On July 16, 2024, the Government issued Decree 89/2024/ND-CP on the conversion of state-owned enterprises established and operated under the State-Owned Enterprises Law into single-member limited liability companies operating under the provisions of the 2020 Enterprise Law.
=> See more: The functions and powers of the legal organization in state-owned enterprises according to decree 56/2024/ND-CP
According to Decree 89/2024/ND-CP, the principles for implementing the conversion are as follows:
1. Principle of Inheriting Rights and Obligations:
a) The single-member limited liability company (SMLLC) shall inherit all legal rights and interests of the state-owned enterprise or subsidiary that has not yet been converted; the SMLLC is allowed to utilize all assets, labor, and land areas managed by the enterprise being converted to organize production and business activities in accordance with the law.
b) The SMLLC is responsible for the obligations of the state-owned enterprise or subsidiary that has not yet been converted, including: outstanding debts, labor contracts, obligations in managing and using land according to the law on land, and other obligations and responsibilities.
c) Branches, representative offices, and business locations of the SMLLC shall inherit all rights and obligations of the branches, representative offices, and business locations of the state-owned enterprise or subsidiary that has not yet been converted.
Photo 1. Principles for Converting State-Owned Enterprises into Private Single-Member Limited Liability Companies from September 1, 2024 _ Hotline: 097 211 8764
2. Principle of Declaration and Business Registration:
a) The enterprise is obliged to declare the business registration dossier according to the information that has been approved by the competent authority in the Decision on the conversion of a state-owned enterprise or a subsidiary that has not yet been converted into a single-member limited liability company (hereinafter referred to as the Conversion Decision). The competent authority responsible for approving the conversion shall be accountable for the information approved in the Conversion Decision. For information not included in the Conversion Decision, the enterprise is responsible for the legality, truthfulness, and accuracy of the information it declares.
b) The enterprise is not required to stamp the application for business registration. Stamping on other documents in the business registration dossier shall be carried out in accordance with the relevant legal regulations.
c) The person authorized to sign the business registration dossier is the legal representative of the enterprise as stipulated in the Conversion Decision.
d) The authorization for carrying out business registration procedures shall comply with the provisions of the Decree on business registration.
3. Principle of Application in Solving Business Registration Procedures:
a) The business registration agency is responsible for the validity of the business registration dossier and is not responsible for any legal violations of the enterprise that occur before and after business registration.
b) The business registration agency does not resolve internal disputes within the enterprise, disputes between members of the enterprise, or disputes between the enterprise and other organizations or individuals.
Therefore, from September 1, 2024, the conversion of state-owned enterprises into private single-member limited liability companies is governed by Decree 89/2024/ND-CP. The new company will inherit all rights and obligations of the old company, including assets and legal responsibilities.
Note: Enterprises must declare accurate information when registering.
Decree 89/2024/ND-CP will be effective from September 1, 2024, replacing Decree 25/2010/ND-CP.
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