Can the branch’s business line be different from the company’s?

Business lines of the branch are an issue that businesses need to pay attention to when establishing and operating branches. According to the provisions of the Law on Enterprise, a branch is a dependent unit of an enterprise. So can a branch do business in a different line of business than the company? The article below will answer the above questions and guide customers through the necessary procedures to add business lines to the branch.

What is a branch?

The branch was established with the purpose of expanding the business scale and market of the enterprise. According to the provisions of Clause 1, Article 44 of the Law on Enterprise 2020:

“A branch is a dependent unit of an enterprise, responsible for performing all or part of the enterprise’s functions, including the function of authorized representation.”

This means that the branch is not an independent legal entity but operates under the management and supervision of the company. Branches may perform some or all corporate functions, including representing the company in business transactions.

Is the branch’s business line different from the company’s?

Clause 1, Article 44 of the Law on Enterprise 2020 also clearly stipulates the branch’s business lines:

“The branch’s business line must be consistent with the enterprise’s line of business.”

Therefore, branches are not allowed to conduct business lines other than the company’s registered lines of business. This is to ensure consistency in the business operations of the enterprise and avoid possible legal risks.

What should be done if a branch wants to expand into a new business sector?

If an enterprise wants a branch to operate a new business line, the parent company must first carry out procedures to add a new business line to the Business Registration Certificate. After that, the enterprise needs to carry out procedures to change the branch operation registration content to update the new business line for the branch.

Article 62 of Decree 01/2021/ND-CP provides detailed regulations on procedures for changing the content of branch operation registration, including the following steps:

Step 1: Submit application

The enterprise sends a Notice of change in the branch operation registration content to the Business Registration Office where the branch is located. Applications can be submitted in person, by post or online.

Step 2: Check your profile

• Upon receiving the notice, the Business Registration Office issues a receipt and checks the validity of the document.
• If the dossier is incomplete or invalid, the Business Registration Office requires additional information.

Step 4: Issue Certificate

• Within 03 working days from the date of receiving complete and valid documents, the Business Registration Office changes information in the National Business Registration Database and issues a Branch Operation Registration Certificate.
• In case the enterprise needs, the Business Registration Office will issue a Confirmation of changing the branch operation registration content.

Effective consulting and support services for branch business operations

To ensure that the branch’s business operations run smoothly and effectively, customers can use Long Phan’s professional consulting services.

Consulting services will support customers in the following issues:

• Consulting on conditions for branch establishment;
• Consulting and guidance on preparing documents and procedures for establishing a branch;
• Consulting on tax code registration, taxes payable and tax declaration for branches;
• Consulting on documents and procedures for changing branch operation registration;
• Consulting on human resource management mechanisms and effective branch operations;
• Consulting on business transactions of the branch to avoid risks;
• Customer representative carries out corporate administrative procedures;
• Consulting and answering other issues during the branch’s operations.

Complying with legal regulations on the branch’s business lines is a condition to ensure business operations are stable and developed. Customers who need advice on procedures for establishing a branch, changing business lines or other related issues, please contact the hotline: 0906735386 for the best support.