Author: Phạm Huyền

Statute of limitation for lawsuits in settlement of disputes of property loan contract

Written by Phạm Huyền on 27 October, 2022. Posted in Pháp luật Hợp đồng.

During business or for other purposes where the borrower needs capital or finance to solve economic difficulties, signing a property loan contract is one of the ways to overcome that difficulty. The parties will agree and commit to the loan, the loan amount, the payment term, the interest on the loan within the due date and the interest on the overdue loan. However, in fact, in many cases, the borrower did not properly perform the payment obligation on time to the lender, even avoiding or delaying payment, affecting the statute of limitations for filing a lawsuit against the lender. So what is the statute of limitations for a lawsuit of property loan contract?

1. Overview of the statute of limitations for a lawsuit

According to the provisions of Clause 3, Article 150 of the Civil Code (“Civil Code 2015”), the statute of limitations for a lawsuit is the time limit within which the subject is entitled to initiate a lawsuit to request the Court to settle the civil case to protect the infringed legitimate rights and interests; if that time limit expires, the right to sue is lost.

More specifically, for a general contract dispute, the statute of limitations for a lawsuit to request a Court to settle a contract dispute is 03 years from the date the claimant knows or must know his/her legal rights and interests are violated.

It can be understood simply that when the payment term in the property loan contract has expired but the borrower has not yet paid the lender, then the legitimate rights and interests of the lender have been infringed and the statute of limitations for starting a loan has been violated. The event is calculated from the day after the date of the last payment period until 03 years later. However, it should be noted that the statute of limitations for lawsuit will only apply to the arising interest debt specified in the property loan contract (not applicable to the principal debt – the lawsuit to claim the property for the principal shall not be limited as for the interest).

2. How to deal with the expiration of the statute of limitations for a lawsuit against a property loan contract?

In fact, for a variety of reasons, the lender allowed its statute of limitations to pass and end. Until the lender wants to sue to request the borrower to pay the principal and the interest arrears arising from the principal debt, the statute of limitations for lawsuit to claim the interest payment has expired. So how does the law protect the right to sue to request interest payment to the lender?

Pursuant to Article 157 of the Civil Code 2015 stipulating the restart of the statute of limitations for initiating a civil case:

“1. The statute of limitations for initiating a civil lawsuit begins again in the following cases:

a) The obligor has admitted part or all of its obligations towards the petitioner;

b) The obligor admits or partially fulfills its obligations towards the petitioner;

c) The parties have reconciled themselves with each other.

The statute of limitations for initiating a civil lawsuit begins again from the day following the date of occurrence of the event specified in Clause 1 of this Article.”

Based on the experience of TNTP and the above provisions, although the statute of limitations for lawsuits has expired, in case the borrower confirms and acknowledges in writing that it will pay part or the whole of the loan amount of interest arising from a contract to the lender, the statute of limitations for initiating may be recalculated starting from the date following the event that the borrower’s written acknowledgment takes place.

The confirmation and acknowledgment of the obligation to pay interest debt to the lender can be expressed in the Minutes and signed by both parties; or

After the lender submits the Complaint to request the Court to settle, the borrower acknowledges the obligation to pay interest at the working sessions and is made a Minutes of testimony at the Court.

At that time, the statute of limitations for lawsuit will be recalculated and the lender can completely sue to ask the borrower to pay the interest incurred in addition to the principal debt.

Above are our analysis of the statute of limitations for lawsuits in the settlement of the disputes of a property loan contract, hope the article helps you.

Sincerely,

Notes for drafting and entering into labor contracts

Written by Phạm Huyền on 26 October, 2022. Posted in Pháp luật Hợp đồng.

A labor contract is legally binding between the employee and the employer regarding working conditions, rights, and obligations of each party in the labor relationship, salary, etc. The dispute related to the labor contract is a typical dispute in labor, arising from the misunderstanding of the parties about the labor contract regulations in the labor relationship. In this post, we will analyze some basic contents that businesses and employees need to pay attention to when drafting and entering into labor contracts in Vietnam.

1. Definition of the labor contract

According to Article 13 of the Labor Code 2019, the labor contract is an agreement between the employee and the employer on a paid job, salary, working conditions, rights and obligations of each party in the labor relations.

Therefore, the labor contract is the basis for ensuring the rights and obligations between the employee and the employer; it is also the basis for dispute settlement (if arising). Before employing a person, the employer shall enter into a labor contract with such person.

A labor contract shall be entered into in writing or in the form of electronic data conformable with electronic transaction laws. However, the parties may enter into an oral contract with a term of less than 01 month, except in the following cases: the subjects of the labor contract are seasonal jobs or certain jobs lasting for less than 12 months; entering into labor contracts with a person aged under full 15 years or the employee who are domestic workers.

2. The remarkable contents when drafting and entering into labor contracts

2.1. Types of labor contract

Article 20 of the Labor Code 2019 stipulates two types of labor contracts as follows:

Indefinite-term labor contract: a contract in which the parties do not determine its term and time of termination.
Definite-term labor contract: a contract in which the parties determine its term and time of termination within 36 months from the date the contract takes effect. For this type of contract, the law does not stipulate a minimum term, but only a maximum contract term of 36 months.

The law stipulates quite specifically the cases in which the enterprise can terminate the labor contract with the employee. The termination of the labor contract by the enterprise that does not fall under the cases specified in the law is considered a violation of the law and this enterprise must bear the consequences for the illegal termination of the contract. Therefore, since entering into a contract, the enterprise should carefully consider factors such as professional qualifications, enterprise needs, working consciousness of personnel, etc. to determine the type of signed contract and the appropriate duration of the contract. The enterprise can enter into 1-2 fixed-term labor contracts, after conducting the process of employees working, the enterprise shall decide whether to continue entering into labor contracts and determine its time of termination or not.

2. Contents of a labor contract

The parties have the right to freely agree on terms that are not prohibited by law, however, to ensure the legitimate rights and interests of employees as well as limit disputes arising in the labor relationship, the law stipulates that the labor contract must contain the following principal contents:

Name and address of the employer, and full name and title of the person entering into the contract on the employer’s side;
Full name, date of birth, gender, residence, identity card number, or passport number of the person entering into the contract on the employee’s side;
Job(s) and workplace;
Term of the contract;
Job- or position-based salary, the form of salary payment, the due date for payment of salary, allowances and other additional payments;
Regimes for promotion and pay rise;
Working hours, rest periods;
Personal protective equipment for the employee;
Social insurance, health insurance and unemployment insurance;
Basic training and advanced training, occupational skill development.

Moreover, when the employee performs a job directly related to business secrets or technological secrets as prescribed by law, the employer may reach a written agreement with the employee on the content and duration of protection of business secrets or technological secrets, interests, and compensation in case of violation.

3. Competence to entering into labor contracts

When entering into a contract, the enterprise and the employee need to check and consider about the competence of the contract’s subject to ensure the validity of the labor contract.

Competence to enter into labor contracts of the enterprise: The legal representative of the enterprise or the person authorized according to regulations of the Law. In enterprises, it is common for the legal representative to authorize the deputy general director, the head of the administrative and human resources department, etc. to sign labor contracts. The employee should request to see the Letter of Authorization of the person signing the contract to ensure the validity of the contract.

Competence to enter into labor contracts of employees:

An employee aged full 18 years or older;
An employee aged between full 15 years and under full 18 years, with the written consent of his/her legal representative;
A person aged under full 15 years and his/her legal representative; or
An employee in a group of employees who is lawfully authorized by other employees in the group to enter into a labor contract.

In addition, the parties should note the following regulation, whether on the employer’s side or the employee’s side, the person authorized to enter into a labor contract may not re-authorize another person to enter into a labor contract.

This is post “Notes for drafting and entering into labor contracts”. We hope this article was useful to you.

Best regards,

Illegal debt collection actions

Written by Phạm Huyền on 25 October, 2022. Posted in Thu Hồi Nợ, Thu hồi nợ.

In previous articles, the differences between debt collection activities and debt reclamation services were made clear. In particular, currently, debt collection is still allowed by the laws. However, this activity is still under the control of the law and has limits. How to collect debt legally? When are debt collection acts considered illegal? The above legal questions will be answered in the article “Illegal debt collection actions.”

1. Publicizing the debtor’s image and information without the debtor’s consent

When the debtor fails to pay the debt on time, the creditor usually publicizes the debtor’s images and information immediately, such as the address of residence, workplace, name, age, date of birth, and identity. Moreover, images and information of the debtor’s family and relatives are also publicized by creditors on social networks or in public. Notably, all of these actions are not agreed upon by the debtor. This action can be considered one of the most common illegal collection actions that creditors often do when the debtor fails to pay the debt on time.

Unfortunately, this behavior is not allowed by the law. It is a typical illegal debt-collection action. Specifically, disclosing the debtor’s images and information is arbitrarily distributing information to a third party without the consent of the personal information owner. It will be sanctioned administratively in Clause 2, Article 84 of Decree 15/2020/ND-CP “Regulations on sanctioning of administrative violations in the field of the post, telecommunications, electronic radio frequencies, information technology, and electronic transactions” (“Degree No. 15”).

Not only that, the one who distributes information without the consent of the information owner may be prosecuted for criminal liability according to Point b, Clause 1, Article 288 of the Criminal Code 2015 (amended and supplemented in 2017) on the crime of Illegally giving or using the information on computer networks or telecommunications networks if the conditions are met to constitute a crime.

2. Insulting, defaming the honor and dignity of the debtor are illegal debt collection actions

The second act is also common. The creditor insults and smears the debtor’s honor and dignity when the debtor fails to pay on time. It is also one of the illegal debt collection actions.

Creditors should note that although the debtor has violated the civil agreement, it does not mean that the creditor has the right to insult or smears the debtor. In fact, many criminal cases appear because the creditor swears and uses vulgar words toward the debtor. As a result, the creditor could not recover the debt and was denounced by the debtor for violating the law. Acts of insulting or defaming the debtor’s honor and dignity will be sanctioned administratively according to Point a, Clause 3, Article 7 of Decree 144/2021/ND-CP “Regulations on sanctioning of administrative violations in the field of social security, order, and safety; prevention of social evil; fire protection; rescue; domestic violence prevention and control” (“Decree No. 144”).

Besides, the act of insulting, and defaming the debtor’s honor and dignity may be prosecuted for criminal liability under Article 155 of the Criminal Code 2015 for the crime of Humiliating other people.

3. Calling or contacting the debtor’s acquaintances to request payment on behalf of the debtor are illegal debt collection actions

Calling or contacting the debtor’s acquaintances, friends, and family to ask them to pay the debt on behalf of the debtor is a typical illegal debt-collection action of financial companies. When the financial company cannot make the debtor pay the debt because the debtor does not have solvency, the company contacts people who know the debtor to ask them to pay the debt.

This behavior has been prohibited by Circular 18/2019/TT-NHNN “Amendment and supplementation of some articles of Circular No. 43/2016/TT-NHNN dated December 30th, 2016 of the Governor of the State Bank of Vietnam on Regulations on consumer lending by financial companies” (“Circular No. 18”).

In essence, the debtor is the only party that must pay the debt to the entitled party. Therefore, the entitled party must not require unrelated persons to pay the debt on behalf of the debtor. If the debtor wants to transfer the payment obligation, it must be the consent of the debtor, the assignee, and the entitled party. Then, the entitled party has the right to request the receiving party to pay the debt.

4. Threatening to use violence or using violence or destroying the debtor’s property

Not only in debt collection but in any case, the act of threatening to use violence or using violence or destroying others’ property is always illegal. However, in many cases, creditors often lose control of their emotions and take actions such as smashing, cursing, and using violence to force the debtor to pay the debt.

It violates the provisions of Point d, Clause 4, Article 12 of Decree No. 144 because of using violence, threatening to use violence, or using other measures that are not permitted by law to collect debts; or Point c, Clause 4, Article 15 of Decree No. 144 for destroying or intentionally damaging other people’s property.

In addition, using violence can be prosecuted for criminal liability under Article 134 of the Criminal Code 2015 for the crime of Intentionally causing injury if the debtor has a bodily injury rate of 11% or more. The one who destroys property can be brought into account for criminal liability under Article 178 of the Criminal Code 2015 for the crime of Destruction or intentionally damaging property if the damaged property costs VND 2,000,000 or more.

5. Calling to request payment constantly, annoyingly

The last illegal debt collection action is calling for payment multiple times per day and has no time limit. It is also a common violation of financial companies. Companies often contact and disturb debtors late at night or early morning.

The behavior has been officially prescribed in Clause 7, Article 1 of Circular No. 18. Financial companies are only allowed to remind debts up to 5 times per day and the time limit for reminding debts must be in the period from 7 a.m to 9 p.m. Excessive debts reminders or outside the stipulated period are illegal debt collection actions.

Above are the five most common illegal debt collection actions that creditors and financial companies often mistake. Debt collectors should pay attention to avoid these behaviors to not “lose lock, stock, and barrel.” TNTP hopes this article is helpful to you.

Best regards.

Thing you should not do in the collectin debt

Things you should not do in debt collection activities

Written by Phạm Huyền on 25 October, 2022. Posted in Thu Hồi Nợ, Thu hồi nợ.

Debt collection is an important activity and always exists in society. However, creditors are not successful in collecting debts all the time. To collect debts effectively, debt collectors need to know there are do’s and don’ts in debt collection. So what should not be done when performing debt collection activities? The article “Things you should not do in debt collection activities” will answer the above question.

1. Performing illegal debt collection activities

The first thing that the entitled party should not do is illegal debt collection acts. Performing these acts is ineffective and causes the entitled party to be administratively sanctioned or prosecuted for criminal liability. The debtor may even damage the entitled party’s reputation, honor, dignity, health, and life if they are urged to pay the debt by illegal debt collection.

So what are illegal debt collection acts? This question has been answered and analyzed in the article “Illegal debt collection actions.” Debt collection actions that are considered illegal include:

Publicizing the debtor’s image and information without the debtor’s consent;
Insulting, defaming the honor and dignity of the debtor;
Calling or contacting the debtor’s acquaintances to request payment on behalf of the debtor;
Threatening to use violence or using violence or destroying the debtor’s property; and
Calling to request payment constantly, annoyingly.

2. Not assessing the debtor’s ability to pay

The next thing the entitled party should not do is not assess the debtor’s solvency. It is the most significant factor that directly determines the result of debt collection. It is the debtor’s solvency. If the debtor cannot pay, no matter what measures the entitled party takes, it will not be able to collect the debt. Therefore, the entitled party should not skip the step of assessing the debtor’s solvency in debt collection.

The entitled party should assess solvency before the debt arises; during the performance of the agreement; and when the debt is due. Even when the debt is overdue, the entitled party should still assess the debtor’s ability to pay. In addition, solvency should be reviewed periodically for timely solutions as soon as the debtor shows signs of insolvency.

3. Not monitoring and urging the debtor to pay the debt regularly and continuously

The third thing the entitled party should not do is “not monitoring and urging the debtor to pay the debt regularly and continuously.” If the entitled party has determined to collect the debt, the entitled party must not let the debt “drift” away. In fact, many creditors have forgotten and left gaping for a long time without contacting the debtor or collecting the debt in a superficial way. By the time the entitled party has remembered the debt, the debtor no longer has the ability to pay or has changed the contact and address. At this time, debt collection becomes much more difficult with a low success rate.

To collect debts effectively, especially overdue debts, the entitled party must monitor and urge the debtor to pay the debt. That will make the debtor understand that the entitled party still remembers the debt and they have to pay the debt. If the entitled party accepts all reasons and solutions offered by the debtor easily, the debtor will delay payment and think that the entitled party has forgotten the debt. The debt collection will gradually become a standstill and the success will be lower.

Here are the things you should not do in debt collection. In addition to the above three things, there are still other things that the entitled party should not do when collecting the debt. However, the above three contents are the most basic principles so that the entitled party can achieve good results in debt collection. TNTP hopes this article is useful to you.

Best regards.

The significant importance of debt collection to companies

Written by Phạm Huyền on 23 October, 2022. Posted in Debt Collection, Thu hồi nợ.

Debt collection is always one of the “tiring” matters for companies. Commercial activities and goods trading take place every day at an increasingly fast pace, leading to an increase in the number of receivables from customers and partners, and not all customers and partners can make the payment in due course. The late payment is a direct impact on the capital flow of companies, especially for large debts that cannot be recovered, it will stop the financial flow, which can directly push companies to the state of insolvency or go bankrupt. Therefore, debt collection to companies is an important role.

1. What is debt collection to companies?

Debt collection is the act of requesting debtors to make the payment of past-due debts in form of money or assets that must be paid to creditors under their agreements and contracts.

An ideal operating state is when there are no overdue debts and no capital misappropriation by any other companies beyond the stipulated time. However, this ideal state does not exist in the practice of almost every company.

In fact, most companies want to appropriate capital from other companies as long as possible as this may be more beneficial for their businesses, especially in the difficult economic situation for the past few years.

Limited liability companies, businesses go bankrupt because they are unable to pay their debts or cannot pay their past-due debts. Therefore, debt collection is of significant importance to companies.

2. The significant importance of debt collection to companies

First, debt collection determines the “life” of companies and avoids the risks in their business operations.

An ideal operating state is when there are no overdue debts and no capital misappropriation by any other companies beyond the stipulated time.

When companies are in a stable financial state with sufficient profits, they can develop their own financial and business plans in accordance with their business operations. When the financial state is not stable, companies may have to borrow money from credit institutions and banks.

In business operations, borrowing capital from other organizations is understandable. In case companies borrow capital from other organizations and can ensure the payment on time, there will be no risk at all. However, in case they fail to guarantee the payment term, many significant risks may arise.

If that loan is classified into the bad debt group, these companies may be put on the “black list”, making it difficult for them to continue to borrow money from banks or other organizations. More seriously, the business’s collateral may be confiscated or distrained to ensure the payment obligation. In addition, many businesses may go bankrupt because they cannot pay their past-due debts due to the exhaustion of capital, or the business debts being unrecovered.

Second, bad debt collection will help businesses ensure their business profits.

Profit is understood as the difference between a company’s revenue and its expenses. Profit is considered the final financial result of business activities, and also the basis and foundation to evaluate the economic efficiency of each company.

In fact, most companies want to appropriate the capital of other ones as long as possible, especially in the difficult economic situation for the past few years. Most businesses misappropriate capital from other businesses through non-payment or prolonging the payment period. Therefore, when the debt is not recovered, the profit is not guaranteed accordingly, which greatly affects the cash flow and financial state of the company.

Third, ensure the financial health of organizations, individuals and companies

For individuals: Through their relationships, carelessness in entering into contracts, without collateral… leading to the borrower’s failure to properly fulfill the payment obligation. Debt collection plays a very important role in minimizing the loss of assets, as well as preserving and maintaining the relationships between creditors and debtors.

For companies and other organizations: Debts will, directly and indirectly, reflect their financial performance. In order to ensure financial health as well as profits, debt collection has a significant impact on the business operations of companies and other business organizations.

In general, debt collection is extremely important to companies, ensuring financial health and safety, helping them to operate effectively and avoiding possible risks in their business activities. Companies need to acknowledge the importance of debt collection and choose an effective and appropriate debt collection method.

Sincerely,

settle dispute by commercial arbitration

Why you should choose settle disputes by Commercial arbitration

Written by Phạm Huyền on 23 October, 2022. Posted in Dispute Settlement, Giải quyết tranh chấp.

The significant development of commercial activities has made a variety of business opportunities for enterprises, on the other hand, that made potential risks and arisen disputes. There are many modes of dispute settlement, with the same destination being an effective judgment or decision of the dispute settlement agency, but Commercial arbitration is a superior dispute resolution mode to the Court. In this post, TNTP will give the reasons “Why should enterprise choose to settle disputes by Commercial arbitration?”.

1. Mechanisms and procedures of settle disputes by Commercial arbitration are flexible

According to Clause 1, Article 3 of the Law on Commercial Arbitration 2010, Commercial arbitration is a mode of dispute settlement agreed upon by the parties and conducted by the Law on Commercial Arbitration, so when the parties agree to settle disputes by Commercial arbitration, arbitration mechanism will be applied to resolve disputes. This is a select mechanism, not the same as the Court, which will default to a dispute settlement mechanism if the parties do not have another select agreement. It can be seen that the arbitration mechanism gives the parties more selections and initiative in dispute settlement.

According to the provisions of arbitration law, the parties can take the initiative in time and venue for dispute settlement to accelerate the time of dispute settlement; the parties have the right to select the Arbitral council; the language used in dispute settlement and the law applicable to the dispute if a party to the dispute has a foreign element; arbitration procedures do not undergo as many levels of trial as by the courts, that therefore saving time and money for enterprises.

2. When settle disputes by Commercial arbitration, Enterprises have the right to a designated dispute settlement person

Having the right to select a dispute settlement arbitrator allows the parties to select experts with expertise and practical experience on the dispute (insurance disputes, shares, stock disputes; disputes in construction, etc…), and have a prestigious profession to become the arbitrators who settle disputes of the parties.

Thereby, contributing to ensuring the quality of dispute settlement promptly and accurately on the principle of voluntary and free agreement of the parties in the dispute.

3. Commercial arbitration shall be adjudicated on the principle of private

The Commercial arbitration mode respects the confidentiality of the entire process, the arbitration meeting is also held in a non-public manner and only with the participation of the parties receiving the decision, which is different from the publicity judgment principle of the Court proceedings. When the dispute and the identities of the parties are kept private, this will satisfy the need for trust in commercial relations, which has great significance in competitive conditions (especially for companies listed on stock exchanges).

In particular, there are lawsuits related to trade secrets and inventions or other factors that need to be kept confidential at the request of the parties.

4. Arbitral awards are final

The arbitral award is different from the judgment or decision of the court which is final and cannot be appealed or protested against.

In the case an international commercial contract arises, the judgment of the National Court is commonly difficult to achieve international recognition. Due to the Court’s essence within a country’s jurisdiction, it is common for the Court’s decision to be recognized in another country which has to be adopted by bilateral agreement and under very strict rules. In contrast, arbitral awards gain international recognition through a wide range of international conventions and in particular the New York Convention 1958 on the Recognition and Enforcement of Arbitral Awards (with 150 countries and territories that are parties to the Convention).

Here is the content of the post “Why should enterprise choose to settle disputes by Commercial arbitration?”. TNTP hopes this article is useful to readers.

Best regards.

Typical disputes arising within the enterprise

Written by Phạm Huyền on 21 October, 2022. Posted in Giải quyết tranh chấp.

Currently, internal enterprise disputes are much more complex and have gotten much worse. The most common are disputes related to the right to access information of members, capital contribution, establishment, operation, dissolution, and corporate mergers, Internal enterprise disputes can arise for many different reasons, but in essence, they are due to conflicts, conflicts of rights, and obligations of subjects in the organization and operation of the enterprise. To better understand the typical disputes arising within the enterprise, let’s find out the article below with TNTP.

1. Disputes arising within the enterprise

According to the provisions of Clause 4, Article 30 of the Civil Procedure Code 2015, an disputes arising within the enterprise will satisfy the following two conditions:

First, disputes between the enterprise and its members, disputes between the enterprise and the manager in a limited liability company or a member of the Board of Directors, the director or general director in a joint-stock company, between members of the company.

Second, disputes related to the establishment, operation, dissolution, merger, consolidation, division, separation, transfer of assets of the enterprise, and transformation of the organizational form of the enterprise.

Thus, it can be understood that internal disputes in an enterprise are conflicts and disagreements between individuals and organizations in the enterprise arising in the entire process from the establishment, operation, dissolution, merger, consolidation, division, separation, and transfer of assets of the company, transformation of the organizational form of the enterprise.

2. Common internal disputes arising within the enterprise

Disputes between the company and its members

Disputes between the company and its members include typical disputes:

Disputes related to the obligation to contribute capital under the commitment to contribute/register on the business registration certificate between members/shareholders.
Disputes over asset valuation when contributing capital, not transferring ownership of assets contributed as capital.
Disputes over rights and interests, distribution of profits among members and shareholders.
Disputes when transferring the capital contribution to the enterprise between members of the company or transferring the capital contributed to the company by that member of the enterprise to another person who is not a member of the company.

Disputes between the company and the manager of the company

Under contract 24, Article 4 of the Enterprise Law 2020, an enterprise manager is a manager of a private company and a company manager, including the owner of the private company, general partners, the chairman of the council, members of the Members’ Council, the President of the company, the Chairman of the Board of Directors, members of the Board of Directors, the Director or General Director and individuals holding different managerial positions as prescribed in the Charter company.

Disputes related to business managers are often quite complicated and fierce. Disputes arising related to the decisions of the General Meeting of Shareholders, the Board of Directors, and the Board of Members, do not accept the decisions because they think that these decisions are unfair, illegal, affecting the rights of shareholders, interests of shareholders, and members of the company.

Disputes between company members

A Member company is a person who contributes capital to the company and has partial or full ownership of the company. When contributing capital to the company, the company has ownership rights to the assets (contributed capital), and the company members have ownership rights to the company.

According to the provisions at point b, Clause 5, Article 6 of Resolution No. 03/2012/NQ-HDTP stipulating typical disputes between members of the company, specifically:

Disputes about choosing a legal representative, disputes related to the rights and obligations of members and shareholders in the company.
Disputes when liquidating assets, dividing debts among members of the company in case the company is dissolved.
Disputes between members of the company related to the establishment, operation, dissolution, merger, consolidation, division, separation, and transformation of the company’s organizational form

3. Methods of resolving internal enterprise disputes

In resolving disputes between the company and its members, the resolution method is the same as that of commercial business disputes. Accordingly, there are four methods of solving the following:

Negotiation method
Mediation at the Mediation Center (commercial mediation)
Settlement of disputes by arbitration
Settlement of disputes by Court.

Above is the article of TNTP on “Typical disputes arriving in the enterprise”. Hope the above article provides you with useful information.

Best regards,

Responsibilities of the enterprise’s legal representative

Written by Phạm Huyền on 20 October, 2022. Posted in Legal newsletter.

The legal representative is a special and important entity associated with the development of the enterprise. Therefore, each enterprise needs to clearly understand the responsibilities of this entity. In this post, we will analyze the provisions on the responsibility of the legal representative.

1. Who is the legal representative?

The legal representative of enterprise means an individual who represents an enterprise to exercise the rights and perform the obligations arising from its transactions, and represents the enterprise in the capacity of a requester for settlement of civil cases, plaintiff, respondent or person with related interests or obligations before arbitration or court, and has other rights and obligations as prescribed by law.

Therefore, the legal representative is required to be an individual, although the enterprise may have the participation of an organization. In case an organization wants to become the legal representative of an enterprise of which it is a member, it can nominate an individual “representative” of itself to become the legal representative of the enterprise.

Each type of enterprise will have a different number of legal representatives, specifically:

For a sole proprietorship: the owner of the sole proprietorship is the legal representative of the enterprise.
For a partnership company: the number of legal representatives corresponds to the number of general partners because the general partners have the right to represent the law and the organization operates the day-to-day business of the partnership company.
For limited liability companies and joint stock companies: there may be one or more legal representatives.

2. Responsibilities of the enterprise’s legal representative

The provisions on the responsibilities of the legal representative in the Law on Enterprise 2020 have not changed compared to the Law on Enterprise 2014, whereby the legal representative must still ensure that:

To exercise and perform the assigned rights and obligations in an honest, prudent and best manner in order to guarantee the lawful interests of the enterprise;
To be loyal to the interests of the enterprise; neither to abuse his/her title or position nor to use business information, know-how or opportunities or other assets of the enterprise for personal gain or for the interests of other organizations or individuals;
To notify the enterprise in a timely, complete and accurate manner of other enterprises which he/she or his/her related party owns or in which he/she or his/her related party has shared or contributed capital amounts in accordance with this Law;
Must authorize in writing another person residing in Vietnam to perform the rights and obligations of the legal representative when exiting Vietnam in case he/she is the only legal representative residing in Vietnam. In this case, the legal representative shall still be held responsible for the exercise and performance of the authorized rights and obligations;
To bear personal liability for damage caused to the enterprise due to his/her breach of the above responsibilities.

This is the post “Responsibilities of the Enterprise’s legal representative”. We hope this article was useful to you.

Best regards,

Beneficial policies for female employees in the workplace (part 1)

Written by Phạm Huyền on 20 October, 2022. Posted in Legal newsletter.

Female employees (“FEs”) have been holding an important role in the process of labor, production, and socio-economic development. However, when participating in labor relations, due to many factors such as health, psycho-physiology,… FEs still face many difficulties. Therefore, the Labor Code 2019 and its guiding documents stipulate many policies to ensure the interests of FEs. In this article, TNTP will analyze some beneficial policies and regulations for FEs.

1. Beneficial policies for female employees in general

Have a gynecological examination at least once a year

Employees are entitled to health check-ups at least once a year. For employees doing arduous, hazardous and dangerous occupations and works, extremely arduous, hazardous and dangerous occupations and works, disabled, underage and elderly employees, are entitled to health check-ups for at least once 6 months. In particular, for FEs, at health check-ups, will be provided with gynecological examinations under the list promulgated by the Ministry of Health.

Take a break of 30 minutes/day during menstruation

FEs during their menstrual period are entitled to a 30-minute break every day counted in working time and are still fully paid under their employment contracts. The number of days of menstrual leave shall be negotiated by both parties but must be at least 03 working days per month. Specific days of leave of each month shall be informed by the employee to the employer. In case the employee wishes to have more flexible rest periods, she can negotiate with the employer to arrange a suitable leave. In case she does not need to take leave and the employer allows her to work, she will be paid an extra salary that corresponds to the amount of work done by her during the period of menstrual leave to which she is entitled.

Be protected from sexual harassment

The Labor Code 2019 and Decree 145/2020/ND-CP stipulate the prevention and combat of sexual harassment in the workplace, which requires businesses to have detailed regulations on the prevention and control of sexual harassment at enterprises. This is a new point compared to the Labor Code 2012. When FEs were sexually harassed at work, instead of silently suffering or quitting their jobs, they can collect evidence, documents and witnesses to complain and denounce the person performing the act of sexual harassment. This person may be dismissed according to the law and the enterprise’s labor regulations. In case an employee who was sexual harassment at the workplace does not want to continue working, she may unilaterally terminate the labor contract immediately without prior notice to the employer.

2. Beneficial policies for female employees which pregnant or nursing employees

2.1 Maternity protection policy

First, FEs are not required to work at night, work overtime and go on a long-distance working trip in the following circumstances: i) Pregnant from the 7th month or from the 6th month if working in upland, remote, border and island areas; ii) The employee is raising a child under 12 months of age unless otherwise agreed by her.

The fact that FEs work at night (from 10 pm to 6 am the next day), work overtime (work outside normal working hours) or go on long business trips (have to travel a lot) are likely to affect their health, thereby affecting the development of the fetus. Therefore, the above provisions will help FEs not be forced to do work that harms their health and the development of the fetus.

Second, FEs who do arduous, hazardous and dangerous occupations and works, extremely arduous, hazardous and dangerous occupations and works or any work that might negatively affect their maternity, notice for their employer shall be assigned to less laborious or safer work, or reduce the working hours by 01 hours per day without reducing their salary, rights or benefits until their child reaches 12 months of age.

The employee does not need to wait for a certain period in her pregnancy to notice to the employer about changing jobs or reducing working hours but can notice since she is pregnant.

The list of arduous, hazardous and dangerous occupations and works, extremely arduous, hazardous and dangerous occupations and works are specified in Circular 11/2020/TT-BLDTBXH issued by the Ministry of Labour – Invalids and Social Affairs. The list of jobs that might negatively affect maternity is specified in Circular 10/2020/TT-BLDTBXH issued by the Ministry of Labour – Invalids and Social Affairs.

Third, the employer must not dismiss an employee or unilaterally terminate the employment contract with an employee due to her marriage, pregnancy, maternity leave, or nursing a child under 12 months of age, except for cases where the employer is a natural person dies or is declared incapacitated, missing or dead by the court, or the employer that is not a natural person ceases its business operation, declared by a provincial business registration authority that it does not have a legal representative or a person authorized to perform the legal representative’s rights and obligations.

Upon expiration of the employment contract with a pregnant female employee or nursing a child under 12 months of age, the conclusion of a new employment contract shall be given priority. This new regulation comes from the unique characteristics of FEs (giving birth, raising a child), to ensure that the employees have economic and salary to care for and raise their children.

Fourth, a female employee who is nursing a child under 12 months is entitled to a daily break of 60 minutes. This daily break time will be fully paid under the employment contract.

In case the employee wishes to have more flexible rest periods, she can negotiate with the employer to arrange a suitable rest period. In case the employee does not need rest and the employer allows her to work, the employee will be paid an extra salary that corresponds to the amount of work done by her during the rest period to which she is entitled.

Above is the article “Beneficial policies for female employees in the workplace (part 1)”, TNTP hopes the article will be helpful and give some grounds for FEs to best protect their rights. Readers can follow the next part in the following periods.

Best regards,

Criteria, rights and obligations of social enterprises

Written by Phạm Huyền on 19 October, 2022. Posted in Legal newsletter.

A social enterprise is a particular type of enterprise, whose business activities are aimed at achieving social goals, with the profits reinvented for such goals or for the community, instead of profit maximization for company members, shareholders or owners. In this article, we will analyze the criteria, rights and obligations of social enterprises in Vietnam.

1. Criteria of social enterprises:

According to Article 10 of Enterprise Law 2020, the criteria to become a social enterprise include:

Be registered in accordance with the Enterprise Law. Depending on the social enterprise’s type including private enterprise, partnership, limited company or joint stock company, this enterprise shall carry out the registration procedures corresponding to its type.
Operate for the purposes of resolving social and environmental issues for public interests. This is a fundamental difference compared to ordinary enterprises. The primary goal of most business owners and partners is to make a profit. Meanwhile, social enterprises are established with the main purpose of resolving social and environmental issues for the public interest instead of making a profit.
Use at least 51% of the annual post-tax profit for re-investment to achieve registered targets. Unlike ordinary enterprises whose all post-tax profits can be used upon the enterprise’s will (as long as it is in accordance with the laws), social enterprises must deduct more than half of their profits after tax (at least 51%) to resolve social and environmental issues as registered.

2. Rights of social enterprises

Social enterprises are basically an enterprise, given so, they have the basic rights of an enterprise as stipulated in Article 7 of Enterprise Law 2020. Besides, because they are also a particular type, social enterprises have some further rights as follows:

The owner or executive of a social enterprise shall be enabled to obtain relevant licenses and certificates prescribed by law.
A social enterprise may raise and receive donations from individuals, enterprises, non-governmental organizations and other Vietnamese and foreign organizations to cover its administrative expenses and operating costs.
The State promulgates policies to encourage, support and promote the development of social enterprises.

3. Obligations of social enterprises

Social enterprises must fully comply with the general provisions on obligations of enterprises in Article 8 of Enterprise Law 2020 and their specific obligations, including:

Maintain operational goals and specified conditions throughout the operation.
Do not use donations for purposes other than covering administrative expenses and operating costs or resolving the social and environmental issues registered by the enterprise.
When receiving donations and aid, the enterprise needs to submit annual reports on its operation to a competent authority.
Inform the competent authority when a social or environmental objective is terminated or profit is not used for re-investment in accordance with the law.

Social enterprises in Vietnam operate under different organizational forms and legal statuses. Because its main purpose is towards society such as providing public services, protecting the environment, providing jobs for disadvantaged people, etc., social enterprises are entitled to relevant preferential policies depending on their field, area or purpose. This fact encourages businesses to operate in the name of social enterprises.

Above is the article “Criteria, rights and obligations of social enterprises”. We hope this article is useful to you.

Sincerely,

Author: Phạm Huyền

Statute of limitation for lawsuits in settlement of disputes of property loan contract

1. Overview of the statute of limitations for a lawsuit

2. How to deal with the expiration of the statute of limitations for a lawsuit against a property loan contract?

Notes for drafting and entering into labor contracts

1. Definition of the labor contract

2. The remarkable contents when drafting and entering into labor contracts

2. Contents of a labor contract

3. Competence to entering into labor contracts

Competence to enter into labor contracts of employees:

Illegal debt collection actions

1. Publicizing the debtor’s image and information without the debtor’s consent

2. Insulting, defaming the honor and dignity of the debtor are illegal debt collection actions

3. Calling or contacting the debtor’s acquaintances to request payment on behalf of the debtor are illegal debt collection actions

4. Threatening to use violence or using violence or destroying the debtor’s property

5. Calling to request payment constantly, annoyingly

Things you should not do in debt collection activities

1. Performing illegal debt collection activities

2. Not assessing the debtor’s ability to pay

3. Not monitoring and urging the debtor to pay the debt regularly and continuously

The significant importance of debt collection to companies

1. What is debt collection to companies?

2. The significant importance of debt collection to companies

First, debt collection determines the “life” of companies and avoids the risks in their business operations.

Second, bad debt collection will help businesses ensure their business profits.

Third, ensure the financial health of organizations, individuals and companies

Why you should choose settle disputes by Commercial arbitration

1. Mechanisms and procedures of settle disputes by Commercial arbitration are flexible

2. When settle disputes by Commercial arbitration, Enterprises have the right to a designated dispute settlement person

3. Commercial arbitration shall be adjudicated on the principle of private

4. Arbitral awards are final

Typical disputes arising within the enterprise

1. Disputes arising within the enterprise

2. Common internal disputes arising within the enterprise

Disputes between the company and its members

Disputes between the company and the manager of the company

Disputes between company members

3. Methods of resolving internal enterprise disputes

TNTP & ASSOCIATES INTERNATIONAL LAW FIRM

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