Decree 193/2013/ND-CP detailing Law on Cooperatives

DECREE

Detailing a number of articles of the Law on Cooperatives

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on Cooperatives dated November 20, 2012;

At the proposal of the Minister of Planning and Investment,

The Government hereby promulgates the Decree detailing a number of articles of the Law on Cooperatives,

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree details the implementation of Article 6, Clause 10 Article 9, Clause 4 Article 13, Clause 13 Article 21, Article 22, Clause 5 Article 23, Clause 1 Article 27, Clause 3 Article 45, Clause 4 Article 49, Article 54, Article 59, Article 61 and Article 62 of the Law on Cooperatives No. 23/2012/QH13 dated November 20, 2012.

Article 2. Subjects of application

Subjects of application of this Decree are defined in Article 2 of the Law on Cooperatives.

Article 3. Conditions for Vietnamese legal entities for becoming members of cooperatives

1. Vietnamese legal entities specified by the Civil Code have needs for cooperation with other members and for using products and services of the cooperative.

2. Vietnamese legal entities must fill an application for voluntarily joining the cooperative and agree with its charter before participating into that cooperative. The person signing the application must be the lawful representative of that legal entity.

3. Representatives of legal entities at cooperatives are the lawful representatives (at-law representatives or authorized representatives) of these legal entities.

4. Vietnamese legal entities must contribute capital as prescribed in Clause 1 of Article 17 of the Law on Cooperatives and cooperatives’ charters.

5. Vietnamese legal entities must meet other conditions as prescribed by cooperatives’ charters.

Article 4. Conditions for foreign individuals for becoming members of cooperatives

In addition to the conditions specified in Clause 1 of Article 13 of the Law on Cooperatives, foreign individuals who wish to participate in cooperatives in Vietnam must meet the following conditions:

1. Being lawfully residing in Vietnam, 18 years or older, having full civil act capacity in accordance with Vietnamese laws.

2. In case of participating in job creation cooperatives, foreign workers must fully comply with Vietnamese laws.

3. For cooperatives with limited business lines in terms of capital ownership by foreigners, the participation of foreigners in the cooperative must comply with the investment law related to such business lines.

4. Other conditions as specified by cooperatives’ charters.

Article 5. Supply of products or services to non-member customers

1. Cooperatives and unions of cooperatives may supply and consume products, services and jobs for members, member cooperatives and non-member customers, provided that they fulfill obligations to members and member cooperatives.

2. The rate of products, services and jobs supplied and consumed as committed by cooperatives or unions of cooperatives to their members, or by member cooperatives to non-member customers, shall be clearly specified in cooperatives’ charters, but not exceeding the following specified maximum limits:

a) 32% of total value of agricultural, forestry, agricultural and salt products or services supplied by cooperatives and unions of cooperatives;

b) 50% of total value of non-agricultural products or services supplied by cooperatives and unions of cooperatives;

c) For job creation cooperatives, wages and salaries paid to non-member workers working under definite term labor contracts shall not exceed 30% of total payroll of all of their workers working under definite term labor contracts.

3. Regarding the credit sector, the State Bank of Vietnam is assigned to assume the prime responsibility for, and cooperate with the Ministry of Planning and Investment, other relevant ministries and sectors in, studying and formulating the rate of products or services supplied and consumed as committed by cooperatives or unions of cooperatives to members, or commitments of member cooperatives to non-member customers, and submitting it to the Government for decision.

4. Regarding cooperatives and unions of cooperatives established after the effective date of the Law on Cooperatives, the rate of products, services or jobs supplied and consumed as committed by cooperatives or unions of cooperatives to members, or commitments of member cooperatives to non-member customers, must conform to provisions of Clauses 2 and 3 of this Article.

5. Regarding cooperatives and unions of cooperatives established before the effective date of the Law on Cooperatives,

a) In case cooperatives or unions of cooperatives have already complied with the rate of products, services or jobs supplied and consumed as committed by cooperatives or unions of cooperatives to members or member cooperatives and non-member customers as specified in Clauses 2 and 3 of this Article, they shall continue their business as prescribed by the Law on Cooperatives;

b) In case cooperatives or unions of cooperatives have not yet complied with the rate of products, services or jobs supplied and consumed as committed by cooperatives or unions of cooperatives to members or member cooperatives and non-member customers as specified in Clauses 2 and 3 of this Article, they must reorganize their business to ensure the rate specified in Clauses 2 and 3 of this Article within 36 months from July 1, 2013, or may choose to establish enterprises to conduct business in such products, services or jobs.

Chapter 2.

ESTABLISHMENT, REGISTRATION AND DISSOLUTION OF COOPERATIVES AND UNIONS OF COOPERATIVES

Article 6. Cooperative registration agencies

1. When being established, cooperatives or unions of cooperatives must register at cooperative registration agencies in localities where they intend to locate their head offices.

a) Unions of cooperatives or people's credit funds shall register with the business registration divisions under the provincial-level Departments of Planning and Investment;

b) Cooperatives may apply for registration with the finance – planning divisions affiliated to the district-level People’s Committees.

2. Rights and obligations of cooperative registration agencies:

a) To directly receive dossiers for registration of cooperatives or unions of cooperatives, branches, representative offices or business locations of cooperatives or unions of cooperatives; grant, replace and revoke registration certificates of cooperatives or unions of cooperatives, registration certificates of operation of branches, representative offices or business locations of cooperatives or unions of cooperatives;

b) To guide cooperatives or unions of cooperatives to carry out the procedures for registration or registration of change, or notification of change, reorganization, dissolution and bankruptcy of cooperatives or unions of cooperatives;

c) To build and manage the systems of information about cooperatives or unions of cooperatives within the competence; to provide information about cooperatives or unions of cooperatives for competent state agencies, organizations or individuals upon their request in accordance with law provisions;

d) To request cooperatives or unions of cooperatives to report on business operations of cooperatives or unions of cooperatives in accordance with Article 23 of this Decree; to urge the implementation of reporting regimes applicable to cooperatives or unions of cooperatives in accordance with law provisions;

dd) To directly inspect or request competent state agencies to inspect cooperatives or unions of cooperatives to verify information stated in registration certificates of cooperatives or unions of cooperatives where necessary;

e) To take responsibility for validity of dossiers for registration of cooperatives or unions of cooperatives;

g) To request cooperatives or unions of cooperatives to temporarily suspend business operations in conditional business lines when discovering that cooperatives or unions of cooperatives fail to meet conditions as prescribed by law and, at the same time, notify competent state agencies for handling in accordance with law provisions;

h) To revoke registration certificates of cooperatives or unions of cooperatives in accordance with Article 56 of the Law on Cooperatives;

i) To implement reporting regimes in accordance with law provisions.

Article 7. Names of cooperatives or unions of cooperatives

1. Names of cooperatives or unions of cooperatives must be written in Vietnamese or Latin characters, except special signs, which may include numbers and symbols, and followed the proper names given to cooperatives or unions of cooperatives by the word “Cooperative” or the phrase “Union of cooperatives”.

2. Cooperatives or unions of cooperatives may use business lines or other complementary symbols constituting their names.

3. Names of cooperatives or unions of cooperatives must be inscribed or mounted at their head offices, branches or representative offices; printed or written on transaction documents, dossiers or materials and publications granted at their discretion.

4. Cooperative registration agencies may reject the intended names of cooperatives or unions of cooperatives if they are not conformable to Article 8 of this Decree.

5. Cooperative registration agencies shall publicize registered names of cooperatives or unions of cooperatives. In case cooperatives or unions of cooperatives registered before the effective date of this Decree have confusing names, cooperative registration agencies shall encourage and create favorable conditions for cooperatives or unions of cooperatives whose names are identical to each other and cause confusion to negotiate to register change of their names or supplement geographical names as distinguishing elements.

Article 8. Prohibitions in naming cooperatives or unions of cooperatives

1. Setting the full name, abbreviated name, or name in a foreign language of the cooperative or union of cooperatives to be duplicate or confusing with the full name or abbreviated name or name in a foreign language of another cooperative or union of cooperatives that have been registered nationwide.

2. Giving full names, abbreviated names, names in foreign languages infringes on industrial assets rights to trade names, trademarks, geographical indications of other organizations and individuals in accordance with the law on intellectual assets.

3. Using the names of state agencies, people's armed force units, political organizations, socio-political organizations, socio-political-professional organizations or socio-professional organization as the whole or part of names of cooperatives or unions of cooperatives.

4. Using famous people's names, words, and symbols that violate the nation's historical, cultural, ethical, and fine traditions.

Article 9. Names in foreign languages and abbreviated names of cooperatives or unions of cooperatives

1. Names in foreign languages of cooperatives or unions of cooperatives must be names translated from Vietnamese into corresponding foreign languages. When translated into a foreign language, the proper name of the cooperative or cooperative union can retain the Vietnamese name or translate the entire Vietnamese name into a foreign language.

2. The foreign language name of the cooperative or union of cooperatives shall be printed or written in smaller font than the Vietnamese name of the cooperative or cooperative union at the headquarters of the cooperative or union of cooperatives or on transaction papers, dossiers and publications granted by cooperatives and unions of cooperatives.

3. Abbreviated names of cooperatives or unions of cooperatives must be either in Vietnamese or other foreign languages.

4. Abbreviated names, signboards of cooperatives or unions of cooperatives, advertisements or transaction documents of cooperatives must bear the alphabetical symbols "HTX" or “LHHTX” for unions of cooperatives.

Article 10. Duplicate and confusing names

1. Duplicate name means the name of the cooperative or union of cooperatives requesting registration, written and read in Vietnamese and completely identical to the name of the cooperative or union of cooperatives registered nationwide.

2. The following cases in which names are deemed to be confused with those already registered:

a) Vietnamese names of cooperatives or unions of cooperatives requesting registration are read the same as those already registered nationwide;

b) Vietnamese names of cooperatives or unions of cooperatives requesting registration only differ from those already registered in the word “và” or the symbol “&” or ''-";

c) Abbreviated names of cooperatives or unions of cooperatives requesting registration are identical to those already registered;

d) Names in foreign languages of cooperatives or unions of cooperatives requesting registration are identical to those already registered;

dd) The proper name of the cooperative or union of cooperatives requiring registration is different from the proper name of the registered cooperative or union of cooperatives by a natural number, ordinal number, one or several Vietnamese letters immediately after the proper name of the cooperative or union of cooperatives, except in cases where the cooperative requests registration as a member of a registered union of cooperatives;

e) The proper name of the cooperative or union of cooperatives requiring registration is different from the proper name of the registered cooperative or union of cooperatives by the word “tân” right before or “mới” right after the registered proper name of the cooperative or union of cooperatives;

g) The proper name of the cooperative or union of cooperatives requiring registration is only different from the name of the registered cooperative or union of cooperatives by the words "Bắc", "miền Bắc", "Nam", "miền Nam", "Trung", "miền Trung", “Tây", "miền Tây", "Đông", "miền Đông" or words with similar meanings, except for the cases where cooperatives or unions of cooperatives request registration as a member of registered cooperatives and unions of cooperatives;

h) Other cases of confusing names are at the discretion of the cooperative registration agency.

Article 11. Logos of cooperatives or unions of cooperatives

1. Cooperatives or unions of cooperatives are allowed to use logos.

2. Logos of cooperatives or unions of cooperatives must be particular signs distinguished from those of other cooperatives or unions of cooperatives that have already been registered.

3. Cooperatives and cooperative unions may choose their own logos in accordance with ethics, national cultural traditions and in accordance with the provisions of law.

4. Logos of cooperatives or unions of cooperatives shall be registered at competent state agencies.

Article 12. Protection of names and logos of cooperatives and unions of cooperatives

Names of cooperatives or unions of cooperatives shall be protected nationwide from the date of grant of registration certificates of cooperatives or unions of cooperatives; logos of cooperatives or unions of cooperatives must be registered at competent state agencies and protected in accordance with law provisions.

Article 13. Dossiers for registration of cooperatives or unions of cooperatives

1. Dossiers for registration of cooperatives or unions of cooperatives shall comply with Clause 2 of Article 23 of the Law on Cooperatives.

2. Written request for registration of cooperatives or unions of cooperatives must contain the principal information as follows:

a) Name of the cooperative or union of cooperatives;

b) Address of the head office of the cooperative or union of cooperatives; addresses of branches, representative offices or business locations (if any); telephone numbers; fax numbers; email addresses;

c) Business lines;

d) Charter capital;

dd) Number of members or member cooperatives;

e) Full name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the at-law representative of the cooperative or union of cooperatives.

3. The Ministry of Planning and Investment shall provide template dossiers for registration of cooperatives or unions of cooperatives for consistent use nationwide.

Article 14. Procedures for registration of cooperatives or unions of cooperatives

1. Lawful representatives of cooperatives or unions of cooperatives intended to be established shall submit one set of dossiers for registration to cooperative registration agencies and shall take responsibility for the accuracy and truthfulness of contents of the dossiers for registration of cooperatives or unions of cooperatives.

Cooperatives or unions of cooperatives may send registration dossiers via email addresses of cooperative registration agencies, but must submit written dossiers for verification and filing purposes when receiving registration certificates.

2. The cooperative registration agency must give or send a receipt when the registration dossier is valid under Article 13 of this Decree and must not request the cooperative or union of cooperatives to submit additional documents other than those specified in Article 13 of this Decree.

3. Cooperative registration agencies must grant registration certificates to the cooperatives or unions of cooperatives within 5 business days from the date of receiving the dossiers, provided that the conditions specified in Article 24 of the Law on Cooperatives are fully satisfied.

In case of refusing to grant registration certificates, cooperative registration agencies must inform cooperatives or unions of cooperatives, whether in writing or via emails, of reasons for such refusal within 5 business days of receiving dossiers.

Article 15. Registration certificates of cooperatives or unions of cooperatives

1. Registration certificates of cooperatives or unions of cooperatives shall be granted to the requesting cooperatives or unions of cooperatives operating in accordance with the Law on Cooperatives.

2. Registration certificates of cooperatives or unions of cooperatives must contain the following information:

a) Name of the cooperative or union of cooperatives;

b) Address of the head office of the cooperative or union of cooperatives; addresses of branches, representative offices or business locations (if any); telephone numbers; fax numbers; email addresses (if any);

c) Business lines;

d) Charter capital;

dd) Full name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the at-law representative of the cooperative or union of cooperative.

Registration certificates of cooperatives or unions of cooperatives shall be according to the form consistently used nationwide as prescribed by the Ministry of Planning and Investment.

3. Cooperatives and unions of cooperatives shall have legal status and have the right to operate according to the content in the registration certificates of cooperatives or unions of cooperatives from the date of grant of such registration certificates, except in the case of conducting conditional business lines.

Article 16. Registration of establishment of branches, representative offices or business locations

1. Cooperatives and unions of cooperatives establishing branches, representative offices, and business locations shall register at the cooperative registration agency where the branch, representative office, and business location are located.

2. When establishing a branch, representative office, business location, the cooperative or union of cooperatives shall send a notice to the cooperative registration agency. Such the notice must contain the following information:

a) Name of the cooperative or union of cooperatives, address of its head office, registration certificate number, date of grant of registration certificate;

b) Name of each branch, representative office or business location intended to be established; that name must contain the words “chi nhánh” regarding registration for establishment of a branch, the words “văn phòng dại diện” regarding registration for establishment of a representative office, or the words “địa diểm kinh doanh” regarding registration for establishment of a business location;

dd) Full name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the at-law representative of the cooperative or union of cooperative;

d) Address of the branch, representative office or business location;

dd) Business lines of the branch or business location; scope of operations of the representative office;

e) Full name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the representative of the branch, representative office or business location.

3. Dossiers for registration of establishment of branches, representative offices or business locations of cooperatives or unions of cooperatives shall be sent together with notices specified in Clause 2 of this Article, including:

a) Valid copy of the registration certificate of cooperative or union of cooperatives;

b) Resolution granted by the general meeting of members on opening of branch, representative or business location of a cooperative or union of cooperative;

c) Written decision of the Board of Directors on appointment of a person to act as the representative of a branch, representative office or business location, enclose with the valid copy of ID card, passport or other lawfully certified personal documents of the representative of the branch, representative office or business location;

d) Valid copy of practicing certificate of one or more individuals as legally specified regarding a branch of a cooperative or union of cooperatives operating in business lines requiring practicing certificates.

4. If the business lines or operation scopes of a branch, representative office or business location is conformable to that of the cooperative or union of cooperatives, in accordance with relevant laws, within 5 business days of receiving valid dossiers, the cooperative registration agency shall grant the registration certificate of branch, representative office or business location to the cooperative or union of cooperatives and, at the same time, update it in the registration records.

After obtaining the registration certificate, the branch, representative office or business location of a cooperative or union of cooperatives may have its stamp made and have the right to use it.

5. In case where a cooperative or union of cooperatives establishes its branch, representative office or business location at a district, province or city other than the place where its head office is located, within 5 business days of receiving the registration certificate of branch, representative office or business location, it must send written notice to the agency granting the registration certificate at the locality where its head office is located for updating in registration records.

6. In case of establishing branches, representative offices or business locations of a cooperative or union of cooperatives in foreign countries, the laws of the host countries shall be complied with.

Within 15 business days from the date of receiving the certificate of opening a branch, representative office or business location from an overseas country’s competent authority, the cooperative or union of cooperatives must send a written notice to the agency granting the registration certificate at the locality where its head office is located for updating in its registration file.

Article 17. Registration for change in names or addresses of head offices, business lines, charter capital or at-law representatives; change in names, addresses or representatives of branches or representative offices of cooperatives or unions of cooperatives

1. When changing name, head office address, production and business lines, charter capital, legal representative; name, address, representative of the branch, representative office, the cooperative, or union of cooperatives shall send a request for registration of change to the cooperative registration agency. Such request must include:

a) Name of the cooperative or union of cooperatives, address of its head office, registration certificate number, date of grant of registration certificate;

b) Full name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the at-law representative of the cooperative or union of cooperative;

c) Information to be changed.

The written request for change must be enclosed with the resolution of the members' general meeting or the written decision of the Board of Directors on change to the registered contents of cooperative or union of cooperatives in accordance with the Law on Cooperatives.

2. Within 5 business days of receiving complete and valid dossiers for registration for change from the cooperative or union of cooperatives, the cooperative registration agency shall register change to the cooperative or union of cooperatives.

Article 18. Regrant of registration certificates of cooperatives or unions of cooperatives or registration certificates of branches or representative offices of cooperatives or unions of cooperatives

1. The registration certificate of cooperative or union of cooperatives or the registration certificate of branch or representative office of cooperative or union of cooperatives shall be regranted in case of loss or damage.

2. When requesting regrant of the registration certificate, the cooperative or union of cooperatives shall send a request to the cooperative registration agency to regrants the certificate of registration of the cooperative or union of cooperatives, branch, or representative office.

3. The written request for regrant of the registration certificate of cooperative or union of cooperatives or the registration certificate of branch or representative office must include the following information:

a) Name of the cooperative or union of cooperatives, address of its head office, registration certificate number, date of grant of registration certificate;

b) Full name, last name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the at-law representative of the cooperative or union of cooperative;

c) Reasons for regrant of the registration certificate.

Within 5 business days of receiving the complete and valid dossiers, the receiving cooperative registration agency shall have to regrant the registration certificate of cooperative or union of cooperatives or the registration certificate of branch or representative office.

Article 19. Dissolution of cooperatives or unions of cooperatives

1. In case a cooperative or union of cooperatives dissolves voluntarily, the dissolution procedure shall be carried out in the following order:

a) Holding the members’ general meeting and issuing the resolution on voluntary dissolution;

b) The members’ general meeting establishes and regulates responsibilities, powers, and operating term of the dissolution council with the components and number of members as prescribed in Clause 1, Article 54 of the Law on Cooperatives;

c) The dissolution council assumes responsibility to perform tasks specified at Points a and b Clause 1 Article 54 of the Law on Cooperatives within the 60 days from the date the general meeting of members issues a resolution on voluntary dissolution and prepares a record of completion of dissolution.

2. In case where a cooperative or union of cooperatives is subject to compulsory dissolution in the cases specified in Clause 2 Article 54 of the Law on Cooperatives, procedures for compulsory dissolution shall be carried out as follows:

a) The agency granting the registration certificate of cooperative or union of cooperatives shall prepare and submit dossiers for compulsory dissolution to the People’s Committee of the same level;

b) The People’s Committee shall issue a decision on dissolution and establish the dissolution council. The chairperson of the council must be the representative of that People's Committee; the council’s standing commissioner must be the representative of the state agency granting the registration certificate to the cooperative or union of cooperatives; other commissioners must be representatives of specialized state agencies of the same level, organizations representing or forming alliance with cooperatives in a province or centrally-run city (if the cooperative or union of cooperatives is a member of one of these organizations representing or forming alliance with cooperatives), People's Committee of a commune, ward or town where the cooperative or union of cooperatives is located, the Board of Directors, the control board, or controllers, members or member cooperatives;

c) The dissolution council shall assume prime responsibility for performing tasks specified at Point c Clause 3 Article 54 of the Law on Cooperatives within 60 days from the date of issuing the decision on compulsory dissolution, and make a record on completion of dissolution;

d) Funds for dissolution shall be taken from the remaining financial sources of cooperatives or unions of cooperatives. In case it is not enough, financial resources from the local budget at the same level as the cooperative registration agency shall be used.

3. Immediately after completion of the dissolution as specified in Clauses 1 and 2 of this Article, the dissolution council shall send a set of dossiers on dissolution of the cooperative or union of cooperatives, enclosed with the record on completion of dissolution to the cooperative registration agency.

Within 5 business days of receiving the complete dossiers, the cooperative registration agency shall review dossiers and, if the conditions are fully met, remove the name of the cooperative or union of cooperatives from its register book, revoke the registration certificate of cooperative or union of cooperatives or the certificate of branch, representative office or business location of cooperative or union of cooperatives, and publicize the dissolution of the cooperative or union of cooperatives.

Chapter 3.

ASSETS AND FINANCE OF COOPERATIVES AND UNIONS OF COOPERATIVES

Article 20. Capital contribution, share purchase and establishment of enterprises

1. Capital contribution, share purchase or establishment of enterprises by cooperatives or unions of cooperatives must meet the following regulations:

a) Obtaining the decision or approval from the members’ general meeting;

b) Capital contribution, share purchase or establishment of enterprises shall be applied to business lines related to those of cooperatives or unions of cooperatives;

c) It is not allowed to use capital sources belonging to undivided assets of cooperatives or unions of cooperatives to contribute capital, buy shares, or establish enterprises.;

d) Total investment in capital contribution, share purchase or establishment of enterprises must not exceed 50% of the charter capital of a cooperative or union of cooperatives as recorded in the latest financial statement;

dd) Business operations must generate profits for at least 02 consecutive years.

2. Within 15 business days from the date of capital contribution, share purchase or establishment, cooperatives or unions of cooperatives must send a notification to the agencies granting registration certificates for these cooperatives or unions of cooperatives. The notification must contain the following information:

a) Name of the cooperative or union of cooperatives, address of its head office, registration certificate number, date of grant of registration certificate;

b) Business lines or operation scope of cooperatives or unions of cooperatives;

dd) Full name, permanent residence address, nationality, number of ID card, passport or other lawfully certified documents of the at-law representative of the cooperative or union of cooperative;

d) Name, address, business lines, number of registration certificate of the enterprise in which the cooperative or union of cooperatives contributes capital, purchase shares or which is established by the cooperative or union of cooperatives;

dd) Capital contribution amount; value of shares purchased; amount of charter capital of the enterprise to be established;

This notification must enclose the resolution of the members’ general meetings on capital contribution, share purchase or establishment of enterprise, held by cooperatives or unions of cooperatives.

3. Cooperative registration agencies shall receive notifications, archive dossiers and record in the monitoring books.

Article 21. Handling undivided assets of cooperatives or unions of cooperatives in case of bankruptcy or dissolution

1. In case where cooperatives or unions of cooperatives are dissolved or bankrupt, their undivided assets referred to in Clause 2 Article 48 of the Law on Cooperatives shall be handled of as follows:

a) Value of assets acquired from non-refundable grants, aids or subsidies of the State shall be transferred to the budget of the local government at the same level as the registration agency;

b) Value of assets acquired from annual capital investment funds that are classified as undivided assets under the decision of the members' general meeting upon termination of the status as members or member cooperatives; assets gifted or donated as undivided assets; capital and assets specified by the Charter of cooperative or union of cooperatives as undivided assets upon termination of the status as members or member cooperatives, shall be handled under decisions of the members’ general meeting;

c) For the value of assets acquired from annual capital investment funds and accepted as undivided assets under the decisions of members' general meetings in case cooperatives or unions of cooperatives terminate their operations; assets that are agreed upon as undivided gifted and donated assets; other equity and assets specified by the charters as undivided assets in case of operation termination, the members' general meetings shall decide on transferring them to local authorities or another organization located in the same locality as the head offices of such cooperatives or unions of cooperatives in service of public interests of population in locality;

d) Rights to use land allocated or leased by the State shall comply with the land law.

2. In case of dissolution or bankruptcy and the capital and assets of the cooperative or cooperative union are not enough to pay debts, the cooperative or union of cooperatives may use the undivided assets to pay debts in the following order:

a) Gifts or donations agreed as undivided assets;

b) Amounts retained from annual capital investment funds classified as undivided assets under the decision of the members’ general meeting;

c) Capital or other assets defined as undivided assets in accordance with the charters.

Article 22. Accounting and auditing cooperatives or unions of cooperatives

1. Cooperatives or unions of cooperatives shall implement financing, accounting and auditing regimes in accordance with law provisions.

2. Cooperatives or unions of cooperatives whose members are legal entities shall be subject to the compulsory audit.

3. Cooperatives or unions of cooperatives are encouraged to carry out the internal audit.

4. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, relevant ministries and sectors in, providing detailed instructions on implementation of financing and accounting regimes applicable to cooperatives or unions of cooperatives.

Article 23. Reporting regimes applicable to operations of cooperatives and unions of cooperatives

1. By March 31 every year, cooperatives or unions of cooperatives shall make reliable, sufficient and accurate review reports on the previous year’s operations of cooperatives and unions of cooperatives to cooperative registration agencies.

2. The report must comprise the following information: Number of members or member cooperatives; number of workers or jobs; production and business results determined based on service contracts between cooperatives or unions of cooperatives and members; assets, capital and investment activities.

3. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance, relevant ministries and sectors in, providing template reports for cooperatives or unions of cooperatives, and provide the reporting regimes applicable to cooperative registration agencies.

Chapter 4.

SUPPORT AND PREFERENTIAL POLICIES OF THE STATE

Article 24. State support policies for cooperatives or unions of cooperatives

1. Training and retraining of human resources

The State shall provide funds for formal professional and technical training and retraining programs for managers of cooperatives, unions of cooperatives or members of cooperatives.

2. Trade promotion and market expansion policies

The State shall support cooperatives or unions of cooperatives for attending domestic and overseas fairs and exhibitions; organize fairs and exhibitions specially designed for the cooperative sector; build brands, trademarks and determine origin of products, develop and deploy the electronic information portal and e-commerce trading platforms.

3. Application of new science, techniques and technologies

a) The national and local Science and Technology Development Funds shall annually set aside amounts used for supporting cooperatives or unions of cooperatives in renovating and applying technologies and report results of these activities to state management agencies in charge of state management of cooperatives and unions of cooperatives;

b) The State shall support scientific and technological research from scientific and technological research funding sources for cooperatives and unions of cooperatives that have projects on research and applications of scientific, technical and technological advances and new technology approved by competent authority.

4. Policies on access to capital and funds to support the development of cooperatives

a) Cooperatives and unions of cooperatives having new investment projects, investments to expand production and business capacity; operating in the agricultural sector, rural areas are entitled to preferential interest rates and credit guarantees from the cooperative development support fund; priority in credit loans from development banks and other credit institutions in accordance with law provisions; entitled to preferential loans according to the Government's regulations on credit policies serving agricultural and rural development;

b) Cooperative development support funds shall perform their duties to grant credit guarantee and interest rate relief to cooperatives or unions of cooperatives.

The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, relevant ministries and sectors in, submitting to the Prime Minister for instructions of this Point.

5. Policies for facilitation of participation in target programs and socio-economic development programs

Qualified cooperatives or unions of cooperatives shall be preferred to participate in target programs and socio-economic development programs, including:

a) Infrastructure construction projects in the area and management of projects after completion, including market projects and infrastructure projects serving the development of industrial clusters and craft village clusters in rural areas;

b) Other socio-economic development projects or programs in the localities that are relevant to the capacity of cooperatives or unions of cooperatives.

6. Policies for establishment of cooperatives and unions of cooperatives

a) Founding members of cooperatives shall be provided free-of-charge with information, consultancy and training in law provisions on cooperatives before establishment;

b) Cooperatives or unions of cooperatives shall be supported with advice on developing charters, guiding and implementing procedures for establishing, registering and organizing operations of cooperatives or unions of cooperatives.

​Article 25. Support and preferential policies granted to cooperatives and unions of cooperatives operating in the agriculture, forestry, aquaculture and salt industry

In addition to the support and preferential policies specified in Article 24 of this Decree, cooperatives or unions of cooperatives conducting business in the agriculture, forestry, aquaculture or salt industry that supply products or provide services to members being individuals, family households or legal entities conducting business in the agricultural, forestry, aquaculture and salt production field may be entitled to the following support and preferential policies:

1. Support in investment in development of infrastructure

a) Investment in infrastructure development, including: headquarters, drying yards, warehouses, preliminary processing and processing workshops, electricity, running water, markets, irrigation works, infrastructure for aquaculture areas, agricultural material stores, infield transportation to serve production and business for the community of members of cooperatives or unions of cooperatives based on projects approved by competent authorities;

b) Infrastructure projects supported by the state in accordance with Point a of this Clause, that are undivided assets of cooperatives and unions of cooperatives after complete construction; cooperatives and unions of cooperatives in charge of preserving, maintaining and maintaining works during use.

2. Policies for allocation and leasing of land serving the operations of cooperatives or unions of cooperatives

Land support applicable to cooperatives or unions of cooperatives shall comply with the land law.

3. Credit incentive policies

a) Cooperatives or unions of cooperatives that are newly established or develop projects in new investment and investment in expansion of production and business capacity shall be preferred to receive loans from credit institutions in accordance with applicable laws;

b) Cooperatives or unions of cooperatives that develop projects for investment in production, business or export eligible for investment incentives may investment advantages in accordance with the investment law.

4. Policies for support of funds, plant or animal varieties in case of natural disasters or epidemics

Depending on the level of damage, dangerous nature of the epidemic and actual needs, cooperatives or unions of cooperatives operating in the fields of agriculture, forestry, fishery and salt production are entitled to support and incentives for capital and seeds when encountering difficulties due to natural disasters and epidemics according to applicable laws on support for seeds, plants, livestock and aquatic products to restore production in areas with damages caused by natural disasters and epidemics.

5. Policies for support for processing products

a) Cooperatives or unions of cooperatives wishing to process products shall be supported in researching into development of investment projects in processing of products as specified at Point b Clause 3 Article 24 of this Decree;

b) Cooperatives or unions of cooperatives shall be entitled to credit incentives for implementation of investment projects for processing of products in accordance with Clause 3 of this Article.

Article 26. Support for reorganization of cooperatives or unions of cooperatives

In case of registering changes in accordance with the Law on Cooperatives, cooperatives or unions of cooperatives shall be entitled to support policies specified in Clause 6 Article 24 of this Decree.

In case of registering changes due to merger, consolidation, splitting or division of cooperatives or unions of cooperatives, the State shall support 50% of costs incurred from these activities as same as establishment of new cooperatives or unions of cooperatives.

Article 27. Organization of implementation of support and preferential policies

1. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance, relevant ministries and sectors in, formulating cooperative development support programs and submitting them to the Prime Minister for submission of support and preferential policies stated in Clause 1, Clause 2, Point b Clause 3 and Clause 6 Article 24; Clause 1, Clause 4 and Clause 5 Article 25 of this Decree.

Cooperative development support programs must specify conditions and criteria for entitlement to support, support contents, funding sources and amounts on the basis of determination of priority in terms of sectors, localities, according to the socio-economic development conditions in each period of the country and developmental level of cooperatives or unions of cooperatives.

2. People’s Committees of provinces or centrally-run cities, ministries, sectors, fatherland front committees and other mass organizations shall mobilize other funding sources other than those defined in cooperative development support programs to participate in performing tasks defined in programs and other tasks according to competence and decentralization.

3. Cooperatives or unions of cooperatives that are enjoying support and preferential policies as specified in this Decree shall not be allowed to enjoy other similar policies specified in other legal documents, except for those not specified in this Decree.

Chapter 5.

STATE MANAGEMENT OF COOPERATIVES OR UNIONS OF COOPERATIVES

Article 28. State management of cooperatives or unions of cooperatives

1. The Ministry of Planning and Investment shall assist the Government in uniform state management of cooperatives or unions of cooperatives.

2. Duties and powers of the state management apparatus for cooperatives and cooperative unions:

a) To assume the prime responsibility for studying and submitting competent authorities for promulgation of legal documents on cooperatives or unions of cooperatives and relevant documents;

b) To disseminate, guide, and organize the implementation of legal documents on cooperatives, unions of cooperatives and related legal documents;

c) To carry out the consistent registration of cooperatives or unions of cooperatives nationwide;

d) To uniformly receive, manage and annually report on results of operation of cooperatives or unions of cooperatives in accordance with law provisions; to develop systems of information about cooperatives and unions of cooperatives nationwide;

dd) To assume the prime responsibility for the formulation and organize the implementation of plans, programs and support and preferential policies for cooperatives and unions of cooperatives; to preside over the final review and formulation of plans, programs, support and preferential policies for cooperatives and unions of cooperatives;

e) To implement or direct the implementation of trial models and multiply models of cooperatives and unions of cooperatives that achieve efficient growth;

g) To assume the prime responsibility for, and coordinate with relevant authorities in inspection and audit of compliance of cooperatives and unions of cooperatives with laws on cooperatives;

h) To handle and provide guidance on handling violations against laws committed by cooperatives and unions of cooperatives, concerned individuals and organizations in accordance with law provisions; to deal with or provide guidance on dealing with any difficulty arising in the course of implementation of law provisions on cooperatives and unions of cooperatives;

i) To preside over international cooperation in development of cooperatives and unions of cooperatives;

k) To preside over or participate in research into formulation of and final review of implementation of guidelines and policies of the Communist Party and the State for cooperatives and unions of cooperatives;

l) To cooperate with financial institutions at all levels in providing instructions on and inspecting and auditing the implementation of financial regimes for cooperatives and unions of cooperatives in accordance with law provisions;

m) Cooperate with the Vietnam Fatherland Front and its members in implementing the laws on cooperatives. Vietnam Fatherland Front and its members shall propagate and encourage people to participate in the establishment and development of cooperatives and unions of cooperatives; to coordinate with State agencies in developing policies and monitoring the implementation of laws on cooperatives; to implement programs and projects for development of cooperatives and unions of cooperatives.

Article 29. Responsibilities of Ministries and Ministerial-level agencies

1. To coordinate with the Ministry of Planning and Investment in perfecting law provisions on cooperatives, developing strategies, policies, programs and plans for development of cooperatives and unions of cooperatives.

2. To perform the tasks of state management of cooperatives and unions of cooperatives as assigned.

3. To propagate, encourage people and organizations to participate in and establish cooperatives.

4. To implement support and preferential policies for cooperatives and unions of cooperatives within the ambit of tasks and powers.

5. To create favorable conditions for cooperatives and unions of cooperatives to participate in target programs and socio-economic development programs.

Article 30. Responsibilities of People’s Committees at all levels

1. To direct and inspect the implementation of tasks of state management agencies in charge of cooperatives in localities.

2. To direct the formulation and organize the implementation of programs and plans for development of cooperatives within localities.

3. To propagate, encourage people and organizations to participate in and establish cooperatives.

4. To take support measures and policies for cooperatives and unions of cooperatives within the competence.

5. To create favorable conditions for cooperatives and unions of cooperatives to participate in target programs and socio-economic development programs.

6. To cooperate with and assist the Vietnam Fatherland Front and its members at all levels and other social organizations in implementing laws on cooperatives and unions of cooperatives; propagating and disseminating laws on cooperatives and unions of cooperatives; initiating programs and projects for development of cooperatives and unions of cooperatives; encouraging related members to participate in cooperatives.

Chapter 6.

IMPLEMENTATION PROVISIONS

Article 31. Effect

This Decree takes effect from January 27, 2014 and replaces the Government’s Decree No. 177/2004/ND-CP dated October 12, 2004, detailing the implementation of a number of articles of the 2003 Law on Cooperatives, the Government's Decree No. 77/2005/ND-CP dated June 9, 2005, providing template guidance on formulation of cooperatives’ charters, the Government’s Decree No. 87/2005/ND-CP dated July 11, 2005, on the business registration of cooperatives, and the Government’s Decree No. 88/2005/ND-CP dated July 11, 2005 on a number of support and incentive policies for development of cooperatives.

Article 32. Reorganization of cooperatives or unions of cooperatives

Within 36 months from July 1, 2013, cooperatives and unions of cooperatives established before the effective date of the Law on must perform the following tasks:

1. Reviewing charters and organization of operation management of cooperatives and unions of cooperatives in accordance with provisions of the Law on Cooperatives No. 23/2012/QH13 dated November 20, 2012.

2. In case where it is necessary to change, dissolve or transform business, cooperatives and unions of cooperatives may convene the members’ general meeting to resolve on the registration of change, voluntary dissolution or transformation into other operation form in accordance with law provisions.

3. In cases where cooperatives or unions of cooperatives ensure strict compliance with provisions of the Law on Cooperatives, registration for change is not required.

Article 33. Implementation responsibilities

 1. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with relevant ministries and sectors in, providing instructions on, and monitoring and expediting, the implementation of this Decree.

Ministers, Heads of Ministerial-level agencies, Government-attached agencies, and Chairpersons of People’s Committees of centrally-run cities and provinces, shall implement this Decree./.