Decree No. 25/2010/NĐ-CP On the conversion of state-owned enterprises into limited liability companies with one member and the organization of management of limited liability companies with one member owned by the State

DECREE

On the conversion of state-owned enterprises into limited liability companies with one member and the management organization of limited liability companies with one member owned by the State

 a single member and the management organization of limited liability companies with one member owned by the State

 a single member owned by the State

________________

THE GOVERNMENT

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

Pursuant to the Law on State-Owned Enterprises dated November 26, 2003;

Pursuant to the Enterprise Law dated November 29, 2005;

The Prime Minister issues this Decision on principles, criteria, and allocation standards for state budget investment capital development phase 2016-2020.

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the conversion of state-owned enterprises into limited liability companies with one member and the management organization of limited liability companies with one member owned by the State.

Article 2. Applicability

1. The enterprises for conversion are specified in Article 7 of this Decree.

2. Limited liability company with one member owned by the State.

3. Organizations and individuals related to the conversion, management organization, and operation of limited liability companies with one member owned by the State.

Article 3. Owner and delegation, classification of implementation of rights and obligations of the owner towards limited liability companies with one member

The State is the owner of limited liability companies with one member that it holds the entire charter capital. The Government uniformly organizes the implementation of rights and obligations towards limited liability companies with one member that the State holds the entire charter capital. Each limited liability company with one member converted from a state-owned enterprise or newly established shall have its rights and obligations of the owner implemented by an organization delegated or classified below (hereinafter referred to as the owner):

1. The Prime Minister or a specialized organization delegated by the Government to implement the rights and obligations of the owner towards limited liability companies with one member converted from the parent company of state economic groups, state corporations, large and important state-owned enterprises decided to establish by the Prime Minister.

2. Ministries, People's Committees of provinces and centrally governed cities (hereinafter referred to as Provincial People's Committees) are classified to implement the rights and obligations of the owner towards limited liability companies with one member converted from:

a) State-owned enterprises directly serving national defense and security; performing public service tasks decided to establish by Ministries, Provincial People's Committees;

b) Parent companies in state corporations, state-owned enterprises within the parent company - subsidiary model; independent state-owned enterprises; agricultural, forestry, and state-owned farms decided to establish by Ministries, Provincial People's Committees for privatization but not yet converted before July 1, 2010.

3. The parent company in the parent company - subsidiary model, the parent company of state economic groups is the owner of limited liability companies with one member converted and reorganized from: independent accounting subsidiaries, dependent accounting units of state corporations, state economic groups; parent companies in state corporations under state economic groups; subsidiaries, dependent accounting units of parent companies; newly established limited liability companies with one member by parent companies.

4. The State Capital Investment Corporation is the owner of limited liability companies with one member converted from independent state-owned enterprises decided to establish by Ministries, Provincial People's Committees, except for those enterprises specified in Clauses 1, 2, and 3 of this Article and other cases decided by the Prime Minister.

5. The owner of limited liability companies with one member has the rights and obligations prescribed in Articles 64, 65, and 66 of the Enterprise Law, this Decree, and the Company Charter.

6. State management agencies not delegated or classified to implement the rights and obligations of the owner of limited liability companies with one member as prescribed in Clauses 1 and 2 of this Article shall only perform state management functions according to the Enterprise Law and relevant laws concerning limited liability companies with one member in their assigned areas. The Ministry of Finance shall provide guidance on financial mechanisms and profit distribution for limited liability companies with one member.

Article 4. Conversion Costs

1. Conversion costs shall be recorded as a reduction in shareholders' equity.

2. The contents and levels of conversion costs shall be prescribed by the Ministry of Finance.

Article 5. Succession of Rights and Obligations before Conversion

A state-owned joint stock company limited to one shareholder shall be responsible for succeeding all lawful rights, interests, and obligations of the enterprise being converted in accordance with the provisions of the law.

Article 6. Application of Relevant Laws

1. The conversion of a state-owned enterprise into a state-owned joint stock company limited to one shareholder and the organization and operation of a state-owned joint stock company limited to one shareholder where the State is the sole owner shall be governed by the Law on State-Owned Enterprises, the Enterprise Law, this Decree, and other relevant legal provisions.

2. In cases where there are differences between the provisions of this Decree and the legal provisions concerning state economic groups regarding management, supervision, and evaluation by the State owner of the parent company that is a 100% state-owned enterprise of a state economic group; regarding the rights and obligations of the direct representative of the State owner at the parent company of the state economic group, the provisions of the law on state economic groups shall apply.

Chapter II

OBJECTS, CONDITIONS, PROCEDURES FOR CONVERSION

Article 7. Objects of Conversion

1. Independent state-owned enterprises.

2. State-owned enterprises that are the parent companies of state economic groups; parent companies within state-owned holding corporations; parent companies within holding corporations under state economic groups; parent companies in the parent-subsidiary model (referred to collectively as parent companies).

3. Independent accounting member companies of state-owned holding corporations and state economic groups.

4. Dependent accounting units of state-owned holding corporations, parent companies of state economic groups, and parent companies of state-owned holding corporations;

5. Agricultural companies, forestry companies, state-owned farms, state-owned forest farms.

Article 8. Conditions for Conversion

1. Enterprises specified in Article 7 of this Decree may be reorganized and converted into state-owned joint stock companies limited to one shareholder when they meet the following conditions:

a) The objects specified in Clauses 1, 2, and 5 of Article 7 of this Decree belong to industries, sectors, and regions where the State needs to hold 100% capital; approved by the Prime Minister.

Parent companies within holding corporations under state economic groups and the objects specified in Clause 3 and 4 of Article 7 of this Decree do not fall under the category of the State holding 100% registered capital, but play a particularly important role in production and business operations, strategic development, holding business secrets, technology, and information of the holding corporation or state economic group which holds 100% registered capital;

b) There remains state capital after financial treatment. In cases where there is no remaining state capital, a report shall be submitted to the Prime Minister for a decision on supplementing state capital; if supplementation is not granted, the enterprise shall proceed with ownership transformation forms for enterprises as stipulated in Article 80 of the Law on State-Owned Enterprises.

Where the business involves industries or professions requiring statutory capital, the registered capital (projected) of the company shall not be lower than the statutory capital.

2. For the objects specified in Clause 4 of Article 7 of this Decree, in addition to the conditions stipulated in Clause 1 of this Article, they must also meet the following conditions:

a) They can be separated into independent accounting units;

b) The conversion of dependent accounting unit members into state-owned joint stock companies limited to one shareholder does not cause difficulties or impact the efficiency of production and business operations of state-owned holding corporations or parent companies.

3. Enterprises subject to shareholding reform but have not yet implemented shareholding reform or are currently implementing the procedures and formalities for converting the enterprise into a joint stock company but are expected to not have a decision from the competent authority determining the value of the enterprise by July 1, 2010.

After being converted into a state-owned joint stock company limited to one shareholder, enterprises specified in Clause 3 of this Article must continue to be converted into joint stock companies according to the approved roadmap by the Prime Minister.

Article 9. Procedures for converting state-owned independent companies, parent companies, wholly-owned subsidiaries, and affiliated units under state-owned holding companies or state economic groups

1. Announcing plans and timelines for conversion:

Based on the overall restructuring plan for 100% state-owned enterprises approved by the Prime Minister, the entity entrusted with the rights and obligations of the owner shall notify the enterprise about the conversion plan and timeline.

2. Establishing the Conversion Board:

a) The Prime Minister authorizes the decision to establish the Conversion Board for the parent company of a state economic group or state holding company established by the Prime Minister's decision, which is made by the Board of Directors of the parent company of the state economic group or state holding company. The Minister or Chairman of the People's Committee at the provincial level decides to establish the Conversion Board for the enterprises they decide to establish. The Board of Directors of the parent company of the state economic group or state holding company decides to establish the Conversion Board for the member companies of the state economic group or state holding company.

b) Members of the Conversion Board include: The Chairperson of the Board is the Chairman of the Board of Directors or General Director (Director) of the company; the permanent member is the Chief Accountant; members of the Conversion Board may include the Chairman of the Grassroots Trade Union, heads of departments or boards responsible for business innovation and development, planning, operations, organizational staffing, labor; they may invite the Secretary of the Party Committee (branch) to participate as a member of the Conversion Board.

The Conversion Board is responsible for organizing the implementation of tasks to convert the enterprise into a limited liability company with one member.

3. The converting enterprise must notify its employees about the conversion plan and timeline within ten days from the date of receipt of the notification as stipulated in Clause 1 of this Article.

4. Developing the conversion proposal, including:

a) Preparing relevant files and documents related to the enterprise conversion;

b) Inventorying, classifying, and determining the capital and assets managed and used by the enterprise.

Assets managed and used by the enterprise include: assets currently being used by the enterprise; assets not needed; assets awaiting liquidation; lost or missing assets and other asset losses; leased, borrowed, held in custody, consigned, joint venture, associated assets; surplus assets; receivables; payables; uncollectible receivables;

c) Listing and classifying labor and formulating plans for land area usage;

d) Formulating financial and asset handling plans; labor reorganization plans; financial reports and projected charter capital.

Enterprises specified in Clause 3 of Article 8 of this Decree are not required to formulate and implement asset and financial handling, labor reorganization, and land usage plans.

5. Establishing the model and organizational structure of the limited liability company with one member; drafting the articles of association.

6. Reviewing, approving, implementing the conversion proposal, and making the conversion decision:

a) The entity deciding to establish the enterprise reviews and approves the Conversion Proposal submitted by the independent state-owned company or parent company;

b) The Board of Directors of the state-owned holding company, parent company of the state economic group, or parent company of the state-owned holding company reviews and approves the Conversion Proposal submitted by the subsidiary of the state-owned holding company or state economic group;

c) The Conversion Board organizes the implementation of the conversion proposal.

7. Appointing the representative of the owner and managerial positions of the company:

The Prime Minister appoints members of the Board of Members, Supervisors, and the Chairman of the Board of Members of the limited liability company with one member that is the parent company of the state economic group or converted from a state-owned holding company established by the Prime Minister's decision based on the proposal of the Minister managing the sector. The agencies and organizations entrusted with the rights and obligations of the owner as stipulated in Article 3 of this Decree appoint members of the Board of Members, Supervisors, or the Chairman of the Board of Members or the Chairman of the company.

The Board of Members or the Chairman of the company appoints or hires the General Director of the company.

For enterprises organized under a Board of Directors model, the owner issues a decision to reappoint Board of Directors members as members of the Board of Members; the Chairman of the Board of Directors as the Chairman of the Board of Members.

8. Registering business.

9. Sending the conversion decision to creditors and notifying employees:

Within fifteen days from the date of the conversion decision, the enterprise must send the conversion decision to creditors and notify the employees.

Article 10. Procedure for converting state-owned joint stock companies into state-owned limited liability companies

1. State-owned corporations shall carry out the conversion in the form of a parent company - subsidiary corporation simultaneously with the formation of the parent company as a state-owned limited liability company.

2. The procedure and formalities for restructuring and converting state-owned corporations into parent company - subsidiary corporations shall be implemented in accordance with Decree No. 111/2007/NĐ-CP dated June 26, 2007 of the Government on the management organization of state-owned corporations and the conversion of state-owned corporations, independent state-owned companies, and parent companies as state-owned corporations operating under the Law on Enterprises.

3. The procedure and formalities for forming the parent company in the form of a limited liability company shall be carried out in accordance with Article 9 of this Decree.

Article 11. Authority to decide on conversion

1. The Prime Minister decides or delegates the Minister to decide on the roadmap and conversion of enterprises established by the Prime Minister's decision.

2. The Minister, Chairman of the People's Committee at provincial level decides on the roadmap and conversion of enterprises established by themselves and subsidiaries of state-owned corporations, state economic groups authorized by the Prime Minister.

3. The Board of Directors of the parent company, state-owned corporation decides on the roadmap and conversion for the objects specified in Clause 3 and 4 of Article 7 of this Decree.

Article 12. Tasks of enterprises in developing the conversion project

1. State-owned corporations established by the state's investment and establishment have the following tasks:

a) Review each member unit, compare with the conditions for conversion; determine the structure and develop a plan to form the parent company in the form of a limited liability company; develop plans to form subsidiary companies as limited liability companies owned by the parent company and plans to equitize member units;

b) Inventory, classify, determine types of capital, assets, debts, labor currently managed by the corporation, each member unit, and units expected to form the parent company; prepare financial statements at the time of conversion, including the situation of investment and capital contribution of the corporation and member units in other enterprises;

c) Develop plans to handle assets, finances, debts, reorganize labor; plans to transfer rights, obligations, assets, capital, debts, labor to the parent company; determine the anticipated registered capital for the parent company; coordinate with relevant state agencies to proactively address issues related to capital, finance, and labor of the parent company during the conversion process as stipulated in Article 13 of this Decree;

d) Draft the charter of the parent company and subsidiary companies expected to be converted into limited liability companies.

2. The objects specified in Article 7 of this Decree have the following tasks:

a) Inventory, classify, determine types of capital, assets, debts, labor currently managed by the company; prepare financial statements at the time of conversion, including the situation of investment and capital contribution of the company in other enterprises;

b) Develop plans to handle assets, finances, debts, reorganize labor and land use; plans to transfer rights, obligations, assets, capital, debts, labor, and land to the limited liability company; determine the anticipated registered capital for the company; coordinate with relevant state agencies to proactively address issues related to capital, finance, labor, and land during the conversion process as stipulated in Article 13 of this Decree;

c) Draft the charter of the limited liability company.

Article 13. Principles for handling capital, assets, finance, and labor when converting

1. The handling of capital, assets, finance, and labor of state-owned corporations established by the State for investment and reorganization into a parent company - subsidiary company structure shall be carried out according to the following principles:

a) All assets of the corporation and its subsidiaries when converting shall be valued.

b) Assets under the management and use of subsidiaries of the corporation that are planned to convert and form a single-member limited liability company: the enterprise shall inventory, classify, determine the quantity, assess the current status, and transfer to the single-member limited liability company.

c) Leased, borrowed, entrusted, consigned, joint venture, and associated assets: the converting enterprise must reach an agreement with the lessor, lender, entruster, joint venture partner, and associate to have the single-member limited liability company continue to inherit existing contracts or terminate them.

d) Unused, stagnant, pending liquidation, deteriorated, lost, damaged assets: the enterprise shall sell, liquidate, and dispose of them according to the current asset management regulations.

đ) Excess assets: the enterprise shall record an increase in the owner's equity at the enterprise.

e) Receivables: subsidiaries of the corporation that are planned to convert and form a parent company shall be responsible for receiving the receivables of the converting enterprise and recovering overdue receivables before conversion. Any outstanding receivables that remain difficult to collect at the time of conversion shall be handled according to the current state regulations on handling outstanding receivables.

g) Payables: the enterprise shall be responsible for inheriting payables to creditors according to commitments, including tax, budget, employee debts; paying off due payables. Payables without claimants and undetermined asset values shall be included in the owner's equity. In cases where the company has difficulties in paying overdue debts, it shall be handled according to the current state regulations on handling outstanding payables.

h) The enterprise shall be responsible for arranging and utilizing labor according to the laws on labor and restructuring state-owned enterprises; implementing the regime for surplus labor according to the principle that each enterprise can only receive state funding once to resolve the regime for surplus labor; inheriting all rights and obligations towards employees according to the laws on labor.

2. The handling of capital, assets, finance, and labor of entities undergoing conversion shall be carried out according to the following principles:

a) All assets of the company when converting shall be valued.

b) Assets under the management and use of the company: the enterprise shall inventory, classify, determine the quantity, assess the current status, and transfer to the single-member limited liability company. Forest land and assets on forest land shall be transferred intact to the single-member limited liability company according to the guidelines of the Ministry of Finance and the Ministry of Agriculture and Rural Development.

c) The principles stipulated in points c, d, đ, e, g, and h of Clause 1 of this Article.

3. The financial report approved by the representative of the owner is the report at the time the single-member limited liability company is issued a Business Registration Certificate.

Article 14. Determination of Registered Capital

1. The registered capital of the parent company formed from restructuring and converting a state-owned holding corporation into a parent company - subsidiary company structure shall be the actual state-owned capital remaining after financial settlement according to the principles stipulated in Clause 1, Article 13 of this Decree and recorded in the Articles of Association of the parent company.

2. The registered capital of a limited liability company with one member converted from a parent company, an independent state-owned enterprise, or an independently accounting affiliate within a holding corporation shall be the actual owner's equity remaining after financial settlement according to the principles stipulated in Clause 2, Article 13 of this Decree and recorded in the Articles of Association of the company.

The Ministry of Finance shall provide guidance on determining the registered capital for a limited liability company with one member converted from a dependent accounting unit.

3. Based on the objectives, tasks, and development strategy of the company, the person deciding to convert the enterprise or the authorized representative shall coordinate with the Ministry of Finance to unify the level of registered capital (adjusting the registered capital upwards or downwards) and sources to supplement the registered capital according to the guidelines of the Ministry of Finance.

Article 15. Articles of Association of a Limited Liability Company with One Member

The Articles of Association of a limited liability company with one member shall be approved by the owner; the Articles of Association shall include the following main contents:

1. Name and principal address of the company; branch offices and representative offices (if any).

2. Objectives and business sectors.

3. Registered capital; methods of adjusting the registered capital.

4. Name, address, rights, and obligations of the organization assigned or delegated to perform the rights and obligations of the owner.

5. Management structure of the company.

6. Legal representative of the company.

7. Procedures for adopting decisions of the company; principles for resolving internal disputes.

8. Basis and methods for determining remuneration, salaries, and bonuses for managers and supervisors.

9. Principles for distributing post-tax profits and handling losses in the company's operations.

10. Circumstances for dissolution and procedures for liquidating the company's assets.

11. Procedures for amending and supplementing the Articles of Association of the company.

12. Full name and signature of the legal representative; full name and signature of the representative of the organization assigned or delegated to perform the rights and obligations of the company's owner.

13. Other contents decided by the organization assigned or delegated to perform the rights and obligations of the company's owner but not contrary to the law.

Article 16. Submission, Approval, and Implementation of the Conversion Plan

1. The enterprise undergoing conversion shall submit the conversion plan to the authority specified in Article 11 of this Decree for a decision to convert.

The content of the conversion decision includes:

a) Name, address, account number of the enterprise being converted; name and address of the limited liability company with one member.

b) Business sectors.

c) Registered capital of the company.

d) Name and address of the organization assigned or delegated to perform the rights and obligations of the owner and individuals appointed as representatives to perform the rights and obligations of the company's owner.

đ) Responsibilities of the company regarding the succession of rights and obligations and the resolution of existing and emerging issues of the enterprise being converted.

2. The enterprise undergoing conversion shall be responsible for implementing the approved conversion decision.

Article 17. Business Registration

The enterprise shall change its business registration and publicly announce it on mass media in accordance with the Law on Enterprises. The business registration dossier must include the decision to convert and other contents as prescribed by the Law on Enterprises.

Article 18. Re-registering Ownership Rights of Assets

After being issued a Business Registration Certificate, a single-member limited liability company must re-register ownership rights for assets transferred from the converted enterprise to the company at the competent state agency issuing the registration. The re-registration of ownership rights is exempt from stamp duty.

Chapter III

ORGANIZATION AND MANAGEMENT OF A SINGLE-MEMBER LIMITED LIABILITY COMPANY OWNED BY THE STATE

Article 19. Application of Corporate Model and Management Structure

1. The parent company of an economic group or a parent company converted from a state-owned corporation shall have a corporate structure comprising the Board of Members, General Director, and Supervisors.

For parent companies operating in special sectors, the management structure of the parent company shall be decided by the Prime Minister.

2. For companies not specified in Clause 1 of this Article, based on the scale, geographical scope, and number of business activities of each company, the owner shall decide to apply a management structure according to the model of the Board of Members, General Director, and Supervisors or the model of Chairman of the Company, General Director (Director), and Supervisors; deciding whether the Chairman of the Company concurrently holds the position of General Director or not.

PART I

ORGANIZATION AND MANAGEMENT OF A COMPANY UNDER THE BOARD OF MEMBERS MODEL

Article 20. Duties, Powers, and Obligations of the Board of Members

The duties, powers, and obligations of the Board of Members as stipulated in Clause 1 of Article 68 of the Law on Enterprises are as follows:

1. To build and decide on the development strategy; long-term, medium-term, and annual plans of the company; to decide on the cooperation plan among member units wholly owned by the company or having controlling shares (if any) through the use of the company's controlling rights in these enterprises.

2. To decide on building and using trademarks; market and technology development solutions; division of specialization, cooperation, access, expansion, and information sharing, markets, research, and application of science and technology between the company and member enterprises (if any); investment projects, purchase and sale contracts, loan contracts, and other contracts valued under 50% of the total asset value recorded in the company's latest financial report or a lower ratio as prescribed in the Company Charter, or not exceeding the maximum value limit prescribed in the Company Charter.

3. To decide on establishing new investments, restructuring, dissolution, and ownership conversion of single-member limited liability company subsidiaries; single-member limited liability companies under the ownership of subsidiaries wholly owned by the parent company with 100% capital contribution; direct units under the parent company; domestic and foreign branches and representative offices of the parent company in accordance with the law.

4. To decide on capital raising schemes with values not exceeding the registered capital or a lower ratio as prescribed in the Company Charter, or not exceeding the maximum value limit prescribed in the Company Charter.

5. To decide on organizational structure, business operation plans, internal management regulations of the company, and staffing of the management apparatus.

6. The Board of Members of a state-owned economic group converted into a single-member limited liability company has the right to decide on the salary scale, unit price of wages, wage payment system for employees and company managers of the single-member limited liability company based on the national minimum wage and the principle that the average wage increase rate is lower than the productivity growth rate, except for positions such as Chairman, Board Member, General Director, Deputy General Director (Sector Director), Chief Accountant, and Supervisor, which are decided by the company owner.

7. To decide on appointing, dismissing, removing, signing contracts, terminating contracts, rewarding, disciplining, salaries, and other benefits for the General Director of the company. To decide on appointing, dismissing, removing, signing contracts, terminating contracts, salaries, and other benefits for Deputy General Directors (Sector Directors) and Chief Accountants of the company based on the proposal of the General Director.

8. To appoint representatives of the company's shareholding in other enterprises based on the proposal of the General Director.

9. To decide on important issues concerning subsidiaries:

a) For single-member limited liability companies wholly owned by the company: to decide on applying the Board of Members management structure or the Chairman of the Company management structure; the number and composition of Board of Members members; appointing, dismissing, removing, rewarding, disciplining, and remuneration or salary levels for Board of Members members, Chairman of the Company, and Supervisors; approving the Articles of Association, amending, and supplementing the Articles of Association of the company; objectives, directions, development strategies, long-term plans, adding business lines, adjusting registered capital, investment projects, purchase and sale contracts, loan contracts, and other contracts within the authority of the company owner; approving the final settlement report and profit distribution plan of the company annually;

b) For joint-stock companies or limited liability companies with two or more members holding controlling shares or stakes of the company: to instruct the company's representative to use controlling rights or veto power in approving the Articles of Association, amending, and supplementing the Articles of Association of the company; objectives, directions, development strategies, long-term plans, adding business lines, investment projects, purchase and sale contracts, loan contracts, and other contracts within the authority of the Board of Directors or Board of Members; raising additional shares or stakes; approving the final settlement report and profit distribution plan of the company annually for enterprises with controlling shares or stakes of the company.

c) For dependent accounting units, public service units, and financial companies (if any): approve the operational regulations of the dependent accounting unit and public service unit; review the draft Charter of the financial company (if any) for submission to the Governor of the State Bank for approval.

10. Supervise the General Director of the company: the Chairman and members of the Board of Members or the Chairman of the company, the Inspector of the limited liability company owned by the company, the Director of the financial company (if any), and the representative of the company's shareholding in other enterprises in performing their functions and tasks as prescribed by the Enterprise Law and this Decree.

11. Approve the annual financial statements of the company; consolidated financial statements of the group of companies or state-owned economic groups.

12. The decisions of the Board of Members on the following matters must be approved by the owner:

a) Strategic development decisions, long-term, medium-term, and annual plans of the company; investment portfolio, main business sectors, and unrelated business sectors; adjustments and supplements to the main business sectors of the company; high-risk sectors, fields, areas, and projects;

b) Approve investment projects; purchase, sale, loan, lending contracts, and other contracts exceeding the limits set forth in Clause 2 of this Article;

c) Approve capital raising schemes exceeding the limits set forth in Clause 4 of this Article;

d) Decisions stipulated in Clause 3 of this Article; investment contributions into other companies; changes in ownership structure of subsidiary companies that result in loss of controlling rights;

d) Decide on the adjustment of the registered capital of the company; transfer part or all of the company's registered capital to other organizations or individuals;

e) Approve final accounts reports; profit utilization plans after completing tax obligations and other financial obligations of the company; plans for handling losses during the business process;

g) Decide on the supplementation and amendment of the Company Charter;

h) Decide on the appointment, hiring, dismissal, removal from office, signing of contracts, termination of contracts with the General Director;

i) Other issues stipulated in the Company Charter.

13. Implement the decisions approved by the company owner.

14. Report to the company owner on the results and business operation situation of the company.

15. Be responsible before the company owner and the law for the exercise of their powers and duties and for the development of the company according to the goals and tasks assigned by the owner or the management contract of the company.

In case the company incurs losses, reduces the return on equity, or fails to achieve the assigned goals and tasks by the owner or the targets set out in the management contract without providing objective reasons accepted by the owner, they will be dismissed or required to compensate for damages according to the law depending on the extent of the violation.

16. Other rights and duties as prescribed in the Company Charter, the Enterprise Law, and related laws.

Article 21. Members of the Board of Members

1. The Board of Members consists of full-time and non-full-time members. The number of members shall not exceed seven people; the company owner decides the number and structure of Board of Members members. Specifically, the Board of Members of the parent company of state-owned economic groups has from five to nine people.

2. Board of Members members must meet the following basic criteria:

a) Reside permanently in Vietnam. The Chairman of the Board of Members must be a Vietnamese citizen;

b) Graduated from university and have business capability and enterprise management skills. The Chairman of the Board of Members must have at least three years of experience managing and operating enterprises in the company's main business sector;

c) Be in good health, have good moral character, be honest, incorruptible, understand the law, and have a sense of compliance with the law;

d) Not be a state administrative official or a political organization leader or hold management positions in affiliated enterprises;

đ) Not belong to the category prohibited from assuming management and operation positions in enterprises according to points b, c, đ, e, g of Clause 2 of Article 13 of the Enterprise Law;

e) Other criteria prescribed in the Company Charter.

3. The Chairman and members of the Board of Members are appointed, relieved of duty, rewarded, and disciplined by the company owner. The term of office of Board of Members members is stipulated in the Company Charter but shall not exceed five years. Board of Members members may be reappointed or replaced.

4. Board of Members members are relieved of duty and replaced in the following cases:

a) Violating the law to the extent of being prosecuted or cases of relief and replacement due to provisions of the Company Charter; in such cases, the Board of Members and the Inspector have the right to request the owner to supplement and replace Board of Members members;

b) Lacking the capability and qualifications to perform assigned tasks; losing or having restricted civil capacity;

c) Resigning;

d) Upon a decision to transfer or assign different work;

đ) Being dishonest in exercising authority or abusing position and authority for personal gain or for others;

e) When the company fails to complete assigned tasks or targets without providing acceptable reasons and obtaining owner approval;

g) Other cases decided by the company owner in accordance with the provisions of the Company Charter.

5. All Board of Members members must jointly bear responsibility before the appointing authority and the law for Board of Members decisions causing damage to the company and the company owner, except for members who voted against the decision; perform the obligations prescribed in Article 72 of the Enterprise Law.

6. The working system of the Board of Members is implemented according to the provisions of Article 68 of the Enterprise Law.

Article 22. Chairman of the Board of Members

1. The Chairman of the Board of Members shall be appointed by the company owner from among the members of the Board of Members. The Company Charter stipulates that either the Chairman of the Board of Members or the General Director shall be the legal representative of the company.

The Chairman of the Board of Members of the parent company of an economic group, or the parent company converted from a corporation established by the Prime Minister's decision, shall not concurrently hold the position of General Director; for other companies, this shall be decided by the company owner.

In cases where the Chairman of the Board of Members concurrently holds the position of General Director, the following conditions must be met:

a) The enterprise proposes the concurrent role and the person proposed for the concurrent role submits a request;

b) The person proposed for the concurrent role must have good health and meet the standards and conditions for both positions;

c) Specific provisions and separation of functions, duties, powers, and responsibilities of the Chairman of the Board of Members and the General Director must be clearly defined;

d) The person proposed for the concurrent role must bear responsibility for the functions, duties, and roles of both the Chairman of the Board of Members and the General Director of the company.

2. The Chairman of the Board of Members shall perform the rights and duties prescribed in Clause 2 of Article 49 of the Enterprise Law and other rights and duties prescribed in the Company Charter; he/she shall be responsible for explaining and bearing responsibility to the company owner for delays or failure to sign decisions of the Board of Members.

Article 23. General Director of the Company

1. The General Director shall manage the daily operations of the company according to the objectives, plans, and resolutions and decisions of the Board of Members in accordance with the Company Charter; he/she shall be responsible to the Board of Members and under the law for the execution of the assigned rights and duties.

2. The General Director shall have the duties and powers prescribed in Article 70 of the Enterprise Law and the following duties and powers regarding member units.

a) Develop business cooperation plans between member units to submit to the Board of Members; organize the implementation of joint business plans and investment plans between member units;

b) Inspect member units to ensure compliance with internal standards, quotas, and unit prices within the company group or corporation;

c) Propose to the Board of Members to decide on appointing representatives of the company's share capital in other enterprises.

3. The General Director shall fulfill the obligations prescribed in Article 72 of the Enterprise Law, other obligations prescribed in the Company Charter, and any contracts signed with the Board of Members (if any).

Article 24. Relationship between the Board of Members and the General Director in Management and Operation

1. When implementing resolutions and decisions of the Board of Members, if issues detrimental to the company are discovered, the General Director shall report to the Board of Members for review and adjustment of the resolution or decision. The Board of Members must consider the General Director's proposal. If the Board of Members does not adjust the resolution or decision, the General Director still has to implement it but has the right to appeal to the company owner.

2. Within fifteen days from the end of each month, quarter, or year, the General Director must submit a written report on the company's operational situation and planned directions for the upcoming period to the Board of Members.

3. The Chairman of the Board of Members has the right to attend or delegate a representative of the Board of Members to attend coordination meetings and preparatory meetings for proposals submitted to the Board of Members chaired by the General Director. The Chairman of the Board of Members or his/her representative may express opinions but does not have the right to conclude the meeting.

4. In cases where the General Director is not a member of the Board of Members, he/she may be invited to attend Board of Members meetings and has the right to express opinions but does not have the right to vote.

Article 25. Supervisors

1. The company owner appoints from one to three Supervisors with a term not exceeding three years; the number of supervisors depends on the scale of capital, geographical scope, and number of business sectors. For a single-member limited liability company converted from a parent company of an economic group or state-owned corporation, three supervisors shall be appointed. In cases where two or more supervisors are appointed, the owner shall designate one person to oversee the planning of work, assign tasks, and coordinate the activities of the supervisors. A Supervisor shall not concurrently hold a management or executive position within the enterprise or be related to those who manage or run the enterprise as stipulated in points a, c, and d, Clause 17, Article 4 of the Enterprise Law.

2. Supervisors have duties, powers, responsibilities, standards, and conditions as prescribed in Article 71 of the Enterprise Law and the Company Charter. Supervisors have the right to use the company's seal to perform tasks as prescribed by law and the Company Charter for Supervisors.

Article 26. Remuneration, Salary, and Other Benefits for Members of the Board of Directors, General Director, and Supervisors

1. Full-time members of the Board of Directors, full-time Supervisors, General Director, Deputy General Directors (Sector Directors), Chief Accountant receive annual salary benefits. Non-full-time members of the Board of Directors and non-full-time Supervisors receive remuneration based on their work and time spent working. Members of the Board of Directors, Supervisors, General Director, Deputy General Directors (Sector Directors), and Chief Accountant receive bonus benefits according to their terms of office. The level of salary and bonuses corresponds to the results and efficiency of the company's business operations and the results of management, operation, or supervision.

2. The payment system for salaries and bonuses is as follows:

a) Monthly, full-time members of the Board of Directors, full-time Supervisors, General Director, Deputy General Directors (Sector Directors), and Chief Accountant are temporarily advanced 70% of the estimated monthly salary amount; the remaining 30% can only be settled and paid at the end of the year. Annually, members of the Board of Directors, Supervisors, General Director, Deputy General Directors (Sector Directors), and Chief Accountant are temporarily advanced 70% of the total annual bonus amount; the remaining 30% can only be settled and paid after the completion of the term of office;

b) The remaining 30% of the salary and bonus amounts are paid to the corresponding individuals based on the financial management regulations of a single-member limited liability company and the monitoring and evaluation regulations for members of the Board of Directors, Supervisors, General Director, Deputy General Directors (Sector Directors), and Chief Accountant of a single-member limited liability company issued by the Ministry of Finance.

In cases where the classification results of the enterprise and the assessment results of management, operation, or supervision by the Board of Directors and each member of the Board of Directors, Supervisors, General Director, Deputy General Directors (Sector Directors), and Chief Accountant do not meet the requirements stipulated in the financial management regulations and monitoring and evaluation regulations, those members of the Board of Directors, Supervisors, General Director, Deputy General Directors (Sector Directors), and Chief Accountant who do not meet the requirements will not be settled for the remaining 30% of the annual salary (for those receiving salaries) and will not receive the remaining 30% of the bonus amount for the term of office.

3. In cases where the Chairman of the Board of Directors concurrently holds the position of General Director, they may only receive the salary of one position.

PART II

ORGANIZATION OF COMPANY MANAGEMENT UNDER THE CHAIRMAN MODEL

Article 27. Chairman of the Company

1. The Chairman of the Company shall be appointed by the company's owner for a term not exceeding five years; he may be reappointed or replaced. The Chairman of the Company may concurrently hold the position of General Director of the Company.

The Company Charter shall stipulate that either the Chairman of the Company or the General Director shall be the legal representative of the Company.

The Chairman of the Company shall act on behalf of the owner to organize the implementation of the owner's rights and obligations; implement the Company's rights and obligations; and bear responsibility before the owner and the law for the execution of the rights and duties assigned.

2. The Chairman of the Company shall have the following rights and duties:

a) Organize the development and decide on the strategic plan for development; long-term, medium-term, and annual plans of the Company;

b) Decide on market development solutions, marketing, and technology of the Company; investment projects, purchase and sale contracts, loan and lending contracts, and other contracts with a value not exceeding 50% of the total asset value recorded in the accounting books of the Company or a lower ratio specified in the Company Charter, or not exceeding the maximum value specified in the Company Charter;

c) Decide on establishing new investments, restructuring, dissolution, and ownership conversion of wholly-owned subsidiary companies; wholly-owned subsidiaries of subsidiary companies so that the parent company holds 100% of the registered capital; subordinate units of the parent company; branches and representative offices of the parent company both domestically and abroad according to the provisions of the law.

d) Decide on capital-raising schemes with a value not exceeding the registered capital or a lower ratio specified in the Company Charter, or not exceeding the maximum value specified in the Company Charter;

đ) Decide on organizational structure, business operation plans, internal management regulations of the Company, and staffing of the management apparatus;

e) Decide on the appointment, dismissal, removal from office, signing of contracts, and determination of salaries and other benefits for the General Director (Director) of the Company. Appoint, dismiss, remove from office, sign contracts, and determine salaries and other benefits for Deputy General Directors (Deputy Directors or Field Directors) and Chief Accountants of the Company upon the recommendation of the General Director (Director);

g) Supervise the General Director in the performance of his rights and duties;

h) Approve the annual financial report; profit utilization plans after fulfilling tax and other financial obligations of the Company; loss handling plans during the business process; and publicly disclose financial reports according to the Government's regulations;

i) Propose to the owner of the Company to approve important matters of the Company as stipulated in the Company Charter;

k) Implement decisions of the owner of the Company;

l) Report to the owner of the Company on the results and business operation situation of the Company;

m) Other rights and duties as prescribed by law and the Company Charter.

3. Decisions of the Chairman of the Company on the following issues must be approved by the owner of the Company:

a) Decisions on the strategic plan for development, long-term, medium-term, and annual plans of the Company; adjustments and supplements to the main business sectors of the Company;

b) Approve investment projects; purchase and sale contracts, loan and lending contracts, and other contracts above the level specified in point b, Clause 2 of this Article;

c) Decisions as specified in point c, Clause 2 of this Article; capital contributions for investment in other companies; changes in the ownership structure of subsidiary companies that result in the loss of control by the Company;

d) Decide on the adjustment of the registered capital of the company; transfer part or all of the company's registered capital to other organizations or individuals;

đ) Approve final accounts reports; profit utilization plans after fulfilling tax and other financial obligations of the Company; loss handling plans during the business process;

e) Decide on the supplementation and modification of the Company Charter;

g) Decide on the appointment, dismissal, removal from office, signing of contracts, and termination of contracts with the General Director;

h) Other matters as stipulated in the Company Charter.

4. The Chairman of the Company must meet the standards prescribed for the Chairman of the Board of Members.

In the case where the Chairman of the Company concurrently holds the position of General Director, the following conditions must be ensured:

a) The enterprise proposes the concurrent role and the person proposed for the concurrent role submits a request;

b) The person proposed for the concurrent role must have good health and meet the standards and conditions for both positions;

c) Specific and distinct implementation of the functions, duties, powers, and responsibilities of the Chairman of the Company and the General Director must be stipulated.

d) The person proposed to concurrently hold these positions must be responsible for the functions, duties, and roles of the Chairman of the Company and the General Director of the Company.

Article 28. General Director of the company

The General Director is the person responsible for managing the daily operations of the company in accordance with the objectives and plans consistent with the Company's Charter and resolutions and decisions of the Chairman of the company; he/she is accountable to the Chairman of the company and the law for the performance of the rights and duties assigned.

The General Director has the duties, powers as prescribed in Article 70 of the Enterprise Law.

Article 29. Inspector

The number, term, duties, powers, responsibilities, criteria, and conditions for Inspectors shall be implemented according to the provisions of Article 25 of this Decree.

Article 30. Remuneration, Salary, and Other Benefits for the Chairman of the company, the General Director, and the Inspector

The Chairman of the company, the General Director, Deputy General Directors (Sector Managers), Inspectors, and Chief Accountants of the company shall enjoy remuneration, salary, and other benefits as stipulated for members of the Board of Members, the General Director, Deputy General Directors (Sector Managers), Inspectors, and Chief Accountants under Article 26 of this Decree. In cases where the Chairman of the company concurrently holds the position of General Director, only one position’s salary may be received.

Chapter IV

MANAGEMENT AND SUPERVISION BY THE OWNER OF A JOINT STOCK COMPANY WITH A SINGLE MEMBER

Article 31. Content of Management and Supervision by the Owner over a Limited Liability Company with a Single Member

The State Owner manages and supervises the following contents regarding a limited liability company with a single member:

1. Regarding the implementation of objectives, tasks, and directions of operation:

a) Business objectives, business sectors, development strategy, production and business plans, investment, and financial plans of the company;

b) Investment portfolio, investment in main business sectors, non-related business sectors; high-risk industries, fields, areas, and projects;

c) Tasks related to providing public goods and services;

d) Results of implementing the objectives and tasks assigned by the owner.

2. Regarding capital and finance:

a) Safeguarding and developing the company's capital;

b) The situation of investment, debt, and the ability to repay debt of the company;

c) Financial activity results, business efficiency, profit rate on state capital;

d) Total wage fund of the company; average wage increase rate compared to the company's labor productivity increase rate;

đ) Increasing or transferring part of the registered capital of the company.

3. Regarding organization and personnel:

a) Reorganization, dissolution, bankruptcy of the company; changing the legal form of the company; amending the company's charter; changing the ownership structure of subsidiary companies that would result in loss of control by the company;

b) Appointing, dismissing, removing from office, setting goals, tasks, or management contracts for the company, salary systems, reward and punishment systems, performance of the Board of Members, Chairman of the company, Inspectors; appointing, dismissing, removing from office, signing contracts, salary systems, reward and punishment systems, performance of the company's General Director.

4. Compliance with the owner's decisions and the company's charter.

5. Other contents as prescribed by the Enterprise Law and relevant laws.

Article 32. Information and Reporting System of the Board of Members, Chairman of the company, and the Owner's Responsibility in Resolving Proposals of the Board of Members, Chairman of the company

1. Information and reporting system of the Board of Members, Chairman of the company to the owner:

a) Within thirty days from the end of each quarter or year, the Chairman of the Board of Members or the Chairman of the company must submit a written report on the company's operational status, business results as stipulated in Clause 14 of Article 20 of this Decree, and the proposed direction for the next period;

b) Within five working days from the date of decision, the Chairman of the Board of Members or the Chairman of the company must submit a written report on the Board of Members' or Chairman of the company's decisions concerning organizational structure, internal management regulations of the company; wage scales, salary systems, rewards, and punishments for the General Director; issues requiring approval by the company owner as prescribed in this Decree.

2. Within thirty days from receiving reports from the Chairman of the Board of Members or the Chairman of the company and the Board of Members' approval proposals as stipulated in Clause 12 of Article 20 of the Board of Members or Clause 3 of Article 27 of this Decree, the owner must decide in writing to approve or respond to the company.

Chapter V

IMPLEMENTING PROVISIONS

Article 33. Effective Date

1. This Decree takes effect from May 5, 2010.

2. This Decree replaces Decree No. 95/2006/NĐ-CP dated September 8, 2006, on the conversion of state-owned enterprises into limited liability companies with a single member.

Article 34. Responsibility for Implementation and Organization of Execution

1. Ministries, provincial People's Committees, State-Owned Enterprise Management Councils, and parent companies of state-owned economic groups shall be responsible for establishing schedules, directing, and organizing the implementation to complete the conversion of state-owned enterprises under their management into limited liability companies with one member before July 1, 2010. For enterprises currently undergoing shareholding reform expected to have their shareholding enterprise value recognized by the competent authority before July 1, 2010, they shall not be converted into limited liability companies with one member but shall continue to implement the shareholding reform process and register as joint-stock companies after July 1, 2010.

2. Political organizations and political-social organizations may apply this Decree to convert enterprises that need to hold 100% of the charter capital into limited liability companies with one member owned by political organizations or political-social organizations. Ministries and provincial People's Committees may apply the provisions of this Decree to convert non-scientific and technological business units that are not required to be transformed into enterprises into limited liability companies with one member after being approved by the Prime Minister.

3. Agencies and organizations assigned or delegated to exercise the rights and obligations of the owner shall be responsible for directing limited liability companies with one member converted or established before the effective date of this Decree to conduct reviews, adjust management structures, and amend the Company Charter in accordance with the provisions of this Decree.

4. The Ministries of Planning and Investment, Finance, Labor, Invalids and Social Affairs, Home Affairs, Agriculture and Rural Development shall be responsible for coordinating with relevant agencies to provide guidance on the implementation of this Decree.

5. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial People's Committees directly under the Central Government, and Management Councils of parent companies of state-owned economic groups and state-owned corporations shall be responsible for implementing this Decree.

The Minister of Planning and Investment shall be responsible for monitoring the implementation of this Decree. /