Law on Management and Use of State Capital for Investment in Production and Business Activities at Enterprises No. 69/2014/QH13

LAW

Management and use of state capital for investment in production and business activities at enterprises
conducting business at the enterprise
_________________

On the basis of the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates the Law on Management and Use of State Capital for Investment in Production and Business Activities at Enterprises.

Chapter I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Law stipulates the investment of state capital in enterprises; management and use of state capital for investment in production and business activities at enterprises, and supervision of the investment, management, and use of state capital at enterprises.

Article 2. Applicability

1. State owner representative.

2. Enterprises wholly owned by the State include:

a) A single-member limited liability company wholly owned by the State that is the parent company of a state-owned economic group, the parent company of a state-owned corporation, or the parent company within a parent company - subsidiary group;

b) An independent single-member limited liability company wholly owned by the State.

3. Representative of state capital invested in joint-stock companies and limited liability companies with two or more members.

4. Other agencies, organizations, and individuals related to the activities of investment, management, and use of state capital at enterprises.

Article 3. Explanation of Terms

In this Law, the following terms shall be understood as follows:

1. The agency representing the owner is an agency or organization assigned by the Government to exercise the rights and responsibilities of the state owner representative for enterprises established by itself or to exercise rights and responsibilities for the portion of state capital invested in joint-stock companies and limited liability companies with two or more members.

2. Financial agencies include the Ministry of Finance and Provincial Financial Departments.

Investment of state capital in enterprises is the act of the State using capital from the state budget or funds managed by the State to invest in enterprises.

2. The direct state owner representative at enterprises wholly owned by the State (hereinafter referred to as the direct state owner representative) is an individual appointed by a competent state agency to the Board of Members or Chairman of the company to exercise the rights and responsibilities of the state owner representative at the enterprise.

3. The representative of the enterprise's capital at joint-stock companies and limited liability companies wholly owned by the State (hereinafter referred to as the enterprise's capital representative) is an individual authorized in writing by the enterprise to exercise the rights and responsibilities of the enterprise for its capital invested in joint-stock companies and limited liability companies.

4. The representative of state capital invested in joint-stock companies and limited liability companies with two or more members (hereinafter referred to as the state capital representative) is an individual authorized in writing by the agency representing the state owner to exercise the rights and responsibilities of the state owner representative for the portion of state capital invested in joint-stock companies and limited liability companies with two or more members.

5. Enterprise managers include the Chairman and members of the Board of Members, the Chairman of the company, General Director or Director, Deputy General Director or Deputy Director, Chief Accountant.

6. State capital at enterprises includes capital from the state budget, received capital with origins from the state budget; capital from the enterprise development fund, enterprise restructuring support fund; government-guaranteed credit capital, state development investment credit capital, and other capital invested by the State at enterprises.

7. Capital of enterprises wholly owned by the State includes the enterprise's equity capital and capital raised by the enterprise.

Article 4. Objectives of investment, management, and use of state capital at enterprises

1. Implement strategic orientation and macroeconomic regulation to stabilize the economy during each period, promoting national socio-economic development in accordance with the socialist direction.

2. Reform and enhance the effectiveness of investment, management, and use of state capital at enterprises.

3. Enhance the effectiveness of production and business operations of enterprises.

Article 5. Principles of investment, management, and use of state capital at enterprises

1. Comply with legal provisions on investment, management, and use of state capital at enterprises.

2. Be consistent with the strategy, plans for socio-economic development, and industry development planning.

3. Invest state capital to form and maintain enterprises in key stages and processes in certain industries and fields where other economic sectors do not participate or where the State holds 100% of the charter capital, maintaining the proportion of shares and contributions as stipulated in Articles 10 and 16 of this Law.

4. The agency representing the owner and the state management agency shall not directly intervene in the production and business activities of enterprises or in the management and operation activities of enterprise managers.

5. Management of state capital invested in enterprises must be carried out through direct representatives of the owner or representatives of state shares; ensuring that enterprises operate according to market mechanisms, equality, cooperation, and competition under the law.

6. The agency representing the owner, direct representatives of the owner, and representatives of state shares bear responsibility for managing and using state capital at enterprises, ensuring efficiency, preservation, and increase in the value of state capital invested in enterprises; preventing dispersion, waste, loss of state capital and assets, and those of enterprises.

7. Transparency in investment, management, and use of state capital at enterprises.

8. Consistent with international treaties to which the Socialist Republic of Vietnam is a member.

Article 6. Forms of state capital investment in enterprises

1. Investing state capital to establish enterprises in which the State holds 100% of the charter capital.

2. Supplementing charter capital for enterprises where the State holds 100% of the charter capital and is currently operating.

3. Supplementing state capital to continue maintaining the proportion of shares and contributions of the State in joint-stock companies and limited liability companies with two or more members.

4. Investing state capital to acquire part or all of an enterprise.

Article 7. State Owner Representative

1. The Government uniformly exercises the rights and responsibilities of the state owner representative in investing state capital in enterprises and managing state capital at enterprises as stipulated in Article 40 of this Law.

2. The Prime Minister, the agency representing the owner, exercises the rights and responsibilities of the state owner representative towards enterprises established by themselves or entrusted to manage, and towards the portion of state capital invested in joint-stock companies and limited liability companies with two or more members as stipulated in Articles 41, 42, and 43 of this Law and other relevant laws.

3. Direct representatives of the owner exercise the rights and responsibilities of the state owner representative at enterprises as stipulated in Article 44 of this Law and other relevant laws.

Article 8. Contents of state management on investment, management, and use of state capital at enterprises

1. Issuing and implementing regulatory legal documents on investment, management, and use of state capital at enterprises.

2. Building investment development strategies for enterprises according to economic and social development strategies, plans, and industry development master plans.

3. Building and retaining basic information about enterprises; monitoring and supervising enterprise activities.

4. Issuing lists, financial management methods, and preferential policies for public goods and services during each period.

5. Supervising, inspecting, and auditing the implementation of state policies and laws at enterprises; resolving complaints and denunciations; rewarding and handling violations.

Article 9. Prohibited acts in the field of investment, management, and use of state capital at enterprises

1. Deciding to invest state capital in enterprises beyond authority, scope, procedures, and formalities.

2. Intervening improperly in the functions, tasks, and powers in managing and using capital and assets of enterprises wholly owned by the State.

3. Not complying with the rights and responsibilities of state-owned representatives in investing, managing, and using state capital at enterprises.

4. Not complying with regulations on managing and using capital and assets of enterprises wholly owned by the State and managing state capital invested in joint-stock companies and limited liability companies with two or more shareholders.

5. Supervising, inspecting, and auditing enterprises beyond functions, tasks, and powers as prescribed by law.

6. Providing inaccurate, incomplete, or untimely information and reports as prescribed by law.

7. Disclosing and using information provided by enterprises or state management agencies in violation of legal provisions.

Chapter II
INVESTMENT OF STATE CAPITAL IN ENTERPRISES

Section 1
INVESTING STATE CAPITAL TO ESTABLISH ENTERPRISES WHOLLY OWNED BY THE STATE WITH 100% CHARTER CAPITAL

Article 10. Scope of investment of state capital to establish enterprises

1. Investing state capital to establish enterprises within the following scope:

a) Enterprises supplying essential public goods and services to society;

b) Enterprises operating in fields directly serving national defense and security;

c) Enterprises operating in natural monopoly sectors;

d) High-tech enterprises with large investments that drive rapid development in other industries and the economy.

2. The Government shall provide detailed regulations on investing state capital to establish enterprises and the mechanism for state orders for enterprises with macroeconomic support and regulation functions and ensuring social welfare as stipulated in Clause 1 of this Article.

Article 11. Authority to decide on investment of state capital to establish enterprises

1. The Prime Minister decides on investment of state capital to establish enterprises in the following cases:

a) Enterprises with production and business assets formed from the implementation of national key projects approved by the National Assembly for investment policy;

b) Parent companies of state-owned economic groups and enterprises with the function of investing and operating state capital.

2. The agency representing the owner decides on investment of state capital to establish enterprises not falling under the cases specified in Clause 1 of this Article.

3. In the case of investing state capital to establish enterprises with criteria equivalent to national key projects,

Article 12. Procedures and formalities for state capital investment to establish enterprises

1. The representative body of the owner shall prepare a project to establish an enterprise. The project must include the following main contents:

a) Objectives and necessity of establishing the enterprise;

b) Name, organizational model, and duration of operation; main business sectors;

c) Total investment amount; registered capital; sources of capital mobilization;

d) Economic and social impact assessment of establishing the enterprise on industry planning, development strategies, and economic zones;

đ) Economic efficiency and social efficiency.

2. The project to establish an enterprise must be reviewed by the competent state agency.

3. For the establishment of enterprises as prescribed in Clause 1, Article 11 of this Law, the representative body of the owner shall submit the project to

4. For the establishment of enterprises as prescribed in Clause 2, Article 11 of this Law:

a) The representative body of the owner shall submit the project to establish the enterprise to the Prime Minister;

b) The Prime Minister shall examine and decide on the policy of establishing the enterprise;

c) The representative body of the owner shall decide to establish the enterprise.

5. The Government shall provide detailed regulations on procedures and formalities for state capital investment to establish enterprises.

Section 2
ADDITIONAL CAPITAL INVESTMENT FOR ENTERPRISES WITH 100% STATE REGISTERED CAPITAL THAT ARE OPERATING

Article 13. Scope of additional capital investment for operating enterprises

1. Additional capital investment shall only apply to enterprises within the scope prescribed in Clause 1, Article 10 of this Law and falling under one of the cases prescribed in Clause 2 of this Article.

2. Cases eligible for additional capital investment:

a) Operating enterprises that are profitable but whose registered capital does not ensure the implementation of their main business sectors approved by the competent state agency;

b) Enterprises operating in fields directly serving national defense and security but whose registered capital does not ensure the fulfillment of assigned State tasks.

Article 14. Authority to decide on additional capital investment for operating enterprises

1. The Prime Minister decides on additional capital investment for enterprises established by himself.

2. The representative body of the owner decides on additional capital investment for enterprises established by itself or entrusted with management according to this Law, except for enterprises prescribed in Clause 1 of this Article.

3. In cases of additional capital investment for operating enterprises where the additional capital amount is equivalent to the capital of a national key project,

Article 15. Procedures and formalities for additional capital investment for operating enterprises

1. The enterprise prepares a plan for additional capital investment. The plan must include the following main contents:

a) Financial status evaluation and production and business results of the enterprise;

b) Objectives, necessity, economic efficiency, and social efficiency of additional capital investment;

c) Determination of the registered capital after additional investment.

2. The enterprise submits the plan for additional capital investment to the representative body of the owner.

3. The representative body of the owner shall take the lead and coordinate with the financial agency at the same level to review the plan for additional capital investment.

4. For additional capital investment as prescribed in Clause 1, Article 14 of this Law, the representative body of the owner shall submit the plan to

5. For additional capital investment as prescribed in Clause 2, Article 14 of this Law:

a) The representative body of the owner shall submit the plan for additional capital investment to the Prime Minister;

b) The Prime Minister shall examine and decide on the policy of additional capital investment;

c) The representative body of the owner shall decide on additional capital investment.

6. The Government shall provide detailed criteria for evaluating effectiveness, procedures, and formalities for additional capital investment for operating enterprises.

Section 3

ADDITIONAL STATE CAPITAL INVESTMENT IN JOINT-STOCK COMPANIES AND LIMITED LIABILITY COMPANIES WITH TWO OR MORE MEMBERS

Article 16. Scope of additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders

1. Additional state capital investment to continue maintaining the proportion of state shares or contributions in joint-stock companies and limited liability companies with two or more shareholders under one of the following circumstances:

a) Unable to attract domestic and foreign investors for businesses providing essential public goods and services to society;

b) Necessary to maintain for the implementation of national defense and security tasks.

2. The Government shall provide detailed regulations on additional state capital investment to continue maintaining the proportion of state shares or contributions in joint-stock companies and limited liability companies with two or more shareholders as stipulated in Clause 1 of this Article.

Article 17. Authority to decide on additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders

1. The Prime Minister decides on additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders that have been converted from enterprises established by himself.

2. The agency representing the owner decides on additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders that have been converted from enterprises established by itself or entrusted to manage according to this Law, except for enterprises stipulated in Clause 1 of this Article.

3. In cases where additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders amounts to the level of capital of a national key project,

Article 18. Procedures and formalities for additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders

1. The representative of state capital reports to the agency representing the owner the plan for additional state capital investment to maintain the proportion of state shares or contributions in joint-stock companies and limited liability companies with two or more shareholders. The plan must include the following main contents:

a) Assessment of the current financial status and business results of joint-stock companies and limited liability companies with two or more shareholders;

b) Plan to increase the registered capital of joint-stock companies and limited liability companies with two or more shareholders;

c) Objectives, necessity, economic efficiency, and social benefits of additional state capital investment;

d) Level of additional capital investment to maintain the proportion of state shares or contributions.

2. The agency representing the owner leads and coordinates with the same-level financial agency to appraise the plan for additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders converted from enterprises established by

3. For additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders as stipulated in Clause 1 of Article 17 of this Law, the agency representing the owner prepares the plan to

4. For additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders as stipulated in Clause 2 of Article 17 of this Law, the agency representing the owner examines and decides.

5. The Government shall provide detailed regulations on procedures and formalities for additional state capital investment in joint-stock companies and limited liability companies with two or more shareholders.

Section 4
INVESTMENT OF STATE CAPITAL TO ACQUIRE PART OR ALL OF A BUSINESS
OR THE ENTIRE ENTERPRISE

Article 19. Scope of Investment of State Capital to Acquire Part or All of a Business

1. Investment of state capital to acquire part or all of a business shall be carried out in any of the following cases:

a) Implementing economic restructuring;

b) Directly serving national defense and security;

c) Supplying essential public goods and services to society.

2. The investment of state capital to acquire part or all of a business as stipulated in Clause 1 of this Article must be consistent with the strategy, plan for socio-economic development, and industry development planning during each period.

Article 20. Authority to Decide on Investment of State Capital to Acquire Part or All of a Business

1. The Prime Minister decides on investment of state capital to acquire part or all of a business that meets the criteria equivalent to a national key project or Group A project under the Law on Public Investment.

2. The agency representing the owner decides on investment of state capital to acquire part or all of a business that meets the criteria equivalent to Group B or Group C projects under the Law on Public Investment.

3. The Prime Minister decides on investment of state capital after the National Assembly decides on the policy of investment in the following cases:

a) Acquiring part of a business with an investment amount equivalent to that of a national key project;

b) Acquiring all of a business that meets the criteria equivalent to a national key project.

Article 21. Procedure and Formalities for Investment of State Capital to Acquire Part or All of a Business

1. The agency representing the owner prepares the investment plan for state capital to acquire part or all of a business. The plan must include the following main contents:

a) Financial status evaluation and production and business results of the enterprise;

b) Objectives, necessity, economic efficiency, social benefits of investing state capital to acquire part or all of a business;

c) Level of investment capital.

2. The agency representing the owner takes the lead and coordinates with the financial authority at the same level to appraise the investment plan for state capital to acquire part or all of a business.

3. For the acquisition of part or all of a business as prescribed in Clause 1 of Article 20 of this Law, the agency representing the owner submits the plan to

4. For the acquisition of part or all of a business as prescribed in Clause 2 of Article 20 of this Law, the agency representing the owner examines and decides.

5. The Government shall provide detailed regulations on the procedure and formalities for investment of state capital to acquire part or all of a business.

Chapter III
MANAGEMENT AND USE OF CAPITAL AND ASSETS AT ENTERPRISES UNDER FULL STATE OWNERSHIP
WHERE THE STATE HOLDS 100% OF THE CAPITAL REGULATED BY LAW

Article 22. Registered Capital

1. Principles for Determining Registered Capital:

a) Not lower than the minimum capital requirement for the industry, profession, or field of production and business operation as prescribed by law;

b) Based on the scale and design capacity for the industry, profession, or field of production and business operation of the enterprise;

c) Consistent with the enterprise's investment and development strategy and plan, and consistent with the primary industry, profession of business operation approved by the competent authority;

d) Consistent with the production and business operation plan.

2. The agency representing the owner is responsible for approving the registered capital and ensuring sufficient registered capital for the enterprise according to the provisions of Clause 1 of this Article.

3. Sources of registered capital investment to establish an enterprise and supplement the registered capital of an operating enterprise from sources forming state capital at the enterprise.

Article 23. Mobilizing Capital

1. Enterprises have the right to borrow capital from credit institutions, financial organizations; borrow from organizations, individuals outside the enterprise, from employees; issue corporate bonds and other forms of capital mobilization in accordance with the provisions of the law.

2. Principles for mobilizing capital:

a) Based on the five-year investment development strategy and annual production and business plans of the enterprise;

b) The capital mobilization plan must ensure the ability to repay debts;

c) The person approving the capital mobilization plan shall be responsible for supervising and inspecting to ensure that the mobilized capital is used for its intended purpose and is effective;

d) The mobilization of capital from domestic organizations and individuals must be carried out through loan contracts with such organizations and individuals in accordance with the provisions of the law; in cases where capital is borrowed from state development credit funds, it shall be implemented in accordance with the provisions of the law on development credit and other relevant laws;

e) The mobilization of capital from foreign organizations and individuals, borrowing or issuing guaranteed bonds shall be carried out in accordance with the provisions of the law on public debt management and other relevant laws;

f) The mobilization of capital in the form of issuing corporate bonds shall be carried out in accordance with the provisions of the law.

3. Authority to mobilize capital:

a) The Board of Members or the Chairman of the company decides on the capital mobilization plan for each project with a mobilization amount not exceeding 50% of the equity capital recorded in the quarterly or annual financial report of the enterprise at the time closest to the time of capital mobilization but not exceeding the capital limit of Project Group B as stipulated in the Public Investment Law. The total debt payable including guarantees for subsidiaries as provided for in Clause 4 of this Article shall not exceed three times the equity capital of the enterprise recorded in the quarterly or annual financial report of the enterprise at the time closest to the time of capital mobilization. The Board of Members or the Chairman of the company may delegate authority to the General Director or Director to decide on the capital mobilization plan in accordance with the articles of association or financial regulations of the enterprise;

b) In cases where the capital mobilization exceeds the limit specified in point a of this clause, or when mobilizing capital from foreign organizations and individuals, the Board of Members or the Chairman of the company shall report to the agency representing the owner for examination and approval.

4. Enterprises have the right to guarantee loans for subsidiaries at credit institutions under the following principles:

a) The total value of loan guarantees for a subsidiary held 100% by the enterprise shall not exceed the equity capital of the subsidiary as recorded in the most recent quarterly or annual financial report at the time of guarantee;

b) The total value of loan guarantees for subsidiaries held over 50% by the enterprise shall not exceed the actual contribution value of the enterprise at the time of guarantee.

5. In cases where enterprises use mobilized capital for purposes other than those intended, or mobilize capital beyond the prescribed limits without approval from competent state agencies, the agency representing the owner shall examine and decide or report to competent state agencies to handle the responsibility of the Board of Members or the Chairman of the company in accordance with the law.

Article 24. Investment, construction, purchase, and sale of fixed assets

1. Authority to decide on investment, construction, purchase, and sale projects of fixed assets of enterprises:

a) Based on the five-year investment development strategy and the annual production and business plan of the enterprise, the Board of Members or the Chairman of the company decides on each investment, construction, purchase, and sale project of fixed assets with a value not exceeding 50% of the enterprise's owner's equity recorded in the quarterly or annual financial report at the time closest to the decision-making time but not exceeding the level of Project Group B as stipulated by the Public Investment Law. The Board of Members or the Chairman of the company delegates authority to the General Director or Director to decide on investment, construction, purchase, and sale projects of fixed assets according to the articles of association or financial regulations of the enterprise;

b) In cases where the investment, construction, purchase, and sale project of fixed assets has a value higher than the limit specified in point a of this clause, the Board of Members or the Chairman of the company reports to the agency representing the owner for examination and approval.

2. Procedures and formalities for investment, construction, purchase, and sale of fixed assets shall be carried out in accordance with the provisions of the law.

3. The person deciding on the investment, construction, purchase, and sale project of fixed assets shall bear responsibility under the law if the decision exceeds their authority or the fixed assets invested in, constructed, purchased, or sold are unusable or inefficiently used.

Article 25. Management and use of fixed assets

1. Enterprises establish, issue, and implement regulations on the management and use of fixed assets.

2. Enterprises have the right to lease, mortgage, or pledge fixed assets based on the principles of efficiency, capital preservation, and development; sell off, liquidate fixed assets that are damaged, technologically obsolete, unnecessary, unusable, or inefficiently used to recover capital.

Article 26. Management of receivables

1. Enterprises manage receivables as follows:

a) Establish, issue, and implement regulations on the management of receivables. The regulation on the management of receivables must specify the responsibilities of collectives and individuals in tracking and recovering debts;

b) Track receivables by debtor category;

c) Regularly classify debts and urge debt recovery.

2. Enterprises have the right to sell overdue receivables, difficult-to-collect receivables, and receivables with no possibility of recovery. Enterprises may only sell debts to economic organizations with the function of buying and selling debts, not directly to debtors. The selling price is agreed upon by both parties and they are responsible for their decisions.

3. In cases where managing receivables leads to the loss of owner's equity or selling debts results in the enterprise suffering losses, losing capital, losing payment capability, dissolution, bankruptcy, the Board of Members or the Chairman of the company, and related persons must compensate for damages and will be subject to legal and corporate charter penalties depending on the nature and severity of the violation.

Article 27. Management of payables

1. Enterprises manage payables as follows:

a) Establish, issue, and implement regulations on the management of payables. The regulation on the management of payables must specify the responsibilities of collectives and individuals in tracking, reconciling, confirming, and paying debts;

b) Track payables by debtor category; regularly classify debts; develop plans to pay debts, balance cash flows to ensure debt payments; pay debt amounts according to the agreed deadlines.

2. The Board of Members or the Chairman of the company, the General Director or Director are responsible for regularly reviewing, evaluating, and analyzing the enterprise's debt repayment capacity, identifying early signs of difficulties in debt repayment to promptly address them, and preventing the occurrence of overdue debts.

3. In cases where management leads to the occurrence of overdue payables or payables without the ability to repay, depending on the nature and severity of the violation, the Board of Members or the Chairman of the company, and related persons must compensate for damages and be subject to legal and corporate charter penalties.

Article 28. Investment outside the enterprise

1. The use of capital, assets, and land use rights of the enterprise for investment outside the enterprise must comply with the provisions of this Law, investment laws, land laws, and other relevant laws; be consistent with the five-year investment development strategy and annual production and business plans of the enterprise.

2. Forms of capital investment outside the enterprise:

a) Contributing capital to establish joint-stock companies or limited liability companies; contributing capital through business cooperation contracts without forming new legal entities;

b) Purchasing shares in joint-stock companies, purchasing equity contributions in limited liability companies or partnerships;

c) Purchasing entire other enterprises;

d) Purchasing treasury bills, bonds.

3. Cases where investment outside the enterprise is not allowed:

a) Contributing capital, purchasing shares, or purchasing entire other enterprises where the managers or representatives of that enterprise are the spouse, father, adopted father, mother, adopted mother, son, adopted son, brother, sister, brother-in-law, brother-in-law, sister-in-law, or sister-in-law of the Chairman and members of the Board of Members, Chairman of the company, Supervisory Board member, General Director or Director, Deputy General Director or Deputy Director, Chief Accountant of the enterprise;

b) Contributing capital together with subsidiary companies to establish joint-stock companies or limited liability companies or implementing business cooperation contracts.

4. Authority to decide on investment capital outside the enterprise:

a) The Board of Members or the Chairman of the company decides on each individual project of investment outside the enterprise with a value not exceeding 50% of the owner's equity recorded in the quarterly or annual financial report of the enterprise at the time closest to the decision-making time but not exceeding the level of Project Group B as stipulated by the Public Investment Law. The Board of Members or the Chairman of the company delegates authority to the General Director or Director to decide on projects of investment outside the enterprise according to the articles of association or financial regulations of the enterprise;

b) In cases where the investment project outside the enterprise has a value greater than the limit specified in point a of this clause, the joint venture capital contribution project of the enterprise with foreign investors in Vietnam, the investment project into other enterprises to supply public goods and services, the Board of Members or the Chairman of the company reports to the agency representing the owner for examination and approval.

Article 29. Overseas Investment by Enterprises

1. The use of capital and assets of the enterprise for overseas investment must comply with the provisions of this Law, investment laws, foreign exchange management laws, and other relevant laws.

2. The Board of Members or the Chairman of the company reports to the agency representing the owner for examination and decision on the policy of overseas investment projects. In cases where the overseas investment project falls within the authority to decide on the investment policy of the National Assembly,

3. Responsibilities of the Board of Members or the Chairman of the company:

a) Building the overseas investment project of the enterprise to ensure compliance with objectives, effectiveness, taking into account risk factors, and submitting it to the agency representing the owner for examination and approval;

b) Issuing operational and management regulations for the use of capital and assets of the enterprise abroad in accordance with local laws, ensuring strict management and preventing loss;

c) Regularly monitoring and evaluating and being responsible for the effectiveness of overseas investment by the enterprise;

d) Reporting periodically every six months and annually to the agency representing the owner on the progress of ongoing investment projects; on the effectiveness of operating projects;

đ) Promptly reporting and proposing solutions to the agency representing the owner in case of issues arising that seriously affect the overseas investment activities of the enterprise;

e) The transfer of profits, other income, and recovery of capital when concluding overseas investment projects back to the home country or continuing investment abroad shall be carried out in accordance with the articles of association, financial regulations of the enterprise, this Law, investment laws, and other relevant laws.

Article 30. Management of a business over a wholly-owned subsidiary and its share capital in joint-stock companies and limited liability companies

1. For subsidiaries in which the business holds 100% of the charter capital:

a) Deciding on establishment, charter capital at establishment, objectives, tasks, and business sectors; deciding to adjust charter capital during operation, reorganization, ownership transfer, dissolution, and bankruptcy of the subsidiary;

b) Issuing financial regulations for the subsidiary;

c) Deciding on appointment, reappointment, dismissal, commendation, and disciplinary action for the Chairman and members of the Board of Members or the Chairman of the company, General Director or Director, and Auditor of the subsidiary;

d) Approving the strategy, five-year investment development plan, and annual production and business plan of the subsidiary;

đ) Approving and amending the articles of association of the subsidiary;

e) Approving the capital raising plan, investment projects, construction, purchase, and sale of fixed assets with a value exceeding 50% of the subsidiary's equity recorded in the quarterly or annual financial report of the subsidiary at the time closest to the capital raising period or another ratio lower than that stipulated in the subsidiary's articles of association;

g) Approving the annual financial statements, profit distribution, and establishment of various funds of the subsidiary.

2. For the portion of the enterprise's contribution in joint-stock companies and limited liability companies with two or more members:

a) Deciding or submitting to the competent authority to decide on increasing, decreasing, recovering, or transferring the right to buy, contribute capital to joint-stock companies and limited liability companies with two or more shareholders according to the laws and the articles of association of the business;

b) Specifying standards, appointing, dismissing, reappointing, commending, disciplining, determining salaries, allowances, bonuses, and other benefits for the representative of the business's capital according to Articles 46, 47, 49, and 50 of this Law;

c) Assigning tasks to the representative of the business's capital to protect the legitimate rights and interests of the business in joint-stock companies and limited liability companies with two or more shareholders;

d) Directing the representative of the business's capital to request joint-stock companies and limited liability companies with two or more shareholders to transfer profits, dividends, or recovered investment capital back to the business; supervising the recovery of investment capital and the receipt of profits and dividends;

đ) Requesting the representative of the business's capital to report periodically or urgently on the financial situation and production and business activities of joint-stock companies and limited liability companies with two or more shareholders;

e) Requesting the representative of the business's capital to report regularly or urgently on the financial status and production and business operations of joint-stock companies and limited liability companies with two or more shareholders;

g) Inspecting and monitoring the activities of the representative of the business's capital to prevent and promptly address deficiencies and weaknesses of the representative.

Article 31. Transfer of Investment Capital Outside the Business

1. Principles of Transfer of Investment Capital:

a) Adhering to the provisions of the Enterprise Law, Securities Law, and other relevant laws;

b) Fully reflecting the actual value of the business, including the value of land use rights according to the Land Law;

c) Ensuring market principles, transparency, and fairness.

2. Methods of Transfer of Investment Capital:

a) The transfer of investment capital of the business in limited liability companies shall be carried out in accordance with the provisions of the Enterprise Law;

b) The transfer of investment capital of the business in listed joint-stock companies or those registered for trading on the securities market shall be carried out in accordance with the Securities Law;

c) The transfer of investment capital of the business in unlisted joint-stock companies or those not registered for trading on the securities market shall be conducted through public auction. In case the public auction fails, competitive bidding shall be conducted. If competitive bidding also fails, the transfer shall be conducted through negotiation.

3. The Board of Members or the Chairman of the company decides on the transfer of investment capital of the business in joint-stock companies and limited liability companies after the State Capital Representative Agency approves the policy. In cases where the transfer value is lower than the book value of the business after deducting the provision for investment loss, the Board of Members or the Chairman of the company must report to the State Capital Representative Agency for review and decision.

Article 32. Wages and bonuses for employees

1. Principles for determining wages for employees:

a) Compliance with laws on labor;

b) Based on agreements in the labor contract;

c) Based on the productivity and effectiveness of work performed by the employee.

2. Bonuses for employees shall be determined based on productivity and work achievements of the employees and shall be extracted from the post-tax profit of the enterprise. The Board of Members or the Company Chairman shall issue bonus regulations for employees.

Article 33. Wages, remuneration, and bonuses for business managers

1. Principles for determining wages and remuneration for business managers appointed by competent authorities:

a) Comply with labor laws and laws governing cadres and civil servants;

b) Based on the annual production and business performance of the enterprise;

c) Based on the level of completion of tasks by business managers; the remuneration of non-specialized business managers shall be determined based on their workload but shall not exceed 20% of the wage of specialized business managers.

2. Bonuses for business managers shall be approved by the enterprise's owner representative body based on the enterprise's operational performance, classification of the enterprise, and the level of completion of assigned tasks by business managers, and shall be extracted from the post-tax profit of the enterprise.

Article 34. Principles for distributing post-tax profits of enterprises

1. Extract not more than 30% of post-tax profits retained by the enterprise for investment in developing the main business sector of the enterprise.

2. Allocate part of the enterprise's post-tax profits to establish incentive funds, welfare funds for employees, and bonuses for business managers and supervisors based on the enterprise's operational effectiveness and the level of completion of assigned tasks.

3. The State collects the remaining post-tax profits after establishing the funds as stipulated in Clause 1 and Clause 2 of this Article to ensure the State's interests from its capital investment in the enterprise.

Article 35. Preservation and Development of Enterprise Capital

1. The preservation and development of enterprise capital shall be carried out through the following measures:

a) Managing and using capital and assets in accordance with this Law and other relevant laws;

b) Insuring assets;

c) Handling asset losses and unrecoverable debts;

d) Establishing reserves for inventory write-downs, doubtful receivables, long-term financial investment write-downs, product warranties, goods, and construction projects.

2. The Board of Members or the Company Chairman shall be responsible for:

a) Preserving and developing enterprise capital;

b) Reporting to the enterprise's owner representative body on changes in the enterprise's equity capital.

Chapter IV
RESTRUCTURING OF STATE CAPITAL IN ENTERPRISES

Article 36. Restructuring State Capital in Enterprises

1. Based on the scope of State capital investment to establish enterprises as stipulated in Article 10 of this Law, the Government shall specify the timeline for withdrawing State capital from enterprises in line with economic and social development strategies and industry development plans.

2. Enterprises that are not wholly owned by the State must restructure State capital in accordance with Articles 37, 38, and 39 of this Law.

3. Recover State capital from enterprises to reinvest and enhance operational efficiency of enterprises that are wholly owned by the State.

4. Attract domestic and foreign investors to participate in the production and business activities of enterprises when restructuring the enterprise.

5. State capital restructuring in enterprises shall be implemented through the following forms:

a) Ownership conversion and enterprise restructuring;

b) Transfer of State capital ownership representation rights at enterprises;

c) Transfer of State capital investment in joint-stock companies and limited liability companies with two or more shareholders.

Article 37. Conversion of Ownership and Restructuring of Enterprises

1. Enterprises may convert ownership through the following forms:

a) Shareholding reform;

b) Sale of the entire enterprise;

c) Sale of part of state capital invested in the enterprise to transform it into a limited liability company with two or more shareholders.

2. Enterprises shall restructure through the following forms:

a) Merger, consolidation, and division of enterprises;

b) Dissolution and bankruptcy of enterprises.

Article 38. Transfer of Rights to Represent State Ownership in Enterprises

1. Principles for transfer:

a) Not affecting production and business activities within the main business sectors of the enterprise;

b) Ensuring the ability and obligation to settle debts of the enterprise;

c) Not reducing the registered capital of the transferring enterprise when transferring part of capital or assets between enterprises.

2. Cases of transfer:

a) Transfer between agencies representing state ownership;

b) Transfer of part of capital or assets between enterprises;

c) Transfer of public investment projects and works from management agencies to enterprises;

d) Transfer of state capital in enterprises between agencies representing state ownership and enterprises with functions of investing and operating state capital.

Article 39. Transfer of State Capital Invested in Joint Stock Companies and Limited Liability Companies with Two or More Members

1. Principles for transfer:

a) In accordance with the criteria for classifying enterprises as prescribed by law;

b) Ensuring market principles, transparency, and fairness;

c) Transfers involving land use rights must comply with laws on land.

2. Methods of transfer:

a) The transfer of capital in limited liability companies with two or more members shall be carried out in accordance with laws on enterprises;

b) The transfer of capital in listed joint stock companies or those registered for trading on the securities market shall be conducted in accordance with laws on securities;

c) The transfer of capital in unlisted joint stock companies or those not registered for trading on the securities market shall be conducted through public auction. If the public auction fails, competitive bidding shall be conducted. If competitive bidding fails, the transfer shall be conducted through negotiation.

Chapter V
RIGHTS AND RESPONSIBILITIES OF STATE OWNERSHIP REPRESENTATIVES

Article 40. Rights and Responsibilities of the Government

1. Prescribing the form, content, procedures, and processes for restructuring state capital in enterprises.

2. Issuing and amending charters for enterprises in which the State holds 100% of the registered capital.

3. Prescribing financial management regulations for enterprises in which the State holds 100% of the registered capital, including: methods for determining registered capital; raising capital; investment, construction, purchase, sale, management, and use of fixed assets; management of receivables and payables; investment and transfer of capital outside the enterprise; distribution of post-tax profits, establishment and use of enterprise funds; preservation and development of enterprise capital; authority to issue financial regulations for enterprises in which the State holds 100% of the registered capital.

4. Establishing criteria for evaluating the achievement of assigned goals and tasks, operational results, and production and business efficiency for enterprises in which the State holds 100% of the registered capital, and the level of completion of tasks by enterprise managers and Supervisors; prescribing supervision and inspection of investment, management, and use of state capital in enterprises; prescribing the disclosure of information about enterprise operations.

5. Prescribing recruitment, appointment, reappointment, dismissal, rewards, and disciplinary measures for enterprise managers, Supervisors, and representatives of state capital.

6. Prescribing salary, remuneration, bonuses, and other benefits for enterprise managers, Supervisors, and representatives of state capital.

7. Prescribing the operation rules of Supervisors in enterprises in which the State holds 100% of the registered capital.

8. Prescribing recruitment, salary, bonuses, and other benefits for employees in enterprises in which the State holds 100% of the registered capital in accordance with labor laws.

9. Reporting to the National Assembly at the end-of-year session on the investment, management, and use of state capital in enterprises nationwide during the previous year.

Article 41. Rights and responsibilities of the Prime Minister regarding enterprises

1. Decide on state capital investment to establish enterprises as provided for in Clause 1 and Clause 3, Article 11 of this Law.

2. For enterprises established by

a) Decide on restructuring, ownership conversion, and enterprise reorganization;

b) Decide on the charter capital when establishing and adjusting the charter capital during operation;

c) Approve the strategy, investment development plan, and five-year production and business plan of the enterprise;

d) Decide on the appointment, reappointment, dismissal, commendation, and disciplinary action for the Chairman of the Board of Members.

3. Approve the project to establish enterprises and the overall project to reorganize and modernize enterprises for enterprises established by the agency representing the owner.

4. Decide on the policy of transferring state capital at enterprises between agencies representing the owner, and between the agency representing the owner and state capital investment and trading enterprises.

Article 42. Rights and responsibilities of the agency representing the owner towards enterprises in which the State holds 100% of the charter capital

1. Decide on state capital investment to establish enterprises as provided for in Clause 2, Article 11 of this Law.

2. For enterprises established by the agency representing the owner:

a) Decide on restructuring, ownership conversion, dissolution, and bankruptcy;

b) Decide on the transfer of state capital at enterprises between the agency representing the owner and state capital investment and trading enterprises after obtaining approval from the competent authority;

c) Issue and amend the charter; decide and adjust the charter capital;

d) Approve the strategy, five-year investment development plan, and annual production and business plan of the enterprise;

đ) Decide on the appointment, reappointment, dismissal, commendation, disciplinary action, salary, remuneration, bonuses, and other benefits for the Chairman and members of the Board of Members, the General Director, the Supervisor, and the representative of state capital; decide on the annual salary and remuneration fund for enterprise managers and Supervisors. Approve the proposal of the Board of Members or the General Director regarding the appointment, reappointment, dismissal, commendation, and disciplinary action for the Managing Director or Director of the enterprise;

e) Approve the capital raising plan, investment projects, construction, purchase, sale of fixed assets, investment projects outside the enterprise, and overseas investment projects of the enterprise as stipulated in Articles 23, 24, 28, and 29 of this Law;

g) Provide capital to implement state capital investment in enterprises after obtaining approval from the competent authority; decide on the transfer of investment capital of the enterprise in joint-stock companies or limited liability companies with two or more shareholders if the transfer value is lower than the book value of the enterprise after deducting loss provisions for investment capital;

h) Decide on the policy of contributing capital, increasing or decreasing capital contribution, and transferring investment capital of the enterprise in joint-stock companies or limited liability companies with two or more shareholders; decide on the policy of accepting joint-stock companies or limited liability companies with two or more shareholders as subsidiaries or associated companies of the enterprise;

i) Approve the financial reports, profit distribution plans, and annual fund allocations of the enterprise;

k) Supervise, inspect, and audit the management, use, preservation, and development of capital, implementation of investment strategies and plans, labor recruitment, and wage and bonus systems of the enterprise; provide comments on supervision, inspection, and auditing by other authorized agencies or organizations concerning state capital investment, management, and use in enterprises;

l) Evaluate the results and efficiency of production and business activities of the enterprise; assess the completion level of management and operational tasks by enterprise managers and Supervisors.

3. For enterprises entrusted with management, the agency representing the owner shall exercise the rights and responsibilities specified in Clauses 1 and 2 of this Article, except for those specified in Article 41 of this Law.

4. The Government shall specify detailed regulations on the implementation of the rights and responsibilities of the agency representing the owner.

Article 43. Rights and responsibilities of the representative body of the owner regarding the state capital invested in joint-stock companies and limited liability companies with two or more shareholders

1. Appointing, dismissing, removing from office, rewarding, disciplining, determining salaries, responsibility allowances, bonuses, and other benefits for the state capital representatives.

2. Deciding on investment to increase capital, transfer shares, and contributions of the State in joint-stock companies and limited liability companies with two or more shareholders within its authority.

3. Supervising the recovery of investment capital, profit distribution, and dividends distributed from joint-stock companies and limited liability companies with two or more shareholders.

4. Requesting the state capital representative to perform tasks stipulated in Article 48 of this Law; promptly providing written opinions on issues within the responsibility of the representative who must report and seek opinions.

5. Inspecting, supervising, and evaluating the activities of the state capital representative.

6. Being responsible for the effectiveness of state capital utilization, preservation, and development.

7. Implementing other rights and responsibilities as prescribed by the Enterprise Law, the enterprise charter, and other relevant laws.

Article 44. Rights and responsibilities of the Board of Members or the Chairman of the company at enterprises where the State holds 100% of the charter capital

1. The Board of Members or the Chairman of the company proposes to the competent authority specified in Articles 40, 41, and 42 of this Law to decide on adjusting the charter capital; amending and supplementing the charter; restructuring, changing ownership, dissolving, and declaring bankruptcy of the enterprise. The Board of Members proposes to the competent authority specified in Articles 40, 41, and 42 of this Law to appoint, reappoint, remove from office, reward, discipline, determine salaries, remuneration, bonuses, and other benefits for the Chairman and members of the Board of Members.

2. The Board of Members or the Chairman of the company decides after approval by the representative body of the owner on the following matters:

a) The five-year investment and development strategy and annual production and business plan of the enterprise;

b) Appointing, reappointing, removing from office, rewarding, and disciplining the General Director or Director;

c) Raising capital, investing, constructing, purchasing, selling fixed assets, projects investing outside the enterprise, and projects investing abroad according to Articles 23, 24, 28, and 29 of this Law;

d) Contributing capital, increasing or decreasing capital contributions, transferring investment capital of the enterprise in joint-stock companies and limited liability companies with two or more shareholders;

đ) Accepting joint-stock companies and limited liability companies with two or more shareholders as subsidiaries or associated companies of the enterprise;

e) Financial reports; profit distribution, and annual establishment of reserve funds of the enterprise.

3. The Board of Members or the Chairman of the company decides on the following matters:

a) Internal management regulations of the enterprise;

b) Salaries, remuneration, bonuses, and other benefits for the General Director or Director appointed by the Board of Members and other positions appointed by the Board of Members;

c) Appointing, reappointing, removing from office, rewarding, disciplining, determining salaries, remuneration, bonuses, and other benefits for Deputy General Directors or Deputy Directors, Chief Accountants;

d) Deciding or delegating the General Director or Director to decide on capital raising plans, investment projects, construction, purchase, and sale of fixed assets within their authority.

4. The Board of Members or the Chairman of the company manages and operates the enterprise in accordance with the law and decisions of the representative body of the owner.

5. The Board of Members or the Chairman of the company is responsible to the representative body of the owner for managing, using, preserving, and developing capital; promptly reporting to the representative body of the owner when the enterprise incurs losses, fails to ensure payment capacity, fails to complete assigned tasks, and other violations.

6. The Board of Members or the Chairman of the company is legally responsible for causing losses to the enterprise's capital and property.

7. The Board of Members, the Chairman, and members of the Board of Members or the Chairman of the company implement other rights and responsibilities as prescribed by the Enterprise Law, the enterprise charter, and other relevant laws.

Article 45. Supervisors at state-owned enterprises with 100% state capital

1. The supervisor shall be appointed, reappointed, or relieved of duty by the agency representing the owner or the competent state agency.

2. The standards, conditions, working regime, rights, and responsibilities of the supervisor shall be implemented in accordance with the laws on enterprises and other relevant laws.

3. Salary, remuneration, and bonuses for supervisors:

a) The salary, remuneration, and bonuses for supervisors shall be determined based on the level of task completion and the effectiveness of business operations of the enterprise;

b) The salary, remuneration, and bonuses for supervisors shall be decided and paid by the agency representing the owner or the competent state agency.

Chapter VI
REPRESENTATIVES OF STATE CAPITAL, REPRESENTATIVES OF THE ENTERPRISE'S CAPITAL

Article 46. Standards for representatives of state capital, representatives of the enterprise's capital

Representatives of state capital and representatives of the enterprise's capital must meet the following standards:

1. Vietnamese citizens residing in Vietnam;

2. Possess political integrity, moral character, have full civil capacity, and sufficient health to fulfill assigned tasks;

3. Understand the law and have a sense of compliance with the law;

4. Have the ability, professional qualifications, and work experience appropriate to the requirements of the position they are appointed to;

5. Not within the period prohibited from holding office, under disciplinary review, investigation, prosecution, trial, serving a prison sentence, or implementing a disciplinary decision;

6. Not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, half-brother, half-sister, brother-in-law, sister-in-law, or sister-in-law of the Chairman and members of the Board of Members, Chairman and members of the Board of Directors, Company Chairman, Supervisor, General Director or Director, Deputy General Director or Deputy Director, Chief Accountant of the enterprise;

7. Other standards as prescribed by the laws on enterprises and other relevant laws.

Article 47. Appointment of representatives of state capital, representatives of the enterprise's capital

1. Based on the standards stipulated in Article 46 of this Law, the agency representing the owner or the state-owned enterprise with 100% state capital shall select and appoint representatives of state capital and representatives of the enterprise's capital. The appointment of representatives must be carried out in writing, specifying the rights and responsibilities of the representatives.

2. The term of appointment of representatives of state capital and representatives of the enterprise's capital shall not exceed the term of the Board of Members or the Board of Directors.

3. Full-time representatives of state capital and representatives of the enterprise's capital shall participate as representatives in only one enterprise.

4. Non-full-time representatives of state capital may participate as representatives of state capital in no more than three enterprises, with the number of non-full-time representatives in one enterprise not exceeding 30% of the number of members of the Board of Members or the Board of Directors. Non-full-time representatives of the enterprise's capital may participate as representatives in one or several enterprises according to the articles of association of the enterprise.

Article 48. Rights and responsibilities of the representative of state capital

1. Report and seek opinions from the state owner's representative agency before participating in discussions, voting, and making decisions at the Shareholders' Meeting, Board of Directors, or Management Board on the following issues:

a) Business sectors, objectives, tasks, strategies, investment development plans, production and business plans;

b) Issuing, amending, and supplementing the charter; increasing or decreasing the registered capital; electing, dismissing, removing, rewarding, and handling violations of Board of Directors members, Management Board members, General Managers or Directors, Deputy General Managers or Deputy Directors;

c) Profit distribution and annual establishment of enterprise funds;

d) Reorganization, dissolution, bankruptcy;

đ) Other matters within the authority of the Shareholders' Meeting, Board of Directors, or Management Board.

2. Timely report on the operation of joint-stock companies or limited liability companies with two or more shareholders that are operating at a loss, unable to ensure payment capacity, failing to complete assigned tasks, and other cases of violation.

3. Regularly every quarter and annually, and upon request of the state owner's representative agency, the representative of state capital shall compile and report on the production and business situation, financial status, and propose solutions.

4. Require joint-stock companies or limited liability companies with two or more shareholders to remit to the state budget the corresponding profits and dividends distributed according to the state capital invested in the company.

5. Shall not continue to serve as a representative if they fail to properly perform their assigned rights and responsibilities or no longer meet the standards for representatives.

6. Shall be held legally responsible for actions causing damage to state capital.

7. Perform other rights and responsibilities stipulated in the company's charter, business laws, and other relevant laws.

Article 49. Rights and responsibilities of the representative of enterprise capital

1. Report and seek opinions from the enterprise that appointed them before participating in discussions, voting, and making decisions at the Shareholders' Meeting, Board of Directors, or Management Board on the following issues:

a) Business sectors, objectives, tasks, strategies, investment development plans, production and business plans;

b) Issuing, amending, and supplementing the charter; increasing or decreasing the registered capital; electing, dismissing, removing, rewarding, and handling violations of Board of Directors members, Management Board members, General Managers or Directors, Deputy General Managers or Deputy Directors;

c) Profit distribution and annual establishment of enterprise funds;

d) Reorganization, dissolution, bankruptcy;

đ) Other matters within the authority of the Shareholders' Meeting, Board of Directors, or Management Board.

2. Timely report on the operation of joint-stock companies or limited liability companies with two or more shareholders that are operating at a loss, unable to ensure payment capacity, failing to complete assigned tasks, and other cases of violation.

3. Regularly every quarter and annually, and upon request of the enterprise, the representative of enterprise capital shall compile and report on the production and business situation, financial status, and propose solutions.

4. Shall not continue to serve as a representative if they fail to properly perform their assigned rights and responsibilities or no longer meet the standards for representatives.

5. Shall be held legally responsible for actions causing damage to enterprise capital.

6. Perform other rights and responsibilities as prescribed by business laws, enterprise charters, and other relevant laws.

Article 50. Salary, fees, bonuses, and other benefits of the representative of state capital, the representative of enterprise capital

1. The full-time representative of state capital or enterprise capital at joint-stock companies or limited liability companies with two or more shareholders shall receive salary, responsibility allowances, bonuses, and other benefits paid by the joint-stock company or limited liability company with two or more shareholders.

2. The part-time representative of state capital or enterprise capital at joint-stock companies or limited liability companies with two or more shareholders shall receive salary, fees, bonuses, and other benefits as follows:

a) Fees paid by the joint-stock company or limited liability company with two or more shareholders;

b) Salary, responsibility allowances, bonuses, and other benefits paid by the state owner's representative agency or enterprises wholly owned by the State.

Chapter VII
SUPERVISION, AUDITING, AND INSPECTION OF STATE CAPITAL INVESTMENT, MANAGEMENT, AND USE AT ENTERPRISES

Section 1
CONTENT OF SUPERVISION, AUDITING, AND INSPECTION OF STATE CAPITAL INVESTMENT, MANAGEMENT, AND USE AT ENTERPRISES

Article 51. Supervision, inspection, and audit of state capital investment activities in enterprises

1. The issuance of policies and laws on state capital investment in enterprises.

2. State capital investment in enterprises according to the objectives, principles, and scope prescribed in this Law.

3. Determination of investment capital, balancing the plan for capital sources, and using capital sources for state capital investment in enterprises.

4. Economic and social effectiveness of state capital investment in enterprises.

5. Decision-making on investment policies, procedures, and formalities for state capital investment in enterprises.

6. Implementation of rights and responsibilities of the agency representing the owner in state capital investment in enterprises.

Article 52. Supervision, inspection, and audit of management and use of capital and assets in enterprises wholly owned by the State

1. Issuance of policies and laws on management and use of capital and assets in enterprises.

2. Implementation of rights and responsibilities of the agency representing the owner in management and use of capital and assets in enterprises.

3. Implementation of production and business plans, financial plans, and development strategies of enterprises, fulfillment of tasks to supply public goods and services ordered by the State, and assigned plans.

4. Mobilization and use of raised capital, management of receivables and payables, implementation of investment projects, construction, purchase, sale of fixed assets, preservation and development of enterprise capital.

5. Issuance of internal management regulations of enterprises.

6. Investment activities outside enterprises and overseas investment activities of enterprises.

7. Transfer, recovery of capital, profit distribution, dividends from investments outside enterprises.

8. Management of enterprise capital invested in joint-stock companies and limited liability companies with two or more shareholders.

9. Implementation of wage, remuneration, bonus, and other benefits and rights for employees, enterprise managers, Supervisors, and representatives of enterprise shares.

10. Fulfillment of obligations to the state budget, profit distribution, establishment and use of enterprise funds.

Article 53. Supervision, inspection, and audit of state capital management activities invested in joint-stock companies and limited liability companies with two or more shareholders

1. Issuance of policies and laws on state capital management invested in joint-stock companies and limited liability companies with two or more shareholders.

2. Implementation of rights and responsibilities of the agency representing the owner in state capital management invested in joint-stock companies and limited liability companies with two or more shareholders.

3. Maintenance of shareholding ratio and contribution capital in joint-stock companies and limited liability companies with two or more shareholders according to the classification criteria of enterprises as prescribed by law.

4. Appointment, implementation of rights and responsibilities, wage, remuneration, bonus, and other benefits and rights of state capital representatives.

5. Implementation of plans for withdrawal of state capital, recovery of state capital, profit distribution, dividends from joint-stock companies and limited liability companies with two or more shareholders.

Article 54. Supervision, inspection, and audit of state capital restructuring at enterprises

1. The issuance of policies and laws on state capital restructuring at enterprises.

2. The exercise of rights and responsibilities of the agency representing the owner in state capital restructuring at enterprises.

3. The development, approval, and implementation of projects for state capital restructuring at enterprises.

Section 2
ORGANIZATION OF SUPERVISION, INSPECTION, AND AUDIT OF INVESTMENT, MANAGEMENT, AND USE OF STATE CAPITAL AT ENTERPRISES

Article 55. Supervision by the National Assembly

1. The National Assembly, the Standing Committee of the National Assembly, the National Ethnic Council, the Committees of the National Assembly, the Delegations of the National Assembly, and National Assembly deputies supervise investment, management, and use of state capital at enterprises in accordance with the law on National Assembly supervision activities.

2. The National Assembly reviews the Government's report at the final session of the National Assembly each year regarding the situation of investment, management, and use of state capital at enterprises in the previous year.

3. Between sessions, the Standing Committee of the National Assembly has the right to request the Government,

Article 56. Inspection and Audit by the Government

1. The Government,

a) The development, issuance, and organization of implementation of policies and laws on investment, management, and use of state capital at enterprises;

b) Exercise of rights and responsibilities of asset representative agencies;

c) The results of production and business operations, preservation, and development of state capital at enterprises.

2. Ministry of Finance:

a) Propose recommendations and solutions to the agency representing the owner regarding investment, management, and use of state capital at enterprises;

b) Annually compile, propose recommendations and solutions on investment, management, and use of state capital at enterprises nationwide and report to the Government.

3. Ministries and agencies equivalent to ministries shall conduct inspections and audits of investment, management, and use of state capital at enterprises within their scope of tasks and powers.

Article 57. Supervision, Inspection, and Audit by the Agency Representing the Owner

1. The agency representing the owner shall carry out supervision, inspection, and audit of the following activities:

a) Investment, management, and use of state capital at enterprises; the effectiveness of production and business operations, preservation, and development of state capital at enterprises;

b) The exercise of rights and responsibilities of enterprise managers, Supervisors, and representatives of state capital;

c) Compliance with policies and laws by enterprises;

d) Investment, recovery of capital, profit, and dividends distributed by joint-stock companies and limited liability companies with two or more shareholders;

đ) Implementation of recommendations and warnings from state management agencies, audit agencies, and the agency representing the owner regarding investment, management, and use of state capital at enterprises.

2. Based on the results of supervision, inspection, and audit as stipulated in Clause 1 of this Article, the agency representing the owner:

a) Timely warn and address issues discovered during the supervision, inspection, and audit process;

b) Require full and timely implementation of recommendations and warnings from state management agencies, audit agencies regarding investment, management, and use of state capital at enterprises;

c) Handle or recommend handling within its authority of enterprise managers, Supervisors, and representatives of state capital who violate regulations on investment, management, and use of state capital at enterprises;

d) Annually compile and send the Ministry of Finance the results of supervision over investment, management, and use of state capital at enterprises established by itself or entrusted to manage.

Article 58. Internal supervision of state-owned enterprises holding 100% of the charter capital

1. Enterprises shall implement internal supervision on the following contents:

a) The effectiveness of production and business operations, preservation, and development of state capital at the enterprise;

b) The implementation of rights and responsibilities of the enterprise manager, Supervisory Board member, and representative of the enterprise's capital;

c) Investment, capital recovery, profit distribution, and dividends received from joint-stock companies and limited liability companies with two or more shareholders;

d) Compliance with policies and laws by the enterprise;

e) Other contents as required by the agency representing the owner.

2. The Board of Members or the Chairman of the company promptly implements measures to prevent risks of capital and asset management safety issues at the enterprise based on internal supervision results; fully and promptly implement recommendations and warnings from supervisory, inspection, and audit agencies.

Chapter VIII
EVALUATION, RANKING, REPORTING AND PUBLIC DISCLOSURE OF ACTIVITIES OF ENTERPRISES HELD BY THE STATE WITH 100% CHARTER CAPITAL

Article 59. Evaluation and ranking of enterprises, evaluation of enterprise managers and Supervisory Board members

1. The evaluation and ranking of enterprises are based on the following criteria:

a) The degree of implementation of the enterprise's plan for revenue, profit, and return on equity;

b) The ability to pay debts and overdue liabilities;

c) The fulfillment of tasks to supply public goods and services ordered by the State;

d) Compliance with investment, management, and use of state capital at the enterprise and other relevant legal provisions.

2. The evaluation of the completion of tasks by enterprise managers and Supervisory Board members is based on the enterprise's evaluation and ranking results and the implementation of assigned rights and responsibilities.

Article 60. Reporting on the activities of the enterprise

1. The enterprise reports to the agency representing the owner the following contents:

a) Annual investment development plans, production and business plans, financial plans;

b) Results of implementing periodic quarterly and annual plans;

c) Financial reports every six months and annually;

d) Resolutions and decisions of the Board of Members;

e) Investment projects and progress in implementing investment projects;

f) Issues arising that may affect the implementation of investment development plans, production and business plans, and financial plans;

g) Results of internal supervision;

h) Other contents as prescribed by law on enterprises.

2. The enterprise must have its annual financial report audited. Before and after the audit, the annual financial report must be submitted to the agency representing the owner, the same-level financial agency, and the competent state management agency as prescribed by law.

3. The Board of Members, the Chairman, and members of the Board of Members or the Chairman of the company are responsible under the law for the accuracy and truthfulness of the contents reported as stipulated in Clause 1 of this Article.

Article 61. Public disclosure of information about the activities of the enterprise

1. The enterprise promptly publishes on its electronic portal the contents regarding the enterprise's activities as specified in Clause 1 of Article 60 of this Law.

2. The agency representing the owner promptly publishes on its electronic portal information about investment, management, and use of state capital at the enterprise it has decided to establish or been assigned to manage.

3. The Ministry of Finance promptly publishes on its electronic portal the Government's report on investment, management, and use of state capital at enterprises nationwide after the Government reports to the National Assembly.

Chapter IX
REWARD AND VIOLATION HANDLING

Article 62. Awards

1. Organizations and individuals completing the following tasks shall be awarded:

a) Successfully fulfilling tasks and objectives in state capital investment activities, management, and utilization at enterprises;

b) Exceeding assigned targets; having solutions and innovations in management and utilization of capital and assets of enterprises;

c) Promptly detecting and preventing wasteful and lossful use of state capital; capital and assets of enterprises.

2. Sources of awards:

a) Monetary rewards as prescribed by laws on commendation and reward;

b) Labor incentive funds, managerial reward funds, and Inspector reward funds.

Article 63. Handling Violations

Organizations, entities, and individuals committing violations of this Law shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the nature, quality, and degree of violation; if damage is caused, compensation must be provided according to the law.

Chapter X
IMPLEMENTING PROVISIONS

Article 64. Transitional Provisions

1. From the date this Law comes into effect, enterprises with 100% state-owned charter capital shall be responsible for requesting competent state authorities to issue charters and financial regulations of the enterprise in accordance with this Law; such issuance must be completed before January 1, 2016. Charters and financial regulations of enterprises with 100% state-owned charter capital issued before this Law takes effect shall continue to be implemented until December 31, 2015.

2. For state capital investment projects in enterprises approved by competent authorities before this Law is promulgated, implementation shall continue according to the approved project.

3. Management and utilization of capital and assets in enterprises with 100% state-owned charter capital, and state capital management in joint-stock companies and limited liability companies with two or more members arising before this Law takes effect shall be handled according to current regulations until December 31, 2015.

Article 65. Effective Date

This Law shall take effect from July 1, 2015.

Article 66. Detailed Regulations

The Government and competent authorities shall provide detailed regulations for the provisions entrusted in this Law.

This Law was passed by the National Assembly of the Socialist Republic of Vietnam, the 13th term, the 8th session on November 26, 2014.