Procedures for registering to establish a private enterprise

Registering to establish a private enterprise is an important first step to help individuals formalize business activities under the protection of the law. Procedures that comply with regulations not only ensure the rights and obligations of business owners but also create favorable conditions to access the market, expand business and participate in legal and transparent commercial activities, contributing to sustainable economic development.

General characteristics of private enterprises

According to Article 188 of the Law on Enterprise 2020, private enterprises have unique legal characteristics, distinguishing them from other types of enterprises. A private enterprise is only established and owned by a single individual.

Private enterprises are not allowed to issue any type of securities. This limits the ability to mobilize capital through the stock market. The owner of a private business must be responsible for all business activities with all of his or her assets – unlimited liability and not limited to the registered capital. Because of this characteristic, private enterprises do not have legal status.

Each individual is only entitled to establish one private enterprise. The owner of a private enterprise cannot simultaneously be the owner of a business or a general partner of another partnership. Private enterprises are not allowed to contribute capital to establish or purchase shares or capital contributions in partnerships, limited liability companies or joint stock companies.

Private enterprises operate under the comprehensive management of the business owner. The owner of a private enterprise has the right to decide on all business activities of the enterprise and use profits after completing tax obligations and other financial obligations according to the provisions of law. Private business owners can directly manage or hire others to be Director/General Director.

Legally, the owner of a private enterprise is the legal representative of the enterprise, representing the enterprise in legal relations with related parties. Business owners have the right to lease or sell private enterprises, but must comply with the provisions of law on notification and registration of changes.

Conditions for registering to establish a private enterprise

Conditions for registering to establish a private enterprise are strictly regulated in Article 17 of the Law on Enterprise 2020. Accordingly, individuals establishing a private enterprise must fully meet the conditions for the right to establish a specific enterprise:

• Individuals 18 years of age or older, with full civil act capacity;
• Not subject to a ban on establishing and managing a business;
• Not subject to the ban on establishing a business according to the provisions of Clause 2, Article 17 of the Law on Enterprises 2020.

Subjects who are not allowed to establish private enterprises include: officials, civil servants and public employees according to the provisions of law; officers, non-commissioned officers, professional soldiers, defense workers in agencies and units of the Vietnam People’s Army; officers, non-commissioned officers, and police workers in agencies and units of the Vietnam People’s Police; people who are being prosecuted for criminal liability, are serving prison sentences, are serving administrative measures…

Private business owners must prove their ability to contribute capital to establish a business. Article 189 of the Law on Enterprise 2020 stipulates that private business owners must accurately register the total investment capital, clearly stating the capital amount in Vietnam Dong, freely convertible foreign currencies, 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.

Private business owners must have a permanent residence address in Vietnam. For business owners who are foreigners, they must have valid documents of residence in Vietnam. In addition, the business lines of private enterprises must comply with the provisions of law and not be in lines of prohibited business investment.

Procedures for registering to establish a private enterprise

Procedures for registering to establish a private enterprise include steps from submitting documents, processing documents, to issuing a Business Registration Certificate. These steps need to be carried out in accordance with regulations to ensure the legality of the business. Specifically as follows:

Prepare documents

According to Article 19 of the Law on Enterprise 2020, private enterprise registration documents include:

• Application for business registration (according to form Appendix I-1 issued with Circular No. 01/2021/TT-BKHDT);
• Copies of personal legal documents for private business owners.

The application for business registration according to Article 23 of the Law on Enterprise 2020 must include the following main contents:

• Business name;
• Head office address of the enterprise, phone number, fax number, email (if any);
• Business lines and occupations;
• Investment capital of private business owners;
• Tax registration information; expected number of employees;
• Full name, signature, contact address, nationality, legal document information of individuals for private business owners.

An individual’s legal documents can be:

• For Vietnamese citizens: Citizen identification card or ID card or valid Vietnamese Passport;
• For foreigners: Foreign passport or valid document replacing a valid foreign passport.

In addition to the above documents, in case of authorization to carry out business registration procedures, there must be an additional authorization document for the individual performing the procedure and a copy of the authorized individual’s legal documents.

In case of authorizing an organization to perform the procedure, a copy of the service contract with the service organization and a letter of introduction from that organization to the individual directly performing the procedure are required.

Private enterprises need to pay attention to additional conditions regarding the company’s headquarters address when registering for establishment.

>>> Reference: Guidelines for Naming a Business in Compliance with the Law.

Registration process

The procedure for registering to establish a private enterprise is carried out according to the provisions of Article 32, Article 33, Article 34 of Decree 01/2021/ND-CP. Specifically:

Step 1: Submit business registration application:

Applicants can choose one of the following methods:

• Submit directly to the Business Registration Office where the enterprise is headquartered;
• Submit via postal service;
• Submit electronically at the National Business Registration Portal (https://dangkykinhdoanh.gov.vn).

Step 2: Receive and process documents:

According to Article 32 of Decree 01/2021/ND-CP, a business registration application is received when there are all required documents, the business name has been filled in in the Application, there is a contact address of the applicant, and the business registration fee has been fully paid.

After confirming that the application is complete, the Business Registration Office will issue a receipt and schedule to return the results to the applicant. The applicant needs to keep this paper to return when receiving the results.

Step 3: Review the validity of the application:

Within 03 working days from the date of receipt of the application, the Business Registration Office will review the validity and decide to grant or refuse to issue the Business Registration Certificate.

In case the dossier is not valid, the Business Registration Office will notify you in writing of the content that needs to be amended or supplemented.

Step 4: Issuance of Business Registration Certificate:

Enterprises are granted a Business Registration Certificate when they meet the prescribed conditions. The information on the Certificate is legally valid from the date of issue and the enterprise has the right to operate business from the date of issuance of the Certificate, except in the case of conditional business investment lines.

Step 5: Announce the business registration content:

According to Article 35 of Decree 01/2021/ND-CP, after being granted the Business Registration Certificate, information about the business will be published on the National Business Registration Portal.

The request for publication and payment of the publication fee are made at the time of submitting the business registration application.

Things to do after registering to establish a private enterprise

After completing the registration procedure to establish a private enterprise, the business owner needs to perform a number of important tasks to ensure business operations comply with legal regulations.

First, businesses need to make a tax declaration with the tax authority. Although when registering to establish a business, information about the business has been transferred to the tax authority to issue a tax code, the business still needs to contact the local tax authority to complete tax procedures. Enterprises must declare initial taxes, register tax calculation methods and pay taxes according to regulations.

Second, businesses need to open a bank account to serve business activities. Private business owners need to bring their Business Registration Certificate, seal and personal documents to the bank to carry out account opening procedures. This account will be used for financial transactions of the business.

Third, businesses must register to use invoices. There are two main forms of invoices: electronic invoices and printed invoices. Currently, according to new regulations, businesses are encouraged to use electronic invoices. Enterprises need to register with the tax authority to receive an invoice code and carry out related procedures.

Fourth, if the enterprise uses workers, it is necessary to carry out labor procedures such as: registering to participate in social insurance, health insurance, unemployment insurance for employees; develop and register labor regulations; Implement regulations on labor safety and occupational hygiene…

In addition, businesses also need to register for conditional business lines (if any). Accordingly, for conditional business lines, after being granted a Business Registration Certificate, the enterprise must contact a specialized agency to be granted a conditional business license before conducting business activities.

Above are a few basic tasks that businesses need to do after being granted a business establishment registration certificate. In addition, depending on business needs and type of registration, businesses need to perform a number of other tasks to ensure business operations run smoothly.

Frequently asked questions about registering to establish a private enterprise

Below are some questions we often receive, please refer to:

Can foreigners establish private businesses in Vietnam?

It is possible, but must have legal residence documents in Vietnam and often has limitations compared to the LLC type.

Can a business name be the same as another business?

No, the business name must be distinct and not confusing with the registered name.

What are the common reasons why applications are rejected?

Missing documents, incorrect information, invalid names or failure to pay the correct fees are common reasons for documents being returned.

Can a private enterprise register multiple professions?

Yes, but occupations must be fully listed and do not violate legal regulations.

Do private enterprises need to engrave their seal?

Yes. Although it is not required to notify the seal sample, enterprises still need a seal to use for official transactions.

After registration, can I change my address, capital, or profession?

Maybe. But any changes must be registered with the Department of Planning and Investment and announced according to regulations.

Can a private business be rented or sold?

Yes. The business owner has the right to lease or transfer, but must register the change according to the law.

If it no longer operates, what should private enterprises do?

Must carry out dissolution procedures, pay tax obligations, announce dissolution and return seal according to regulations.

Quick private business establishment registration service at Long Phan Consulting Company

Long Phan Consulting Company provides professional, quick private enterprise registration services with a team of experienced consultants. We carry out the entire process from initial consultation to completing registration procedures, helping customers save time, effort and ensure compliance with legal regulations.

Long Phan Consulting Company’s services include:

• Consulting on the type of business suitable to customers’ business needs;
• Consulting on conditions for registering to establish a private enterprise;
• Support in drafting and completing business registration documents;
• Representing customers to submit documents and work with the business registration agency;
• Monitor application processing progress and resolve arising problems.

When using the services at Long Phan Consulting Company, customers will enjoy many benefits: receive full advice on legal issues related to the establishment and operation of businesses; Support with post-establishment registration procedures such as tax code registration, invoice use registration, bank account opening…

Conclude

Registering to establish a private enterprise is a quick and simple first step to legally realizing a business idea. With compact procedures, no minimum charter capital requirement and full decision-making power of the owner, this type is suitable for individuals who want to proactively manage business activities. Contact Long Phan Consulting Company via the hotline 1900636389 to receive full, legal procedural support.