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Conditions for establishing a private enterprise?

Establishing a private enterprise is an important decision that requires careful preparation in many aspects. To ensure the establishment process goes smoothly and legally, it is necessary to clearly understand the necessary conditions such as legal regulations, capital requirements, and choosing the right business line. This article will provide detailed information on the necessary conditions so that you can confidently start a business.

According to Article 27 of the Enterprise Law 2020, the regulations on granting business registration certificates are as follows:

"Article 27. Granting of Business Registration Certificate

1. An enterprise is granted a Certificate of Business Registration when it meets all of the following conditions:

a) The registered business lines and professions are not prohibited from investment and business;

b) The name of the enterprise must comply with the provisions of Articles 37, 38, 39 and 41 of this Law;

c) Have valid business registration documents;

d) Pay full business registration fees according to regulations of law on fees and charges.

2. In case the Certificate of Business Registration is lost, damaged or destroyed in any other form, the enterprise shall be re-issued a Certificate of Business Registration and must pay a fee as prescribed by law."

At the same time, Article 188 of the Enterprise Law 2020 and Clause 1, Article 189 of the Enterprise Law 2020 specifically stipulate that for Private Enterprises:

- A private enterprise is an enterprise owned by an individual who is personally responsible for all activities of the enterprise with all of his/her assets.

- Private enterprises are not allowed to issue any type of securities.

- Each individual is only allowed to establish one private enterprise. The owner of a private enterprise cannot be at the same time the owner of a business household or a general partner of a general partnership.

- Private enterprises are not allowed to contribute capital to establish or purchase shares or capital contributions in a partnership, limited liability company or joint stock company.

- The investment capital of a private enterprise owner is self-registered by the enterprise owner. The private enterprise owner is obliged to accurately register the total investment capital, clearly stating the capital in Vietnamese Dong, freely convertible foreign currency, gold and other assets; for capital in other assets, the type of asset, quantity and remaining value of each type of asset must also be clearly stated.

Thus, to establish a Private Enterprise you need to meet the following conditions:

- The registered business sector is not prohibited from investment and business.

- The Company name must not be identical or confusing with a registered business name.

- The owner of a private business is an individual.

- Have the right investment capital.