Chapter 2-Sole proprietorships ( ENTREPRENEURSHIP))

ENTREPRENEURSHIP

1. SOLE PROPRIETORSHIP AND HOUSEHOLD BUSINESS

2. OVERVIEW I. SOLE PROPRIETORSHIP II. BUSINESS HOUSEHOLD - Definition - Characteristic Rights of owners to their sole proprietorship III. DISCUSSION

3. I. SOLE PROPRIETORSHIP Definition <Art.188.1 LoE > A sole proprietorship is an enterprise owned by a single individual whose liability for its entire operation is equal to his/her total assets

4. 2. Characteristic - is a kind of enterprises  = > possess common characteristics of an enterprise; have the rights and obligations of an enterprise owned by a single individual Self-investment in establishing a sole proprietorship has total authority to decide all of its business activities use of post-tax profit

5. The owner of a sole proprietorship must be liability for its entire operation is equal to his/her total assets. - A sole proprietorship is not a judical person

6. - An individual may only establish one sole proprietorship.  - S ole proprietorships must not issue any kind of securities. Disadvantages of sole proprietorships

7. 3 . Exercising the owner’s rights  Rights to establish the sole proprietorship Administration of sole proprietorships Authority to decide all of its business activities U se of profit  F ulfillment of other financial obligations as prescribed by law

8. 3.1 Rights to establish the sole proprietorship C apital of a sole proprietorship shall be registered by its owner. Do not need to transfer the right to property E ntitled to increase or decrease its capital

9. 3.2 Administration of sole proprietorships - T he owner is responsible for every business activity of the enterprise - M ay directly or hire another person to hold the position of Director/General Director - The sole proprietorship’s owner is its legal representative who will represent it during civil proceedings, as the plaintiff, defendant or person with relevant interests and duties before the court and arbitral tribunals, and in performance of other rights and obligations prescribed by law.

10. 3.3 Rights to determine the company Leasing out a sole proprietorship - The sole proprietorship’s owner is entitled to lease out the entire sole proprietorship for a period. Process: + a written notification and certified true copies of the lease contract + submitted to the business registration authority and tax authority.

11. - Rights of parties in the leasing contract: + Owner: benefit the lease price; + Lessee ( người đi thuê) : benefit the business and profit from it. Responsibility of parties: + T he sole proprietorship’s owner is still legally responsible as its owner , + O bligations of the lessee to the sole proprietorship’s business operation shall be specified in the lease contract - Khi gây ra thiệt hại cho người thứ 3: + Owner have a responsibility with the third party – vì owner là legal responsitative + Leesee have a responsibility with the owner through the leasing contract.

12. Selling a sole proprietorship - Tr ansfer the ownership from the owner of the sole proprietorship to the buyer Process: + A written notification is submitted to the business registration authority  ; + Signed contract with notarization; +The buyer re-register to the authority. - Who buy? O rganization or individual

13. Obligation of the owner : + Before selling the sole proprietorship, the owner must:  Settle all debts;  Resolve matters concerning labor  Liquidate commercial contract. + After selling the sole proprietorship : the owner is still responsible for its debts and liabilities that occur before the date of transfer unless otherwise agreed upon by the owner, the buyer and the creditors.

14. 3.4 Right to profit - The sole individual to get the profit. - Decide how much profit to use, for what purposes, and how - Not bounded by obligations like other types of enterprises.

15. II. HOUSEHOLD BUSINESS Decree 01/2021/NĐ-CP on Enterprise Registration Definition (Art. 79) A household business is established by an individual or family household member who shall take responsibility for business operations of the household business with all of their property. If a household business is established by members of a family household, one of them shall be authorized to act as the representative of the household business. The individual applying for registration of household business or the person authorized by the family household members to act as the representative of the household business shall be the owner of the household business.

16. 2. Characteristic - A singular unit but has an economical function. - A household business is established by an individual or family household members - Has one head quarter (however they can have several business places) - The owner and other family household members applying for household business registration shall be liable for all business operations of the household business - A household business is not a judicial person.