at the cooperative's headquarters about: results of production and business activities; establishment of funds; distribution of profits based on capital contributions and service usage levels; social contributions; rights and obligations of each member, except for trade secrets and production technology secrets as defined by the General Assembly;

3. Autonomy, responsibility, and mutual benefit:

a) The cooperative decides independently: selection of production and business plans; distribution of production and business results; establishment and level of fund contributions; wage levels for those working for the cooperative;

b) The cooperative independently chooses and decides: forms and timing of capital mobilization; active use of its own capital and assets; actively seeking markets and customers and signing contracts; implementing contracts and bearing legal responsibility for signed contracts;

c) The cooperative bears responsibility for risks during operations. Each member within the cooperative shares responsibility for cooperative risks within their capital contribution limits, jointly deciding on risk mitigation measures;

d) Cooperative members share benefits as prescribed in Clauses 1, 2, 3, 4, and 5 of Article 18 of the Law on Cooperatives 2003;

4. Cooperation and community development:

a) Cooperative members must foster a spirit of collective building and cooperation within the cooperative and in the broader community;

b) Cooperatives cooperate with each other in production, business, and in developing the cooperative movement.

Article 3. Rights of cooperatives

1. Cooperatives shall independently choose to operate in industries and trades that are not prohibited by law.

2. In cases where cooperatives operate in industries and trades with conditions:

a) For industries and trades requiring a business license, cooperatives may engage in such industries and trades from the date they obtain the business license.

b) The issuance of business licenses for industries and trades with conditions, as stipulated by law, shall be conducted independently from the issuance of business registration certificates for cooperatives.

c) For industries and trades with conditions but without a requirement for a license, cooperatives have the right to engage in such industries and trades from the moment they meet all required conditions and commit to fulfilling these conditions throughout their business operations. d) The legal representative of the cooperative shall be responsible for complying with the business conditions as prescribed. If the cooperative engages in business without meeting the necessary conditions, the legal representative of the cooperative shall bear legal responsibility for such business activities.

3. In cases where operating in industries and trades requires a statutory capital:

a) Cooperatives may operate in industries and trades requiring statutory capital when they possess the statutory capital as prescribed by law. Authorities responsible for managing statutory capital and authorities responsible for confirming statutory capital shall provide specific guidance on the amount and procedures for confirming statutory capital for industries and trades requiring statutory capital.

b) The legal representative of the cooperative shall be responsible for the truthfulness and accuracy of the confirmed statutory capital at the time of establishment and during the course of operation. The heads of authorities responsible for managing statutory capital and the heads of authorities confirming statutory capital shall jointly bear responsibility for the accuracy of the confirmed statutory capital.

4. In cases where operating in industries and trades requires a professional certificate, the cooperative must have at least one member of the Management Board holding a professional certificate.

5. Cooperative inventions, utility models, industrial designs, trademarks, geographical indications, trade secrets, technological know-how, and other intellectual property objects of the cooperative shall be protected according to the provisions of the law.

6. Cooperatives have the right to lodge complaints against acts violating the rights and legitimate interests of the cooperative. State agencies shall resolve such complaints according to their authority in accordance with the Law on Complaints and Petitions and other relevant laws.

7. Cooperatives have other rights as provided for in Clauses 2, 3, 4, 5, 6, 7, 8, 10, and 12 of Article 6 of the Law on Cooperatives 2003.

Article 4. Social Insurance applicable to cooperatives

The mandatory social insurance contribution for cooperatives is regulated as follows:

1. Cooperatives shall base their production and business conditions to establish and adopt at the General Assembly of Members the wage and salary levels to be paid to members and regular employees working for the cooperative. These wage and salary levels must be registered with the provincial or centrally-administered city labor management agency where the cooperative's main office is located and publicly announced within the cooperative.:

a) Cooperatives, members, and regular employees receiving wages and salaries from the cooperative shall implement mandatory social insurance contributions according to the Labor Code.

b) Members and employees not subject to mandatory social insurance contributions shall participate in voluntary social insurance contributions according to the Labor Code.

2. Members who are not subject to mandatory social insurance shall participate in voluntary social insurance in accordance with the provisions of the Labor Code.

Article 5. Founders

1. Are Vietnamese citizens, aged 18 years or older, having full capacity for civil acts as prescribed by the Civil Code; representing households or legal entities with sufficient authority, understanding laws related to cooperatives, and affirming in writing their commitment to establish and develop the cooperative initiated by themselves.

2. The founders report in writing to the People's Committee of the commune where the main office of the cooperative is planned to be located regarding the establishment, location of the office, production and business direction, operational plan of the cooperative, while conducting promotional and mobilization activities for individuals, households, legal entities, and state officials who wish to join the cooperative; developing production, business directions; drafting the Charter and promoting other necessary tasks to organize the founding assembly of the cooperative.

Article 6. Establishing management and executive bodies of the cooperative

1. For cooperatives establishing a single body for both management and operation:

a) The number of members of the Management Board and Supervisory Board is decided by the Founding Assembly of the cooperative based on the number of members of the cooperative at the time of establishment. During the course of operation, the General Meeting of Members decides on increasing or decreasing the number of members of the Management Board and Supervisory Board as appropriate and reports in writing to the business registration authority;

b) The Founding Assembly or the General Meeting of Members directly elects the Management Board and the Cooperative Director from among the members of the Management Board; elects the Supervisory Board and the Head of the Supervisory Board from among the members of the Supervisory Board;

c) The Cooperative Director concurrently serves as the Head of the Management Board and has rights and duties as stipulated in Clause 2, Article 27 and Points b, c, đ Clause 2, Article 28 of the Law on Cooperatives 2003;

d) The Founding Assembly or the General Meeting of Members decides on the number of Deputy Directors of the cooperative for the Management Board to select from among the members of the Management Board or cooperative members.

2. For cooperatives establishing separate management and executive bodies:

a) The number of members of the Management Board and Supervisory Board is implemented according to the guidance provided in Point a, Clause 1 of this Article;

b) The Founding Assembly or the General Meeting of Members directly elects the Management Board and the Head of the Management Board from among the members of the Management Board; the Supervisory Board and the Head of the Supervisory Board from among the members of the Supervisory Board;

c) The Management Board appoints or dismisses the Cooperative Director (a member of the cooperative) or hires and terminates the contract of the Cooperative Director (an external person) according to the resolution of the General Meeting of Members;

d) The Cooperative Director has the rights and duties as stipulated in Clause 3, Article 28 of the Law on Cooperatives 2003;

đ) The number of Deputy Directors and the selection of Deputy Directors of the cooperative is implemented according to the guidance provided in Point d, Clause 1 of this Article.

Article 7. Drafting the Charter, Internal Regulations, and Rules of Procedure of the cooperative

1. Each cooperative must have its own Charter when established. The cooperative Charter must comply with Article 12 of the Law on Cooperatives 2003, the model guidelines for drafting the cooperative Charter prescribed by the Government, and be suitable for specific conditions regarding the industry and business operations of the cooperative.

2. The founders draft the cooperative Charter and submit it to the Founding Assembly for discussion and approval.

3. Each article and clause of the Charter is discussed and approved according to the principle of majority with more than 50% of cooperative members participating in the meeting agreeing. In case of voting, if the number of votes in favor and against are equal, then the vote of the side hosting the meeting is decisive.

4. Contents not agreed upon by more than 50% of cooperative members participating in the meeting will continue to be discussed in subsequent meetings until the required number of votes in favor as stipulated in Clause 3 of this Article is reached before being recorded in the Charter.

5. In cases where detailed regulations are needed for specific activities of the cooperative that are not covered by the Charter, the Management Board drafts specific Internal Regulations and Rules of Procedure for each activity, submitting them to the General Meeting of Members for approval.

Article 8. Business Registration

1. The cooperative has the right to choose the business registration authority at the provincial or district level. During its operation, the cooperative may change its place of business registration to suit its operational conditions. When changing the place of business registration, the cooperative must submit a withdrawal application to the original business registration authority and then submit it to the new business registration authority. at provincial or district registration agencies. During its operation, a cooperative may change its business registration location to suit its operational conditions. When changing the business registration location, the cooperative must submit a request to the original registration agency to withdraw its file for submission to the new registration agency.

2. The representative who establishes the cooperative or the legal representative of the cooperative shall submit the business registration dossier to the chosen business registration authority and shall be responsible for the accuracy and truthfulness of the business registration dossier.

3. Cooperatives that meet the business registration requirements stipulated in  Clause 1, Article 15 of the 2003 Law on Cooperatives shall have the registration agency chosen by the cooperative issue a business registration certificate to the cooperative in accordance with point a, Clause 2, Article 15 of the 2003 Law on Cooperatives.

3. If the cooperative meets the conditions for business registration as stipulated in Clause 1, Article 15 of the Law on Cooperatives 2003, the business registration authority chosen by the cooperative must issue a business registration certificate for the cooperative according to Point a, Clause 2, Article 15 of the Law on Cooperatives 2003. and notify periodically between relevant agencies as follows:

 

4. The results of business registration must be reported and announced periodically between authorities as follows:

a) Monthly, the district-level business registration authority reports to the provincial-level business registration authority about the business registration situation of cooperatives in the district. The provincial-level business registration authority informs the subordinate district-level business registration authorities about the business registration situation of cooperatives registered with the provincial-level business registration authority. Business registration agencies at all levels shall report to the competent state management agencies at the same level about the cooperative's business registration status and changes in the cooperative's activities within their jurisdiction.

b) Quarterly, the business registration authorities at all levels inform the competent state management agencies at the same level about the business registration situation and changes in cooperatives within their jurisdiction.

1. A cooperative may establish a subsidiary enterprise under the model of a limited liability company in accordance with the provisions of the Enterprise Law.

Article 9. Establishment of Subsidiary Enterprises under Cooperatives

1. The cooperative may establish subsidiary enterprises in the form of a limited liability company according to the provisions of the Enterprise Law.

Article 10. Conditions for Becoming a Member

1. For individuals:

2. The cooperative is the sole owner of the limited liability company.

b) Submit an application to join the cooperative; agree with the Charter, Internal Regulations, and Rules of Procedure of the cooperative;

3. The legal status, rights, and obligations of the cooperative towards the limited liability company shall be implemented in accordance with the provisions of the Enterprise Law and other relevant legal documents.;

d) Individuals who do not meet the conditions specified in points a, b, and c of Clause 1 of this Article, individuals currently being pursued for criminal responsibility, individuals serving a prison sentence, individuals deprived of their professional qualifications by a court due to committing crimes as prescribed by law, and individuals undergoing compulsory education or medical treatment are not eligible to be members of cooperatives.

Article 10. Conditions for Becoming a Member

a) Being a Vietnamese citizen, at least 18 years old, with full civil capacity;

b) Meet the conditions stipulated in points b and c of Clause 1 of this Article;

b) Submitting an application to join the cooperative; agreeing with the Charter, Internal Regulations, and Rules of Procedure of the cooperative;;

d) State officials and civil servants who do not meet the conditions specified in points a, b, and c of Clause 2 of this Article; state officials and civil servants working in fields involving state secrets, officers, non-commissioned officers, and professional military personnel in armed forces units c) Contributing capital as prescribed in the cooperative's Charter; contributing labor directly through management, participation in production activities, providing advice, knowledge, business, and scientific and technical services to the cooperative based on the cooperative's needs;

3. For households:

d) Individuals who do not meet the conditions stipulated in Points a, b, and c of Clause 1 of this Article; individuals currently being pursued for criminal responsibility; individuals currently serving a prison sentence; individuals deprived of their professional qualifications by the court due to crimes as prescribed by law; and individuals currently undergoing decisions to be placed in educational facilities or medical institutions cannot be members of the cooperative.

b) The household must appoint a representative  2. For officials and civil servants:

a) Obtaining written consent from the head of the direct managing agency; This shall not be a member of the cooperative society.

4. For legal entities:

a) They are organizations and agencies (excluding social funds and charitable funds) as prescribed by the Civil Code and the Cooperative Society Charter; of b) They must submit an application to join the cooperative society as stipulated in point b, Clause 1 of this Article. The person signing the application must be the legal representative of the legal entity and participate in the activities of the cooperative society, fulfilling the obligations of a member as prescribed by the Cooperative Society Charter. The legal representative of the legal entity may delegate another individual who is part of the leadership structure of the legal entity to represent them in the cooperative society if the Cooperative Society Charter does not provide otherwise;

c) Contribute capital and labor as prescribed by the Cooperative Society Charter. State administrative bodies and units under the people's armed forces shall not use state assets and public funds to contribute capital to the cooperative society;

d) Legal entities that do not meet the conditions prescribed in points a, b, and c of Clause 4 of this Article shall not be members of the cooperative society.;

Article 11. Organizing the General Assembly of Members

1. Cooperative societies with more than 100 members may organize the General Assembly of Members.

2. Cooperative societies with between 100 and 500 members shall have a participation rate of at least 30% of the total number of members; cooperative societies with more than 500 members shall have a participation rate of at least 20% of the total number of members.

3. The Cooperative Society Charter shall specify the procedures for electing representatives to attend the General Assembly of Members.

Article 12. Organizing an Extraordinary General Meeting of Members

1. The Management Board shall convene an extraordinary general meeting of members in the following cases:

a) To resolve issues exceeding the authority of the Management Board or the Supervisory Board;

b) If at least one-third of the members in the cooperative society submit separate applications or sign a joint application sent to the Management Board or the Supervisory Board requesting the convening of an extraordinary general meeting to resolve the issue raised in the application. Within 15 days from the date of receipt of the complete request applications from at least one-third of the members, the Management Board must convene an extraordinary general meeting of members.

2. The Supervisory Board shall convene an extraordinary general meeting of members in the following cases:

a) If within 15 days from the date of receipt of the complete applications from at least one-third of the members as stipulated in point b, Clause 1 of this Article, the Management Board does not convene an extraordinary general meeting of members, then the Supervisory Board must convene an extraordinary general meeting of members to resolve the issues raised in the applications;

b) When there is a violation of laws on cooperatives, the Charter, Internal Regulations, Rules of Procedure of the cooperative society, and Resolutions of the General Meeting of Members, and the Supervisory Board has requested but the Management Board does not implement or implements without result the measures to prevent such violations.

3. In case the Supervisory Board does not convene an extraordinary general meeting of members as prescribed in Clause 2 of this Article, the members shall submit an application to the business registration agency for the cooperative society requesting intervention. Within three months from the date the business registration agency issues a notice requesting the cooperative society to convene an extraordinary general meeting of members, if the cooperative society still does not organize such a meeting, the business registration agency shall report to the People's Committee where the business registration certificate was issued to initiate compulsory dissolution procedures for the cooperative society in accordance with Clause 2 of Article 21 of this Decree.

b) When there is a violation of laws on cooperatives, the Charter, Internal Regulations, and Rules of Procedure of the cooperative, and the Resolution of the General Assembly of Members, the Supervisory Board has requested but the Management Board does not implement or fails to effectively implement measures to prevent such violations.

3. In cases where the Supervisory Board does not convene an extraordinary General Assembly of Members as required by Clause 2 of this Article, members may submit a request to the business registration agency to intervene. If the cooperative still fails to convene an extraordinary General Assembly of Members within three months from the date the business registration agency issues a notice, the business registration agency shall report to the People's Committee at the place where the business registration certificate was issued to initiate compulsory dissolution procedures for the cooperative in accordance with Clause 2, Article 21 of this Decree.

Article 13. Termination of Membership Status in a Cooperative

The termination of membership status in cases prescribed in Clause 1 shall be handled as follows: Article 20 of the Law on Cooperatives 2003 shall be resolved as follows:

1. For the cases prescribed in Points a, b, c, and d of Clause 1, the Management Board shall examine, prepare files, and proactively resolve them. The results of the handling and the files shall be submitted to the nearest General Assembly of Members for approval;

2. For the case prescribed in Point d of Clause 1, the Management Board shall prepare a file to expel the member and submit it to the General Assembly of Members for decision;

3. Rights and obligations of members in cases prescribed in Clauses 1 and 2 of this Article shall be resolved according to the provisions of the Cooperative Charter.

Article 14. Capital Contribution of Members; Increase, Decrease in Registered Capital of the Cooperative

1. Capital contribution may be in the form of Vietnamese currency, foreign currency, assets, land use rights, intellectual property rights, and other negotiable instruments:

a) In the case of capital contribution in foreign currency, the value of the contribution must be converted into Vietnamese Dong at the exchange rate published by the State Bank of Vietnam at the time of contribution;

b) In the case of contribution with assets, land use rights, intellectual property rights, and other negotiable instruments, they must be converted into Vietnamese Dong and implemented according to specific conditions stipulated in the Cooperative Charter. The determination of the value of the capital contribution in these cases shall be agreed upon by the Management Board and the contributor in accordance with market prices at the time of contribution. If necessary, a Valuation Committee of the cooperative may be established, with members representing the Management Board, Supervisory Board, and members to ensure objectivity, transparency, and fairness.

Assets, land use rights, intellectual property rights, and other negotiable instruments contributed as capital become common property of the cooperative;

c) In the case of capital contribution through labor wages, the value of the contribution is calculated based on the total amount of unpaid wages that the cooperative owes the worker up to the time of contribution.

2. The maximum level of capital contribution of a member shall be stipulated in the Cooperative Charter but shall not exceed 30% of the registered capital of the cooperative at the time of the member's contribution.

3. Time of initial capital contribution, amount of initial capital contribution, and deadline for full capital contribution registration of members:

a) For newly established cooperatives, members must make their initial capital contribution when the cooperative receives its business registration certificate;

b) For cooperatives currently operating, members must make their initial capital contribution after the General Assembly of Members approves the decision to admit them;

c) The initial contribution amount shall not be less than 50% of the registered capital;

d) The deadline for full capital contribution registration of members shall be a maximum of one year from the date of the initial contribution.

4. Members shall be refunded their capital contributions when terminating their membership status according to Clause 2 of Article 31 of the Law on Cooperatives 2003. The form and deadline for refunding capital contributions of members must comply with the provisions of the Cooperative Charter regarding capital contributions, Point b of Clause 1 of this Article, and relevant laws.

 

5. Matters concerning the increase or decrease in registered capital of the cooperative:

 

a) The registered capital of the cooperative increases when: The annual General Assembly of Members decides to adjust the minimum capital contribution level to raise additional capital contributions from all members, or one or some members contribute additional capital within the limit of a single member's maximum contribution not exceeding 30% of the cooperative's registered capital;

b) The registered capital of the cooperative decreases due to the refunding of members' capital contributions, but the minimum capital contribution level shall not be increased. If the registered capital decreases and there is a member whose capital contribution exceeds 30% of the cooperative's registered capital, the adjustment of that member's capital contribution shall be carried out at the nearest General Assembly of Members.

c) When there is a change in registered capital, the cooperative must supplement the Cooperative Charter and notify the business registration authority and the state management agency responsible for statutory capital (if the business involves industries requiring statutory capital).

Article 15. Receiving and using state subsidies and capital from domestic and foreign organizations and individuals      

1. Cooperatives may receive and use state subsidies and capital from domestic organizations and individuals according to the agreement of the parties, in compliance with current laws.

2. The use of state subsidies shall be as follows:

a) Capital non-repayable grants OF THE STATE for cooperatives, shall be included in the undivided capital of the cooperative; capital Such assistance shall be included in the undivided capital of the cooperative;

b) Capital repayable state grants to cooperatives without interest shall become debts of the cooperative to the state; capital Such assistance shall become a debt of the cooperative to the State.   

3In cases where foreign elements are involved in the received capital, the receipt and use of such capital must comply with Vietnamese law and international treaties to which the Socialist Republic of Vietnam is a party. national international treaties or agreements to which the Socialist Republic of Vietnam is a party.

Article 16. Cooperative operating capital

1. Cooperative operating capital includes: member contributions; legitimate transferred capital when merging or consolidating cooperatives; joint venture contributions; cooperative reserves; idle funds of the cooperative; state subsidies and capital from domestic and foreign organizations and individuals; gifts; loans from credit institutions and banks; occupied capital and other legally raised capital.

2. Cooperatives shall specify the management and use of each type of capital in accordance with the Law on Cooperatives 2003 and related legal provisions in their Charter or Management Regulations on capital management and use.

Article 17. Establishment of cooperative funds

1. Post-tax profits of cooperatives shall be used to offset previous year losses (if any) as prescribed by relevant laws. The remaining portion may be used to establish mandatory funds: production development fund and reserve fund. The ratio of establishment of these two funds shall be decided by the Member Assembly, but the minimum extraction rate from post-tax profit shall not be less than 20% for the production development fund and 5% for the reserve fund.

2. Whether to establish other funds or not shall be decided by the Member Assembly based on the cooperative's conditions.

3. The purpose, management methods, and usage of cooperative funds must be clearly defined in the Charter or Financial Management Regulations and related legal provisions.

Article 18. Cooperative assets

1. Cooperative assets formed from cooperative operating capital shall be managed and used in accordance with the Charter or Financial Management Regulations, resolutions of the Member Assembly, and relevant financial management laws, including purchasing, selling, transferring, giving, or other forms.

2. Infrastructure projects, architectural structures, cultural and social welfare facilities serving the community within the area, formed from the production development fund; welfare fund; non-repayable grants from the state, domestic and foreign organizations and individuals; gifts are undivided assets of the cooperative.

Article 19. Handling assets and capital of cooperatives upon dissolution

1. For undivided assets of the cooperative as stipulated in Clause 2, Article 18 of this Decree, transfer to local authorities for management and use for community purposes. The remaining value of these assets shall be handled as follows:

a) The portion of asset value formed from non-repayable State capital assistance shall be transferred to the local budget where the cooperative is headquartered.

b) The portion of asset value formed from sources such as member capital and effort, non-repayable assistance from domestic and foreign organizations and individuals, gifts, and donations shall be decided by the General Assembly of Members on whether to transfer to the local budget or not. In case the General Assembly decides not to transfer, the local budget must repay the cooperative the remaining value of these assets.

2. For other assets, including intellectual property rights contributed by members to the cooperative, handle according to the provisions of the Charter consistent with relevant laws. Specifically, land assets formed from member contributions through land use rights and land allocated by the State for the cooperative's use shall be handled in accordance with the law on land.

3. Procedure for handling capital and assets of the cooperative upon dissolution:

a) Recover all assets and capital owed or held in trust by members and outside organizations and individuals.

b) Liquidate existing assets, raw materials, products, and goods (excluding undivided assets).

c) Pay secured debts as prescribed by law.

d) Pay dissolution costs, including expenses for asset recovery and liquidation and debt collection.

đ) Pay unsecured debts.

e) Pay to the State: taxes and other amounts payable to the budget; repayable grants without interest; loans with interest (if any).

f) Return member contributions according to the Charter and additional member contributions.

If the total capital at the time of dissolution is less than the total amount due, prioritize payment of the amounts specified in point c and d; the remaining payments shall be made in proportion to the remaining capital over the total amount due for payments specified from point đ to point f.

4. Handling of remaining capital and funds after paying off all debts and dissolution costs of the cooperative shall be decided by the General Assembly of Members in accordance with the cooperative's Charter and relevant laws.

Article 20. Handling Losses

Losses incurred by the cooperative in a year shall be handled as follows:

1. Reduce losses by collecting from individuals and organizations responsible under the law and the cooperative's Charter.

2. Reduce losses by insurance compensation from insurance organizations that the cooperative has insured with.

3. The cooperative uses pre-tax profits to offset previous year losses as provided for in the Enterprise Income Tax Law; if insufficient, the cooperative uses post-tax profits to offset losses according to the decision of the General Assembly of Members. 4. If the above measures are still insufficient to offset losses, the remaining losses shall be covered by the reserve fund according to the decision of the General Assembly of Members, the Charter, or the Financial Management Regulations of the cooperative. dated November 29, 2006 and the Law amending and supplementing several articles of the Law on Tax Administration 5. When all the above revenues have been used but are still insufficient to cover actual losses, the remaining losses shall be carried forward to the next year in accordance with tax laws.

If the revenues collected under points 1 and 2 of this Article exceed the losses, the remaining amount shall be included in the cooperative's extraordinary income.

When all revenues from the sources mentioned in Clauses 1 and 2 of this Article are insufficient to cover the actual losses, the remaining losses shall be carried forward to the next year in accordance with tax laws.

If the revenues from the sources mentioned in Clauses 1 and 2 of this Article exceed the losses, the excess amount shall be recorded as extraordinary income of the cooperative.

Article 21. Compulsory Dissolution of Cooperatives

1. A cooperative shall be subject to compulsory dissolution if it falls under one of the cases stipulated in Clause 2, Article 42 of the Law on Cooperatives 2003.

2. The procedure for compulsory dissolution of cooperatives shall be as follows:

a) The agency issuing business registration for the cooperative shall submit the compulsory dissolution dossier to the People's Committee at the same level;

b) The People's Committee shall issue a decision on dissolution and establish a Dissolution Board. The Chairman of the Dissolution Board shall be a representative of the People's Committee; members shall be representatives of: the provincial cooperative alliance (if the cooperative is a member of the alliance), the local authority where the cooperative is headquartered, the Cooperative Management Board, the Cooperative Supervisory Board, and cooperative members;

c) The Board shall carry out the dissolution procedures for the cooperative according to the People's Committee’s decision and dissolve itself upon completion of the dissolution process.

3. The dissolution expenses shall be sourced from the remaining financial resources of the cooperative. In case of insufficiency, funds from the local cooperative development support fund (at the provincial level) shall be utilized.

Article 22. Cooperative Federations

1. A cooperative federation is an economic organization established voluntarily by cooperatives within the same industry or different industries, contributing capital and jointly bearing responsibility for financial obligations and operational costs of the federation. A cooperative federation operates according to the organizational and operational principles of cooperatives.

2. A cooperative federation must consist of at least four cooperatives.

3. A cooperative federation must have a Charter regarding its organization and management that complies with the provisions of the Law on Cooperatives.

4. A cooperative federation may engage in all industries and trades not prohibited by law. When engaging in conditional industries or trades requiring statutory capital or professional certificates, the federation shall comply with the regulations applicable to cooperatives as stipulated in Clauses 2, 3, and 4 of Article 3 of this Decree.

5. The legal representative of a cooperative federation must be an individual who is a member of one of the constituent cooperatives.

6. Founders of a cooperative federation:

a) Are the legal representatives of the cooperatives initiating the establishment of the federation and participating in its activities.

b) The founders of the cooperative federation must report in writing to the district People's Committee where the main office of the federation is planned to be located about the establishment, direction, and operational plan of the federation; simultaneously, they must promote and mobilize other cooperatives interested in joining the federation; develop production and business plans; draft the federation's Charter; and advance other necessary tasks to organize the founding assembly of the federation.

c) The founders of the cooperative federation shall elect or appoint a representative to prepare and submit the business registration dossier of the federation to the provincial business registration agency.

Article 23. Working Relationship between Ministries, Agencies Equivalent to Ministries, Provincial People's Committees, and the Cooperative Alliance

1. The cooperative alliance is an economic and social organization established voluntarily by cooperatives and cooperative federations. The cooperative alliance is organized by industry and sector. The central cooperative alliance and provincial cooperative alliances are established. - The central cooperative alliance is organized and operates according to the Charter decided by the Prime Minister; provincial cooperative alliances are organized and operate according to the Charter decided by the provincial People's Committee Chairperson. The Charter of the provincial cooperative alliance must be consistent with the Charter of the central cooperative alliance.

The central cooperative alliance is organized and operates according to the Charter decided by the Prime Minister; provincial cooperative alliances are organized and operate according to the Charter decided by the provincial People's Committee Chairperson. The Charter of the provincial cooperative alliance must be consistent with the Charter of the central cooperative alliance.

2. Ministries, agencies equivalent to ministries, and provincial people's committees shall create conditions for the cooperative alliance to:

a) Participate in researching and formulating systems, policies, planning, programs for cooperative development; 

b) Lead or participate in implementing programs and projects related to collective economic development; directly implement or participate in implementing training courses for cooperative management cadres according to the state's plan;

c) Attend and present their opinions at government meetings (for the central cooperative alliance) and provincial people's committee meetings (for provincial cooperative alliances) on collective economic development and policies for cooperatives;

d) Provide legal normative documents, guidelines, and policies related to cooperative development;

đ) Promote the Law on Cooperatives, relevant laws on cooperative development, and disseminate exemplary and advanced cooperative models;

e) Participate in bilateral and multilateral international cooperation activities related to cooperative development;

f) Support with material infrastructure, funding, and necessary conditions for the cooperative alliance to operate.            

3. The cooperative alliance has the responsibility to implement and be subject to supervision and inspection by state agencies regarding the tasks in which the alliance participates in the coordination relationship.

Article 24. State Management of Ministries and Ministerial-Level Agencies over Cooperatives 1. Contents of state management:

a) Submit to the Government and the Prime Minister strategies and plans for developing cooperatives within their respective sectors and fields of management;

b) Submit to the Government and the Prime Minister mechanisms and policies to encourage and support the development of cooperatives within their respective sectors and fields of management; 

c) Guide mechanisms and policies to encourage and support the development of cooperatives within their respective sectors and fields of management;

d) Guide the application and transfer of science and technology; provide information, marketing, and trade promotion services for cooperatives;

đ) Establish systems and organize training and capacity building for managerial and operational positions in cooperatives;

e) Direct the summary of practical experiences, and expand successful cooperative models;

f) Organize and direct the implementation of international cooperation on cooperatives;

g) Inspect the implementation of laws related to cooperatives.

2. Responsibilities of Ministries and Ministerial-Level Agencies:

a) The Ministry of Planning and Investment assists the Government in uniformly managing state administration over cooperatives nationwide;

b) Ministries such as Agriculture and Rural Development, Trade, Industry, Transport, Construction, Fisheries, Education and Training uniformly manage cooperatives within their respective fields of responsibility;

c) The State Bank of Vietnam guides internal credit system and principles of operation within cooperatives; uniformly manages the People's Credit Fund;

d) The Ministry of Home Affairs guides the establishment of specialized machinery for state management over cooperatives of Ministries, Ministerial-Level Agencies, provincial people's committees;

đ) The Ministry of Finance guides financial policies for cooperatives; allocate training and capacity-building funds for managers and positions within cooperatives;

e) The Ministry of Labor, Invalids and Social Affairs guides social insurance contributions for cooperative members according to Article 4 of this Decree;

f) The Ministry of Natural Resources and Environment guides land allocation and leasing for cooperatives;

g) The Ministry of Science and Technology guides the transfer of technology into cooperatives, guides cooperatives in applying new technologies, and the intellectual property protection regime for cooperatives.

3. Based on their functions, tasks, and authorities, Ministries and Ministerial-Level Agencies shall specifically define the organizational structure to assist Ministers and Heads of Ministerial-Level Agencies in performing state management functions over cooperatives under their purview.

Article 25. State Management at Various Levels over Cooperatives.

1. Responsibilities of provinces and centrally-administered cities (hereinafter referred to as provincial level): the People's Committee a) Implement and guide the execution of strategies and plans for developing cooperatives in their jurisdictions;

b) Direct and inspect the implementation of training programs and capacity-building for managerial and operational positions in cooperatives carried out in their jurisdictions according to the division of labor by the Government and the Prime Minister; the People's Committee c) Coordinate with the Fatherland Front, the Federation of Cooperatives, and the Farmers' Union at the provincial level in planning and directing the dissemination of cooperative laws and new cooperative models to members and those wishing to join cooperatives; implement programs and projects for developing cooperatives in the province;

d) Direct the provincial business registration agency to consider issuing and revoking business registration certificates for cooperatives; examine and issue or revoke operating licenses for branches, representative offices, and units under cooperatives and cooperative unions registered at the provincial level;

đ) Support cooperatives in administrative procedures for restructuring, dissolution, and bankruptcy for cooperatives registered at the provincial level;e) Resolve complaints and denunciations of cooperative unions and cooperatives regarding violations of cooperative laws within their jurisdiction; protect the legitimate rights and interests of cooperative unions, cooperatives, members, and workers in cooperatives;

f) Propose the Government and the Prime Minister to amend and supplement policies for developing cooperatives.

2. Responsibilities of districts, urban districts, towns, and cities under provinces (hereinafter referred to as district level):

a) Implement plans to disseminate and popularize laws on cooperatives and new cooperative models among members and those wishing to join cooperatives; inspect, summarize, and evaluate the situation of cooperative development in their districts;

b) Direct the business registration agency to consider issuing and revoking business registration certificates for cooperatives; examine and issue or revoke operating licenses for branches, offices, and units under cooperatives registered at the district level;

fc) Support cooperatives in administrative procedures for restructuring, dissolution, and bankruptcy for cooperatives registered at the district level;

d) Resolve complaints and denunciations of cooperatives regarding violations of cooperative laws within their jurisdiction; protect the legitimate rights and interests of cooperatives, members, and workers in cooperatives according to the law for cooperatives registered at the district level. the People's Committee 3. Responsibilities of communes, wards, and towns (hereinafter referred to as commune level):

a) Organize the dissemination and popularization of laws on cooperatives and the Party and State's policies on developing cooperatives at the commune level;

b) Based on legal provisions, create conditions for those who wish to establish cooperatives to easily establish and operate smoothly.

2. For cooperatives and cooperative unions that have registered for business before the Cooperative Law of 2003 comes into effect:

a) They do not need to re-register but must amend and supplement the Cooperative Charter according to Article 12 of the Cooperative Law of 2003 and must be approved at the nearest member assembly from the date this Decree takes effect;

b) When changing the place of business registration, they must re-register according to the provisions of the Cooperative Law of 2003. the People's Committee commune, ward, town (hereinafter referred to collectively as commune level):

a) Organize the dissemination and popularization of laws on cooperatives and the Party and State policies on cooperative development at the commune level;

b) Based on legal provisions, create favorable conditions for those who wish to establish cooperatives to easily set up and operate smoothly.

Article 26.  Implementation Provisions

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

2. For cooperatives and cooperative federations that had registered their businesses before the 2003 Law on Cooperatives came into effect:

a) They need not re-register but must amend and supplement their Charters in accordance with Article 12 of the 2003 Law on Cooperatives and obtain approval at the nearest General Assembly of Members, starting from the effective date of this Decree;

b) When changing their business registration location, they must re-register in accordance with the 2003 Law on Cooperatives;

c) When changing or supplementing business sectors and industries, the cooperative must notify the business registration authority where it has registered its business activities and comply with the provisions of Clauses 2, 3, and 4 of Article 3 of this Decree if the business sectors and industries are subject to conditions; the business sectors and industries must have statutory capital; the business sectors and industries must have a professional practice certificate.

3. All previous regulations that conflict with this Decree are hereby abolished.

4. Cooperatives that are not organized and operate in accordance with the Law on Cooperatives 2003 and this Decree shall voluntarily dissolve or be compulsorily dissolved in accordance with Article 42 of the Law on Cooperatives 2003 and Article 21 of this Decree.

5. For People's Credit Funds, in addition to the provisions of this Decree, the Government shall issue separate regulations.

6. The Ministry of Planning and Investment shall coordinate with relevant ministries and sectors to guide the implementation of this Decree.

7The Ministers, Heads of agencies equivalent to ministries, the People's Committee Chairmen of/.