Decree No 96/2015/ND-CP ("Decree No 96"), issued by the Government on October 19, 2015, regulates provisions of the Enterprise Law, such as those concerning enterprise seals and cross-ownership in enterprises.
Decree No 96/2015/ND-CP ("Decree No 96"), issued by the Government on October 19, 2015, regulates provisions of the Enterprise Law, such as those concerning enterprise seals and cross-ownership in enterprises.
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1. Seal
Decree No 96 clarifies Article 44 of the Enterprise Law about provisions relating to seals:
a. Decision of the authority
If not regulated in the company regulations, the authority deciding the form, content and number of the seals in the enterprise shall be:
– Owner of the private enterprise for private enterprises.
– The associative council for partnered companies.
– The associative council or company president for limited liability companies.
– The administrative council for joint stock companies.
b. Form and content of seal samples
Article 12 of Decree No 96 specifies that the company regulations or decisions on seals must include the following:
– Seal sample, such as form, size, content and ink colour;
– Number of seals;
– Regulations regarding the management and usage of seal samples.
In addition, the form of seal samples must take a specific shape such as a circle, polygon or others, while a seal unified in content, form and size is obligatory.
According to Article 14 of Decree No 96, the enterprise can amend words, characters, signs and images in the content of the seal, except for the following:
– National flag, national emblem or the Communist Party flag of the Socialist Republic of Viet Nam;
– Images, symbol and name of the state, state authority and armed force units, as well as political organisations, political-social organisations, political-professional organisations and social organisations, besides social-professional organisations;
– Words, signs and images violating historical traditions, ethical culture, fine traditions and customs of the people of Viet Nam.
In addition, the enterprise should take responsibility under the law for intellectual property and other laws related to the use of images, words and signs in the content or form of the seal samples. The business registration agency shall not be responsible for verifying the content of the seals during the procedure of notifying seal samples of enterprises.
c. Seal samples of agencies and representative offices
If not regulated in the company regulations, the authorised person specified in clause 1 of Article 12 of Decree No. 96 (in Section 1.a) will decide on the number, form, content and sample of seals as well as the management and use of seals of the agencies and representative offices.
Similar to the seal samples of the enterprises mentioned above, the enterprise can use words, characters, signs or images in the content of the seals, with exceptions listed in Article 14 of the decree (in section 1.b).
d. Managing and using seals
Certain points regarding the management and usage of seals specified in Article 15 of Decree No. 96 are mentioned below for enterprises established before July 1, 2015:
– Enterprises can continue to use the issued seal without having to notify the business registration agency.
– Enterprises renewing seals as per Decree No 96 must hand over the old seal and the seal registration certification to the police agency that issued the said certification for a receipt from the agency, stating the seal of the enterprise has been received.
– In case of having lost the seal and the seal registration certification, enterprises must notify the police agency that issued the said seal and certification.
Decree No 96 has also specifically listed cases in which the enterprise needs to notify the business registration agency near the headquarter of the enterprise, including:
– Creating a seal for the first time after registering the enterprise;
– Changing the number, content, form of seal samples and ink colour;
– Cancelling seal samples.
2. Restricting cross-ownership between companies
Decree No 96 has clarified the definition of ‘cross-ownership' and ‘establishing enterprise from capital contribution between companies' in clauses 2 and 3 of Article 189 of the Enterprise Law, specifically:
– Cross-ownership means simultaneous ownership of the capital contribution and shares between two enterprises.
– Establishing enterprise from capital contribution between companies is an instance which the total amount of shares and capital contribution owned by the companies are equal to or greater than 51 per cent of the charter capital, or the total amount of common shares of the concerned companies.
Also, Article 16 of Decree No 96 has clarified the establishment of enterprise through capital contribution in clause 3 of Article 189 of the Enterprise Law including: capital contribution and purchase of shares to establish a new enterprise; and purchase of capital contribution and shares of established enterprises.
The company president or member of the associative council, and member of the administrative council of the concerned company will be jointly responsible for compensating the damage caused by the company in case of violations relating to the decision in capital contribution, purchase of shares and the capital contribution from other companies, according to regulations in the decree.
3. Taking effect
The decree will take effect from December 8, 2015, and will replace Decree No 102/2010/ND-CP in 2010, specifically guiding the Enterprise Law.
PLF recommends that enterprises should quickly amend and update the content of company regulations regarding their seal form. In addition, during capital contribution, purchase of shares and capital contribution of other companies, the enterprises should note the terms restricting cross-ownership between companies in the regulations of this decree.
(Source:PLF LAW FIRM)
