Circular No. 7841/TC-TCDN stipulates the timing for transferring accounting records from state-owned enterprises to joint-stock companies and the methods for addressing financial issues arising during this transition, ensuring benefits for shareholders.
Scope of application
State-owned enterprises converting to joint-stock companies; Relevant ministries, sectors, localities
Key points
- The time point for transferring accounting records from a state-owned enterprise to a joint-stock company is when the business registration certificate is issued (Article 51 of the Law on Enterprises).
- Financial issues arising before the official conversion of an enterprise into a joint-stock company are handled according to current regulations of the State.
- An enterprise may pay dividends to investors from its profits, but the maximum dividend rate shall not exceed the bank loan interest rate and must ensure that the enterprise does not incur losses.
- Benefit: Shareholders have their investment capital rights guaranteed.
- Cost: The enterprise may bear financial burdens if paying dividends to shareholders.
- Limitation: Enterprises must comply with regulations on dividend rates and cannot operate at a loss.
🌐 Social impact of this document
- Benefit: Shareholders have their investment capital rights guaranteed.
- Cost: The enterprise may bear financial burdens if paying dividends to shareholders.
- Limitation: Enterprises must comply with regulations on dividend rates and cannot operate at a loss.
❓ Frequently asked questions
When is the time point for transferring accounting records from state-owned enterprises to joint-stock companies?
This timing occurs when the business registration certificate is issued (Article 51 of the Law on Enterprises).
How are financial issues arising during the transition from state-owned enterprises to joint-stock companies handled?
These issues are addressed according to current regulations of the State.
Can an enterprise pay dividends to investors?
Yes, but the maximum dividend rate shall not exceed the bank loan interest rate and must ensure that the enterprise does not incur losses.
Full text
LETTER
OF THE MINISTRY OF FINANCE NUMBER 7841 TC/TCDN DATE AUGUST 11, 2001
REGARDING THE HANDLING OF FINANCIAL ISSUES
PRIOR TO STATE-OWNED ENTERPRISES BECOMING JOINT STOCK COMPANIES
Dear: - Ministries, ministerial-level agencies, and central government agencies
- People's Committees of provinces and centrally-administered cities
- State-owned Corporations established by Decision No. 91/TTg
Recently, the Ministry of Finance has received several opinions from ministries, sectors, and localities regarding the determination of the official time point for state-owned enterprises to become joint stock companies and handling financial issues arising during the transition period from state-owned enterprises to joint stock companies. Based on current regulations of the State guiding the implementation of the Enterprise Law and the conversion of ownership in state-owned enterprises, the Ministry of Finance provides guidance as follows:
- The time point for transferring accounting records from a state-owned enterprise to a Joint Stock Company is the date when the enterprise receives the business registration certificate as stipulated in Article 51 of the Enterprise Law.
- Financial issues arising during the period before a state-owned enterprise officially becomes a joint stock company shall be handled according to the State-Owned Enterprise Law and current regulations of the State.
- To ensure the interests of shareholders regarding capital investment (from when they purchase shares until the time the enterprise officially converts into a joint stock company), the enterprise may pay interest to investors from its profits, based on an agreement between the enterprise and the investor, but must adhere to the following principles:
+ The maximum interest rate shall not exceed the bank loan interest rate.
+ Payment of interest must ensure that the enterprise does not incur a loss.
We request ministries, sectors, and localities to guide enterprises to implement the above guidance. During implementation, if there are any difficulties, please report them to the Ministry of Finance for study and resolution.
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