Decree No. 19/2019/NĐ-CP On Ho, Hui, Bieu, Phuong

DECREE

On Ho, Hui, Bieu, Phuong

Pursuant to the Government Organization Law dated June 19, 2015;

Pursuant to the Civil Code dated November 24, 2015;

At the proposal of the Minister of Justice;

The Government promulgates the Decree on Ho, Hui, Bieu, Phuong.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates principles for organizing Ho, Hui, Bieu, Phuong (hereinafter referred to as Ho); conditions for becoming members and organizers of Ho; joining and withdrawing from Ho; agreements regarding Ho; order of receiving Ho, interest rates; rights, obligations, and legal responsibilities of members and organizers of Ho.

Article 2. Applicability

This Decree applies to:

1. Participants in a Ho include members and organizers.

2. Other agencies, organizations, and individuals related to the matter.

Article 3. Principles of Organizing Ho

1. The organization of Ho must comply with the basic principles of civil law as stipulated in Article 3 of the Civil Code.

2. The organization of Ho can only be carried out for the purpose of mutual assistance among participants in the Ho relationship.

3. It is not allowed to organize Ho for lending at high interest rates, fraudulently appropriating assets, abusing trust to appropriate assets, illegally raising capital, or other violations of the law.

Article 4. Definitions

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

1. A Ho is a Ho formed based on specific agreements among participants regarding time, amount of Ho, contribution methods, receipt methods, rights, and obligations of the organizer (if any) and members.

2. Members are those who participate in the Ho, contribute to the Ho, and receive Ho and pay interest (if any).

3. An organizer is the person who organizes and manages the Ho, collects contributions, and distributes them to members entitled to receive Ho during each opening period until the end of the Ho. The organizer may also be a member of the Ho.

4. The amount of Ho is the sum of money or other property (hereinafter referred to as money) determined by agreement that each member must contribute during each opening period.

5. The opening period is the time determined by agreement among participants when members contribute their shares and some members receive Ho.

6. A Ho without interest is a Ho where members receive their shares when the opening period arrives and do not have to pay interest to other members.

7. A Ho with interest is a Ho where members receive their shares when the opening period arrives and must pay interest to other members.

8. A Ho with commission is a Ho with interest or a Ho without interest where members receiving Ho must pay a commission to the organizer according to the level agreed upon by participants.

Article 5. Conditions for Becoming a Member

1. A member is a person aged eighteen years or older and not in cases of losing capacity for civil acts, being restricted in capacity for civil acts, or having difficulties in recognizing and controlling behavior as provided for in the Civil Code.

A person aged fifteen years or older but under eighteen years old may be a member if they have personal property, and if using immovable or movable property to join the Ho requires registration, such person must obtain consent from their legal representative.

2. Other conditions as agreed upon by participants in the Ho.

Article 6. Conditions for Becoming an Organizer

1. An organizer is a person aged eighteen years or older and not in cases of losing capacity for civil acts, being restricted in capacity for civil acts, or having difficulties in recognizing and controlling behavior as provided for in the Civil Code.

2. In cases where members organize the Ho themselves, the organizer is the person elected by more than half of the total number of members, except where members have agreed otherwise.

3. Other conditions as agreed upon by participants in the Ho.

Article 7. Form of Agreement on Chain Participation

1. The agreement on chain participation shall be in writing. The written agreement on chain participation shall be notarized or certified if the participants request.

2. In case the agreement on chain participation is amended or supplemented, the amended or supplementary document must comply with the provisions of Clause 1 of this Article.

Article 8. Content of the Written Agreement on Chain Participation

1. The written agreement on chain participation shall include the following main contents:

a) Full name, identification number or citizen identification number or passport number; date of birth; place of residence of the chain leader (the place where the chain leader usually resides or the current place of residence if the usual place cannot be determined);

b) Number of members, full name, identification number or citizen identification number or passport number, date of birth, place of residence of each member;

c) Chain share;

d) Duration of chain participation, opening period;

đ) Contribution and withdrawal procedures;

2. In addition to the contents prescribed in Clause 1 of this Article, the written agreement on chain participation may include the following contents:

a) Commission rate for the chain leader in the case of commission;

b) Interest rate in the case of interest;

c) Obligation to provide collateral or other measures to ensure the performance of obligations by the chain leader;

d) Transfer of chain share;

đ) Joining, withdrawing from, or terminating chain participation;

e) Liability for breach of obligations;

g) Other contents agreed upon.

Article 9. Joining Chain Participation

Except in cases where there is another agreement, a person can become a new member of the chain when:

1. There is consent from the chain leader and all members.

2. They contribute their full share according to the agreement at the time of joining.

Article 10. Withdrawing from Chain Participation

1. A member who has withdrawn their share can withdraw from the chain but must contribute any unpaid shares and hand them over to the chain leader or the bookkeeper in the absence of a chain leader as stipulated in Clause 1 of Article 12 of this Decree.

2. The withdrawal of a member who has contributed shares but has not yet withdrawn their share shall be carried out as follows:

a) They shall receive back their contributed shares according to the agreement. If there is no agreement, the withdrawing member shall receive back their contributed shares at the end of the chain; if there is a valid reason, they shall receive back their contributed shares at the time of withdrawal.

b) The withdrawing member must return part of the interest received (if any) and fulfill other obligations according to the agreement; if causing damage, they must compensate according to the Civil Code.

3. In the event that a participant in the chain dies, the rights and obligations established in the chain relationship shall be resolved according to the law on inheritance. The participation of the heir in the chain shall be carried out according to the agreement between the heir and the participants in the chain.

Article 11. Termination of Chain Participation

1. The chain terminates when it falls under one of the following circumstances:

a) By agreement of the participants in the chain;

b) The purpose of participating in the chain by the members has been achieved;

c) Other cases as provided by law.

2. Upon termination of the chain, the rights and obligations of the participants in the chain shall be implemented according to the agreement on chain participation and the provisions of the Civil Code.

Article 12. Family Ledger

1. The head of the family must establish and keep the family ledger, except in cases where there is an agreement for one member to establish and keep the family ledger. In cases where the family does not have a head, members may agree to entrust one member with establishing and keeping the family ledger.

2. The family ledger shall contain the following contents:

a) The contents of the agreement on the family as stipulated in Clause 1, Article 8 of this Decree;

b) The date of contribution and the amount contributed by each member;

c) The date of withdrawal and the amount withdrawn by the withdrawing member;

d) The signature or thumbprint of the member when contributing and withdrawing;

đ) Other contents related to the operation of the family.

Article 13. Receipt

When contributing, withdrawing, receiving interest, paying interest, or performing other related transactions, members have the right to request the head of the family or the person who establishes and keeps the family ledger to issue a receipt for that transaction.

Article 14. Notification of Organizing the Family

1. The head of the family must notify in writing the People's Committee of the commune where they reside about organizing the family in any of the following cases:

a) Organizing the family with the value of shares in one opening period from VND 100 million upwards;

b) Organizing two or more families.

2. Contents of the notification:

a) Name, ID number or citizen identification card number or passport number, date of birth, place of residence of the head of the family;

b) Start and end time of the family;

c) Total value of shares at the opening period;

d) Total number of members.

3. If information about the family has been notified according to the provisions of Clause 1 and Clause 2 of this Article and there is a change, the head of the family must notify in writing the People's Committee of the commune where they reside about the change.

4. If the head of the family fails to fulfill the obligation prescribed in Clause 1 of this Article, they will be subject to administrative penalties as provided by law.

Chapter II

RIGHTS AND OBLIGATIONS OF MEMBERS AND HEAD OF THE FAMILY

Article 15. Rights of Members

1. Members in a non-profit family have the following rights:

a) To contribute one or more shares in one opening period;

b) To withdraw;

c) To transfer part or all of their share to another person in accordance with the Civil Code;

d) To request the head of the family or the person keeping the family ledger to view, copy the family ledger and provide relevant information about the family;

đ) To request the head of the family to return the share of a member who did not contribute their share on time, except in cases where there is a different agreement;

e) To request the head of the family to fulfill their obligations as the head of the family as stipulated in Article 18 of this Decree;

g) To request other members to fulfill their obligations as members as stipulated in Article 16 of this Decree;

h) The rights of members as stipulated in Clause 1, Articles 7, 9, 10, and 13 of this Decree;

i) To perform the notification as prescribed in Article 14 of this Decree if the head of the family does not perform it;

k) Other rights as provided by law and by the agreement on the family.

2. Members in a profit-making family have the following rights:

a) The rights stipulated in Clause 1 of this Article;

b) To propose the interest rate in each opening period, except in cases stipulated in Clause 3, Article 20 of this Decree;

c) To withdraw before other members if they propose the highest interest rate in the opening period, except in cases where there is a different agreement;

d) To enjoy interest from the withdrawing member.

3. Members in a commission-earning family have the following rights:

a) The rights stipulated in Clause 1 of this Article if the family is non-profit, or the rights stipulated in Clause 2 of this Article if the family is profit-making;

b) To agree on the level of commission earned by the head of the family.

Article 16. Obligations of Members

1. Members in a non-interest association have the following obligations:

a) To contribute to the association according to the agreement;

b) To notify new place of residence to other participants in the association in case of change;

c) To continue contributing shares for other members to claim until the last member claims their share if they have claimed their share before others;

d) The obligations of members in implementing the provisions of Article 10 and Clause 2 of Article 11 of this Decree;

đ) In case there is no head of the association, the member assigned to establish and keep the association's ledger shall fulfill the obligations stipulated in Clause 1 of Article 12, Clause 5 and Clause 6 of Article 18 of this Decree.

2. Members in an interest-bearing association have the following obligations:

a) The obligations specified in Clause 1 of this Article;

b) To pay interest to members who have not yet claimed their shares when they claim them.

3. Members in a commission-based association have the following obligations:

a) The obligations specified in Clause 1 of this Article if it pertains to a non-interest association or the obligations specified in Clause 2 of this Article if it pertains to an interest-bearing association;

b) To pay the commission amount to the head of the association when claiming their share according to the agreement.

Article 17. Rights of the Head of the Association

1. The head of a non-interest association has the following rights:

a) To collect shares from members;

b) To demand that a member who does not contribute their share repay the share if the head has contributed on behalf of that member;

c) The rights of the head in implementing the provisions of Clause 1 of Article 7, Article 9 and Article 10 of this Decree;

d) Other rights agreed upon.

2. The head of an interest-bearing association has the following rights:

a) The rights stipulated in Clause 1 of this Article;

b) To claim shares in the first opening period and not having to pay interest to other members if the head is also a member, except in cases where there is a different agreement.

3. The head of a commission-based association has the following rights:

a) The rights stipulated in Clause 1 of this Article if the family is non-profit, or the rights stipulated in Clause 2 of this Article if the family is profit-making;

b) To receive commissions from members who claim their shares.

Article 18. Obligations of the Head of the Association

1. To notify members about the new place of residence in case of change.

2. To provide full information about the number of associations; shares, opening periods; the number of members in each association that they manage to those wishing to join the association.

3. To hand over shares to members who claim them at each opening period.

4. To pay on behalf of members who do not contribute their shares at the opening period, except in cases where there is a different agreement.

5. To allow members to view, copy the association's ledger and provide related information about the association when requested.

6. To send notifications as prescribed in Clause 1 of Article 14 of this Decree.

7. The obligations stipulated in Clause 1 of Article 12 and Article 13 of this Decree.

8. Other obligations agreed upon or as prescribed by law.

Chapter III

ORDER OF CLAIMING SHARES AND INTEREST RATES

Section 1
ORDER OF CLAIMING SHARES

Article 19. Order of Claiming Shares in Non-Interest Associations

1. The order of claiming shares at each opening period is determined through drawing lots, voting, selection or other methods agreed upon by the participants in the association.

2. If the participants in the association do not have an agreement, the order of claiming shares will be determined through drawing lots.

Article 20. Order of Claiming Shares in Interest-Bearing Associations

1. The member claiming shares in each opening period is the one offering the highest interest rate, except in cases where there is a different agreement.

2. In a single opening period where multiple members offer the same interest rate which is the highest, these members will draw lots to determine the member claiming shares, except in cases where there is a different agreement.

3. A member who has already claimed shares may not offer an interest rate in subsequent opening periods, except in cases stipulated in Clause 4 of this Article.

4. In cases where a member contributes multiple shares in each opening period, this member has the right to offer an interest rate up to the point of claiming shares corresponding to the number of shares contributed by that member in one opening period.

Section 2
INTEREST RATES

Article 21. Interest Rate in Profit-Sharing Joint Ventures

1. The interest rate in profit-sharing joint ventures shall be agreed upon by the members of the joint venture or proposed by each member to receive the joint venture at each opening period but shall not exceed 20% per year of the total value of the shares they must contribute minus the value of the shares already contributed over the remaining time of the joint venture. In cases where the maximum interest rate mentioned above is adjusted by the competent authority as stipulated in Clause 1, Article 468 of the Civil Code, the adjusted maximum interest rate shall apply.

2. If the interest rate agreed upon or proposed by each member to receive the joint venture at each opening period exceeds the maximum interest rate prescribed in Clause 1 of this Article, such excess interest rate shall be invalid.

Article 22. Interest Rate in Case of Late Contribution or Late Delivery of Shares

1. In cases where, at the opening period, the joint venture owner does not deliver or delivers insufficient shares to the member entitled to receive them, and the member who has not received the joint venture does not contribute their share or contributes insufficiently, they must pay interest on the amount delayed for the corresponding delay period.

The interest rate arising from late contribution or late delivery of shares shall be determined according to the agreement of the parties but shall not exceed the maximum interest rate prescribed in Clause 1 of Article 21 of this Decree of the delayed amount over the delay period. If there is no agreement, the interest rate shall be determined at 50% of the maximum interest rate prescribed in Clause 1 of Article 21 of this Decree of the delayed amount over the delay period.

2. In cases where, at the opening period, the member who has received the joint venture does not contribute their share or contributes insufficiently, they must pay interest as follows:

a) In cases where the joint venture does not generate profit, the interest rate shall be determined according to the agreement but shall not exceed the maximum interest rate prescribed in Clause 1 of Article 21 of this Decree of the delayed contribution amount over the delay period. If there is no agreement, the interest rate shall be determined at 50% per year of the maximum interest rate prescribed in Clause 1 of Article 21 of this Decree of the delayed contribution amount over the delay period.

b) In cases where the joint venture generates profit, the interest rate shall be determined according to the provisions of Clause 5, Article 466 of the Civil Code for profit-generating joint ventures.

Chapter IV

LEGAL LIABILITY OF THE JOINT VENTURE OWNER AND MEMBERS

Article 23. Liability of the Joint Venture Owner for Not Delivering or Insufficiently Delivering Shares to Members Entitled to Receive Them

In cases where, at the opening period, the joint venture owner does not deliver shares to the member entitled to receive them, the joint venture owner shall bear responsibility for that member as follows:

1. Fulfilling the obligations prescribed in Clauses 3 and 4 of Article 18 of this Decree.

2. Paying interest on the delayed amount delivered to the member entitled to receive the joint venture according to the provisions of Clause 1 of Article 22 of this Decree.

3. Bearing penalties in cases where participants in the joint venture have agreed on penalty clauses as stipulated in Article 418 of the Civil Code.

4. Compensating for damages (if any).

Article 24. Liability of Members Who Do Not Contribute Their Shares

In cases where, at the opening period, a member does not contribute their share or contributes insufficiently, that member shall bear responsibility for the joint venture owner as follows:

1. Repaying the amount that the joint venture owner has contributed on behalf of the member.

2. Paying interest on the delayed contribution amount according to the provisions of Article 22 of this Decree.

3. Bearing penalties in cases where participants in the joint venture have agreed on penalty clauses as stipulated in Article 418 of the Civil Code.

4. Compensating for damages (if any).

Article 25. Dispute Resolution and Handling of Violations

1. In cases of disputes regarding the family fund or arising from the family fund, such disputes shall be resolved through negotiation, mediation, or by requesting the court to resolve them in accordance with the provisions of the law.

2. The head of the family fund, members, individuals, and organizations related have the right to request competent authorities to handle administrative violations or pursue criminal responsibility against persons who engage in usurious lending, fraudulently appropriating assets, misappropriating assets through abuse of trust, illegally raising capital, or other acts of violating the law when participating in family fund relationships.

Chapter V
IMPLEMENTING PROVISIONS

Article 26. Effective date

1. This Decree takes effect from April 5, 2019.

2. Decree No. 144/2006/NĐ-CP dated November 27, 2006 of the Government on family funds, hui, bieu, phuong ceases to be effective from the date this Decree takes effect.

Article 27. Transitional Provisions

1. Family funds established and implemented before the effective date of this Decree shall be governed by the provisions of Decree No. 144/2006/NĐ-CP dated November 27, 2006 of the Government on family funds, hui, bieu, phuong.

2. Family funds established before the effective date of this Decree and currently being implemented, which have contents and forms different from the provisions of this Decree, may be modified and supplemented by agreement among members to comply with this Decree for application of its provisions.

3. Family funds established before the effective date of this Decree that have not yet been implemented or are currently being implemented with contents and forms consistent with the provisions of this Decree shall apply the provisions of this Decree.

Article 28. Responsibility for Implementation

1. The Ministry of Justice is responsible for:

a) Directing, guiding, inspecting, and organizing the implementation of this Decree;

b) Propagating and disseminating this Decree and relevant legal provisions.

2. The Ministry of Public Security is responsible for investigating and handling, within its authority, acts of fraudulently appropriating assets, misappropriating assets through abuse of trust, usurious lending, and other acts of violating the law through organizing family funds.

3. People's Committees at all levels are responsible for:

a) Compiling situations and developments of family fund relationships in their locality upon request of competent state agencies;

b) Propagating and disseminating this Decree and relevant legal provisions.

4. People's Committees at the commune level are responsible for receiving and compiling information about family funds in accordance with Article 14 of this Decree and promptly reporting signs of violations of the law on family funds to competent public security agencies.

5. The Minister, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of People's Committees at all levels, and related individuals and organizations are responsible for implementing this Decree./.