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MODEL CONTRACT IN COMMERCIAL ACTIVITIES IN VIETNAM

Model contracts in commercial activities in Vietnam.

Written by TNTP LAW on . Posted in Contract Law.

In commercial practices, drafting a Contract can be a long process, requiring much time and effort to develop and complete. A fully comprehensive contract can take months or even years to draft and complete for specific fields such as construction or transportation. Model contracts are used as a solution to save time and effort for the parties when participating in commercial activities. In this article, TNTP will clarify the issue of model contracts and the role of model contracts in commercial activities in Vietnam.

I. Overview of model contracts

Article 405 of the Civil Code 2015 has the following regulations on model contracts: “A model contract is a contract that includes terms set out by one party in a form for the other party to respond within a reasonable time; If the offeree accepts the contract, it will be considered as accepting the entire content of the contract according to the form provided by the offeror”. From the above regulations, it can be seen that a model contract is a type of contract in which one party has already drafted the contract contents, and if the other party in the contract replies to accept it, then it is considered as accepting the entire content with the form provided.

In addition, Vietnamese law also stipulates model contracts as follows:

• The model contract must be made public so that the remaining parties know about the content of the contract before signing. The process and format of publicizing the model contract shall comply with the provisions of the law.

• In case a model contract has unclear terms, the party drafting the model contract will be at a disadvantage when explaining those terms.

• In case the model contract has a clause that exempts the party drafting the model contract from liability while increasing the liability, or eliminating the legitimate rights of the other party, that clause will be void.

• For disputes between suppliers of goods/services and consumers, even though the arbitration clause has been stated in the general conditions of supply of goods/services prepared by the supplier, consumers still have the right to choose Arbitration or Court to resolve disputes. Suppliers of goods/services are only entitled to sue in arbitration if approved by the consumer.

II. Register sample contract

Based on the List of essential goods and services requiring contract registration according to the form issued with Decision 02/2012/QD-TTg, amended and supplemented by Decision 35/2015/QD-TTg, the following goods and services must register the model contract:

• Providing electricity for household use;

• Providing water for household use;

• Pay TV;

• Landline telephone service;

• Terrestrial mobile communication services (payment form: postpaid);

• Terrestrial mobile communication services (payment form: prepaid);

• Internet service;

• Transporting passengers by air;

• Railway passenger transport;

• Buy and sell apartments and daily-life services provided by the apartment complex’s management unit;

• Life insurance.

III. The role of Model Contracts in commercial activities in Vietnam

Model contracts provide many effects as follows:

• Using a model contract will save time and effort for the parties when negotiating and drafting the contract. In specific fields such as construction and international trade, where negotiating and drafting the contract can take a lot of time and effort, a model contract is often used by the parties for their convenience.

• For businesses that trade goods or services in large quantities, when the commercial activities that the business conducts are repetitive over a long period of time, model contracts will become a great help instead of negotiating many times about the same content in the contract.

IV. Some notes when using model contracts

Besides the benefits of model contracts, the parties need to pay attention to the following issues when using model contracts:

• It is necessary to carefully review and evaluate the contents of the terms in the model contract since accepting the model contract means agreeing with all terms in the contract, as well as any potential risks in the contract. For that reason, there can be some provisions designed in such a way that the benefits are completely towards one party in the contract, namely the one who drafted the model contract. In case of disagreement with some or the entire content of the contract, the proposed party has the right to request adjustments, or amendments to the contents of the contract or refuse to sign the contract.

• Model contracts cannot be used mechanically in all transactions, because each transaction has different matters and a model contract cannot cover it all. Therefore, depending on transaction practices, the parties can adjust the model contract accordingly to match the nature of the transaction.

Above is the content of the article “Model Contract in commercial activities in Vietnam”. TNTP hopes that this article has brought useful information and legal knowledge to readers.

Best regards.

Khi chuyển nhượng cổ phần cần chú ý những gì để hạn chế xảy ra tranh chấp

Written by TNTP LAW on . Posted in Uncategorized.

Chuyển nhượng cổ phần là hoạt động thường thấy và diễn ra phổ biến trong các doanh nghiệp (có loại hình là công ty cổ phần). Các cổ đông chuyển nhượng cổ phần cho nhau theo quy định pháp luật nhằm giúp doanh nghiệp huy động vốn và cải thiện vấn đề tài chính theo tình hình kinh doanh của công ty. Tuy nhiên, vì đây là hoạt động liên quan đến lợi ích của hai bên là cổ đông chuyển nhượng và cổ đông nhận chuyển nhượng, do đó, trên thực tế không ít tranh chấp xoay quanh vấn đề chuyển nhượng cổ phần diễn ra. Với kinh nghiệm của mình, trong bài viết này, luật sư của TNTP sẽ phân tích rõ hơn về chuyển nhượng cổ phần và các vấn đề có liên quan mà các doanh nghiệp cần chú ý để hạn chế xảy ra xung đột, tranh chấp giữa các cổ đông khi thực hiện việc chuyển nhượng cổ phần.

1. Chuyển nhượng cổ phần là gì?

• Pháp luật không quy định cụ thể khái niệm“Chuyển nhượng cổ phần” là gì nhưng căn cứ vào quy định tại Luật Doanh nghiệp và các văn bản quy phạm pháp luật liên quan, chúng ta có thể hiểu như sau:

 Chuyển nhượng cổ phần là việc cổ đông chuyển nhượng bán/tặng cho cổ phần của mình cho cổ đông nhận chuyển nhượng hoặc công ty mua lại cổ phần của cổ đông chuyển nhượng. Việc chuyển nhượng cổ phần sẽ làm thay đổi số lượng cổ phần cổ đông đang nắm giữ cho người khác thông qua việc mua bán, cho tặng, thừa kế, …

 Các cổ đông được tự do chuyển nhượng nhưng phải tuân theo quy định của pháp luật và quy định tại Điều lệ.

• Các trường hợp chuyển nhượng cổ phần thường thấy:

 Chuyển nhượng cổ phần phổ thông:

Cổ phần phổ thông là cổ phần phải có trong công ty cổ phần. Chuyển nhượng cổ phần phổ thông là giao dịch giữa:

(i) Cổ đông chuyển nhượng sẽ bán một phần hoặc toàn bộ cổ phần của mình cho bên nhân chuyển nhượng (có thể là cá nhân, pháp nhân ngoài công ty hoặc cổ đông khác cùng công ty); hoặc
(ii) Một người mua cổ phần của doanh nghiệp khi doanh nghiệp chào bán cổ phần.
 Chuyển nhượng cổ phần ưu đãi:

Cổ phần ưu đãi chưa được pháp luật quy định khái niệm cụ thể nhưng có thể hiểu ngoài cổ phần phổ thông thì công ty cổ phần có thể có cổ phần ưu đãi. Cổ đông ưu đãi sẽ nhận được một số ưu đãi nhất định tương ứng với loại cổ phần ưu đãi mà mình nắm giữ từ lợi nhuận kinh doanh của doanh nghiệp.

Theo quy định của pháp luật, có 04 loại cổ phần ưu đãi bao gồm:

– Cổ phần ưu đãi cổ tức;

– Cổ phần ưu đãi hoàn lại;

– Cổ phần ưu đãi biểu quyết; và

– Cổ phần ưu đãi khác theo quy định tại Điều lệ công ty và pháp luật về chứng khoán.

Điều kiện chuyển nhượng đối với các loại cổ phần ưu đãi sẽ phụ thuộc vào từng loại cổ phần, một số cổ phần ưu đãi có thể được chuyển nhượng theo tính chất tùy nghi hoặc do Điều lệ công ty quy định. Nhưng có những cổ phần ưu đãi thì việc chuyển nhượng không phải do cổ động hay điều lệ quyết định mà do quyết định của Tòa án đã có hiệu lực pháp luật hoặc thừa kế (đối với cổ phần ưu đãi biểu quyết).

 Chuyển nhượng cổ phần trong các trường hợp đặc biệt:

– Cổ đông là cá nhân chết:

Theo quy định tại Khoản 3 và 4 Điều 127 Luật Doanh nghiệp 2020, trường hợp cổ đông là cá nhân chết thì người thừa kế theo di chúc hoặc theo pháp luật của cổ đông đó trở thành cổ đông của công ty. Trường hợp không có người thừa kế hoặc người thừa kế từ chối nhận thừa kế hoặc bị truất quyền thừa kế thì số cổ phần của cổ đông đó được giải quyết theo quy định của pháp luật về dân sự.

– Cổ đông tặng cho cổ phần hoặc sử dụng cổ phần để trả nợ:

Việc tặng cho cổ phần dựa trên ý chí của cổ đông sở hữu cổ phần đó quyết định mà không cần thiết phải có sự thỏa thuận giữa bên tặng, cho và bên nhận.

Việc sử dùng cổ phần để trả nợ là việc chuyển quyền sở hữu số cổ phần mình nắm giữ cho chủ nợ và việc này buộc phải có sự thỏa thuận giữa hai bên.

Cá nhân, tổ chức được tặng cho hoặc nhận trả nợ bằng cổ phần sẽ trở thành cổ đông của công ty.

2. Những việc cần chú ý để hạn chế xảy ra tranh chấp chuyển nhượng cổ phần

Trước khi quyết định (nhận) chuyển nhượng cổ phần, các cổ đông phải tìm hiểu rõ mọi vấn đề xoay quanh việc chuyển nhượng cổ phần bởi tranh chấp thường xảy ra do sự chủ quan và thiếu hiểu biết về pháp luật. Như vậy, các cổ đông cần chú ý những điều sau:

• Bên chuyển nhượng phải là người sở hữu cổ phần và có tên trên sổ đăng ký cổ đông.
• Cổ phần chuyển nhượng được thanh toán đầy đủ và người mua cổ phần trở thành cổ đông công ty khi thông tin của người mua được ghi đầy đủ, ghi đúng vào sổ đăng ký cổ đông theo quy định pháp luật.
• Việc chuyển nhượng cổ phần phải chịu thuế thu nhập cá nhân cùng các khoản phí và thuế liên quan khác chưa được tính toán chính xác có thể gây ra tổn thất về mặt tài chính hoặc các rủi ro pháp lý.

Trên đây là bài viết của luật sư TNTP về chủ đề: “Khi chuyển nhượng cổ phần cần chú ý những gì để hạn chế xảy ra tranh chấp”. Mong rằng bài viết này đem lại giá trị với các độc giả.

Trân trọng,

What should you pay attention to when transferring shares to limit disputes?

What should you pay attention to when transferring shares to limit disputes?

Written by TNTP LAW on . Posted in Dispute Settlement.

Transfer of shares is a common activity in enterprises (joint stock companies). Shareholders transfer shares to each other under the law to help enterprises raise capital and improve financial capability according to the company’s business situation. However, because this is an activity related to the interests of both parties, the transferring shareholder and the transferee shareholder, many disputes surrounding the issue of share transfer occur in reality. With our experience, in this article, TNTP’s lawyers will analyze more clearly the transfer of shares and related issues that enterprises need to pay attention to limit conflicts and disputes between shareholders when transferring shares.

1. What is the transfer of shares?

• The law does not specifically stipulate the definition of “Transfer of share”, but based on the provisions of the Enterprise Law and related legal documents, we can understand that:

 Transfer of share is an act where the transferring shareholder sells/gives away their shares to the transferee shareholder or the company repurchases the transferring shareholder’s shares. The transfer of shares will change the number of shares that each shareholder holds through buying, selling, giving away, inheriting, etc.

 Shareholders are free to transfer but must comply with the provisions of law and the provisions of the Charter.

• Common cases of transfer of shares:

 Transfer of ordinary shares:

Ordinary shares are shares that must be held in a joint stock company. Transfer of ordinary shares is a transaction between:

(i) The transferring shareholder will sell part or all of their shares to the transferee party (which can be an individual, a legal entity outside the company, or another shareholder of the same company); or
(ii) A person buys shares of an enterprise when the enterprise offers shares for sale.

 Transfer of preference shares:

Preference shares have not been specifically defined by law, but it can be understood that joint stock companies can have preference shares in addition to ordinary shares. Preference shareholders will receive certain preferences corresponding to the type of preference shares they hold from the enterprise’s business profits.

According to the provisions of law, there are 04 types of preference shares including:

– Participating preference shares;

– Redeemable preference shares;

– Voting preference shares; and

– Other types of preference shares prescribed by the company’s charter and securities laws.

Transfer conditions for types of preference shares will depend on each type of share. Some preference shares can be transferred on a discretionary basis or as prescribed by the company’s charter. But with some preference shares, the transfer is not decided by the shareholders or the charter, but by a legally effective Court’s decision or inheritance (for voting preference shares).

 Transfer of shares in special cases:

– Shareholders who are individuals die:

According to the provisions of Clauses 3 and 4, Article 127 of the Law on Enterprises 2020, In case of the death of a shareholder that is an individual, his/her heir at law or designated by a will shall become a shareholder of the company. In the event a shareholder that is an individual dies without an heir or the heir refuses the inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.

– Shareholders give away shares or use shares to pay debt:

The giveaway of shares is based on the will of the shareholder who owns the shares and there is no need for an agreement between the giveaway party and the recipient.

Using shares to pay debt is transferring ownership of the shares a shareholder holds to the creditor and this requires an agreement between the two parties.

Individuals and organizations that are given away or receive debt payments in the form of shares will become shareholders of the company.

2. Things to pay attention to to limit disputes from transfer of shares

Before deciding to transfer (receive) shares, shareholders must clearly understand all issues relating to the transfer of shares because disputes often arise due to subjectivity and lack of understanding of the law. Thus, shareholders need to pay attention to the following:

• The transferor must be the owner of the shares and have their name on the shareholder register.
• The transferred shares are fully paid and the share buyer becomes a shareholder of the company when the buyer’s information is fully and correctly recorded in the shareholder register according to the law.
• The transfer of shares is subject to personal income tax and other related fees and taxes that have not been accurately calculated, which can cause financial loss or legal risks.

Above is an article by TNTP’s lawyer on the topic: “What should you pay attention to when transferring shares to limit disputes?” Hopefully, this article brings value to readers.

Sincerely,

 

Matters to be noted when drafting arbitration clauses in commercial contracts

Matters to be noted when drafting arbitration clauses in commercial contracts

Written by TNTP LAW on . Posted in Contract Law.

Commercial contracts play a crucial role in regulating economic relationships between enterprises in the modern day. However, the performance of the contract does not always go in their favor. Commercial disputes can arise at any time due to differences in the interpretation and performance of contract terms. Therefore, anticipating dispute resolution methods, especially drafting arbitration clauses, becomes extremely important. Through this article, TNTP will highlight the matters to be noted when drafting arbitration clauses in commercial contracts.

1. Choosing an arbitration center

• The first and most important consideration when drafting an arbitration clause in a commercial contract is selecting an arbitration center. Enterprises should choose an arbitration center based on criteria such as reputation, experience in the relevant field, transparent dispute resolution processes, and service fees. According to Article 43, Clause 5 of the Law on Commercial Arbitration 2010, if the parties have an arbitration agreement but do not specify a particular arbitration center, they must deal again with the choice of the arbitration center. If an agreement cannot be reached, it will be chosen at the request of the Plaintiff.

• Thus, choosing the right arbitration center in the contract will save time and avoid unnecessary disputes. Some common arbitration centers include: Vietnam International Arbitration Center (VIAC), Singapore International Arbitration Centre (SIAC), International Chamber of Commerce (ICC), Hong Kong International Arbitration Centre (HKIAC), and many other international arbitration centers.

2. Arbitration Rules

• Each arbitration center typically has its own set of rules governing the dispute resolution process. For example, VIAC has its own Arbitration Rules, similar to SIAC and HKIAC.

• Usually, once an arbitration center is chosen, the parties will apply the procedural rules of that center. However, in practice, there could be possibilities where the parties, having chosen a particular arbitration center, wish to use the procedural rules of a different center. Nonetheless, agreeing to apply the procedural rules of another arbitration center can risk invalidating the arbitration agreement. Specifically, according to Article 4 of Resolution 01/2014/NQ-HĐTP, one reason an arbitration agreement may be unenforceable is if the parties agree to resolve disputes at a specific arbitration center but choose to apply the procedural rules of another center, despite the chosen center’s regulations not permitting this.

• When a dispute arises, it is often very difficult for the parties to sit down together and amend their agreement. The inability to reach an agreement will render the arbitration agreement unenforceable, leading to the dispute being resolved by the court. This contradicts the initial intention of choosing arbitration for dispute resolution, despite its many advantages, particularly the quick resolution time.

3. Arbitration Venue

Choosing the arbitration venue or dispute resolution location is also very important, especially in international arbitration. Typically, the law of the country and local legal regulations at the arbitration venue will apply to govern arbitration procedures. When selecting an arbitration venue, the parties should consider the following factors:

• Neutrality: The arbitration venue should be neutral and not disadvantage any party.
• Cost: Travel, accommodation, and arbitration session costs at that venue.
• Convenience: The arbitration venue should be convenient for the parties to travel and participate in.

Specifying the arbitration venue helps ensure an efficient and fair arbitration process. This also enhances the feasibility and enforceability of the arbitration award, as a suitable venue minimizes legal risks and supports the enforcement process after the dispute is resolved.

4. Arbitration costs

When drafting the arbitration cost clause in a commercial contract, it is essential to ensure that all related costs are clearly defined and payment responsibilities are allocated fairly and transparently between the parties. The detailed factors to consider include:

• Arbitration center fees: Fees payable to the arbitration center for managing and conducting the arbitration process. The arbitration fee schedule applies according to the regulations of the arbitration center.

• Other costs: Lawyer and expert fees; Costs of hiring lawyers or other expert consultants for the arbitration process; Evidence and translation costs, including costs for collecting and presenting evidence, and translation if the parties use different languages from the arbitration language specified in the contract or language under the decision of the arbitration tribunal.

During arbitration proceedings, the parties may agree on which party will bear the arbitration and other costs. However, to avoid unnecessary disputes during the resolution process, the parties should clearly and explicitly outline the allocation of arbitration costs within the commercial contract. This ensures transparency and fairness and prevents unnecessary disputes over costs. Typically, in commercial contracts, the parties agree that the losing party will bear all the above-mentioned costs.

5. Arbitration language

The language used in the arbitration process is an important factor that should be clearly defined in the arbitration clause. For disputes in Vietnam, according to the 2010 Law on Commercial Arbitration, if the dispute does not involve foreign elements, the language used will be Vietnamese. For disputes involving foreign elements, the language will be agreed upon by the parties. If there is no such agreement, the Arbitration Tribunal will decide the language used in the proceedings. Factors to consider when choosing the arbitration language include:

• Contract language: Generally, the contract language will be chosen as the arbitration language to ensure consistency.

• Language both parties are fluent in: If the contract is bilingual or in a different language, the parties may agree to choose a language both parties are fluent in to avoid misunderstandings and difficulties during arbitration.

Choosing the right language helps ensure the arbitration process runs smoothly, avoiding misunderstandings and reducing time and costs for translation.

6. Validity and binding nature of arbitration awards

Finally, the arbitration clause should clearly stipulate the validity and binding nature of arbitration awards. Key factors to consider include:

• Binding nature: Arbitration awards must be binding on the parties. The parties should commit to complying with and implementing the arbitration awards seriously.

• Enforceability: Arbitration awards need to be enforceable in countries where the parties have assets or business operations. The parties should ensure that the arbitration award will be recognized and enforced according to the provisions of international arbitration agreements, such as the 1958 New York Convention.

Clearly stipulating the validity and binding nature of arbitration awards ensures that the parties will comply with the award, and the dispute will be definitively resolved.

Drafting arbitration clauses in commercial contracts is an important step to ensure that disputes can be resolved effectively and fairly. Businesses should pay attention to the above factors to ensure that the arbitration clause is drafted thoroughly and clearly, protecting the interests of both parties in the contract. Should readers require additional support in drafting arbitration clauses or any other legal issues, please do not hesitate to contact TNTP. TNTP is always ready to assist you with all legal matters.

This concludes the article “Matters to be noted when drafting arbitration clauses in commercial contracts” that TNTP presents to our readers. We hope this article is helpful to you.

Best regards,

 

TNTP & ASSOCIATES INTERNATIONAL LAW FIRM

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