Circular No. 202/2009/TT-BTC guiding certain contents regarding finance in selling and transferring state-owned enterprises with 100% state capital.

CIRCULAR

Guidelines on certain financial matters in the sale and transfer of state-owned enterprises with 100% state capital,

assign a state-owned enterprise with 100% state capital

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Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on the sale and transfer of state-owned enterprises with 100% state capital (hereinafter referred to as Decree No. 109/2008/NĐ-CP),

The Ministry of Finance issues guidelines on certain financial matters in the sale and transfer of state-owned enterprises with 100% state capital as follows:

PART I

GENERAL PROVISIONS

Article 1. Object and Conditions for Application

In accordance with the provisions of Article 2 and Article 4 of Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on the sale and transfer of state-owned enterprises with 100% state capital (hereinafter referred to as Decree No. 109/2008/NĐ-CP).

Article 2. Actual, Reasonable, and Necessary Costs for Organizing the Sale and Transfer of Enterprises

1. Costs for selling and transferring enterprises: These are expenses related to the sale and transfer of enterprises from the time the decision to sell or transfer the enterprise is made until the completion of the handover of the enterprise to the buyer or transferee. Among these:

a. Costs for selling the enterprise include:

- Expenses for inventory verification and valuation of assets;

- Expenses for formulating the enterprise sale plan;

- Expenses for organizing workers' and staff meetings at the enterprise to implement the sale of the enterprise;

- Expenses for promotional activities, advertising, and public information dissemination;

- Expenses for organizing auctions;

- Expenses for hiring auditors and consultants to determine the value of the enterprise (if applicable);

- Expenses for the Reform Board at the enterprise;

- Other expenses related to the sale of the enterprise.

The level of costs is determined based on the enterprise's value on the accounting books but shall not exceed VND 50 million for enterprises valued under VND 1 billion; VND 100 million for enterprises valued between VND 1 billion and VND 5 billion; VND 150 million for enterprises valued between VND 5 billion and VND 10 billion; and VND 200 million for enterprises valued over VND 10 billion.

b. Costs for transferring the enterprise include:

- Expenses for inventory verification of assets;

- Expenses for formulating the enterprise transfer plan;

- Expenses for organizing workers' and staff meetings at the enterprise to implement the transfer of the enterprise;

- Expenses for promotional activities, advertising, and public information dissemination;

- Expenses for hiring auditors;

- Expenses for the Reform Board at the enterprise;

- Other expenses related to the transfer of the enterprise.

The level of costs is determined based on the enterprise's value on the accounting books but shall not exceed VND 50 million for enterprises valued under VND 5 billion; VND 100 million for enterprises valued between VND 5 billion and VND 10 billion; and VND 150 million for enterprises valued over VND 10 billion.

c. For large and complex enterprises, if necessary costs for selling or transferring the enterprise exceed the maximum control levels specified in points a and b of this Clause, the authority deciding on the sale or transfer of the enterprise shall proactively review and decide on the necessary costs but shall not exceed the value of the state capital at the unit being sold or transferred and shall be responsible for their decisions.

d. The General Director or Director of the enterprise decides on the content and amount of necessary costs within the maximum control level to organize the implementation of the sale and transfer of the enterprise and shall be responsible for the legality and validity of these expenses.

2. Costs for selling and transferring enterprises are guaranteed by the following sources:

a. Costs for selling the enterprise or part of the enterprise (hereinafter referred to as selling the enterprise) are deducted from the proceeds from selling the enterprise; if insufficient, they are handled as follows::

- In cases where the enterprise sale plan is expected to generate proceeds insufficient to cover the costs of selling the enterprise, the provisions of Clause 2, Article 8 of Decree No. 109/2008/NĐ-CP shall apply.

- In cases where the actual proceeds from selling the enterprise are insufficient to cover the costs of selling the enterprise after implementing the enterprise sale plan, support will be provided from the Enterprise Restructuring Support Fund according to the provisions of Clause 6, Article 5 of Decree No. 109/2008/NĐ-CP, specifically as follows:

+ The Enterprise Restructuring Support Fund of the Group or Corporation in the case of selling a member company, subsidiary, or dependent unit of the Group or Corporation;

+ The Enterprise Restructuring Support Fund of the Parent Company in the case of selling a limited liability company wholly owned by the Parent Company, or selling a dependent unit of the Parent Company;

+ The Enterprise Restructuring Support Fund at the State Capital Investment Corporation in the case of selling a wholly independent state-owned company; a wholly independent state-owned corporation; or a wholly independent state-owned group, parent company organized and operating under the parent company-subcompany model and limited liability companies wholly owned by the state capital belonging to Ministries, agencies equivalent to ministries, government agencies, provincial People's Committees, and municipal People's Committees directly under the central government.

In the specific case of selling a part of an independent state-owned company or an independent accounting unit of a member company, if the proceeds are insufficient to cover the costs of selling, the independent state-owned company or the independent accounting unit of the member company shall bear the responsibility for payment.

b. Costs for transferring the enterprise are deducted from the value of the state capital at the enterprise. If the costs for transferring the enterprise as planned exceed the value of the state capital at the enterprise, it shall be converted to another restructuring method according to regulations.

In cases where the workforce collective in the enterprise still accepts the transfer of the enterprise, they must have a capital contribution plan to meet production and business requirements and establish ownership rights of the enterprise representative receiving the transfer, which must be approved by the authority deciding on the transfer of the enterprise. Specifically, the difference in shortfall of costs for transferring the enterprise will be supported from the Enterprise Restructuring Support Fund of the economic group, state corporation, or parent company in the case of transferring an independent accounting unit member; the Central Enterprise Restructuring Support Fund in the case of transferring a state-owned enterprise with 100% state capital belonging to Ministries, sectors, provincial People's Committees, and municipal People's Committees directly under the central government.

c. Documentation for requesting cost support in the case of selling and transferring enterprises:

- The request for financial support must be confirmed by the competent authority deciding to sell or transfer the enterprise. The content of the letter includes the total amount received from selling the enterprise or the remaining state capital value at the enterprise (in the case of transferring the enterprise); costs associated with selling or transferring the enterprise; the amount still lacking and requesting support. Additionally, in the case of transferring the enterprise, there must also be a plan for contributing capital and a commitment to accept the transferred enterprise from the representative of the receiving party.

- Decision on selling or transferring the enterprise by the competent authority (original or copy);

- Contract for selling or transferring the enterprise (original or copy);

- Minutes confirming the value of the enterprise (original or copy);

- Detailed list of costs associated with selling or transferring the enterprise (with an assessment by the competent authority deciding to sell or transfer the enterprise);

Article 3. Regarding tax debts and other amounts payable to the State budget

The enterprise is responsible for declaring and submitting the final tax report up to the time of determining the enterprise's value to the tax authority for verification and determination of the outstanding tax according to regulations. The tax authority is responsible for proactively arranging staff to conduct inspections of enterprises that are being sold or transferred in accordance with the time of determining the enterprise's value that has been announced. In cases where the tax authority has not completed the inspection by the time of officially determining the enterprise's value, the enterprise may use the financial statements prepared as the basis for determining the enterprise's value (including the determination of the enterprise's tax obligations and profit distribution). Any discrepancies regarding tax obligations to the State (if any) will be adjusted when the enterprise receives the business registration certificate.

The enterprise is responsible for declaring taxes, calculating taxes, and fulfilling tax payment obligations as stipulated in Article 30 and Clause 3 of Article 55 of the Tax Administration Law. If the tax authority fails to comply with the provisions of the Tax Administration Law, causing damage to the enterprise, it must compensate the enterprise according to the law.

In cases where the enterprise does not submit the necessary documents and request the tax authority to inspect, the Enterprise Reform and Development Board and the enterprise leadership are responsible for additional taxes generated compared to the figures in the financial reports at the officially handed-over time approved by the competent authority, and any resulting losses.

Chapter II

SALE OF 100% STATE CAPITAL ENTERPRISES

Article 4. On inventory, asset handling, and Reward Fund, Welfare Fund

1. Inventory, reconciliation, classification of assets, and handling of financial discrepancies

a. Upon receipt of the decision to sell the enterprise from the competent authority, the enterprise is responsible for organizing the inventory, reconciliation, and classification of assets under its management and use at the time of determining the enterprise's value.

b. The enterprise is responsible for conducting annual financial statement audits in accordance with the State regulations. In cases where the time of determining the enterprise's value does not coincide with the end of the fiscal year, the selling enterprise must prepare financial statements at the time of determining the enterprise's value.

c. Based on the results of the inventory and annual financial statement audit up to the time of determining the enterprise's value, the selling enterprise is responsible for actively handling financial discrepancies before determining the value of the enterprise in accordance with its authority and current laws.

In cases of difficulties or exceeding authority, the selling enterprise must promptly report to the authority issuing the decision to sell the enterprise for consideration and resolution. If reported but not resolved, these discrepancies must be clearly recorded in the Minutes Confirming the Value of the Selling Enterprise to serve as grounds for continued resolution during the period from determining the enterprise's value to the sale of the enterprise.

2. Handling of assets

a. For excess or missing assets, the causes must be analyzed and handled as follows:

- Missing assets must determine the responsibility of organizations and individuals to handle material compensation according to current regulations. The difference between the compensation value of related individuals, groups, and insurance organizations (if any) and the actual loss value is covered by the Financial Reserve Fund; if insufficient, it is recorded in the operating results; if the enterprise still incurs a loss, it is recorded as a reduction in state capital.

- Excess assets, if the cause cannot be determined and the owner cannot be found, are handled by increasing state capital corresponding to the actual value of the surplus assets.

b. For assets that are no longer needed after approval by the authority deciding to sell the enterprise, stagnant assets, and assets awaiting liquidation, they are handled as follows:

- Liquidation and sale: The General Director of the enterprise is responsible for directing the organization to liquidate and sell assets in accordance with current laws.

Revenue and expenses for liquidation and sale activities are recorded as income and expenses of the enterprise.

- By the time of determining the enterprise's value, assets that are no longer needed, stagnant assets, and assets awaiting liquidation that have not been handled are not included in the enterprise's value; the enterprise is responsible for preserving and transferring them to the following entities:

+ The Company for Debt Purchase and Idle Assets of Enterprises to handle according to the law for 100% state-owned enterprises and limited liability companies wholly owned by the State in ministries, agencies equivalent to ministries, government agencies, provincial people's committees, and centrally-administered municipalities;

+ State-owned corporations, state-owned holding companies, and independent state-owned companies to handle according to the regulations for 100% state-owned enterprises and limited liability companies wholly owned by state-owned corporations, state-owned holding companies, and holding companies.

c. For welfare facilities: kindergartens, health stations, and other welfare assets invested from the Reward Fund and Welfare Fund shall be transferred to the management company for continued service to the workforce within the enterprise being sold. In the case of selling a subsidiary unit, the welfare facility shall be handed over to the parent company for management and use.

Housing for officials, workers, and employees invested from the enterprise's Welfare Fund, including housing invested with state budget capital, shall be transferred to the local land administration agency for management.

Assets used in production and business invested from the Reward Fund and Welfare Fund of the enterprise being sold shall be included in the enterprise value and continue to be used in production and business by the company. The corresponding capital portion of this asset value that the selling enterprise is responsible for repaying the Reward Fund and Welfare Fund to distribute among the employees working at the enterprise at the time of determining the enterprise value.

Welfare facilities invested with state capital, if the selling enterprise continues to use them, shall be included in the enterprise value.

3. Reward Fund and Welfare Fund

a. The remaining balance of the Reward Fund and Welfare Fund in cash shall be used to distribute to the employees working at the enterprise at the time of determining the enterprise value according to their years of service at the selling enterprise. The General Director of the enterprise shall cooperate with the trade union organization at the enterprise to develop a distribution plan and make the decision on distribution.

The source of the Reward Fund and Welfare Fund is determined as follows: the balance of the fund (excluding sources that have formed welfare assets) plus (+) the actual value of assets currently used for production and business invested from the Reward Fund and Welfare Fund.

b. In the case where the enterprise has spent more than the allocated Reward Fund and Welfare Fund, it shall be handled as follows:

- For amounts directly spent on employees listed in the regular roster at the time of the sale decision, they shall not be deducted from the state capital at the enterprise. The General Director of the enterprise shall cooperate with the trade union to handle this by recovering the funds or converting them into receivables for the subsequent company to inherit.

- For expenditures exceeding the Reward Fund and Welfare Fund that cannot identify the recipient for recovery (such as spending on employees who have left or retired before the sale decision...), the State Capitalization Steering Committee shall report to the authority deciding the enterprise value to handle it as uncollectible receivables.

Article 5. Debt Settlement

The enterprise being sold or having a part being sold shall be responsible for reconciling, confirming, and recovering receivables due before the sale; mobilizing resources to pay off due debts or negotiating with creditors to resolve before the sale.

For remaining receivables and payable debts, depending on the conditions of purchase and sale, whether or not to inherit debts, the following principles shall apply:

1. In the case of selling with debt inheritance: the buyer shall be responsible for paying off payable debts and collecting receivables according to the commitment; the commitment to inherit receivables and payables shall be recorded in the enterprise purchase and sale contract and notified in writing to creditors, debtors, and related parties.

2. In the case of selling without debt inheritance:

The handling of receivables and payables shall be carried out according to the following regulations:

a. Receivables:

- For receivables that have sufficient documentation proving they are unrecoverable according to current state regulations on handling overdue debts, the cause and responsibility of individuals and organizations shall be clearly identified and dealt with according to current laws. The loss after processing shall be covered by the reserve for difficult-to-collect receivables, and if insufficient, it shall be recorded as business expenses of the enterprise.

- For other overdue receivables, the enterprise must continue to collect or negotiate the sale of receivables to economic organizations with functions to buy and sell debts and surplus assets, and may not directly sell receivables to debtors. Losses from selling receivables shall be recorded as business expenses.

- At the time of determining the enterprise value, the selling enterprise shall be responsible for transferring receivables not included in the enterprise value (including receivables already processed using the reserve for difficult-to-collect receivables, risk reserves, operational reserves...) still being monitored outside the statement) to relevant agencies as follows:

+ The Enterprise Debt Collection and Surplus Asset Management Company to handle according to the law for enterprises with 100% state capital and limited liability companies with 100% state share capital under ministries, agencies equivalent to ministries, government agencies, provincial people's committees, centrally governed cities;

+ State-owned corporations, state-owned holding companies, and independent state-owned companies to handle according to the regulations for 100% state-owned enterprises and limited liability companies wholly owned by state-owned corporations, state-owned holding companies, and holding companies.

b. Payables:

- Payables that do not need to be paid shall be recorded as increased state capital.

- For tax arrears and other payments to the state budget: the enterprise shall be responsible for declaring and submitting tax settlement reports up to the time of determining the enterprise value to the tax authority for verification and determination of outstanding taxes according to regulations. The tax authority shall be responsible for proactively arranging staff to inspect enterprises being sold in accordance with the time frame for determining the enterprise value announced.

If the inspection has not been completed by the time the enterprise value is organized, the enterprise may use the financial statements prepared as the basis for determining the enterprise value (including the determination of the enterprise's tax obligations and profit distribution). Any discrepancies in tax obligations to the state (if any) will be adjusted at the time of completing the enterprise sale (the signing of the enterprise sale contract).

- For overdue loans from state commercial banks and the Vietnam Development Bank (collectively referred to as lending banks), the enterprise shall be responsible for reconciliation and cooperation with the lending bank to handle according to the following principles:

In the case where the selling enterprise incurs losses, has no remaining state capital, and cannot repay overdue debts, the enterprise shall be responsible for processing the necessary procedures and documents to request debt write-off, debt extension, or loan interest cancellation according to current laws.

Within a maximum period of 20 working days from the date of receiving the enterprise's documents, the lending bank shall provide comments on the handling of the notification letter and inform the enterprise.

As for overdue principal and interest debts that cannot be written off, they shall be settled using the proceeds from the sale of the enterprise.

For overdue foreign loans with guarantees, the enterprise and guarantor must negotiate with creditors to develop a resolution plan in accordance with the legal regulations on managing foreign borrowing and repayment.

For social insurance debts and employee debts, the enterprise is responsible for settling them completely before the sale to ensure workers' rights.

c. Provisions, losses, and profits shall be handled according to the following provisions:

- Provisions: reduction in inventory valuation, difficult-to-collect receivables, securities valuation reduction, exchange rate differences shall be used to offset losses as stipulated currently; if there is any surplus, it shall be recorded as an increase in state capital.

- Provision for unemployment benefits: the selling enterprise is responsible for fully establishing such provisions according to the State's regulations and using them to assist redundant labor during the sale process; at the time of sale, if there is any surplus, it shall be recorded as an increase in state capital at the time of transfer.

- Risk reserve funds and business operation reserves of banking and insurance systems, after offsetting losses as stipulated, shall be retained by the selling enterprise but must be included in the initial price when selling the enterprise.

- Financial reserves for loss coverage (if any), covering asset losses and unrecoverable debts after individual responsibility compensation has been processed (if any), the remaining amount shall be included in the value of state capital in the selling enterprise.

- Profits generated to cover previous year's losses (if any) according to the Law on Corporate Income Tax, covering unused asset losses, pending liquidation, asset valuation reductions, and unrecoverable debts; the remaining amount shall be distributed according to current regulations before determining the enterprise's value.

- Losses calculated up to the point of determining the selling enterprise's value, after processing according to the above regulations, if there are still losses and no remaining state capital, the selling enterprise shall cooperate with the Vietnam Development Bank (formerly the Support Fund for Development) and state commercial banks to cancel loan interest according to the current state regulations on handling outstanding debts.

d. Long-term investments in other enterprises, such as joint ventures, joint operations, share capital contributions, establishment of limited liability companies, and other long-term investment forms.

If the selling enterprise inherits long-term investments in other enterprises, the entire amount of these investments shall be included in the enterprise's value.

If the selling enterprise does not inherit long-term investments in other enterprises, it shall report to the competent authority for handling as follows:

+ Transfer to another state-owned enterprise holding 100% of the capital as a partner;

+ If transfer is not possible, the selling enterprise must inherit and include it in the selling enterprise's value according to the regulations.

đ. For amounts prepaid by the enterprise to suppliers for goods and services such as rent, land lease payments, purchase payments, wages... if they have already been fully recorded as operating expenses, the enterprise shall adjust the accounting entries to reduce corresponding operating expenses for unsupplied goods and services or unexecuted rental periods, and record an increase in prepaid expenses (or expenses awaiting allocation).

Article 6. Determining the value of the enterprise

The determination of the enterprise's value shall be carried out in accordance with the principles stipulated in Chapter III of Decree No. 109/2007/ND-CP and the guidance provided in the Circular of the Ministry of Finance guiding the implementation of certain financial issues when transferring state-owned enterprises 100% capital to joint-stock companies as prescribed in Decree No. 109/2007/ND-CP dated June 26, 2007 of the Government, including the value of land use rights granted (if any).

Article 7. Determination of the initial sale price of the enterprise

1. In cases where the sale includes the assumption of debt, the initial price shall not be lower than the total value of the state capital already determined in accordance with Article 6 of this Circular. If the actual value of the state capital is negative and the buyer agrees to purchase it, the initial price shall be set at zero.

2. In cases where the sale does not include the assumption of debt, the initial price shall not be lower than the total value of the enterprise already determined in accordance with Article 6 of this Circular, ensuring that the proceeds from the sale minus costs are sufficient to pay off debts.

Article 8. Conversion of form

1. In cases where there is no buyer or the buyer refuses to purchase, if the enterprise meets the conditions specified in point a, b Clause 3, Article 2 of Decree No. 109/2008/ND-CP, it shall be converted to the form of transferring the enterprise; in cases where these conditions are not met, it shall be converted to another form of restructuring (merger, consolidation, dissolution, bankruptcy).

2. For enterprises included in the list for equitization, which have proceeded with steps in the equitization process but have not been able to complete equitization, if they meet the conditions for selling the enterprise, the authority deciding on equitization may consider and decide to apply the form of selling the enterprise. In this case, the value of the enterprise for sale shall be taken from the value of the enterprise approved by the competent authority when implementing equitization.

Chapter III

TRANSFERRING THE BUSINESS TO A GROUP OF WORKERS

Article 9. Regarding inventory and asset disposal

1. The reform board at the enterprise shall conduct an inventory, determine the quantity and current status of all assets, including long-term and short-term investments; leased, borrowed, held-in-trust, sold-on-behalf-of, consigned, occupied, and lent assets; reconcile and classify various types of receivables and payables; prepare lists of creditors and amounts owed, lists of debtors and amounts due, clearly distinguishing between recoverable and non-recoverable debts; carry out asset classification, asset disposal, and financial treatment when transferring the enterprise according to Article 22 of Decree No. 109/2008/ND-CP and Article 3 of this Circular.

2. Asset Disposal:

The disposal of assets, surplus balances of the Reward Fund, Welfare Fund, unfinished construction costs, provisions, losses, or profits shall be carried out in accordance with the provisions of Clause 2, Clause 3, Article 4 of this Circular.

Article 10. Handling of Receivables and Payables

The enterprise being transferred shall be responsible for reconciling, confirming, collecting receivables and payable debts due (including taxes and budget payments) before the transfer; mobilizing resources to settle payable debts due or negotiating with creditors to handle them before the transfer. For remaining payable debts, the following principles shall apply:

1. For overdue debts to commercial state banks and Vietnam Development Bank (collectively referred to as lending banks), the enterprise shall be responsible for reconciling and coordinating with the lending bank to handle them according to the following principles:

a. In cases where the enterprise being transferred incurs losses, has no state capital left, and cannot repay overdue debts, the enterprise shall be responsible for completing the necessary procedures and documents to request the bank to write off, defer, or reduce interest on loans according to current laws.

Within a maximum period of 20 working days from the date of receipt of the enterprise's documents, the lending bank shall provide a written response to the enterprise.

If the bank does not issue a written response, the enterprise shall comply with the loan contracts or agreements already signed with the bank.

b. For principal and interest debts that cannot be written off, the following principles shall apply:

- The enterprise shall complete all necessary procedures to transfer the responsibility for repaying the debt to the entity receiving the enterprise transfer.

- Coordinate with the lending bank to implement the debt sale to the Company for Purchasing Debts and Enterprise Surplus Assets and other companies with the function of purchasing debts at agreed prices.

2. For social insurance debts belonging to the enterprise and employees that the enterprise has collected, before the transfer, the enterprise can deduct these debts from the state capital value at the enterprise to settle them. In cases where the state capital value at the enterprise is insufficient to settle social insurance debts, but the employees still wish to receive the enterprise and have a plan to contribute capital to maintain business operations, the difference between the state capital and the transfer costs shall be supported for payment from the Enterprise Restructuring Support Fund, specifically as follows:

- The Enterprise Restructuring Support Fund of Groups, Corporations, and parent companies in cases of member enterprises, subsidiaries, limited liability companies invested 100% by the parent company.

- The Enterprise Restructuring Support Fund at the State Capital Investment Corporation in cases of transferring 100% state capital enterprises; independent accounting member companies under Ministries, agencies equivalent to Ministries, government agencies, People's Committees of provinces and centrally-administered cities.

3. The entity receiving the enterprise transfer shall be responsible for assuming the receivables and payables of the enterprise after handling them.

Article 11. Determining the value of the enterprise to be transferred.

Based on the Plan for determining the value of the enterprise established by the Director and the Reform Board of the enterprise, the Director of the enterprise shall organize the determination of the enterprise's value.

1. For state-owned enterprises with 100% state capital included in the list of enterprises to be transferred under the Comprehensive Scheme for the Reorganization of State-Owned Enterprises approved by the Prime Minister:

Based on the accounting books, audited financial statements, tax settlement reports, and inventory reports at the time of transfer, the organization shall implement the determination of the enterprise's value according to the principle that all assets of the enterprise when being transferred shall be valued at their current value in Vietnamese dong. In this regard:

- Tangible assets: are the remaining values recorded in the accounting books.

- Cash assets including cash on hand, bank deposits, and securities (bills, bonds, etc.) of the enterprise shall be determined based on the cash count report (for cash), the reconciled balance with the bank (for deposits), and the face value of the securities.

- Receivables with recoverable amounts, short-term and long-term pledges, and investments shall be determined based on the actual balances recorded in the accounting books that have been reconciled and confirmed.

- Uncompleted expenses (for basic construction investment, unfinished production and business activities) shall be determined based on the actual occurrences recorded in the accounting books.

- The value of intangible assets (if any) shall be determined based on the remaining values recorded in the accounting books. Specifically, the value of land use rights shall be determined in accordance with the Circular of the Ministry of Finance guiding the implementation of certain financial issues when transferring state-owned enterprises with 100% state capital into joint-stock companies as stipulated in Decree No. 109/2007/NĐ-CP dated June 26, 2007 of the Government.

The value of the enterprise for transfer does not include the value of leased, borrowed, joint venture, associated, held-in-trust, sold-on-behalf-of, consigned assets; assets formed from welfare and reward funds; housing assets for officials and employees (transferred to local real estate management agencies); receivables without recoverable amounts that the receiving party does not accept.

The transfer price of the enterprise is determined based on the remaining value of the state capital portion in the enterprise after deducting the costs of transferring the enterprise, social insurance debts of the enterprise and employees that the enterprise has collected. In this case, the value of the state capital portion in the enterprise equals the enterprise's value minus the actual debts payable, surplus welfare and reward funds, and operating expenses (if any). If, after determination, the enterprise no longer has state capital but the receiving party still requests to take over, the receiving party must have a capital contribution plan to maintain production and business operations, commit to assuming debts and losses, and a debt repayment plan consistent with the production and business plan.

2. For enterprises subject to sale, if they have completed the steps for selling the enterprise but have not succeeded, and if they meet the conditions for transferring the enterprise as prescribed in Article 3 of Decree No. 109/2008/NĐ-CP, the authority deciding to sell the enterprise may consider and decide to switch to the form of transferring the enterprise. In this case, the enterprise's value is determined based on the enterprise's value recorded in the enterprise's accounting books that have been audited.

Article 12. Conversion of Form.

In cases where the receiving party does not accept the transfer or the costs to organize the implementation of transferring the enterprise exceed the remaining state capital value at the enterprise, the agency deciding on the transfer must consider and decide to convert to dissolution or bankruptcy of the company.

Article 13. Transfer and Acceptance of the Enterprise.

1. Based on the enterprise transfer contract, the transferring party (the General Director of the enterprise, the Chief Accountant, and the representative of the Reform Board at the enterprise) must hand over all assets, capital, debts, land use rights, economic contracts, other rights and obligations to the receiving party (representative of the labor collective) along with relevant files and certificates.

2. During the period before the transfer, the transferring enterprise is responsible for managing all assets and capital of the enterprise, preventing damage, loss, or depletion. The General Director and related individuals of the transferring enterprise bear legal responsibility for any loss or depletion of assets and capital during this period.

3. The transfer must be recorded in a protocol signed by the General Director, Chief Accountant, representative of the Reform Board at the transferring enterprise, and the representative of the labor collective receiving the transfer.

Any unresolved issues prior to the transfer must be clearly noted in the transfer protocol.

Article 14. Ownership Rights to the Enterprise After Transfer

All assets of the enterprise after the transfer belong to the ownership of the labor collective. Workers participating in the reception of the transfer are granted ownership corresponding to the number of shares distributed from the state capital at the time of transfer or the contribution capital corresponding to the number of years working in the state sector, entitled to dividends, and have the right to inheritance but may not transfer the allocated shares within three years following the transfer of the enterprise.

Chapter IV

IMPLEMENTATION

Article 15. Reporting Work

Ministries, agencies equivalent to ministries, government-affiliated agencies, provincial People's Committees, city People's Committees directly under the Central Government, Management Boards of State Economic Groups, State-owned Corporations are responsible for reporting to the Steering Committee for Enterprise Reform and Development, the Ministry of Planning and Investment, the Ministry of Finance regarding matters related to the process of selling, transferring enterprises, specifically:

1. Results of handling financial issues when they arise.

2. Results of determining the enterprise value, including: Protocol on determining the enterprise value; Decision on announcing the enterprise value (within five working days from the date of the competent authority's decision to announce the enterprise value).

3. Approval decision on the sale and transfer plan (within five working days from the date of approval).

4. Results of sales and transfers (within five working days from the completion date of the sale and transfer).

5. Decision on sale and transfer expenses.

6. Decision on re-determining the state capital value at the official transfer date to the buyer or transferee.

7. Protocol of transfer from the enterprise to the buyer or transferee.

Article 16. Effective Date

1. This Circular takes effect 45 days from the date of signature and replaces Circular No. 109/2005/TT-BTC dated December 8, 2005, issued by the Ministry of Finance guiding certain contents on finance in the transfer, sale, lease, and business contracting of state-owned enterprises.

2. During implementation, if there are difficulties, agencies, organizations, and individuals are requested to promptly report to the Ministry of Finance for research and resolution./.