Comments on the draft Corporate Law (amended)
On June 11, in Hanoi, the Vietnam Union of Science and Technology Associations (VUSTA) organized a workshop on Comments on the draft Corporate Law (amended). Dr. Pham Van Tan - Vice President cum General Secretary of VUSTA and Dr. Phan Tung Mau - Vice President of Vietnam Union of Associations presided over the workshop.
PhD.Pham Van Tan – Vice Presient cum General Secretary of VUSTA gave opening speech.
In the opening speech at the workshop, Dr. Pham Van Tan - Vice President and General Secretary of VUSTA said that a comprehensive amendment of the Corporate Law at this time is very necessary, because some contents of the applicable Law 2014 are no longer suitable in the current situation, even many regulations also cause troubles, hindering and wasting time and money for businesses.
Dr. Tan added that this amendment meets the urgent need to fully institutionalize the content of the Party's Resolution on private economic development, improvement of the governance and operational efficiency of state-owned enterprises; improvement of business environment, enhancement of national competitiveness, cost reduction for businesses.
PhD. Pham Sy An – Vietnam Institute of Economics presented overview report on the draft Corporate Law (amended)
At the workshop, Dr. Pham Sy An - Vietnam Institute of Economics said that the Corporate Law 2014 has many shortcomings. Some provisions of the Corporate Law are incomplete, unclear, incompatible with relevant changes in laws and new realities arising. For example, the Law requires some management positions in enterprises to have certain professional qualifications, diplomas (Clause 2, Article 65). These requirements are not actually effective, limiting employment opportunities and investors in business management, adversely affecting entrepreneurship and creativity. However, these shortcomings remain in the revised draft Corporate Law.
According to Clause 8, Article 4 of the Corporate Law 2014, the concept of a state-owned enterprise only includes an enterprise with 100% of charter capital owned by the state; there has not been any regulation on determining the type of enterprise to which the State has dominant shares or contributed capital.
The regulations on organization and management of enterprises in which the State has dominant shares or contributed capital also need to be reviewed, supplemented and amended to achieve the objectives of improving economic efficiency, ensuring publicity, transparency and accountability of enterprises, including enterprises that the State has dominant charter capital and enterprises with 100% of charter capital owned by the State, Dr. An said.
Dr. An added that the Draft Law is currently formulated with 10 chapters with 213 articles, regulations on establishment, management organization, reorganization, dissolution and related activities of enterprises, including limited liability companies, joint stock companies, partnerships and private businesses; regulations on group of companies and business households.
The scene of the workshop
Subjects of application of the Law are: businesses, business households; Agencies, organizations and individuals involved in the establishment, management organization, reorganization, dissolution and related activities of enterprises and business households.
The bill also raised regulations on prohibited acts such as: Issuing or refusing to grant enterprise registration certificates, requesting enterprise founders to submit additional documents contrary to the provisions of this Law; causing delay, inconvenience, obstructing, harassing enterprise founders and business activities of enterprises. Preventing owners, members, shareholders of the enterprise from exercising their rights and obligations in accordance with this Law and the Company's charter. Doing business in the form of an enterprise without registering or continuing to do business when the enterprise registration certificates have been revoked. Declaring untruthfully and inaccurately the contents of enterprise registration dossiers and contents of registration dossiers for changes of enterprise registration contents...
In the opinion of Dr. Tran Viet Hung - Former Vice President of VUSTA, each type of enterprise is stipulated in a separate chapter. Thus, the Draft Law has spent 7/11 chapters for 7 types of enterprises, a fairly large amount. In my opinion, a State-owned enterprise is only a special case of a limited liability company or a joint stock company when the state is the owner of more than 50% of the company's legal capital (according to the Draft Law). The State-owned enterprises are also not covered by this law! On the other hand, it is regulated that when the state holds more than 50% of the legal capital of a company, that company is considered as a state company, which is also inaccurate, leaving a large amount of state capital in companies where the state holds less than 50% of the legal capital of the company. Currently, the Government has established and assigned the State Capital Management Committee to manage the entire amount of state capital in enterprises. This is a new feature that we need to study and amend this law.
As for the opinion of Dr. Tran Duy Khanh – Director, APEC Entrepreneur Research and Training Institute, State enterprises include enterprises where the State holds more than 50% of charter capital, the total number of voting shares prescribed in Article 87a of this Law. This is the inequality right from the name, the state contributes capital to other enterprises with over 50% of these enterprises are Limited Liability Company, Joint Stock Company... These enterprises will operate under which model, model of state-owned enterprises or joint stock companies, limited liability? In my opinion, the organizational structure and operation of these enterprises must comply with the provisions of the Corporate Law, and the persons appointed by the State must take responsibility for all activities of the enterprises before the State. Therefore, the companies with over 50% the state's capital with the above governance framework are regulated to organize activities like state enterprises, which is contradictory and inappropriate.
At the workshop, the delegates discussed and gave many multidimensional opinions, but many delegates said that in order to support the development of enterprises, there were many laws with special provisions to encourage and endow start-up enterprises, high-tech enterprises, enterprises in difficult economic areas such as the Law on Science and Technology, the Law on Technology Transfer, the Law on High Technology, the Law on Competitiveness, the Law on Investment, etc. The Editorial Board should have more guidelines and introductions for enterprises, to implement.
News, photos: HT