What is a BCC contract? Detailed editing instructions

A BCC contract is an important tool to help parties participate in business cooperation without establishing a new legal entity. Properly drafting a BCC contract brings many benefits, including clearly dividing the rights, obligations and responsibilities of the parties, thereby limiting risks and creating a solid foundation for long-term cooperation. Ensuring complete and detailed contracts help the parties work toward common goals in an effective and transparent manner.

What is a BCC contract? How to execute BCC contracts

Pursuant to Clause 14, Article 3 of the Law on Investment 2020, a BCC contract is also known as a business cooperation contract, is a contract signed between investors to cooperate in business, share profits, and divide products according to the provisions of law without establishing an economic organization.

Regarding the way to execute BCC contracts, based on Clause 3, Article 27 and Clause 1, Article 49 of the Law on Investment 2020, the parties to the contract will establish a coordination board to execute the BCC contract, in addition, the Foreign investors will also establish an executive office in Vietnam to implement contracts.

What should you keep in mind when drafting a BCC contract?

When drafting a BCC contract (business cooperation contract), the parties involved need to pay attention to a number of important factors to ensure legality, clarity and feasibility in implementing the contract. Here are the points to note:

1. Clearly define cooperation goals

• Purpose of cooperation: It is necessary to clearly define the goal of cooperation in the BCC contract, including the specific project or business activity that the parties will carry out.
• Scope of cooperation: Define the scope of cooperation, including the jobs, products or services that each party will provide.

2. Determine the contributions of the parties

• Contributing capital or assets: It is necessary to clearly state what each party contributes to the project, which can be cash, assets, technology, labor resources, market information, etc.
• Cost sharing: Costs arising during the cooperation process need to be clearly specified, who will bear which costs, and the cost division ratio between the parties.
• Profit sharing: The parties need to agree on the profit sharing ratio from the project or common business activity. This rate may be based on the level of contribution or another agreement between the parties.

3. Determine the rights and obligations of the parties

• Rights and responsibilities: It is necessary to clarify the rights and obligations of each party throughout the cooperation process, from providing resources to project management.
• Conditions for participation and commitment of the parties: Clearly stipulate the conditions for the parties to participate in cooperation and commit to properly implementing the signed obligations.

4. Manage and control cooperative activities

• Management mechanism: The contract needs to define the mechanism for operating, managing and monitoring cooperative activities.
• Decision-making process: The decision-making process needs to be clear, defining how important decisions are made during the collaboration process.
• Reporting and inspection: Provides requirements for periodic reporting and ways to inspect and monitor the contract implementation process.

5. Contract performance time

• Cooperation time: It is necessary to clearly define the starting and ending time of the contract, or the specific implementation time for activities and projects.
• Conditions for contract extension: If the contract can be renewed, the parties need to clearly agree on the conditions and procedures for contract extension.

6. Dispute resolution

• Dispute resolution methods: Dispute resolution provisions are very important. The parties need to agree in advance on the method of dispute resolution (mediation, arbitration, court).
• Protection rights: It is necessary to stipulate how to protect the rights of the parties in case of dispute.

7. Terms of confidentiality and intellectual property rights

• Information security: If the cooperation requires the parties to share sensitive information, there should be information security provisions, limiting the unauthorized disclosure or use of information.
• Intellectual property: Clearly define ownership of intellectual property (copyrights, patents, trademarks, etc) created during the collaboration process.

8. Conditions for terminating the contract

• Termination conditions: The contract should clearly state the conditions for termination, such as when there is a breach of contract, when cooperation goals are not achieved or when there is a change in circumstances.
• Sanctions for violation: Regulations on forms of handling when one party violates the contract, including compensation for damages, contract fines or unilateral contract termination.

9. Applicable legal provisions

• Governing law: It is necessary to clearly determine which law will govern the contract, especially in cases where the parties are from different countries.
• Competent court: Agreement on a competent court or dispute resolution agency if a dispute arises.

10. Risk and insurance

• Risk division: It is necessary to clearly determine which risks each party is responsible for in cooperation, especially financial, technical, or market risks.
• Insurance: The parties can agree to buy insurance to protect common interests in cooperation.

11. Contract flexibility

• Contract adjustment: If necessary, the contract should have provisions allowing the parties to adjust or change the contract when there is a change in circumstances or cooperation goals.

Latest BCC contract form

Currently, the Law on Investment 2020 and its guiding documents do not stipulate a specific BCC contract form, so this contract will be established by agreement of the parties, which is required to have all the prescribed content. in Article 28 of this Law.

Long Phan provides a BCC contract template that includes the contents of the law. We invite you to refer to the link below:

>> BCC contract sample.

Consulting services and guidance on drafting BCC contracts in Long Phan

Coming to Long Phan, you will be provided with consulting services and guidance on drafting professional BCC contracts, with the goal of bringing absolute peace of mind to you in all cooperative transactions. This consulting service will include:

• Consulting on BCC contract structure: building a reasonable BCC contract structure, clearly dividing the rights, responsibilities and obligations of the parties, ensuring the terms are consistent with cooperation goals.
• Drafting detailed BCC contracts: BCC contract drafting service with clearly and fully presented terms, protecting the interests of customers and partners.
• Consulting on profit and risk division: Establish profit sharing methods and risk allocation methods during the cooperation process, making everything transparent and fair.
• Consulting on relevant regulations: Ensure BCC contracts comply with current regulations, avoid violations and protect your legal rights.
• Instructions for implementing BCC contracts: Instructions on the process of implementing BCC contracts, from signing to monitoring implementation, ensuring that the parties fully fulfill their obligations.
• Consulting on dispute resolution in BCC contracts: Providing strategies and dispute resolution options, if any, to help you handle conflicts effectively and legally.
• Support for updating and adjusting BCC contracts: When there are changes in terms of new needs, we will help you amend and supplement the BCC contract quickly and reasonably.
• Assess risks and feasibility of the contract: Analyze potential risk factors in the contract and propose risk mitigation options.
• Consulting on other issues related to BCC contracts.

Properly drafting a BCC contract not only protects the interests of the parties but also ensures transparency, limits risks and optimizes the effectiveness of long-term cooperation. With a team of experienced experts and a deep understanding of regulations, Long Phan commits to accompanying you in every step from consulting, drafting to implementing BCC contracts, helping you maximize your Optimize business cooperation opportunities. Please contact us immediately via the hotline: 0906735386 to receive dedicated advice and professional service.