New regulations of Law on Enterprises
Decision rights on the number of legal representatives, quantity and content of corporate seals, changes in business registration procedures, etc., are several highlights prescribed in the Law on Enterprises 2014.
Law on Enterprises 2014 was approved by the National Assembly on November 26, 2014 and will take effect on July 1, 2015 with significantly notable changes as follows:
Enterprises may have many legal representatives
Limited Liability Companies (LTD.) and Joint Stock Companies (JSC) may have one or more legal representatives (LRs). Depending on the needs of administration of each entity, enterprises are entitled to decide on the number, management titles, specific rights and obligations of their LRs in the company’s charter.
Enterprises have the right to decide on the form, quantity, and content of corporate seal
Based on current provisions, each enterprise may only be allowed to use one seal, unless otherwise approved to use a second seal whose sample is registered at the police office. Beginning on July 1, 2015, enterprises are entitled to decide on the form, quantity, and content of their corporate seal but the name and code of the enterprise must be guaranteed to be shown. In addition, enterprises must inform the business registration authority of the seal’s sample to publicly publish it on the National Portal of business registration.
Duration of capital contribution is shortened to 90 days
The owner and members of LTD must contribute sufficient and correct type of capital as committed when registering for company establishment within a period of 90 days commencing from the date of issuance of Business Registration Certificate, whereas the duration of capital contribution regulated by current provisions is up to 36 months. However, for an LTD set up before July 1 2015, duration of capital contribution is still carried out under the provisions of the company’s Charter.
Social enterprises
While in the Law on Enterprises 2005, the Government only encourages, facilitates, and gives incentives to enterprises participating in the production and provision of public products and services, the criteria, rights and obligations with which social enterprises are set up are now regulated more specifically with better details under the new provisions.
