Law on Cooperatives No. 17/2023/QH15

LAW

ON COOPERATIVES^[1]

Pursuant to the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates the Law on Cooperatives.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Law regulates the establishment, organization of management, reorganization, dissolution, bankruptcy and related activities of cooperative groups, cooperatives and unions of cooperatives; state policies on development of cooperative groups, cooperatives and unions of cooperatives.

Article 2. Subjects of application

1. Cooperative groups, cooperatives and unions of cooperatives.

2. Members of cooperative groups, cooperatives and unions of cooperatives.

3. Agencies, organizations and individuals related to the establishment, organization of management, reorganization, dissolution, bankruptcy and related activities of cooperative groups, cooperatives and unions of cooperatives.

Article 3. Application of the Law on Cooperatives and other laws

In case other laws have special provisions on establishment, organization of management, reorganization, dissolution, bankruptcy and related activities of cooperative groups, cooperatives and unions of cooperatives, such laws shall prevail.

Article 4. Interpretation of terms

In this Law, the terms below are construed as follows:

1. Internal transactions mean the provision of products and services, including also job creation services and internal lending, by cooperatives and unions of cooperatives to their official members under written agreements.

2. External transactions mean transactions other than internal transactions of cooperatives and unions of cooperatives.

3. Cooperative registration certificate means a document, in paper or electronic form, recording information on the registration of a cooperative or union of cooperatives, issued by a Business registration agency to that cooperative or union of cooperatives.

4. Cooperative group registration certificate means a document, in paper or electronic form, recording information on the registration of a cooperative group, issued by a business registration agency.

5. Labor contribution means members’ personal participation in managerial and labor activities under agreements with cooperative groups, cooperatives and unions of cooperatives.

6. Capital contribution means contribution of assets by members to create charter capital upon the establishment of a cooperative or union of cooperatives or to add the charter capital of an existing cooperative or union of cooperatives or to create common assets of members of a cooperative group.

7. Cooperative means an organization with the legal person status which is established by at least 5 official members on a voluntary basis and of which members cooperate with and support one another in production, business and job creation activities in order to meet their common economic, cultural and social needs and contribute to building the social community toward sustainable development under the mechanism of autonomous governance, accountability, equality and democracy.

8. Union of cooperatives means an organization with the legal person status which is established by at least 3 cooperatives being its official members on a voluntary basis and of which members cooperate with and support one another in production, business and job creation activities in order to expand the scale of production and business, raise the market participation capacity, and contribute to building the social community toward sustainable development under the mechanism of autonomous governance, accountability, equality and democracy.

9. Product and service usage level of member means ratio of value of products and services used by each member to the total value of products and services provided by a cooperative or union of cooperatives to all of its members.

10. Labor contribution level of member is measured by the ratio of each member’s salary, wage or remuneration amount to the total salary, wage or remuneration amount of all members.

11. People with family relationships include spouse, biological father, biological mother, adoptive father, adoptive mother, father-in-law, mother-in-law, biological child, adopted child, son-in-law, daughter-in-law, biological brother, biological sister, brother-in-law, sister-in-law, spouse’s biological brother, and spouse’s biological sister.

12. Contributed capital amount means the value of asset(s) a member of a cooperative or union of cooperatives has contributed or committed to contribute to the charter capital of such cooperative or union of cooperatives or the value of asset(s) a member of a cooperative group has contributed or committed to contribute to such cooperative group under their cooperation contract.

13. Indivisible common fund means a fund of a cooperative or union of cooperatives that may not be divided to its members during operation.

14. Indivisible common assets mean assets of a cooperative or union of cooperatives that may not be divided to its members during operation.

15. Divisible common assets mean assets of a cooperative or union of cooperatives that may be divided to its members.

16. Members include official members, associate members with capital contribution and associate members without capital contribution of cooperatives and unions of cooperatives and members of cooperative groups.

17. Official members include:

a/ Members that contribute capital to, and use products and services of, cooperatives and unions of cooperatives;

b/ Members that contribute capital and labor to cooperatives and unions of cooperatives;

c/ Members that contribute capital and labor to, use products and services of, cooperatives and unions of cooperatives.

18. Associate member with capital contribution means a member that only contributes capital to a cooperative or union of cooperatives without using products or services of, or contributing labor to, such cooperative or union of cooperatives.

19. Associate members without capital contribution include:

a/ Members that do not contribute capital to, and only use products and services of, cooperatives and unions of cooperatives;

b/ Members that do not contribute capital but contribute labor to cooperatives or unions of cooperatives;

c/ Members that do not contribute capital but contribute labor to, and use products and services of, cooperatives and unions of cooperatives.

20. Reorganization of cooperatives and unions of cooperatives means the division, separation, consolidation or merger of cooperatives and unions of cooperatives.

21. Cooperative group means an organization without the legal person status formed on the basis of a cooperation contract by at least 2 members that voluntarily establish and contribute capital and labor to such cooperative group to carry out certain tasks, enjoy benefits and take responsibility together.

22. Internal transaction value ratio means ratio of internal transaction revenues to total revenues or ratio of internal transaction costs to total costs of a cooperative or union of cooperatives in a fiscal year.

23. Capital contribution ratio means ratio of the contributed capital amount of a member of a cooperative or union of cooperatives to the charter capital of such cooperative or union of cooperatives or ratio of the contributed capital amount of a member of a cooperative group to the total of contributed capital amounts of all members of such cooperative group.

24. Charter capital means total value of assets contributed or committed to contribute by official members and associate members with capital contribution of a cooperative or union of cooperatives upon the establishment or during the operation of such cooperative or union of cooperatives.

25. Minimum capital contribution means the smallest capital amount that an individual or organization must contribute to the charter capital of a cooperative or union of cooperatives in order to become an official member or capital-contributing associate member of such cooperative or union of cooperatives.

26. Maximum capital contribution means the largest capital amount that an individual or organization may contribute to the charter capital of a cooperative or union of cooperatives.

Article 5. The State’s guarantee for cooperative groups, cooperatives, unions of cooperatives and their members

1. The State recognizes and protects the ownership of assets, capital, income, and lawful rights and interests of cooperative groups, cooperatives, unions of cooperatives and their members. Compulsory purchase or requisition of assets of cooperative groups, cooperatives and unions of cooperatives by the State must comply with the law on compulsory purchase and acquisition of assets.

2. The State guarantees a fair business investment environment between cooperative groups, cooperatives and unions of cooperatives and enterprises and economic organizations of other types.

3. The State guarantees the right to autonomy and accountability of cooperative groups, cooperatives and unions of cooperatives in their organization, operation, production and business activities and does not interfere with their lawful activities.

Article 6. Political organizations and socio-political organizations in cooperative groups, cooperatives and unions of cooperatives

1. Political organizations and socio-political organizations in cooperative groups, cooperatives and unions of cooperatives shall operate within the framework of the Constitution, laws and their charters.

2. Cooperative groups, cooperatives and unions of cooperatives shall create favorable conditions for their members and employees to establish or join organizations specified in Clause 1 of this Article.

Article 7. Prohibited acts related to cooperative groups, cooperatives and unions of cooperatives

1. For state management agencies:

a/ Granting cooperative registration certificates or cooperative group registration certificates to cooperative groups, cooperatives or unions of cooperatives that fail to fully satisfy conditions specified in this Law; refusing to grant cooperative registration certificates or cooperative group registration certificates to cooperative groups, cooperatives or unions of cooperatives that fully satisfy conditions specified in this Law;

b/ Obstructing the exercise of lawful rights and performance of lawful obligations by cooperative groups, cooperatives, unions of cooperatives and their members in accordance with this Law;

c/ Providing support and incentives to cooperative groups, cooperatives and unions of cooperatives in contravention of law-specified principles, beneficiaries and contents of support and incentive policies and regulations on competence and procedures for support and incentive provision;

d/ Abusing powers to act against regulations on support and incentives for cooperative groups, cooperatives and unions of cooperatives;

dd/ Causing delays, inconveniences, obstructions or harassments in the registration and operation of, and the provision of support for, cooperative groups, cooperatives and unions of cooperatives to such cooperative groups, cooperatives and unions of cooperatives as well as related organizations and individuals;

e/ Intentionally reporting or providing false or untruthful information relating to support and incentives for cooperative groups, cooperatives and unions of cooperatives.

2. For cooperative groups, cooperatives and unions of cooperatives:

a/ Operating without a registration certificate specified in this Law; operating while failing to fully satisfy the conditions specified in this Law and relevant laws;

b/ Making untruthful or inaccurate declarations in their registration dossiers;

c/ Failing to strictly adhere to organization, management and operation principles specified in this Law;

d/ Providing false or untruthful information or falsifying documents for self-seeking purposes;

dd/ Using support resources for improper purposes in contravention of their commitments.

3. For members of cooperative groups, cooperatives and unions of cooperatives:

a/ Abusing their positions and powers for self-seeking purposes or for interests of a group of members;

b/ Providing untruthful information to their cooperative groups, cooperatives and unions of cooperatives.

Article 8. Principles of organization, management and operation of cooperative groups, cooperatives and unions of cooperatives

1. Voluntary participation and membership expansion

Individuals and organizations may establish, join and leave cooperative groups, cooperatives and unions of cooperatives on a voluntary basis. Cooperative groups, cooperatives and unions of cooperatives must attach importance to benefits of their members, admit more members and refrain from discriminating gender, social status, ethnicity or religion  of their members and persons who wish to join them.

2. Democracy and equality in organization and management

Members of cooperative groups have democratic rights in deciding on the organization and operations of such cooperative groups. Official members of cooperatives and unions of cooperatives may participate in the organization, management and operation of such cooperatives and unions of cooperatives in a democratic, equitable and independent manner, regardless of their contributed capital amounts.

3. Responsibility of members to participate in economic activities of cooperatives and unions of cooperatives

When joining cooperatives or unions of cooperatives, official members shall contribute capital to, and have the right to jointly control capital, funds and assets of, their cooperatives and unions of cooperatives; may be distributed income mainly based on their product and service usage levels or labor contribution levels.

4. Autonomy and accountability

Cooperative groups, cooperatives and unions of cooperatives are entitled to autonomy and take responsibility for their operations before the Constitution and law.

5. Attaching importance to education, training and provision of information

Cooperative groups, cooperatives and unions of cooperatives shall attach importance to propagating the Party’s guidelines and policies and the State’s policies and laws on development of collective economy to their members, people, and the youth; regularly provide education, training and re-training to their members and employees for improvement of their qualifications and technical skills; provide information to their members in a complete, accurate and timely manner.

6. Strengthening cooperation and association

Members shall coordinate and associate with, and support, one another for prosperity of every member and the collective. To encourage cooperative groups to participate in establishing cooperatives and cooperatives to cooperate with one another to establish unions of cooperatives to improve their capacity to join product and service production and consumption chains. To encourage cooperative groups, cooperatives and unions of cooperatives to cooperate with one another in forming and joining representative organizations and the Vietnam Cooperative Alliance system in order to develop the domestic and international cooperative movement. To strengthen the association of cooperative groups, cooperatives and unions of cooperatives with other organizations, particularly state enterprises, in promoting the consumption and use of their products and services, and creating conditions for cooperative groups, cooperatives and unions of cooperatives to operate efficiently.

7. Paying attention to community development

Cooperative groups, cooperatives and unions of cooperatives shall care for their members and, together with their members, build united and mutual-support communities and participate in the development of residential communities in their localities and regions as well as in the country and world.

Article 9. Rights of cooperatives and unions of cooperatives

1. To organize the implementation of their set objectives and targets in an efficient manner.

2. To decide on their organization, management and operation; to employ laborers.

3. To carry out business and production activities in business lines and sectors not banned by law.

4. To require members to register their demand for products and services in order to formulate and implement plans on supply and sale of products and services to members.

5. To sell their products and services to the market after fulfilling their obligations and ensuring benefits of their members according to their charters or relevant laws.

6. To provide services and organize economic, social and cultural activities for their members and for interests of communities for the sustainable development purpose.

7. To participate in implementing policies, programs and projects on economic, cultural and social development, maintenance of political security, social order and safety, and environmental protection in residential communities.

8. To admit new members and terminate the member status of existing members in accordance with the law on cooperatives.

9. To increase or decrease their charter capital during operation.

10. To mobilize capital in accordance with law.

11. To carry out internal lending in accordance with this Law.

12. To separately monitor internal and external transaction revenues and costs.

13. To join joint ventures, associate or cooperate with domestic and foreign organizations and individuals in order to achieve their operation objectives.

14. To contribute capital to, buy shares of, and establish, enterprises in order to support their operation.

15. To distribute their incomes and settle their losses and debts.

16. To join representative organizations of cooperatives and unions of cooperatives.

17. To complain about and denounce acts of infringing upon their lawful rights and interests in accordance with law; to resolve internal disputes and handle violating members according to their charters.

18. Other rights provided by law and their charters.

Article 10. Obligations of cooperatives and unions of cooperatives

1. To admit those that fully satisfy the conditions specified by this Law, their charters and relevant laws as their members.

2. To ensure lawful rights and interests of their members in accordance with this Law and their charters.

3. To implement agreements with their members, adhering to the principle of meeting members’ registered demand as much as possible before serving non-member customers.

4. To comply with regulations on finance, tax, accounting, auditing, statistics and relevant regulations.

5. To manage and use their capital, assets and funds in accordance with law and their charters.

6. To manage and use land and resources in accordance with law.

7. To conclude and implement labor contracts with, pay social insurance premiums for, and implement policies toward, their employees in accordance with law.

8. To provide their members and employees with education, training, knowledge dissemination and re-training.

9. To properly, fully and promptly perform the obligation of registering themselves in accordance with this Law.

10. To disclose information to members under Article 14 of this Law and disclose information in accordance with relevant regulations.

11. To pay compensations for damage they cause to their members in accordance with law and their charters.

12. To make, update and archive registers of official members and associate members with capital contribution.

13. To report and update information on their operation in accordance with law.

14. Other obligations as specified by law and their charters.

Article 11. At-law representatives of cooperatives and unions of cooperatives

1. The at-law representative of a cooperative or union of cooperatives is an individual who represents such cooperative or union of cooperatives in exercising rights and performing obligations arising from its transactions; and represents such cooperative or union of cooperatives as the requester for settlement of civil matters, plaintiff, defendant or person with related rights and obligations before the arbitration or court and has other rights and obligations in accordance with law.

2. A cooperative or union of cooperatives may have one or more than one at-law representative. The number, titles, rights and obligations of at-law representatives; division of rights and obligations among at-law representatives in case a cooperative or union of cooperatives has more than one at-law representative must comply with its charter.

3. A cooperative or union of cooperatives must always have at least one at-law representative residing in Vietnam. In case a cooperative or union of cooperatives has only one at-law representative who fails or is unable to exercise rights and perform obligations of at-law representatives within 30 days and fails to authorize another person to do so, within 15 days after the above 30-day time limit expires, the cooperative or union of cooperatives shall convene a meeting of the General Meeting of Members to elect a new at-law representative.

4. The court and other competent procedure-conducting bodies may appoint at-law representatives of cooperatives and unions of cooperatives to participate in proceedings in accordance with law.

Article 12. Document archive regime

1. A cooperative or union of cooperatives shall archive the following documents in accordance with law:

a/ Its charter and regulations; register of official members and associate members with capital contribution;

b/ The cooperative registration certificate; intellectual property rights protection titles; goods or service quality registration certificates; licenses for doing business in conditional business lines and other relevant papers;

c/ Documents and certificates of its ownership and right to use assets;

d/ Certificates of contributed capital amounts of its official members and associate members with capital contribution; minutes and resolutions of the Founding Conference, General Meeting of Members, and Board of Directors; and its decisions;

dd/ Financial statements, accounting books, accounting vouchers and other accounting documents;

e/ Written conclusions of inspection and examination agencies, and audit reports (if any);

g/ Other documents as specified by its charter.

2. A cooperative group shall archive the following documents in accordance with law:

a/ The cooperation contract;

b/ The cooperative group registration certificate (if any);

c/ Records of contributions of its members;

d/ Other documents as specified in the cooperation contract.

Article 13. National Information System on Cooperatives

1. The National Information System on Cooperatives consists of the National Portal on Cooperatives; the database on cooperative groups, cooperatives and unions of cooperatives; and related databases and technical infrastructure of the System.

2. The National Information System on Cooperatives shall be built uniformly from the central level to local levels and standardized for updating, exploitation and management by means of information technology.

3. The Minister of Planning and Investment shall provide information contents and updating, exploitation and management of the National Information System on Cooperatives.

Article 14. Disclosure of information to members of cooperatives and unions of cooperatives

1. Information to be disclosed to members of a cooperative or union of cooperatives includes:

a/ The charter and internal regulations;

b/ Resolutions of the General Meeting of Members and Board of Directors, and decisions of the Director (General Director);

c/ List of official members and associate members with capital contribution and their capital contribution ratios;

d/ Annual financial statements;

dd/ Information on the management and use of the indivisible common fund and indivisible common assets;

e/ Information on education, training, knowledge dissemination and re-training for members and employees;

g/ Other information that must be disclosed as specified in the charter.

2. Information specified in Clause 1 of this Article shall be posted up at the head office of the cooperative or union of cooperatives within 5 working days from the date of issuance of the relevant document and provided to members upon their request. Such information shall be posted up for least 30 consecutive days.

Article 15. Register of members of cooperatives and unions of cooperatives

1. The register of official members and associate members with capital contribution of a cooperative or union of cooperatives is a paper document or electronic data consisting of the following main contents:

a/ Name, identification number and head office address of the cooperative and union of cooperatives;

b/ Full names, contact addresses, citizenship(s) and personal identification numbers or serial numbers of legal papers of individual members; names, identification numbers or serial numbers of legal papers and head office addresses of institutional members;

c/ Contributed capital amount, capital contribution ratio, time of capital contribution, type of assets used for capital contribution, and quantity and value of each type of assets used for capital contribution of each official member or associate member with capital contribution;

d/ Serial number and date of grant of the capital contribution certificate of each official member or associate member with capital contribution.

2. Cooperatives and unions of cooperatives shall decide on the making of registers of associate members without capital contributions.

Article 16. Classification of cooperatives

1. Cooperatives shall be classified into micro, small-sized, medium-sized and large-sized ones based on the number of their official members and either of the following criteria:

a/ Revenues;

b/ Total capital.

2. Micro, small-sized, medium-sized and large-sized cooperatives shall be determined by field of operation.

3. The Government shall detail this Article.

Chapter II

STATE POLICIES ON DEVELOPMENT OF COOPERATIVE GROUPS, COOPERATIVES AND UNIONS OF COOPERATIVES

Article 17. Policy implementation principles

1. To ensure publicity and transparency of contents, beneficiaries, order, procedures and resources for implementation of support policies, support levels, and support policy implementation results.

2. To implement support policies in sync with the General Program on development of collective economy and in conformity the State’s resource-balancing capacity in each period.

3. In case a cooperative group, cooperative or union of cooperatives is simultaneously qualified for different support levels under the same support policy in accordance with this Law and other relevant regulations, it may choose to apply the most beneficial support level.

Article 18. Criteria for being entitled to policies

1. A cooperative or union of cooperatives may be considered to be entitled to a support policy if satisfying the following criteria:

a/ Not being in the period of serving an administrative violation handling decision issued for its violation of  the provisions on prohibited acts of Clause 2, Article 7 of this Law; not being in the period of executing a legally effective criminal judgment issued by the court;

b/ Having expanded its membership or increased the internal transaction value ratio or developed their indivisible common funds or indivisible assets or provided education, training, coaching, knowledge dissemination and re-training to their members and employees or having been newly established in a locality with difficult socio-economic conditions or extremely difficult socio-economic conditions as specified by law;

c/ Having made audit reports if so required by the support policy.

2. A cooperative group will be considered for being entitled to a support policy if satisfying the following criteria:

a/ Having a cooperative group registration certificate;

b/ Not being in the period of serving an administrative violation handling decision issued for its violating of the provisions on prohibited acts of Clause 2, Article 7 of this Law;

c/ Having expanded its membership or provided education, training, coaching, knowledge dissemination and re-training to members and employees, or having been newly established in a locality with difficult socio-economic conditions or extremely difficult socio-economic conditions as specified by law.

3. In case more than one cooperative or union of cooperatives satisfies the requirements specified in Clause 1 of this Article, and more than one cooperative group satisfies the requirements specified in Clause 2 of this Article, priority will be given to the cooperative group, cooperative or union of cooperatives that has more members; has more members being persons with disabilities; has more members being ethnic minority people; has more members and employees covered by compulsory social insurance and voluntary social insurance; has female managers, has many female members or employs more female workers; operates in a locality with difficult socio-economic conditions or extremely difficult socio-economic conditions as specified by law; participates in forming value chains and industrial clusters in association with green economy, circular economy, knowledge-based economy, organic agriculture, adaptation to climate change, and digital transformation for the sustainable development; and organizes or participates in activities for community interests.

4. The Government shall detail this Article.

Article 19. Funds for implementation of policies

1. The state budget in accordance with the law on the state budget.

2. Funds from tax, fee, charge, land rental and land use levy exemption and reduction and amounts remittable to the state budget in accordance with law.

3. Preferential loans in accordance with law.

4. Funds lawfully mobilized from and donated by domestic and foreign individuals and organizations.

Article 20. Policy on human resource development, information and consultancy

1. To formulate and incorporate contents on collective economy in training programs of a number of higher education institutions, political theory training programs, and state management training programs.

2. To formulate and implement training and re-training programs to improve capacity for members and employees of cooperative groups, cooperatives, unions of cooperatives, state management agencies, representative organizations, and related agencies and organizations.

3. To support payment of salaries, bonuses and benefits to attract high-quality workers to cooperative groups, cooperatives and unions of cooperatives.

4. To formulate and implement communication programs to improve management, production and business awareness and knowledge of cooperative groups, cooperatives and unions of cooperatives.

5. To provide support in terms of information, legal consultancy, access to capital sources and other issues in the course of establishment, operation, re-organization, dissolution and bankruptcy of cooperative groups, cooperatives and unions of cooperatives; conversion of cooperative groups into cooperatives.

6. To build a network for providing consultancy services to cooperative groups, cooperatives and unions of cooperatives.

7. To expand models of efficiently operating cooperatives and unions of cooperatives.

8. To undertake international cooperation on formal training in collective economy.

9. The Government shall detail this Article.

Article 21. Land policy

1. Local administrations shall prioritize the allocation of land areas for lease to cooperative groups, cooperatives and unions of cooperatives under land use master plans and plans; offer reasonable incentives regarding land rental rates and lease terms to cooperative groups, cooperatives and unions of cooperatives that have not yet received land lease support in accordance with the land law and relevant laws.

2. Cooperative groups, cooperatives and unions of cooperatives that rent land or land with water surface from the State for production and business are eligible for exemption from or reduction of rentals of land or land with water surface; those that rent or sub-rent land or land with water surface from organizations, households or individuals for production and business are entitled to the State’s support for payment of land rentals in accordance with law.

3. The State shall create conditions for cooperative groups, cooperatives and unions of cooperatives to use land stably for their production and business activities in accordance with the land law.

Article 22. Tax, fee and charge policy

1. Cooperative groups, cooperatives and unions of cooperatives are entitled to the highest tax, charge and fee incentives among those applicable to the same field, sector, business line and geographical areas in accordance with the laws on taxes, fees and charges.

2. For cooperative groups, the registration fee will not be collected. The charge for publishing registration contents on the electronic information system of Business registration agencies will not be collected.

3. To exempt or reduce enterprise income tax in accordance with the law on enterprise income tax for:

a/ Income from internal transactions of cooperatives and unions of cooperatives;

b/ Income of cooperative groups, cooperatives and unions of cooperatives when entering in association with other individuals and organizations to form value chains and industrial clusters, associated with green economy, circular economy and knowledge-based economy for the sustainable development;

c/ Other cases specified by the law on enterprise income tax.

4. To exempt enterprise income tax for income amounts set aside to form the indivisible common fund and indivisible common assets of cooperatives and unions of cooperatives in accordance with the law on enterprise income tax.

5. To exempt or reduce license fees for cooperative groups, cooperatives and unions of cooperatives in accordance with the law on fees and charges.

6. To exempt registration fee for individuals and organizations upon transfer of land use rights, transfer of ownership of assets contributed as capital to cooperatives and unions of cooperatives in accordance with the law on fees and charges.

Article 23. Capital access and insurance policy

1. Cooperative groups, cooperatives and unions of cooperatives are entitled to the following capital access policy:

a/ To borrow soft loans from credit institutions in accordance with law;

b/ To be provided with lending support in the forms of preferential interest rates, post-investment interest-rate support, and investment credit guarantee from the Cooperative Development Support Fund under the Government’s regulations;

c/ To be given with priority in access to funding sources from science and technology development funds, environmental protection funds, climate change adaptation funds, and financial institutions in accordance with law for the sustainable development;

d/ To be provided with support for building financial capacity for cooperatives and unions of cooperatives operating in the fields of finance and banking;

dd/ To be given with priority and provided with support for participation in investment promotion activities of ministries, sectors and localities.

2. Cooperative groups, cooperatives and unions of cooperatives will be provided with support for payment of insurance premiums for indivisible common assets covered by insurance in accordance with the Law on Insurance Business.

3. Members of cooperative groups, cooperatives and unions of cooperatives that are not subject to compulsory social insurance may be entitled to the State’s support when participating in voluntary social insurance in accordance with the law on social insurance.

Article 24. Policy on application of science and technology, innovation and digital transformation

1. To support cooperative groups, cooperatives and unions of cooperatives in carrying out innovation and improving productivity based on science and technology and innovation; to develop models of green economy, circular economy, and greenhouse gas emission reduction; to renovate, acquire, improve, perfect and master technologies through technology research, training, consultancy, searching, decoding and transfer; and to establish, manage, exploit, protect and develop intellectual property.

2. To support cooperative groups, cooperatives and unions of cooperatives in carrying out digital transformation and application of e-commerce in production and circulation of products through building information technology infrastructure and providing terminal equipment and shared software and applications.

3. To support cooperative groups, cooperatives, and unions of cooperatives in building and connecting their websites with the National Information System on Cooperatives.

4. To provide funding support for the provision of technology transfer consultancy services to cooperative groups, cooperatives and unions of cooperatives based on their demands and under contracts signed with consultancy service providers.

5. The Government shall detail this Article.

Article 25. Market access and research policy

1. To support cooperative groups, cooperatives and unions of cooperatives for them to be provided with information on legal and economic issues; market survey and research; and forecasting of, and warning about, trade remedies to be applied to Vietnamese exports.

2. To support cooperative groups, cooperatives and unions of cooperatives in associating with one another in forming raw material areas, producing and selling products, and applying for and achieving certification of standards so as to develop the market.

3. To support cooperative groups, cooperatives and unions of cooperatives in the building and registration of goods marks and origin; and product registration and marketing.

4. To support the creation of products, goods and services that are of local origin and characterized by their local economic and cultural value and advantages.

5. To support cooperative groups, cooperatives and unions of cooperatives in organizing and participating in domestic and foreign fairs and exhibitions; to build, deploy and participate in e-commerce trading floors.

6. To give priority to, and support, cooperative groups, cooperatives and unions of cooperatives in participating in trade promotion activities organized by ministries, sectors and localities.

7. The Government shall detail this Article.

Article 26. Investment policy for infrastructure and equipment development

1. To provide support for investment in developing infrastructure facilities and equipment of cooperative groups, cooperatives and unions of cooperatives in order to serve production and business activities, social security, environmental protection, and climate change adaptation.

2. To transfer a number of state-owned infrastructure facilities for use for community interests to cooperative groups, cooperatives and unions of cooperatives in localities for management, operation and maintenance in accordance with law.

3. To transfer a number of public works and other infrastructure facilities to cooperative groups, cooperatives and union of cooperatives for use as head offices, warehouses and stores for trading, display and introduction of products serving production and business activities in accordance with law.

4. To provide support funds for investment in, and building of, infrastructure facilities to form chains for production, processing services and consumption of cooperative groups, cooperatives and unions of cooperatives.

5. The Government shall detail this Article.

Article 27. Financial consultancy and risk assessment support policy

1. To provide support to cover audit costs to micro and small-sized cooperatives eligible for the State’s support policies under regulations.

2. To support representative organizations and the Vietnam Cooperative Alliance system in carrying out risk assessment and financial consultancy; internal control consultancy, internal audit consultancy for cooperative groups, cooperatives and unions of cooperatives.

3. The Government shall detail this Article.

Article 28. Policies to support activities in the field of agriculture

1. In addition to the policies specified in Articles 20 thru 27 of this Law, cooperative groups, cooperatives and unions of cooperatives operating in the field of agriculture are entitled to the following policies:

a/ Support for payment of agricultural insurance premiums in accordance with the law on insurance business;

b/ Support in terms of capital, crop seeds, livestock breeds, and science and technology upon the transformation of production towards sustainable production or organic agriculture to adapt to climate change;

c/ Support for payment of expenses for the building of infrastructure facilities in material zones in case of receiving land use rights as capital contribution or renting land or land with water surface from organizations, households and individuals to form concentrated agricultural production material zones.

2. The Government shall detail Points b and c, Clause 1 of this Article.

Article 29. Cooperative development support funds

1. A cooperative development support fund is a state financial fund outside the state budget or any financial institution operating not for the profit-making purpose, preserving and developing its capital by itself, and enjoying financial autonomy and accountability for capital mobilization and use to serve the performance of the following functions:

a/ Providing soft loans, post-investment interest rate supports and investment credit guarantees to cooperatives, unions of cooperatives, and members of cooperative groups and cooperatives, except members being enterprises;

b/ Receiving, managing and using domestic and foreign capital sources, financial aid and assistance, contributions and entrusted funds of domestic and foreign individuals and organizations in accordance with law;

c/ Mobilizing capital from domestic individuals and organizations in accordance with law;

d/ Entrusting loan provision or providing loans under entrustment; providing financial and investment consultancy and training courses for its borrowers in accordance with law.

2. The Vietnam Cooperative Development Support Fund shall be established at the central level. Provincial-level cooperative development support funds shall be established in provinces and centrally run cities.

3. The Government shall provide the establishment, organization and operation of cooperative development support funds.

Chapter III

MEMBERS OF COOPERATIVES AND UNIONS OF COOPERATIVES

Section 1

MEMBERS OF COOPERATIVES

Article 30. Conditions for becoming members of cooperatives

1. Official members and associate members with capital contribution of cooperatives include:

a/ Vietnamese citizens who are aged full 18 years or older, and have full civil act capacity;

b/ Individuals who are foreign investors possessing investment registration certificates in accordance with the investment law;

c/ Households, cooperative groups and other organizations without the legal person status that are established and operate in Vietnam. Members of these organizations shall appoint their representatives in accordance with the Civil Code to exercise the rights and perform the obligations of members of cooperatives;

d/ Vietnamese legal persons.

2. Associate members without capital contribution of cooperatives include:

a/ Vietnamese citizens or foreigners lawfully residing in Vietnam who are aged full 18 years or older and have full civil act capacity;

b/ Vietnamese citizens who are aged between full 15 years and under 18 years, do neither have their civil act capacity restricted nor have lost their civil act capacity, and have no difficulties in perceiving and controlling their acts; when participating in civil and labor transactions, these subjects must satisfy law-specified conditions;

c/ Households, cooperative groups and other organizations that have no legal person status and are established and operate in Vietnam. Members of these organizations shall appoint their representatives in accordance with the Civil Code to exercise the rights and perform the obligations of members of coopratives;

d/ Vietnamese legal persons.

3. Organizations and individuals wishing to become members of cooperatives shall file applications for voluntarily joining cooperatives, contribute capital or pay the membership fee, and satisfy the conditions specified in this Law and charters of such cooperatives.

4. Members of a cooperative may concurrently become members of other cooperatives, unless otherwise provided by such cooperative’s charter.

5. When joining cooperatives as official members or associate members with capital contribution, individual foreign investors or foreign-invested economic organizations must satisfy:

a/ Market access conditions applicable to foreign investors specified by the investment law and relevant laws;

b/ National defense and security assurance conditions specified by the investment law.

6. Cooperatives that have official members or associate members with capital contribution being foreign-invested economic organizations or  individual foreign investors must satisfy the market access conditions applicable to foreign investors specified by the investment law and relevant laws.

7. Official members being foreign-invested economic organizations and individual foreign investors of a cooperative must account for less than 35% of the total official members of such cooperative.

Article 31. Rights of members of cooperatives       

1. Official members of a cooperative have the following rights:

a/ To be provided with products, services and jobs by the cooperative;

b/ To receive incomes distributed in accordance with this Law and the cooperative’s charter;

c/ To enjoy benefits of the cooperative;

d/ To attend or elect delegates for attending the General Meeting of Members;

dd/ To vote on matters falling within the competence of the General Meeting of Members;

e/ To self-nominate or nominate others as members of the Board of Directors, Director (Director General), members of the Supervisory Board or supervisors and other elected managerial positions;

g/ To propose or request the Board of Directors, Director (Director General), Supervisory Board or supervisors to explain about the operation of the cooperative;

h/ To request the Board of Directors, Director (Director General), Supervisory Board or supervisors to convene extraordinary meetings of the General Meeting of Members;

i/ To be provided with necessary information related to operation of the cooperative; to be provided with training or retraining support for improvement of their professional qualifications to serve the operation of the cooperative;

k/ To leave the cooperative in accordance with this Law and the cooperative’s charter;

l/ To have part or all of their contribution capital amounts refunded in accordance with this Law and the cooperative’s charter;

m/ To receive the remaining divided value of assets of the cooperative in accordance with this Law and the cooperative’s charter;

n/ To file complaints and denunciations and initiate lawsuits in accordance with law.

o/ Other rights provided by law and the cooperative’s charter.

2. Associate members with capital contribution have the following rights:

a/ The rights specified at Points b, c, g, i, k, l, m, n and o, Clause 1 of this Article;

b/ To attend and raise their opinions but not be allowed to vote at General Meeting of Memberss, if invited.

3. Associate members without capital contribution have the following rights:

a/ The rights specified at Points a, c, i, k, n and o, Clause 1 of this Article;

b/ To attend and raise their opinions but not be allowed to vote at the General Meeting of Members, if invited.

Article 32. Obligations of members of cooperatives          

1. Official members of a cooperative have the following rights:

a/ To contribute capital to the cooperative fully and in due time as committed in accordance with the cooperative’s charter;

b/ To use products and services of the cooperative as registered or contribute labor under agreement with the cooperative;

c/ To take responsibility for debts and financial obligations of the cooperatives within the scope of their contributed capital amounts to the cooperative.

d/ To pay compensations for the damage they cause to the cooperative in accordance with law;

dd/ To comply with the operational guidelines, purposes, charter and regulations of the cooperative, resolutions of General Meeting of Memberss, and decisions of the Board of Directors, in case of applying the full governance model, or decisions of the Director, in case of applying the simplified governance model;

e/ Other obligations specified by law and the charter of the cooperative.

2. Associate members with capital contribution have the obligations specified at Points a, c, d, dd and e, Clause 1 of this Article.

3. Associate members without capital contribution of a cooperative have the following obligations:

a/ To pay the membership fee in accordance with the charter of their cooperative. Membership fee is not a state budget revenue as specified in the Law on Charges and Fees.

b/ The obligations specified at Points b, d, dd and e, Clause 1 of this Article.

Article 33. Termination of the cooperative member status

1. The member status of an official member shall be terminated in the following cases:

a/ The member, who is an individual dies, is declared dead or missing by a court, has his/her civil act capacity restricted or lost, or finds it difficult in perceiving or controlling his/her acts;

b/ The member, that is an organization, no longer exists or is dissolved or goes bankrupt;

c/ The cooperative no longer exists or is dissolved or goes bankrupt;

d/ The member voluntarily leaves the cooperative;

dd/ The member is expelled in accordance with the cooperative’s charter;

e/ The member refuses to use products or services or fails to contribute labor for a consecutive period of time as specified by the cooperative’s charter;

g/ At the committed time of full capital contribution, the member fails to make contribution or contributes capital at a level lower than the minimum capital contribution as specified in the cooperative’s charter.

2. The member status of an associate member with capital contribution shall be terminated in the cases specified at Points a, b, c, d, dd and g, Clause 1 of this Article.

3. The member status of an associate member without capital contribution shall be terminated in the following cases:

a/ The cases specified at Points a, b, c, d, dd and e, Clause 1 of this Article;

b/ The member fails to pay the membership fee in accordance with the cooperative’s charter.

4. The competence to terminate the cooperative member status and settlement of rights and obligations of cooperative members in cases of member status termination must comply with this Law and charters of cooperatives.

Section 2

MEMBERS OF UNIONS OF COOPERATIVES

Article 34. Conditions for becoming members of unions of cooperatives

1. Members of unions of cooperatives include:

a/ Official members being cooperatives;

b/ Associate members with capital contribution and associate members without capital contribution being Vietnamese legal persons.

2. Cooperatives and Vietnamese legal persons shall file applications for voluntarily joining unions of cooperatives, contribute capital and satisfy the conditions specified in this Law and charters of such unions of cooperatives.

3. Members of a union of cooperatives may concurrently become members of other unions of cooperatives, unless otherwise provided by such unions’ charters.

4. When joining unions of cooperatives as official members or associate members with capital contribution, foreign-invested economic organizations must satisfy:

a/ Market access conditions applicable to foreign investors specified by the investment law and relevant laws;

b/ National defense and security assurance conditions specified by the investment law.

5. Unions of cooperatives that have their official members or associate members with capital contribution being foreign-invested economic organizations must satisfy the market access conditions applicable to foreign investors specified by the investment law and relevant laws.

6. Official members being foreign-invested economic organizations of a union of cooperatives must account for less than 35% of the total official members of such union of cooperatives.

Article 35. Rights of members of unions of cooperatives       

1. Official members of a union of cooperatives have the following rights:

a/ To be provided with products, services and jobs by the union of cooperatives;

b/ To receive incomes distributed in accordance with this Law and the charter of the union of cooperatives;

c/ To enjoy benefits of the unions of cooperatives;

d/ To attend or elect delegates to attend meetings of the General Meeting of Members;

dd/ To vote on the issues falling within the competence of the General Meeting of Members;

e/ To self-nominate or nominate others as members of the Board of Directors, Director (Director General), members of the Supervisory Board or supervisors and other elected managerial positions;

g/ To propose or request the Board of Directors, Director (Director General), Supervisory Board or supervisors to explain about the operation of the union of cooperatives;

h/ To request the Board of Directors, Director (Director General), Supervisory Board or supervisors to convene extraordinary meetings of the General Meeting of Memberss;

i/ To be provided with necessary information related to operation of the union of cooperatives; to be provided with training or retraining support for improvement of their professional qualifications to serve the operation of the union of cooperatives;

k/ To leave the union of cooperatives in accordance with this Law and the charter of the union of cooperatives;

l/ To have part or all of their contributed capital amounts refunded in accordance with this Law and the charter of the unions of cooperatives;

m/ To receive the remaining value of assets of the union of cooperative in accordance with this Law and the charter of the union of cooperatives;

n/ To file complaints and denunciations and initiate lawsuits in accordance with law.

o/ Other rights provided by law and the charter of the union of cooperatives.

2. Associate members with capital contribution of a union of cooperative have the following rights:

a/ The rights specified at Points b, c, g, i, k, l, m, n and o, Clause 1 of this Article;

b/ To attend and raise their opinions without being allowed to vote at meetings of the General Meeting of Members, if invited.

3. Associate members without capital contribution of a union of cooperatives have the following rights:

a/ The rights specified at Points a, c, i, k, n and o, Clause 1 of this Article;

b/ To attend and raise their opinions without being allowed to vote at meetings of the General Meeting of Members, if invited.

Article 36. Obligations of members of unions of cooperatives          

1. Official members of a union of cooperatives have the following rights:

a/ To contribute capital to the union of cooperatives fully and in due time as committed in accordance with the charter of the union of cooperatives;

b/ To use products and services of the union of cooperative as registered or contribute labor as agreed with the union of cooperatives;

c/ To take responsibility for debts and financial obligations of the union of cooperatives within the scope of their contributed capital amounts at the union of cooperatives.

d/ To pay compensations for the damage they cause to the union of cooperatives in accordance with law;

dd/ To comply with the operational guidelines, purposes, charter and regulations of the union of cooperatives, resolutions of the General Meeting of Members, and decisions of the Board of Directors, in case of applying the full governance model, or decisions of the Director, in case of applying the simplified governance model;

e/ Other obligations specified by law and the charter of the union of cooperatives.

2. Associate members with capital contribution have the obligations specified at Points a, c, d, dd and e, Clause 1 of this Article.

3. Associate members without capital contribution of a union of cooperatives have the following obligations:

a/ To pay the membership fee in accordance with the charter of the union of cooperatives. Membership fee is not a state budget revenue as specified in the Law on Charges and Fees.

b/ The obligations specified at Points b, d, dd and e, Clause 1 of this Article.

Article 37. Termination of the cooperative union member status

1. The member status of an official member of a union of cooperative shall be terminated in the following cases:

a/ The member no longer exists or is dissolved or goes bankrupt;

b/ The union of cooperatives no longer exists or is dissolved or goes bankrupt;

c/ The member voluntarily leaves the union of cooperatives;

d/ The member is expelled in accordance with the charter of the union of cooperatives;

dd/ The member refuses to use products or services of, or fails to contribute labor for a consecutive period of time to, the union of cooperatives as specified by the Charter of the union of cooperatives;

e/ At the committed time of full capital contribution, the member fails to make capital contribution or makes capital contribution at a level less than the minimum capital contribution specified in the Charter of the union of cooperatives.

2. The member status of an associate member with capital contribution shall be terminated in the cases specified at Points a, b, c, d, and e, Clause 1 of this Article.

3. The member status of an associate member without capital contribution of an union of cooperatives shall be terminated in the following cases:

a/ The cases specified at Points a, b, c, d and dd, Clause 1 of this Article;

b/ The member fails to pay the membership fee in accordance with the Charter of the union of cooperatives.

4. The competence to terminate the cooperative union member status and settlement of rights and obligations of cooperative union members in cases of member status termination must comply with this Law and charters of unions of cooperatives.

Chapter IV

ESTABLISHMENT OF COOPERATIVES AND UNIONS OF COOPERATIVES

Article 38. Founders

1. A founder of a cooperative is an individual or organization that voluntarily commits to participate in the establishment and become an official member of such cooperative.

A founder of a union of cooperatives is a cooperative that voluntarily commits to participate in the establishment and become an official member of such union of cooperatives.

2. Founders of a cooperative or union of cooperatives shall advocate and propagate the establishment of such cooperative or union of cooperatives; formulate its production or business plan(s) and draft charter; and make preparations for organizing the Founding Conference.

3. Founders of a cooperative or union of cooperatives may contact a business registration agency, competent state agency or a representative organization in the locality where the cooperative or union of cooperatives is to be established or other agencies and organizations in order to receive consultancy and support for the establishment of the cooperative or union of cooperatives.

4. Founders that are foreign-invested economic organizations and individual foreign investors must satisfy the market access conditions applicable to foreign investors specified by the investment law and relevant laws.

Article 39. Conferences to establish cooperatives and unions of cooperatives

1. A conference to establish a cooperative or union of cooperatives held by founders must be participated by:

a/ Individual founders;

b/ At-law representatives or proxy representatives of institutional founders;

c/ Individuals and at-law representatives or proxy representatives of other organizations that wish to join the cooperative or union of cooperatives;

d/ Representatives of representative organizations who are invited to participate in the conference but have no voting right.

2. A conference to establish a cooperative or union of cooperatives shall be proceeded in the following order:

a/ Discussing the draft charter, the list of members, production and business plan(s), and governance model;

b/ Passing the charter;

c/ Passing the list of individual and institutional members that approve the charter and fully satisfy the conditions specified in this Law and relevant laws.

3. Official members shall decide on:

a/ The production and business plan(s);

b/ The election of members of the Board of Directors and its chairperson, in case of applying the full governance model, or selection of the Director, in case of applying the simplified governance model. The Board of Directors shall appoint the Director (Director General);

c/ The election of members of the Supervisory Board and its head, in case of applying the full governance model, or selection of a supervisor, in case of applying the simplified governance model;

d/ The person authorized to register the establishment and carry out other activities related to the establishment, organization and operation of the cooperative or union of cooperatives.

4. Official members and associate members with capital contribution shall valuate and approve results of the valuation of assets used for capital contribution by members under Clause 1, Article 77 of this Law.

5. Resolutions of Founding Conferences must cover the contents specified in Clause 3 of this Article and passed on the principle of majority vote with each member having one vote.

Article 40. Contents of charters of cooperatives and unions of cooperatives

The contents of the charter of a cooperative or union of cooperatives must not contravene the relevant provisions of this Law and relevant laws, and include the following principal information:

1. Name and address of the head office; logo (if any);

2. Business lines;

3. Conditions and procedures for the admission of members;

4. Cases of, and procedures for, termination of the member status, specifying conditions for termination of the member status, including:

a/ Cases of member expulsion;

b/ Frequency of product or service use or consecutive period of time during which official members do not contribute labor to the cooperative or union of cooperatives;

c/ The minimum value of products or services that official members must use;

5. Rights and obligations of members;

6. Governance model; competence of the General Meeting of Members; tasks and powers of the Board of Directors, Director (Director General), and Supervisory Board, in case of applying the full governance model, or tasks and powers of the Director and supervisor, in case of applying the simplified governance model;

7. Number, titles, rights and obligations of at-law representatives; division of rights and obligations among at-law representatives in case the cooperative or union of cooperatives has more than one at-law representative;

8. Charter capital; increase and reduction of charter capital; minimum capital contribution and maximum capital contribution, capital contribution form and time limit; valuation of assets used for capital contribution; refund of part or the whole contributed capital amounts of official members and associate members with capital contribution;

9. Membership fee, in case the cooperative or union of cooperative has associate members without capital contribution;

10. Form of organizing the General Meeting of Members; method of voting at the General Meeting of Members; method of electing delegates to attend and vote at the General Meeting of Members in case the General Meeting of Members is held in the form of representative meeting;

11. Minimum internal transaction value ratio;

12. Investment, capital contribution, share purchase, enterprise establishment, and forming of partnerships and associations with economic organizations;

13. Setting aside of funds; ratios of setting aside funds; ratios and methods of income distribution;

14. Financial management, use and handling of assets, capital, funds and losses;

15. Principles of payment of remunerations, salaries, wages, bonuses and other entitlements for members of the Board of Directors, Director (Director General), members of the Supervisory Board or supervisors, and employees;

16. Order and procedures for grant, re-grant, renewal or revocation of certificates of contributed capital amounts;

17. Order and procedures for charter amendment and supplementation;

18. Measures to handle members with overdue debts;

19. Handling of violations of the charter and principles of settlement of internal disputes.

Article 41. Registration of cooperatives and unions of cooperatives

1. Registration of a cooperative or union of cooperatives means registration of the establishment of such cooperative or union of cooperatives; registration of transformation of a cooperative group into a cooperative; registration of operation of a branch, representative office or business place, and the obligation to make other registrations and notices in accordance with this Law.

2. Registration dossiers shall be sent to business registration agencies by one of the following methods:

a/ Hand-delivery of paper dossiers to business registration agencies;

b/ Sending of paper dossiers by post;

c/ Submission of e-dossiers via e-information systems of business registration agencies.

3. The Government shall provide business registration agencies, and order, procedures for, and interdisciplinary process of, registration of cooperatives and unions of cooperatives.

4. The Ministry of Planning and Investment shall provide forms for papers for carrying out procedures for registration of cooperatives and unions of cooperatives.  

Article 42. Registration of the establishment of cooperatives and unions of cooperatives

1. Before a cooperative or union of cooperatives commences its operation, the person authorized to register the establishment of such cooperative or union of cooperatives shall carry out procedures for establishment registration at the business registration agency in the locality where the head office of such cooperative or union of cooperatives is located.

2. An establishment registration dossier must comprise:

a/ A written request for establishment registration;

b/ The charter;

c/ The resolution of the Founding Conference;

d/ The list of official members and associate members with capital contribution;

dd/ The list and personal identification numbers of at-law representatives who are Vietnamese; the list and copies of legal papers of at-law representatives who are foreigners;

e/ A copy of the investment registration certificate specified at Point b, Clause 1, Article 30 of this Law;

g/ A copy of the investment registration certificate for the project on establishment of the cooperative or union of cooperatives in case such cooperative or union of cooperatives is established with the participation of individual foreign investors or foreign-invested economic organizations in accordance with the law on investment.

3. Persons authorized to register the establishment of cooperatives or unions of cooperatives shall fully, truthfully and accurately declare the contents specified in Clause 2 of this Article and take responsibility before law for their declarations.

4. Within 3 working days after receiving a registration dossier, a business registration agency shall consider its validity and grant a cooperative registration certificate. In case such dossier is invalid, the business registration agency shall notify in writing the contents that need to be amended or supplemented to the person authorized to register the establishment of the cooperative or union of cooperatives. In case of refusal to grant a cooperative registration certificate, it shall notify such in writing, clearly stating the reason.

Article 43. Contents of written requests for registration of establishment of cooperatives and unions of cooperatives

A written request for registration of establishment of a cooperative or union of cooperatives must have the following principal contents:

1. Name of the cooperative or union of cooperatives;

2. Address of the head office and telephone number of the cooperative or union of cooperatives;

3. Business lines;

4. Charter capital;

5. Number of official members and associate members with capital contribution, clearly providing information on official members and associate members with capital contribution that are individual foreign investors or foreign-invested economic organizations;

6. Full names, signatures, contact addresses, citizenships and personal identification numbers or serial numbers of legal papers of at-law representatives of the cooperative or union of cooperatives;

7. Tax registration information.

Article 44. Cooperative registration certificates  

1. Conditions for grant of a cooperative registration certificate for a cooperative or union of cooperatives:

a/ Its registered business lines are not banned from business investment;

b/ It has submitted a valid registration dossier;

c/ Its name complies with this Law;

d/ It has fully paid the registration fee in accordance with the law on charges and fees.

2. A cooperative or union of cooperatives may have its cooperative registration certificate re-granted or renewed in accordance with regulations of the Government. Upon the re-grant or renewal of its cooperative registration certificate, a cooperative or union of cooperatives shall pay a fee in accordance with law.

Article 45. Contents of cooperative registration certificates

A cooperative registration certificate must have the following principal contents:

1. Name of the cooperative or union of cooperatives;

2. Address of the head office of the cooperative or union of cooperatives;

3. Identification number of the cooperative or union of cooperatives;

4. Charter capital of the cooperative or union of cooperatives;

5. Full names, contact addresses, citizenships and personal identification numbers or serial numbers of legal papers of at-law representatives of the cooperative or union of cooperatives.

Article 46. Identification numbers of cooperatives and unions of cooperatives

1. Identification numbers of cooperatives and unions of cooperatives shall be created by electronic information systems of business registration agencies and granted to such cooperatives and unions of cooperatives upon their establishment.

2. Each cooperative or union of cooperatives has a sole identification number which may not be granted to another organization.

3. Identification numbers of cooperatives and unions of cooperatives shall be used for the performance of tax obligations and administrative procedures, exercise of rights, and performance of other obligations.

Article 47. Registration of change of contents of cooperative registration certificates

1. A cooperative or union of cooperatives shall register change of contents of its cooperative registration certificate upon the occurrence of a change in the information specified in Clauses 1, 2 and 5, Article 45 of this Law or an increase or a decrease by 5% or more or by VND 1 billion or more in its charter capital or upon its reorganization. The change registration shall be carried out as follows:

a/ Within 10 days after the occurrence of a change in contents of its cooperative registration certificate, the cooperative or union of cooperatives shall submit a change registration dossier to the business registration agency;

b/ Within 3 working days after receiving the dossier, the business registration agency shall examine its validity and grant a cooperative registration certificate. In case the dossier is invalid, the business registration agency shall notify in writing the contents that need to be modified or supplemented. In case of refusal to grant a cooperative registration certificate, the business registration agency shall notify such in writing, clearly stating the reason.

2. The registration of change of contents of a cooperative registration certificate under a court ruling or an arbitration award shall be carried out as follows:

a/ Within 10 days after the court ruling becomes legally effective or the arbitration award takes effect, the change registration requester shall send a change registration dossier to the business registration agency;

b/ Within 3 working days after receiving the change registration dossier, the business registration agency shall examine its validity and grant a cooperative registration certificate according to contents of the legally effective court ruling or effective arbitration award. In case the dossier is invalid, the business registration agency shall notify in writing the contents that need to be modified or supplemented. In case of refusal to grant a cooperative registration certificate, the business registration agency shall notify such in writing, clearly stating the reason.

3. The Government shall specify dossiers for registration of change of contents of cooperative registration certificates.  

Article 48. Notification of change of registered contents of cooperatives and unions of cooperatives           

1. Cooperatives and unions of cooperatives shall notify business registration agencies upon the change of one of the following contents:

a/ Registered business lines;

b/ Tax registration information;

c/ Information on official members or associate members with capital contribution that are foreign-invested economic organizations or individual foreign investors.

2. The change notification shall be carried out as follows:

a/ Within 10 days after the occurrence of a change in the contents specified in Clause 1 of this Article, a cooperative or union of cooperatives shall send a dossier for change notification to the business registration agency;

b/ Within 3 working days after receiving a valid notification dossier, the business registration agency shall examine its validity and modify registered contents. In case the notification dossier is invalid, the business registration agency shall notify in writing the contents that need to be modified or supplemented. In case of refusal to modify registered contents, it shall notify such in writing, clearly stating the reason.

3. Notification of change of registered contents of a cooperative or union of cooperatives under a court ruling or an arbitration award shall be carried out as follows:

a/ Within 10 days after the court judgment or ruling becomes legally effective or the arbitration award takes effect, the registered content change requester shall send a dossier for notification of change of registered contents to the business registration agency;

b/ Within 3 working days after receiving a notification dossier, the business registration agency shall examine its validity and modify registered contents under the legally effective court judgment or ruling or effective arbitration award. In case the dossier is invalid, the business registration agency shall notify in writing the contents that need to be modified or supplemented. In case of refusal to modify registered contents, it shall notify such in writing, clearly stating the reason.

4. The Government shall specify dossiers for notification of change of registered contents of cooperatives and unions of cooperatives.

Article 49. Announcement of registered contents of cooperatives and unions of cooperatives

1. After granting a cooperative registration certificate to a cooperative or union of cooperatives, a business registration agency shall announce registered contents of such cooperative or union of cooperatives on its electronic information system. To-be-announced contents include:

a/ Contents of the cooperative registration certificate;

b/ Business lines.

2. In case of registration of change of contents of cooperative registration certificates under Article 47 of this Law or notification of change of registered contents of cooperatives and unions of cooperatives under Article 48 of this Law, changed contents shall be announced on electronic information systems of business registration agencies.

3. Registered contents and changed contents specified in Clauses 1 and 2 of this Article shall be announced for 30 consecutive days from the date relevant dossiers are accepted.

Article 50. Names of cooperatives and unions of cooperatives and their branches, representative offices and business locations

1. The Vietnamese name of a cooperative or union of cooperatives consists of two components arranged in the following order:

a/ The name of the cooperative must start with the phrase “Hop tac xa” (Cooperative). The name of a cooperative development support fund operating as a cooperative must start with the phrase “Quy ho tro phat trien hop tac xa” (Cooperative development support fund). The name of a union of cooperative must start with the phrase “Lien hiep hop tac xa” (Union of cooperatives);

b/ The proper name written in letters in the Vietnamese alphabet, plus letters f, j, z and w, numerals and symbols.

2. Foreign-language names of cooperatives and unions of cooperatives are names translated from Vietnamese ones into one of the Latin foreign languages. Upon the translation of their names into foreign languages, cooperatives and unions of cooperatives may either keep intact their proper names or translate their proper names into foreign-language words with equivalent meanings.

3. Abbreviated names of cooperatives and unions of cooperatives may be abbreviated from their Vietnamese or foreign-language names.

4. The name of a branch, representative office or business location of a cooperative or union of cooperatives must consist of the name of such cooperative or union of cooperatives followed by the phrase “Chi nhanh” (Branch) for branches, or phrase “Van phong dai dien” (Representative office) for representative offices, or phrase “Dia diem kinh doanh” (Business location) for business location.

5. The proper name of a cooperative or union of cooperatives may not:

a/ Be identical or confusingly similar to the name of another registered cooperative or union of cooperatives nationwide;

b/ Infringe upon industrial property rights to the trade name, mark or geographical indication of another organization or individual in accordance with the law on intellectual property;

c/ Be wholly or partially identical to the name of a state agency, people’s armed forces unit, political organization, socio-political organization, socio-political-professional organization or socio-professional organization, unless such agency, unit or organization so permits;

d/ Contain words, phrases or symbols that are contrary to the national historical tradition, culture, ethics and fine traditions and customs.

6. Names of cooperatives and unions of cooperatives and their branches, representative offices and business locations shall be registered with business registration agencies.

7. The Government shall detail this Article.

Article 51. Head offices of cooperatives and unions of cooperatives

Head offices of cooperatives and unions of cooperatives in the Vietnamese territory are their contact addresses and shall be determined based on administrative unit boundaries.

Article 52. Seals of cooperatives and unions of cooperatives

1. Seals of cooperatives and unions of cooperatives may be made by seal-carving establishments or take the form of digital signatures in accordance with the law on e-transactions.

2. Cooperatives and unions of cooperatives shall decide on types, quantities, forms and inscription contents of their seals and seals of their branches, representative offices and other attached units.

3. The management and keeping of seals must comply with charters of, or regulations issued by, cooperatives and unions of cooperatives or their branches, representative offices or other attached units that have seals. Cooperatives and unions of cooperatives shall use their seals in their operation in accordance with law.

Article 53. Branches, representative offices and business locations of cooperatives and unions of cooperatives

1. Branches are dependent units of cooperatives and unions of cooperatives and have the task of performing all or some of functions of such cooperatives and unions of cooperatives, including the function of proxy representation. Business lines of branches must be the same as those of their cooperatives and unions of cooperatives.

2. Representative offices are dependent units of cooperatives and unions of cooperatives and have the task of proxy representation for interests of their cooperatives and unions of cooperatives. Representative offices may not perform the business function of their cooperatives and unions of cooperatives.

3. Business locations are places where cooperatives and unions of cooperatives carry out specific business activities.

Article 54. Provision of information on registered contents of cooperatives and unions of cooperatives

1. Organizations and individuals may request business registration agencies to provide information on registered contents of cooperatives and unions of cooperatives archived on electronic information systems of such business registration agencies and shall pay a fee for the information provision in accordance with law.

2. Business registration agencies are obliged to fully and promptly provide information under Clause 1 of this Article.

Article 55. Registration of operation of branches and representative offices; notification of business locations of cooperatives and unions of cooperatives

1. A cooperative or union of cooperatives may establish one or more than one branch or representative office in a locality within domestic administrative unit boundaries according to the following procedures:

a/ The cooperative or union of cooperatives shall send a dossier for registration of operation of a branch or representative office to the business registration agency in the locality where such branch or representative office is to be located;

b/ Within 3 working days after receiving the dossier for registration of operation of the branch or representative office, the business registration agency shall examine its validity and grant an operation registration certificate for the branch or representative office. In case the dossier is invalid, the business registration agency shall notify in writing the contents that need to be modified or supplemented. In case of refusal to grant an operation registration certificate, it shall notify such in writing, clearly stating the reason.

2. Within 10 days after the occurrence of a change in contents of its domestic branch or representative office’s operation registration certificate, a cooperative or union of cooperatives shall send a change registration dossier to the business registration agency.

3. Cooperatives and unions of cooperatives may establish overseas branches and representative offices. Within 30 days after establishing an overseas branch or representative office, a cooperative or union of cooperatives shall send a notification dossier to the business registration agency in the locality where its head office is located.

4. Within 10 days after deciding on a business location, a cooperative or union of cooperatives shall send a notification dossier to the business registration agency in the locality where such business location is located.

5. The Government shall specify dossiers for operation registration; dossiers for registration of change of operation registration of branches and representative offices; and notification of business locations of cooperatives and unions of cooperatives.

Chapter V

GOVERNING BODIES OF COOPERATIVES AND UNIONS OF COOPERATIVES

Section 1

GOVERNING BODIES AND GENERAL MEETING OF MEMBERS

Article 56. Governing body

1. There are 2 governance models applicable to cooperatives and unions of cooperatives:

a/ Full governance model under which the governing body shall comprise the General Meeting of Members, Board of Directors, Director/General Director and Supervisory Board. The chairperson of the Board of Directors may concurrently act as the Director/General Director;

b/ Simplified governance model under which the governing body shall comprise the General Meeting of Members, Director and supervisor.

2. Small-, medium-, and large-sized cooperatives and unions of cooperatives with 10 or more members shall be organized after the full governance model.

3. Micro-cooperatives and unions of cooperatives with less than 10 members may be organized after the full or simplified governance model.

4. In case a cooperative or union of cooperatives that is organized after the simplified governance model develops into a small-, medium- or large-sized cooperative or union of cooperatives with 10 or more members, the General Meeting of Members must decide on the conversion into the full governance model at its nearest meeting.

Article 57. General Meeting of Members

1. The General Meeting of Members is the highest decision-making organ of a cooperative or union of cooperatives. The General Meeting of Members shall meet once a year and may hold extraordinary meetings. For a cooperative or union of cooperatives organized after the simplified governance model, the General Meeting of Members shall hold its regular meetings according to the Charter of the cooperative or union of cooperatives but at least once every 3 months and may hold extraordinary meetings.

2. The General Meeting of Members shall be organized in the form of plenary meeting or representative meeting. In case of organizing in the form of plenary meeting, the General Meeting of Members shall consist of official members who attend and vote at meetings of the General Meeting of Members. In case of organizing in the form of representative meeting, the General Meeting of Members shall consist of delegates who represent official members to attend and vote at meetings of the General Meeting of Members. A cooperative or union of cooperatives with 50 or more official members may organize the General Meeting of Members in the form of representative meeting.

Associate members with capital contribution and associate members without capital contribution may be invited to attend meetings of the General Meeting of Members.

3. Meetings of the General Meeting of Members may be held in the form of in-person meeting or video conference or combined in-person meeting and video conference.

4. All meetings of the General Meeting of Members shall be recorded in minutes and may be audio-recorded or video-recorded for provision of meeting minutes or records to members upon the latter’s request. A meeting’s minutes must contain signatures of the person presiding over, and secretary of, the meeting. In case the person presiding over, and secretary of, the meeting refuse to sign the minutes, the minutes will become valid if it is signed by more than half of the attendees and must clearly state that the person presiding over, and secretary of, the meeting refuse to sign it. The persons who sign the minutes of a meeting of the General Meeting of Members shall take joint responsibility for the accuracy and truthfulness of the minutes.

Article 58. Delegates attending representative meetings

1. Criteria of delegates and the order and procedures for election of delegates to attend representative meetings shall be specified by the Charter.

2. The number of delegates attending representative meetings shall be specified by the Charter but must satisfy the following requirements:

a/ Not to be less than 50% of the total official members, for cooperatives and unions of cooperatives having between 50 and 100 official members;

b/ Not to be less than 30% of the total official members, for cooperatives and unions of cooperatives having between over 100 and 300 official members;

c/ Not to be less than 20% of the total official members, for cooperatives and unions of cooperatives having between over 300 and 1000 official members;

d/ Not to less than 200 delegates, for cooperatives and unions of cooperatives having 1,000 or more official members.

3. Delegates attending representative meetings shall express the opinions and aspirations of, and inform the results of the meetings to, all members they represent.

Article 59. Convening of the General Meeting of Members

1. The Board of Directors, in case of applying the full governance model, or the Director, in case of applying the simplified governance model, shall convene an annual meeting of the General Meeting of Members within 4 months from the last day of every fiscal year.

2. In case a cooperative or union of cooperatives is organized after the full governance model, an extraordinary meeting of the General Meeting of Members may be convened in the following cases:

a/ The Board of Directors convenes the meeting to deal with issues falling beyond its competence;

b/  The Board of Directors convenes the meeting at the request of the Supervisory Board or at least one-third of official members;

c/ The chairperson of the Board of Directors convenes the meeting when it is impossible to hold a regular meeting of the Board of Directors after two times of convening.

3. In case a cooperative or union of cooperatives is organized after the simplified governance model, the Director shall convene an extraordinary meeting of the General Meeting of Members in the following cases:

a/ To deal with issues falling beyond his/her competence;

b/ At the request of supervisors or at least one-third of official members.

4. For the cases specified at Point b, Clause 2 and Point b, Clause 3 of this Article, the convening of an extraordinary meeting of the General Meeting of Members shall be carried out as follows:

a/ Within 15 days after receiving the request of the Supervisory Board or supervisors or at least one-third of official members, the Board of Directors or the Director shall convene an extraordinary meeting of the General Meeting of Members;

b/ Past 15 days from the date of receiving the request of the Supervisory Board or supervisors or at least one-third of official members, if the Board of Directors or the Director fails to convene an extraordinary meeting of the General Meeting of Members or past 4 months from the final date of the fiscal year, if the Board of Directors or the Director fails to convene an annual General Meeting of Members, the Supervisory Board or supervisor may convene an extraordinary meeting of the General Meeting of Members;

c/ If the Supervisory Board or supervisor fails to convene an extraordinary meeting of the General Meeting of Members within 15 days after it/he/she is entitled to do so under Point b of this Clause, the member representing at least one-third of the total official members shall be entitled to convene a meeting of the General Meeting of Members. The appointment of a representative member must be recorded in minutes and contain signatures of all members requesting the convening of a meeting of the General Meeting of Members.

5. In case the Board of Directors or the Director fails to convene the meeting of the General Meeting of Members under Clause 1 and Point a, Clause 4 of this Article, it/he/she shall compensate for any damage caused to the cooperative or union of cooperatives in accordance with law and the Charter.

In case the Supervisory Board or supervisor fails to convene the meeting of the General Meeting of Members under Point b, Clause 4 of this Article, the Supervisory Board or supervisor shall compensate for any damage caused to the cooperative or union of cooperatives in accordance with law and the Charter.

6. A meeting of the General Meeting of Members shall be presided over by the convener, except the General Meeting of Members decides to elect another member to preside over the meeting.

7. The meeting of the General Meeting of Members shall take place if it is attended by at least half of official members or convened delegates. In case of the number of attendees is insufficient, the meeting of the General Meeting of Members shall be cancelled.

In case the first meeting cannot take place because the prescribed conditions are not satisfied, the second meeting shall be convened within 30 days from the intended date of the first meeting. The second meeting of the General Meeting of Members shall be conducted if it is attended by at least 33% of official members or convened delegates.

In case the second meeting cannot take place because the prescribed conditions are not satisfied, the third meeting shall be convened within 20 days from the intended date of the second meeting. In this case, the meeting of the General Meeting of Members shall take place regardless of the number of attendees.

Article 60. Preparation for the General Meeting of Members

1. The convener of a meeting of the General Meeting of Members shall make a list of members and delegates entitled to attend the meeting, and prepare agenda, contents, documents and draft resolutions; send notices of invitation to members at least 3 days before the commencement of the meeting. The notice of invitation must specify the time, venue, form and agenda of the meeting. Such notice of invitation may be sent in the form of paper document or electronic document, or by other means as specified by the Charter.

2. The content of the agenda of a meeting of the General Meeting of Members may change when at least one-third of official members propose in writing the modification of an item of the agenda. The letter of proposal shall be sent to the convener at least 2 days prior to the opening date of the meeting of the General Meeting of Members unless otherwise specified in the Charter. The letter of proposal must specify official members’ names and contents of the proposal.

3. The convener of the meeting of the General Meeting of Members may only reject the proposal specified in Clause 2 of this Article in one of the following cases:

a/ The proposal is not sent on schedule;

b/ The proposal is not conformable with the contents recommended for consideration at the General Meeting of Members;

c/ The proposal falls beyond the decision-making competence of the General Meeting of Members;

d/ Other cases specified in the Charter.

4. If rejecting the proposal, the convener must report thereof to the General Meeting of Members before deciding on the agenda of the meeting.

The approved proposals must be included in the tentative agenda. The agenda of the meeting of the General Meeting of Members must be voted and approved by the General Meeting of Members.

Article 61. Attendance and voting at meetings of the General Meeting of Members

1. A member or delegate shall be considered attending and voting at a meeting of the General Meeting of Members in the following cases:

a/ He/she personally attends and votes at the meeting;

b/ He/she attends and votes online;

c/ He/she has authorized another individual or organization to attend and vote at the meeting.

2. The following contents shall be adopted by the General Meeting of Members when they are voted for by at least 65% of members and delegates attending and voting at the meeting as specified in Clause 1 of this Article:

a/ Amendment or supplementation of the Charter;

b/ Decision on investment in, or sale of, divisible common assets of a value equal to or higher than 20% of the total value of assets of the cooperative or union of cooperatives as stated in the latest financial statement; decision on investment in, or sale of, indivisible common assets;

c/ Change in the governance model of the cooperative or union of cooperatives;

d/ Re-organization, dissolution or bankruptcy of the cooperative or union of cooperatives.

3. The contents not specified in Clause 2 of this Article shall be adopted when they are voted for by over 50% of the members or delegates attending and voting at the meeting as specified in Clause 1 of this Article.

4. For a cooperative, each official member attending a plenary meeting of the General Meeting of Members shall have a vote, regardless of its/his/her contributed capital amount or member position. The number of votes of each delegate attending a representative meeting of the General Meeting of Members shall be equal to that of the number of members authorizing the delegate to attend the meeting.

5. For a union of cooperatives, official members or delegates of official members attending the General Meeting of Members may have the same or different number of votes in proportion to the number of official members of member cooperatives as specified by the Charter of the union of cooperatives.

6. Ballot papers and minutes of vote count at the General Meeting of Members must be retained.

Article 62. Conditions to become a member of the Board of Directors, Director/General Director, member of the Supervisory Board or supervisor, and accountant

1. A member of the Board of Directors of a cooperative or union of cooperatives must satisfy the following conditions:

a/ Being an official member or at-law representative or proxy representative of an institutional official member of the cooperative or union of cooperatives;

b/ Not being concurrently a member of the Supervisory Board or a supervisor, the chief accountant or treasurer of the cooperative or union of cooperatives;

c/ Not being a person having the family relationship with another member of the Board of Directors or Supervisory Board or a supervisor, the chief accountant or treasurer of such cooperative or union of cooperative;

2. The Director/General Director of a cooperative or union of cooperatives must satisfy the following conditions:

a/ Being an official member or at-law representative or a proxy representative of an institutional official member of the cooperative or union of cooperatives. Cooperatives and unions of cooperatives organized after the full governance model may hire the Director/General Director under decisions of the General Meeting of Members.

b/ Not being concurrently a member of the Supervisory Board or a supervisor, the chief accountant or treasurer of such cooperative or union of cooperatives;

c/ Not being a person having the family relationship with a member of the Supervisory Board or a supervisor, the chief accountant or treasurer of the cooperative or union of cooperatives.

3. A member of the Supervisory Board or a supervisor of a cooperative or union of cooperatives must satisfy the following conditions:

a/ Being an official member or at-law representative or a proxy representative of an institutional official member of the cooperative or union of cooperatives;

b/ Not being concurrently a member of the Board of Directors or the Director/General Director, chief accountant or treasurer of the cooperative or union of cooperatives;

c/ Not being a person having the family relationship with a member of the Board of Directors or another member of the Supervisory Board or a supervisor, the Director/General Director, chief accountant or treasurer of the cooperative or union of cooperative.

4. Persons who fall into the following cases may not act as members of the Board of Directors, Director/General Director, members of the Supervisory Board or supervisor of a cooperative or union of cooperatives:

a/ Being examined for penal liability or held in temporary detention, serving an imprisonment sentence or executing the administrative handling measure of consignment to a compulsory drug rehabilitation establishment or compulsory education institution, or being banned by the court from holding certain positions, practicing certain professions or performing certain jobs.

b/ Other cases specified by law and the Charter of the cooperative or union of cooperatives.

5. Chief accountants and accountants must possess professional expertise and skills in accounting in accordance with the law on accounting.

Article 63. Relief from duty, removal from office, and dismissal of, and termination of labor contracts signed with, holders of titles in cooperatives and unions of cooperatives

1. A member of the Board of Directors, member the Supervisory Board, supervisor or the Director/ General Director shall be relieved from duty, removed from office, dismissed or have his/her labor contract terminated in one of the following cases:

a/ He/she no longer satisfies the conditions specified in Article 61 of this Law;

b/ He/she submits a resignation letter and has it approved;

c/ He/she has his/her civil act capacity restricted or has lost his/her civil act capacity, or has difficulty in perceiving and controlling his/her acts;

d/ The organization for which the Director/General Director, member of the Supervisory Board or supervisor represents has lost its legal person status, has its existence terminated, is dissolved or goes bankrupt;

dd/ Other cases specified by law, the Charter and labor contract.

2. After being relieved from duty, removed from office, dismissed or have their labor contracts terminated, members of the Board of Directors, Directors/General Directors, members of the Supervisory Board or supervisors shall still take responsibility for the decisions they made during their term of office.

Section 2

FULL GOVERNANCE MODEL

Article 64. Competence of the General Meeting of Members in case of applying the full governance model

1. To approve development orientations of the cooperative or union of cooperatives; to amend and supplement the Charter; to report on the operation of the Board of Directors and Supervisory Board, annual financial statements and production and business plans.

2. To approve plans on distribution of incomes and settlement of losses and debts; the rate of deduction for setting up the indivisible common fund and other funds; plans on payment of remuneration, salaries, wages, bonuses and other preferential treatment policies for members of the Board of Directors, Director/General Director, members of the Supervisory Board, holders of managerial and other professional titles, and employees.

3. To approve the investment in, or sale of, divisible common assets of a value equal to or higher than 20% of the total value of assets of the cooperative or union of cooperatives as stated in the latest financial statement; and investment in, or sale of, indivisible common assets.

4. To approve capital contribution, share purchase; establishment of enterprises, forming of partnerships or affiliations; to participate in other cooperative or union of cooperatives, representative organizations of cooperatives or unions of cooperatives.

5. To approve the increase or decrease of charter capital, minimum capital contribution; capital mobilization; the return of part or the whole of contributed capital amounts; results of valuation of assets and indivisible common assets; regulations on management and use of assets and funds.

6. To approve the governance model, internal governance regulations, and operation regulations of the Board of Directors and Supervisory Board; to decide on the number of members of the Board of Directors and Supervisory Board and number of at-law representatives of the cooperative or union of cooperatives; to approve the re-organization, dissolution or bankruptcy of the cooperative or union of cooperatives.

7. To elect, remove from office or relieve from duty members of the Board of Directors, members and the head of the Supervisory Board, and at-law representatives. To elect, remove from office or relieve from duty or authorize the Board of Directors to elect, remove from office or relieve from duty the chairperson of the Board of Directors. To approve the policy of assigning the chairperson of the Board of Directors to hold the position of Director/General Director or hiring Director/General Director.

8. To decide on selection of independent audit firms.

9. Other competence as decided by the General Meeting of Members, which, however, must not contravene this Law and relevant laws.

Article 65. Board of Directors

1. The Board of Directors of a cooperative or union of cooperatives is the managing body of the cooperative or union of cooperatives, comprising the Chairperson and other members elected among official members of the cooperative or union of cooperatives by the Founding Conference or the General Meeting of Members. The number of members of the Board of Directors shall be specified by the Charter of the cooperative or union of cooperatives but must be at least 3 and at most 15. The total number of members of the Board of Directors that are foreign-invested economic institutions and foreign individual investors must make up less than 35% of total members of the Board of Directors.

2. The term of office of the Board of Directors of a cooperative or union of cooperatives shall be specified by the Charter of the cooperative or union of cooperatives but must not exceed 5 years. The term of office of members of the Board of Directors coincides with that of the Board of Directors. Members of the Board of Directors may be re-elected for an unlimited number of terms of office. The election, removal from office and relief from duty of members of the Board of Directors shall be conducted by secret ballot.

3. The Board of Directors of a cooperative shall hold regular meetings in accordance with the Charter of the cooperative but at least once every quarter. The Board of Directors of a union of cooperatives shall hold regular meetings in accordance with the Charter of the union of cooperatives but at least twice a year.

4. The Board of Directors shall hold an extraordinary meeting at the request of one of the following entities:

a/ The chairperson of the Board of Directors;

b/ The Director/General Director;

c/ The head of the Supervisory Board;

d/ At least one-third of members of the Board of Directors.

5. Meetings of the Board of Directors shall be held as follows:

a/ A meeting of the Board of Directors shall take place when it is attended by at least two-thirds of members of the Board of Directors. Decisions of the Board of Directors shall be approved on the majority principle with each member of the Board of Directors having one vote. In case of a tie vote, the contents which are voted for by the chairperson of the Board of Directors or the person authorized by the chairperson of the Board of Directors to preside over the meeting shall be approved;

b/ In case a regular meeting of the Board of Directors fails to attract sufficient attendees as required, the chairperson of the Board of Directors shall convene a second meeting within 15 days from the intended date of the first meeting. In this case, the meeting shall take place if it is attended by more than half of members of the Board of Directors;

c/ In case the second meeting of the Board of Directors fails to attract sufficient attendees as required, the chairperson of the Board of Directors shall convene an extraordinary meeting of the General Meeting of Members within 30 days from the intended date of the second meeting. The chairperson of the Board of Directors shall report the case to the extraordinary meeting of the General Meeting of Members for the latter to review the member status of members of the Board of Directors who fail to attend the two previous meetings, and propose handling measures.

d/ All meetings of the Board of Directors shall be recorded in minutes and may be audio-recorded or video-recorded for provision of meetings’ minutes or records to its members upon the latter’s request. A meeting’s minutes must contain signatures of the person presiding over the meeting and secretary. Members of the Board of Directors may reserve their opinions which shall be recorded in minutes. In case the person presiding over, and secretary of, the meeting refuse to sign the meeting minutes, the minutes shall become valid if it is signed by more than half of the attendees and must clearly state that the person presiding over, and secretary of, the meeting refuse to sign it. The persons who sign the minutes of a meeting of the Board of Directors shall take joint responsibility for the accuracy and truthfulness of such minutes.

6. In case the contents approved by the Board of Directors contravene law, resolutions of the General Meeting of Members and the Charter, causing damage to the cooperative or union of cooperatives, the members who agree with the approval of such contents shall be jointly liable for those contents and shall compensate the cooperative or union of cooperatives for the damage in accordance with law; the members who object the approval of such contents shall be exempted from liability and may request the court to terminate the implementation of or annul such contents.

Article 66. Tasks and powers of the Board of Directors

1. To submit to the General Meeting of Members for consideration and approval the contents falling within the competence of the General Meeting of Members under Article 64 of this Law.

2. To decide on the organization of assisting units and affiliates of the cooperative or union of cooperatives as specified by the Charter. To establish branches and representative offices.

3. To organize the implementation of resolutions of the General Meeting of Members. To report to the General Meeting of Members on production and business outcomes of the cooperative or union of cooperatives.

4. To transfer, liquidate and handle assets of the cooperative or union of cooperatives according to its competence. To decide on investment in, or sale of, divisible common assets of a value of under 20% of the total value of assets of the cooperative or union of cooperatives as stated in the latest financial statement.

5. To coordinate with asset owners and capital contributors in conducting valuation or hiring a valuation organization to conduct valuation of assets of individuals and organizations during the operation of the cooperative or union of cooperatives.

6. To manage, admit or terminate the member status of, official members and associate members with capital contribution. To report to the General Meeting of Members at its nearest meeting on the expansion of membership of the cooperative or union of cooperatives.

7. To elect, remove from office and relieve from duty the chairperson of the Board of Directors (if case of such an event) in accordance with the Charter.

8. To appoint, relieve from duty and dismiss; sign and terminate labor contracts with; and supervise and review the performance of the Director/General Director; the Delegate Director/Delegate General Director and holders of other managerial titles.

9. To decide on the commendation, reward and disciplining of official members, associate members with capital contribution and employees; to reward other individuals and organizations for outstanding contributions to the building and development of the cooperative or union of cooperatives.

10. Other tasks and powers specified by law and the Charter.

Article 67. Chairperson of the Board of Directors

1. The chairperson of the Board of Directors of a cooperative or union of cooperatives shall be elected from official members of the cooperative or union of cooperatives, and removed from office or relieved from duty by the Founding Conference or General Meeting of Members; or elected from members of the Board of Directors, and removed from office or relieved from duty by the Board of Directors. The election, removal from office or relief from duty of the chairperson of the Board of Directors shall be conducted by secret ballot.

2. The chairperson of the Board of Directors of a cooperative or union of cooperatives has the following tasks and powers:

a/  To take responsibility before the General Meeting of Members and Board of Directors for his/her assigned tasks;

b/ To sign the Charter and resolution on the establishment of the cooperative or union of cooperatives; documents of the Founding Conference and the General Meeting of Members; and documents of the Board of Directors in accordance with law and the Charter of the cooperative or union of cooperatives;

c/ To decide on the working agenda and plans of the Board of Directors and assign tasks to members of the Board of Directors;

d/ To prepare the contents and agenda of, and convene and chair, meetings of the Board of Directors and General Meeting of Members, unless otherwise specified by this Law and the Charter of the cooperative or union of cooperatives;

dd/ Other tasks and powers specified by law and the Charter of the cooperative or union of cooperatives.

3.  In case the chairperson of the Board of Directors of a cooperative or union of cooperatives is absent or cannot perform his/her tasks, he/she shall authorize in writing another member to exercise the tasks and powers of chairperson of the Board of Directors as stated in the Charter of the cooperative or union of cooperatives. If no member is authorized or the chairperson of the Board of Directors is dead, missing, placed under temporary detention, serving an imprisonment sentence or executing the administrative handing measure of consigning to a compulsory drug rehabilitation establishment or compulsory education institution, has absconded from his/her  place of residence, has his/her civil act capacity restricted or lost his/her civil act capacity, has difficulty in perceiving or controlling his/her acts, or is banned by the court from holding certain positions, practicing certain professions or performing certain jobs, the election of chairperson of the Board of Directors shall be conducted as follows:

a/ The Board of Directors shall elect one of its remaining members to temporarily act as chairperson of the Board of Directors until the General Meeting of Members elects the chairperson of the Board of Directors at its nearest meeting.

b/ The Board of Directors shall elect one of its remaining members as its chairperson in case it is authorized by the General Meeting of Members to elect the chairperson of the Board of Directors.

4. In case the chairperson of the Board of Directors concurrently acts as the Director/General Director, he/she shall exercise the latter’s rights and powers specified in Clause 4, Article 68 of this Law.

Article 68. Directors/General Directors after the full governance model

1. The Director/General Director of a cooperative or union of cooperatives is the person who administers the operation of the cooperative or union of cooperatives; is subject to the supervision and held responsible before the Board of Directors and law for the performance of his/her assigned tasks and exercise of his/her delegated powers.

2. The term of office of the Director/General Director shall be specified in the Charter of the cooperative or union of cooperatives but must not exceed 5 years. The Director/General Director may be re-elected for an unlimited number of terms of office.

3. If the Director/General Director of a cooperative or union of cooperatives is hired or not an official member of the cooperative or union of cooperatives, he/she may attend meetings of the General Meeting of Members and Board of Directors but may not vote. The term of the Director/General Director shall be specified in his/her labor contract.

4. The Director/General Director has the following tasks and powers:

a/ To submit to the Board of Directors contents falling within the latter’s competence;

b/ To implement resolutions of the Founding Conference and General Meeting of Members, resolutions and decisions of the Board of Directors; to sign contracts in the name of the cooperative or union of cooperatives within his/her competence;

c/ To organize the implementation of production and business plans; to decide on business locations;

d/ To be responsible for joint purchase or sale of products and services for members of the cooperative or union of cooperatives;

dd/ To manage, admit, or terminate the member status of, associate members without capital contribution and report thereon to the Board of Directors; to recruit employees; to decide on the commendation, reward and disciplining of associate members without capital contribution and employees;

e/ Other tasks and powers specified by law and the Charter.

Article 69. Supervisory Board after the full governance model

1. The Supervisory Board of a cooperative or union of cooperatives is composed of between 1 member and 7 members, including a head and supervisors elected by the General Meeting of Members from official members of the cooperative or union of cooperatives and shall take responsibility before the General Meeting of Members. The term of office of the Supervisory Board must not exceed 5 years. The term of office of members of the Supervisory Board shall coincide with that of the Supervisory Board. Members of the Supervisory Board may be re-elected for an unlimited number of terms of office. In case the Supervisory Board is composed of only 1 member, such member shall concurrently act as the head of the Supervisory Board. The election, removal from office or relief from duty of members of the Supervisory Board shall be conducted by secret ballot.

2. The Supervisory Board shall operate independently, inspect and supervise the operation of the cooperative or union of cooperatives in accordance with law and the Charter.

3. The Supervisory Board has the following tasks and powers:

a/ To inspect the observance of law and adherence to the Charter, resolutions of the General Meeting of Members and Board of Directors, and regulations of the cooperative or union of cooperatives;

b/ To supervise the operation of the Board of Directors, the performance of the Director/General Director and members in accordance with law, and the Charter, resolutions of the General Meeting of Members and regulations of the cooperative or union of cooperatives;

c/ To examine financial activities, the compliance with accounting regulations, distribution of incomes, handling of losses, use of funds, assets and loans of the cooperative or union of cooperatives and supports of the State;

d/ To appraise annual financial statements before submitting them to the General Meeting of Members; to conduct internal audits when necessary; to review, inspect and evaluate the effect and efficiency of internal supervision, internal audit, risk management and early warning systems of the cooperative or union of cooperatives;

dd/ To request the provision of materials, books, documents and necessary information to serve the review, inspection and supervision; such materials, books, documents and information must not be used for other purposes;

e/ To inform the Board of Directors of, and report before the General Meeting of Members on, supervision results; to recommend the Board of Directors or Director/General Director to address weaknesses and violations in the operation of the cooperative or union of cooperatives; to submit to the General Meetings of Members for consideration and approval reports on the operation of the Board of Directors;

g/ To receive proposals related to the cooperative or union of cooperatives; to settle them within its competence or propose the Board of Directors and General Meeting of Members to settle them according to the latter’s  competence;

h/ The head of the Supervisory Board and supervisors may attend but may not vote at meetings of the Board of Directors;

i/ To prepare the agenda and convene extraordinary meetings of the General Meeting of Members;

k/ Other tasks and powers specified by law and the Charter.

Section 3

SIMPLIFIED GOVERNANCE MODEL

Article 70. Competence of the General Meeting of Members of a cooperative or union of cooperatives organized after the simplified governance model

1. To approve the orientations on development of the cooperative or union of cooperatives; to amend and supplement its Charter; to report on activities of the Director and supervisor; to approve annual financial statements and production and business plans.

2. To approve plans on income distribution and handling of losses and debts; rates of deduction for setting up the indivisible common fund and other funds; plans on remuneration, salary, wages, bonuses and other preferential regimes applicable to the Director, supervisor, other managerial and professional title holders, and employees.

3. To approve the investment in, or sale of, divisible common assets of a value equal to or higher than 20% of the total value of assets as recorded in the latest financial statement of the cooperative or union of cooperatives; and the investment in, or sale of, indivisible common assets.

4. To approve capital contribution, share purchase, establishment of businesses, joint ventures and affiliations; and participation in other cooperatives, unions of cooperatives and, representative organizations.

5. To approve the increase and decrease of the charter capital and minimum capital contribution; capital mobilization; and return of part or the whole of contributed capital amounts; to valuate or approve the results of valuation of assets and indivisible common assets; to approve regulations on the management and use of assets and funds.

6. To approve the governance model; regulations on internal management; plans on organization of assisting divisions and attached units of the cooperative or union of cooperatives; and the reorganization, dissolution and bankruptcy of the cooperative or union of cooperatives.

7. To elect, remove from office and dismiss the Director and supervisor; to decide on the number, election, removal from office and dismissal of the at-law representative(s).

8. To decide on the selection of an independent auditing organization; to establish branches and representative offices; to reward and discipline official members and associate members with capital contribution.

9. To approve the admission or termination of the member status of official members and associate members with capital contribution under the cooperative’s or union of cooperatives’ Charter.

10. Other competences as decided by the General Meeting of Members, which however, must not be contrary to this Law and other relevant laws.

Article 71. Director under the simplified governance model

1. The Director of a cooperative or union of cooperative is the person who administers operations of the cooperative or union of cooperatives, is subject to the supervision of the General Meeting of Members, and held responsible before the General Meeting of Members and law for the performance of his/her assigned tasks and vested powers.

2. The term of office of the Director shall be specified in the Charter of the cooperative or union of cooperatives but must not exceed 5 years. The Director may be re-elected without any limit in the number of the term of office. The election, removal from office and dismissal of the Director shall be implemented by secret ballot.

3. The Director has the following tasks and powers:

a/ To submit to the General Meeting of Members contents falling under the latter’s competence;

b/ To sign the Charter of the cooperative or union of cooperatives and resolution on the establishment of the cooperative or union of cooperatives, and documents of the General Meeting of Members;

c/ To implement resolutions of the General Meeting of Members and decide on day-to-day operations affairs of the cooperative or union of cooperatives which fall beyond the competence of the General Meeting of Members; to sign contracts in the name of the cooperative or union of cooperatives in case he/she is the at-law representative as provided by the Charter of the cooperative or union of cooperatives or specified by law;

d/ To organize the implementation of production and business plans; to decide on business locations; to report to the General Meeting of Members the results of production and business activities of the cooperative or union of cooperatives and membership expansion work;

dd/ To be held responsible for joint purchase and sale of products and services for members of the cooperative or union of cooperatives;

e/ To decide on the transfer, liquidation and handling of assets of the cooperative or union of cooperatives according to his/her competence as assigned by the General Meeting of Members; to decide on the investment in, or sale of, divisible common assets of a value of lower than 20% of the total value of assets recorded in the latest financial statement of the cooperative or union of cooperatives;

g/ To manage members, and notify resolutions and decisions of the General Meeting of Members to official members and associate members with capital contribution; to admit and terminate the member status of associate members without capital contribution in accordance with this Law and the Charter of the cooperative or union of cooperatives, and submit reports thereon to the General Meeting of Members at the latter’s nearest meeting; to recruit employees; and to evaluate the performance of the Delegate Director (if any);

h/ To decide on the reward and disciplining of associate members without capital contribution and employees; to reward other organizations and individuals that make outstanding contributions to the building and development of the cooperative or union of cooperatives;

i/ To perform other tasks and exercise other powers in accordance with law and the Charter of the cooperative or union of cooperatives.

Article 72. Supervisors under the simplified governance model

1. The supervisor of a cooperative or union of cooperatives shall examine and supervise operations of the cooperative or union of cooperatives in accordance with law and Charter of the cooperative or union of cooperatives. The supervisor shall operate independently and be held responsible before the General Meeting of Members and law for the performance of his/her assigned tasks and vested powers.

2. The term of office of the supervisor shall be stipulated in the Charter of the cooperative or union of cooperative which, however, must not exceed 5 years and the supervisor may be re-elected without any limits on the number of term of office. The election, removal from office and dismissal of supervisors shall be implemented by secret ballot.

3. A supervisor has the following tasks and powers:

a/ To examine the compliance with law and observance of the Charter of the cooperative or union of cooperative, resolutions of the General Meeting of Members and regulations of the cooperative or union of cooperatives;

b/ To supervise the operations of the Director and members in accordance with law, the Charter of the cooperative or union of cooperatives, resolutions of the General Meeting of Members, and regulation of the cooperative or union of cooperatives;

c/ To examine financial activities, the observance of regulations on accounting, income distribution, handling of losses, and use of funds, assets and loans of the cooperative or union of cooperatives and the State’s supports;

d/ To appraise annual financial statements before submission to the General Meeting of Members; to organize internal auditing when necessary;

dd/ To request the provision of documents, records, and papers and necessary information for the purposes of examination and supervision; such documents, records and papers must not be used for any other purposes;

e/ To report to the General Meeting of Members on the supervisory results; and propose the Director to remedy shortcomings and violations in the operations of the cooperative or union of cooperatives;

g/ To receive proposals and settle them according to his/her competence or propose the Director or General Meeting of Members to settle them according to the latter’s competence;

h/ To prepare the agenda for, and convene  extraordinary meetings of the General Meeting of Members;

i/  To perform other tasks and exercise other powers in accordance with law and the Charter of the cooperative or union of cooperatives.

Chapter VI

ASSETS AND FINANCES OF COOPERATIVES AND UNIONS OF COOPERATIVES

Article 73. Contributed assets

1. Contributed assets must be in Vietnam dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technologies, technical know-how, and other assets and other rights that can be valuated in Vietnam dong.

2. Only individuals and organizations that are lawful owners or have the right to use the property rights and other rights over the assets specified in Clause 1 of this Article may use such assets to make capital contribution in accordance with law.

3. For assets being land use rights, means of transport and other assets, individuals and organizations may either use such assets to make capital contribution or permit cooperatives and unions of cooperatives to enjoy other rights over such assets as agreed with the cooperatives or unions of cooperatives in accordance with the law on land and civil law.

4. Members may use assets to participate in production and business activities of a cooperative or union of cooperatives under cooperation or affiliation contracts signed with the cooperative or union of cooperatives. In this case, these assets shall not be considered assets used for capital contribution and the transfer of ownership to the cooperative or union of cooperatives is not required.

Article 74. Contribution of charter capital to cooperatives and unions of cooperatives

1. Contributed capital amounts of official members to a cooperative or union of cooperative shall comply with their agreements and the provisions of this Law and  the Charter of the cooperative or union of cooperative regarding the minimum capital contribution and maximum capital contribution. The maximum capital contribution must not exceed 30% or 40% of the charter capital, for cooperatives or unions of cooperatives respectively.

2. The total contributed capital amount of all associate members with capital contribution of a cooperative or union of cooperation shall comply with their agreements and  the provisions of the Charter of the cooperative or union of cooperative but must not exceed 30% or 40% of the charter capital, for cooperatives or unions of cooperatives, respectively.

3. The total contributed amount of all members being foreign-invested economic organizations and foreign investors of a cooperative or union of cooperatives must not exceed 30% of the charter capital of the cooperative or union of cooperatives.

4. The deadline, form and level of capital contribution to the charter capital of a cooperative or union of cooperatives by a member shall  comply with the Charter of the cooperative or union of cooperatives but the member must make full contribution within 6 months from the date the cooperative or union of cooperatives is granted a cooperative registration certificate or from the date the member is admitted to the cooperative or union of cooperatives, exclusive of the time for transport or import of assets used for capital contribution and performance of administrative procedures for transfer of the ownership over such assets (if any). During this period of time, the member has the rights and obligations corresponding to the ratio of its/his/her committed contributed capital amount.

5. A member may only make capital contribution to the cooperative or union of cooperatives in assets of a type other than the committed one if so approved by the Board of Directors, for cooperatives and unions of cooperatives organized after the full governance model, or the General Meeting of Members, for cooperatives and unions of cooperatives organized after the simplified governance model.

6. Past the time limit specified Clause 4 of this Decree, members that fail to make capital contribution or fail to make full capital contribution as committed shall be handled as follows:

a/ A member that fails to make capital contribution as committed or contributes a capital amount lower than the minimum capital contribution specified in the Charter of the cooperative or union of cooperatives shall be subject to termination of the member status;

b/ A member that fails to make full capital contribution as committed but its/his/her contributed capital amount is equal to or higher than the minimum capital contribution specified in the Charter of the cooperative or union of cooperative shall have the rights corresponding to the ratio of its/his/her contributed capital amount in accordance with this Law and the Charter of the cooperative or union of cooperative.

7. Within 30 days after the deadline for making full capital contribution as committed under Clause 4 of this Article, a cooperative or union of cooperatives shall register a change in its charter capital which must be equal to the capital amount already contributed under this Law, except the case where the insufficient capital amount has been fully contributed within the specified time limit. A member who fails to make full  capital contribution as committed shall be held responsible for the financial obligations arising before it/he/she is granted a certificate of the contributed capital amount in accordance with this Law and the Charter of the cooperative or union of cooperatives, corresponding to the capital amount it/he/she has committed to contribute.

Article 75. Certificates of contributed capital amounts

1. A cooperative or union of cooperatives shall grant a certificate of contributed capital amount to each of its members and record such to the member register at the time the member makes full capital contribution.

2. A certificate of contributed capital amount must have the following principal contents:

a/ Name, identification number and address of head office of the cooperative or union of cooperatives;

b/ The charter capital of the cooperative or union of cooperatives;

c/ Full name, contact address, citizenship, personal identification number or serial number of a legal paper of the capital contributor, for individuals; name, address of head office, identification number or serial number of a legal document of the capial contributor, for organizations;

d/ The member’s contributed capital amount and its ratio in the charter capital;

dd/ The number and date of issuance of the certificate of contributed capital amount;

e/ Full name and signature of the at-law representative of the cooperative or union of cooperatives.

3. A cooperative or union of cooperatives shall re-grant a certificate of contributed capital amount in case it is lost or damaged; renew the certificate in case there is a change in its contents as specified in Clause 2 of this Article; and revoke the certificate in case the member status is terminated.

4. The order and procedures for grant, re-grant, renewal and revocation of certificates of contributed capital amounts must comply with the Charter of the cooperative or union of cooperatives.

Article 76. Transfer of assets used for capital contribution

1. The capital contribution in assets to a cooperative or union of cooperatives shall be implemented as follows:

a/ For assets subject to registration of ownership or land use rights, members shall carry out procedures for transfer of the ownership or land use rights to the cooperative or union of cooperatives in accordance with law;

b/ For assets not subject to registration of ownership, the capital contribution must be implemented by handover of assets with written certification thereof.

2. The contribution of capital to a cooperative or union of cooperatives through an agreement permitting the cooperative or union of cooperatives to enjoy other rights over an asset shall be implemented as follows:

a/ There must be a written contract on establishment of other rights over the asset between the member and the cooperative or union of cooperatives, clearly stating the duration for enjoyment of such rights in accordance with law and the Charter of the cooperative or union of cooperatives;

b/ The certificate of contributed capital amount must clearly state the duration of enjoyment of the rights;

c/ The member is not required to transfer the ownership over the asset or land use rights to the cooperative or union of cooperatives.

3. A record of handover of an asset used for capital contribution must contain the principal information:

a/ Name and address of head office of the cooperative or union of cooperatives;

b/ Full name, contact address, citizenship, personal identification number or serial number of a legal document of the capital contributor, for individuals; name, address of head office, identification number or serial number of a legal document of the capital contributor, for organizations;

c/ Type and unit number of the asset used for capital contribution; the total value of the contributed asset and its ratio in the charter capital of the cooperative or union of cooperatives;

d/ Date of handover; signatures and full names of the capital contributor, for individuals, or the proxy representative or at-law representative of the capital contributor, for individuals or organizations, and the at-law representative of the cooperative or union of cooperatives.

4. The capital contribution shall be considered completed when the ownership over the asset or land use rights or other rights over the asset is/are established for the cooperative or union of cooperatives as specified in Clauses 1 and 2 of this Article.

Article 77. Valuation of contributed assets and indivisible common assets

1. Assets used for capital contribution upon the establishment of a cooperative or union of cooperatives shall be valuated by all official members and associate members with capital contribution or valuated by a valuation organization.

In case official members and associate members with capital contribution themselves valuate assets used for capital contribution to the cooperative or union of cooperative and the value of these assets is determined as higher than their actual value at the time of capital contribution, these members shall jointly contribute a capital amount equal to the difference between the value of the assets they determine and the actual value of the assets at the time the valuation completes.

In case assets used for capital contribution are valuated by a valuation organization, their value must be approved by more than 50% of the total official members and associate members with capital contribution that attend the Founding Conference.

2. The asset used for capital contribution during the operation of a cooperative or union of cooperatives shall be valuated by the General Meeting of Members or the Board of Directors of the cooperative or union of cooperatives and the capital contributor under their agreement or by a valuation organization. In case the valuation is conducted by a valuation organization, the value of assets must be approved by the capital contributor, and the General Meeting of Members or the Board of Directors of the cooperative or union of cooperatives.

3. The valuation of indivisible common assets during operation or upon dissolution and bankruptcy of a cooperative or union of cooperatives shall be carried out by a valuation organization and approved by its General Meeting of Members or Board of Directors.

Article 78. Increase and decrease of charter capital of cooperatives and unions of cooperatives

1. The charter capital shall be increased in the following cases:

a/ Increase of the contributed capital amount of a member;

b/ Receipt of the contributed capital amount of a new member.

2. The charter capital shall be decreased in the following cases:

a/ A member fails to make capital contribution or make full capital contribution as committed though the time limit specified in Clause 4, Article 74 of this Law has expired;

b/ A cooperative or union of cooperatives returns part or the whole of contributed capital amounts to its members.

3. A cooperative or union of cooperatives shall be allowed to decrease its charter capital only when it can fully pay its debts and perform other asset-related obligations after returning contributed capital amounts to its members.

4. In case the decrease in the charter capital leads to the situation whereby the contributed capital amount of a member exceeds the maximum capital contribution, the cooperative or union of cooperatives shall take one or some of the following measures to ensure compliance with the provision of this Law and its Charter regarding the maximum capital contribution:

a/ Returning the excessive amount to the member;

b/ Mobilize additional capital from other members;

c/ Admitting new members.

Article 79. Mobilization of capital and receipt of supports, donations and aid

1. A cooperative or union of cooperatives shall prioritize the mobilization of capital from its members for making investment and developing their production and business as agreed upon with its members.

2. In case the amount of capital mobilized from its members is not sufficient to cover its needs, the cooperative or union of cooperatives shall mobilize capital from other sources in accordance with law and its Charter.

3. A cooperative or union of cooperatives receiving the State’s supports shall fulfill tax obligations in accordance with the law on enterprise income tax. The management of the State’s supports shall be implemented as follows:

a/ Supports which must be incorporated in indivisible common assets as prescribed shall be regarded as an indivisible common asset of the cooperative or union of cooperatives;

b/ Supports which must be refunded shall be incorporated in the cooperative or union of cooperatives’ debts;

c/ Supports other than those specified in Points a and b of this Clause shall be managed according to the Charter of the cooperative or union of cooperatives.

4. A cooperative or union of cooperatives may receive, manage and use lawful donations and aid from individuals and organizations under their agreements in accordance with law. The receipt, management and use of donations and aid involving foreign elements must comply with law, international agreements and treaties to which the Socialist Republic of Vietnam is a contracting party.

Article 80. Operating capital of cooperatives and unions of cooperatives

1. The operating capital of a cooperative or union of cooperatives includes the contributed capital amounts of its official members and associate members with capital contribution, membership fee, mobilized capital, accumulated capital, the indivisible common fund, other funds and other lawful revenues.

2. The management and use of the operating capital of the cooperative or union of cooperatives must comply with this Law and other relevant laws.

Article 81. Establishment of enterprises of cooperatives and unions of cooperatives

1. A cooperative or union of cooperatives may establish enterprises for the purpose of supporting its operations and for association, consumption and use of its products and services. The order and procedures for enterprise establishment must comply with the law on enterprises.

2. A cooperative or union of cooperatives shall exercise its rights and perform its obligations in the capacity of owner of the enterprise in accordance with the law on enterprises and other relevant laws.

3. Contracts and other transactions between a cooperative or union of cooperatives and the enterprise it established must be made and performed in an independent and equal manner with the same conditions as those applicable to independent legal entities.

4. The enterprise established by a cooperative or union of cooperatives may not become an official member or associate member with capital contribution of the cooperative or union of cooperatives.

5. The establishment of an enterprise by a cooperative or union of cooperatives must:

a/ Be approved by the General Meeting of Members;

b/ Not use capital from the indivisible common fund and indivisible common assets.

6. Within 10 working days after the establishment of an enterprise, the cooperative or union of cooperatives shall notify such to the agency having granted its cooperative registration certificate.

7. The Government shall specify the conditions for cooperatives and unions of cooperatives to establish enterprises.

Article 82. Contribution of capital to, and purchase of shares of, enterprises

1. A cooperative or union of cooperatives may make capital contribution to, and purchase shares of, enterprises, except those being its official members or associate members with capital contribution, for the purpose of supporting its operation, and for the association, consumption and use of its products and services.

2. A cooperative or union of cooperatives shall exercise its rights and perform its obligations in the capacity of member or shareholder of the enterprise in accordance with the law on enterprises and other relevant laws.

3. An enterprise which the cooperative or union of cooperatives makes capital contribution to, or purchase shares, may not become the latter’s official member or associate member with capital contribution.

4. The cooperative’s or union of cooperatives’ capital contribution to or share purchase of an enterprise must:

a/ Be approved by the General Meeting of Members;

b/ Not use capital from the indivisible common fund and indivisible common assets for contributing capital to, or purchasing shares of, the enterprise.

Article 83. Internal lending in cooperatives and unions of cooperatives

1. Internal lending means the provision of loans of a term of at most 12 months by a cooperative or union of cooperatives to its official members to support their production, business and life, which must carried out on a voluntary basis, adhering to the principles of self-accountability, not-for-profit purpose, ensuring capital preservation, repayment and coverage of internal lending costs. Internal lending transactions are not banking operations as provided in the law on credit institutions.

2. A cooperative or union of cooperatives may carry out internal lending activities if satisfying the following conditions:

a/ The cooperative or union of cooperatives is organized after the full governance model with a Supervisory Board of at least 3 members;

b/ The cooperative or union of cooperatives carries out internal lending activities after having allocated sufficient funds for its production and business without using capital mobilized from its members or non-member entities for internal lending;

c/ The cooperative or union of cooperatives opens a separate book for recording, monitoring and accounting internal lending activities;

d/ Internal lending activities must be approved by the General Meeting of Members and specified in the Charter of the cooperative or union of cooperatives.

3. The Government shall detail Clause 2 of this Article and provide for the lending levels and limits, lending interest rates and settlement of risks from internal lending activities.

Article 84. Indivisible common funds

The indivisible common fund of a cooperative or union of cooperatives shall be formed from the following sources:

1. Income from internal transactions annually set aside according to the ratio specified in the Charter of the cooperative or union of cooperatives;

2. Income from external transactions; income of the enterprise(s) it establishes; and income from capital contribution and share purchase set aside annually according to the ratio specified in the Charter of the cooperative or union of cooperatives but must not be lower than:

a/ 5%, for cooperatives;

b/ 10%, for unions of cooperatives.

3. Income from transfer and liquidation of indivisible common assets specified at Point a, Clause 3, Article 79, and Point c, Clause 2, Article 88 of this Law;

4. Income from lawful donations and aid of individuals and organizations in Vietnam dong or foreign currencies which are incorporated to the indivisible common fund under agreements after fulfillment of tax payment obligations in accordance with law.

Article 85. Income from internal transactions of cooperatives and unions of cooperatives

1. A cooperative or union of cooperatives shall separate income from internal transactions and income from external transactions to serve as a basis for competent state agencies to consider granting enterprise income tax exemption and reduction or enjoyment of the State’s policies under regulations, and for income distribution under Article 86 of this Law; in case of being incapable of separation, the entire income of the cooperative or union of cooperatives shall be considered being generated from external transactions.

2. The Government shall specify internal transactions and income from internal transactions of cooperatives and unions of cooperatives.

Article 86. Income distribution

After setting aside the indivisible common fund, paying taxes, fulfilling other financial obligations and settling losses in production and business activities in accordance with law, a cooperative or union of cooperatives may distribute its income as follows:

1. Setting aside funds as prescribed by law (if any);

2. Setting aside other funds as decided by the General Meeting of Members;

3. The income left after setting aside the funds specified in Clauses 1 and 2 of this Article shall be distributed to official members and associate members with capital contribution in the following order:

a/ To distribute at least 51% of the remaining income from internal transactions to official members based on their product and service usage level and labor contribution level; to distribute the remainder to official members and associate members with capital contribution based on ratios of their contributed capital amounts as stated in the Charter;

b/ To distribute the remaining income from external transactions to official members and associate members with capital contribution as stated in the Charter.

Article 87. Management and use of funds

1. The indivisible common fund of a cooperative or union of cooperatives shall be used to form and develop indivisible common assets; may not be distributed to members during operation; shall be handled when the cooperative or union of cooperatives dissolves or goes bankrupt under Articles 101 and 102 of this Law. The cooperative or union of cooperatives shall keep a book for monitoring the indivisible common fund by funding sources.

2. A cooperative or union of cooperatives may deposit idle capital from the indivisible common fund as savings amount at credit institutions and use the fund as collateral for borrowed loans but must preserve capital; particularly, the indivisible common fund formed from supports of the State and individuals and organizations may not be used as collaterals for loans. Interests arising from savings deposits shall be accounted in the indivisible common fund.

3. The management and use of the indivisible common fund and other funds of a cooperative or union of cooperatives must be specified in the Charter and regulations on financial management of the cooperative or union of cooperatives and relevant laws.

4. Every year, the Board of Directors or Director shall, within the ambit of its/his/her competence, report to the General Meeting of Members on the management and use of the funds in the year and directions for use of the funds in the following year.

Article 88. Management and use of assets

1. Assets of a cooperative or union of cooperatives shall be formed from the following sources:

a/ Contributed capital amounts of official members and associate members with capital contribution, and membership fee;

b/ Capital mobilized from members and other mobilized capital amounts;

c/ Capital and assets formed during operation;

d/ Financial supports of the State and lawful donations and aid of other organizations and individuals.

2. Indivisible common assets of a cooperative or union of cooperatives include:

a/ Land use rights for land areas allocated by the State without land use levy; land areas allocated by the State with land use levy, land areas leased by the State, land areas obtained through purchase of land-attached assets or lawful acquisition of land use rights from other entities or persons for which the land use levy or land rental, or the money amounts paid for purchase of land-attached assets or acquisition of land use rights are supported by the State;

b/ Assets formed from the indivisible common fund;

c/ Assets the formation of which is partially or wholly supported by the State which are regarded as indivisible assets under regulations;

d/ Assets lawfully donated or provided as aid by individuals and organizations, which are regarded as indivisible assets under the donation or aid agreements;

dd/ Assets being structures serving the common interests of the community which are invested, built and transferred by the State to the cooperative or union of cooperatives for management and use;

e/ Other assets treated as indivisible assets as specified by the Charter.

3. A cooperative or union of cooperatives shall manage and use its indivisible common assets according to the following principles:

a/ To manage and use assets specified in Clause 2 of this Article in accordance with law and its Charter or agreements with donors. To keep a book for monitoring indivisible common assets based on funding sources of formation.

b/ To take responsibility for protecting, regularly maintaining and repairing indivisible common assets at their own expense in the course of asset use;

c/ The cooperative or union of cooperative may transfer and liquidate its indivisible assets after the assets are valuated under Clause 3, Article 77 of this Law as long as the transfer or liquidation is approved by the General Meeting of Members and conforms with law and its Charter or the agreement with the lawful donors;

d/ The cooperative or union of cooperative may use indivisible common assets as collaterals when borrowing loans and must preserve assets, except for the indivisible common assets specified at Points a, c and dd. Clause 2 of this Article which must not be used as collaterals for borrowing loans as required by the support providers.

4. The management and use of assets of cooperatives and unions of cooperatives must comply with their Charters, resolutions of their General Meeting of Members and financial management regulations and relevant regulations.

Article 89. Settlement of losses and debts of cooperatives and unions of cooperatives

1. By the end of a fiscal year, in case of occurrence of a loss, a cooperative or union of cooperatives shall carry forward such loss in accordance with the law on tax administration.

2. Debts of a cooperative or union of cooperatives shall be settled in accordance with law and its Charter.

Article 90. Return and inheritance of contributed capital amounts

1. A cooperative or union of cooperatives shall return contributed capital amounts to a member when the member status of such member is terminated or return contributed capital amounts in excess of the maximum capital contribution specified in this Law and its Charter.

2. A member shall have its/his/her contributed capital amount returned only after fulfilling its/his/her financial obligations toward the cooperative or union of cooperatives.

3. In case an individual official member or associate member with capital contribution dies, if his/her heir satisfies the conditions specified in this Law and the Charter and voluntarily joins in the cooperative, he/she shall become an official member or associate member with capital contribution and continue to exercise the rights and perform the obligations of official members or associate members with capital contribution. If he/she does not wish to join in the cooperative, he/she will be entitled to inherit the dead member’s contributed capital amount in accordance with law.

4. In case an individual official member or associate member with capital contribution is missing, his/her asset manager shall exercise his/her rights and perform his/her obligations in accordance with the civil law.

5. In case an individual member is declared by a court to have his/her civil act capacity restricted or lost, or has difficulty in cognition and behavior control, his/her guardian or at-law representative shall exercise his/her rights and perform his/her obligations in accordance with the civil law.

6. In case an institutional member terminates its existence, is dissolved or goes bankrupt, the return of its contributed capital amount must comply with law and the Charter.

Article 91. Accounting regime

1. Cooperatives and unions of cooperatives shall perform the accounting work and make financial statements in accordance with the law on accounting.

2. Cooperatives and unions of cooperatives shall decide whether to monitor and separately account their internal and external transactions. In case a cooperative or union of cooperatives does not monitor and separately account its internal transactions, all of its transactions shall be regarded as external transactions.

3. The Minister of Finance shall provide the accounting regime applicable to cooperatives and unions of cooperatives.

Chapter VII

REORGANIZATION, DISSOLUTION AND BANKRUPTCY OF COOPERATIVES AND UNIONS OF COOPERATIVES

Article 92. Division of cooperatives and unions of cooperatives

1. A cooperative or union of cooperatives may divide its assets, rights, obligations and existing members (below referred to as the divided cooperative or union of cooperatives) to establish two or more new cooperatives and unions of cooperatives.

2. Procedures for division of a cooperative or union of cooperatives are as follows:

a/ The General Meeting of Members of the divided cooperative or union of cooperatives shall adopt a resolution on division of the cooperative or union of cooperative in accordance with this Law and its Charter.

The resolution on division of the cooperative or union of cooperatives must include the following main contents: Name and head office address of the divided cooperative or union of cooperatives; names of new cooperatives or unions of cooperatives; principles and method of, and procedures for, division of rights and assets, including also the indivisible common fund and indivisible common assets, labor use plan; method of, time limit and procedures for, transfer of contributed capital amounts of the divided cooperative or union of cooperatives to new cooperatives or unions of cooperatives; principles for settling obligations of the divided cooperative or union of cooperatives; and time limit for division of the cooperative
or union of cooperatives;

b/ Within 15 days after being adopted, the resolution on division of the cooperative or union of cooperatives shall be sent to all creditors and notified to employees and the People’s Committee of the locality where the cooperative registration certificate is granted.

c/ The registration of new cooperatives or unions of cooperatives must comply with Article 41 and Article 42 of this Law. In this case, the establishment registration dossier of a new cooperative or union of cooperatives must comprise the documents specified at Points a, b, d, dd, e and g, Clause 2, Article 42 of this Law and the resolution on division of the cooperative or union of cooperatives.

3. The divided cooperative or union of cooperatives shall terminate its existence after the new cooperatives or unions of cooperatives are granted cooperative registration certificates. The new cooperatives or unions of cooperatives shall take joint responsibility for unpaid debts, labor contracts and other obligations of the divided cooperative or union of cooperatives or reach an agreement with creditors, customers and employees for one of them to take charge of these obligations. The new cooperatives or unions of cooperatives shall naturally take over all lawful rights, obligations and benefits divided under the resolution on division of the cooperative and union of cooperatives.

4. Indivisible common assets and the indivisible common funds of the divided cooperative or union of cooperatives shall be converted into indivisible common assets and indivisible common funds of the involved cooperatives or unions of cooperatives after the division under a plan decided by the General Meeting of Members of the divided cooperative or union of cooperatives.

Article 93. Separation of cooperatives and unions of cooperatives

1. A cooperative may be separated by transferring part of its assets, rights, obligations and members (below referred to as the separated cooperative) to establish one or more than one separating cooperative. A union of cooperatives may be separated by transferring part of its assets, rights, obligations and members (below referred to as the separated union of cooperatives) to establish one or more than one separating union of cooperatives. Separated cooperatives and unions of cooperatives are not required to terminate their existence.

2. Procedures for separation of a cooperative or union of cooperatives are as follows:

a/ The General Meeting of Members of the cooperative or union of cooperatives shall approve a resolution on separation of the cooperative or union of cooperatives in accordance with this Law and the Charter.

The resolution on separation of the cooperative or union of cooperatives must include following main contents: name and head office address of the separated cooperative or union of cooperatives; name(s) of the separating cooperative(s) or union(s) of cooperatives; labor use plan; principles, methods and procedures for transfer of part of assets, rights and obligations from the separated cooperative or union of cooperatives to the separating cooperative(s) or union(s) of cooperatives, including also the indivisible common fund and indivisible common assets; and time limit for separation of the cooperative or union of cooperatives;

b/ Within 15 days after being adopted, the resolution on separation of the cooperative or union of cooperatives shall be sent to all creditors and notified to all employees and the People’s Committee of locality where the cooperative registration certificate is granted.

c/ The registration of the separating cooperative(s) or union(s) of cooperatives must comply with Articles 41 and 42 of this Law. In this case, the establishment registration dossier for a separating cooperative or union of cooperatives must comprise the documents specified at Points a, b, d, dd, e and g, Clause 2, Article 42 of this Law and the resolution on separation of the cooperative or union of cooperatives.

d/ The registration of change of contents of the cooperative registration certificate or notification of change of registration contents for the separated cooperative or union of cooperatives must comply with Articles 41, 47 and 48 of this Law. In this case, such a dossier must be enclosed with the resolution on separation of the cooperative or union of cooperatives.

3. The separated cooperative or union of cooperatives and separating cooperative(s) or union(s) of cooperatives shall take joint responsibility for unpaid debts, labor contracts and other obligations of the separated cooperative or union of cooperatives, unless otherwise agreed upon by the separated cooperative or union of cooperatives, separating cooperative(s) or union(s) of cooperatives, and the former’s creditors, customers and employees. The separating cooperative(s) or union(s) of cooperatives shall naturally take over all lawful rights, obligations and benefits divided under the resolution on separation of the cooperative and union of cooperatives.

4. Indivisible common assets and the indivisible common fund of the separated cooperative or unions of cooperative shall be converted into indivisible assets and indivisible common funds of the involved cooperatives unions of cooperatives after the separation under a plan decided by the General Meeting of Members of the separated cooperative or union of cooperatives.

Article 94. Consolidation of cooperatives and unions of cooperatives

1. Two or more cooperatives or unions of cooperatives may be consolidated (below referred to as consolidated cooperatives or unions of cooperatives) into a new cooperative or union of cooperatives of the same type (below referred to as the consolidating cooperative or union of cooperatives) and at the same time the consolidated cooperatives or unions of cooperatives shall terminate their existence.

2. Procedures for consolidation of cooperatives or unions of cooperatives are as follows:

a/ The consolidated cooperatives or unions of cooperatives shall prepare a draft consolidation contract and draft Charter of the consolidating cooperative or union of cooperatives.

The consolidation contract must include the following main contents: names and head office addresses of the consolidated cooperatives or unions of cooperatives; name and head office address of the consolidating cooperative or union of cooperatives; labor use plan; debt handling plan; time limit, procedures and conditions for transfer of assets, including the indivisible common fund and indivisible common assets; time limit and procedures for conversion of the contributed capital of the consolidated cooperatives or unions of cooperatives into that of the consolidating cooperative or union of cooperatives; and time limit for consolidation;

b/ The General Meeting of Members of consolidated cooperatives or unions of cooperatives shall approve the consolidation contract and Charter, decide on the governance model, elect the chairperson and members of the Board of Directors or Director, the head and member of the Supervisory Board or supervisor of the consolidating cooperative or union of cooperatives;

c/ Within 15 days after being approved, the consolidation contract shall be sent to all creditors and notified to all employees and the People’s Committees of the localities where the consolidating cooperatives’ or unions of cooperatives’ registration certificates have been granted.

d/ The registration of the consolidating cooperative or union of cooperatives must comply with Articles 41 and 42 of this Law. The establishment registration dossier of the consolidating cooperative or union of cooperatives must comprise the documents specified at Points a, b, d, dd, e and g, Clause 2, Article 42 of this Law, the consolidation contract and the resolution approving the consolidation of the consolidated cooperatives or unions of cooperatives.

3. The consolidating cooperative or union of cooperatives is entitled to lawful rights and interests and take responsibility for unpaid debts, labor contracts and other obligations of the consolidated cooperatives or unions of cooperatives. The consolidating cooperative or union of cooperatives shall automatically take over all lawful rights, obligations and benefits of the consolidated cooperatives and unions of cooperatives under the consolidation contract.

4. Indivisible common assets and indivisible common funds of the consolidated cooperatives or unions of cooperatives shall be converted into indivisible common assets and the indivisible common fund of the consolidating cooperative or union of cooperatives.

Article 95. Merger of cooperatives and unions of cooperatives

1. One or more than one cooperative or union of cooperatives may merge itself/themselves by transferring all lawful assets, rights, obligations and interests (below referred to as the merged cooperative(s) or union(s) of cooperatives) into another cooperative or union of cooperatives of the same type (below referred to as the merging cooperative or union of cooperatives).

2. Procedures for merging cooperatives and unions of cooperatives are as follows:

a/ The merged and merging cooperatives or unions of cooperatives shall jointly prepare a draft merger contract and draft Charter of the merging cooperative or union of cooperatives.

The merger contract must have the following main contents: name and head office address of the merging cooperative or union of cooperatives; name(s) and head office address(es) of the merged cooperative(s) or union(s) of cooperatives; labor use plan; method, procedures, time limit, and conditions for transfer of assets, including also the indivisible common fund and indivisible common assets, and conversion of the contributed capital of the merged cooperative(s) or union(s) of cooperatives to that of the merging cooperative or union of cooperatives; and time limit for merger.

b/ The General Meeting of Members of the merged and merging cooperatives or unions of cooperatives shall approve the merger contract and Charter of the merging cooperative or union of cooperatives.

c/ Within 15 days after being approved, the merger contract shall be sent to all creditors and notified to all employees and People’s Committees of the localities where the cooperative registration certificates are granted;

d/ The registration of change of contents of the cooperative registration certificate and notification of change of registration contents of cooperatives or unions of cooperatives must comply with Articles 41, 47 and 48 of this Law. In this case, a registration dossier must be enclosed with the merger contract and resolution approving the merger contract of the merged and merging cooperatives and unions of cooperatives.

3. After the merging cooperative or union of cooperatives is registered, the merged cooperative(s) or union(s) of cooperatives shall terminate its/their existence; the merging cooperative or union of cooperatives is entitled to lawful rights and benefits, and shall take responsibility for unpaid debts, labor contracts and other obligations of the merged cooperative(s) or union(s) of cooperatives. The merging cooperative or union of cooperatives shall naturally take over all lawful rights, obligations and interests of the merged cooperative(s) or union(s) of cooperatives under the merger contract.

4. Indivisible common assets and the indivisible common fund of the merged cooperative(s) or union(s) of cooperatives shall be converted into those of the merging cooperative or union of cooperatives.

Article 96. Suspension and cessation of operation, termination of business operation of cooperatives and unions of cooperatives

1. A cooperative or union of cooperatives shall notify in writing to the business registration agency within 3 working days before the date of suspension of its business operation or resumption of its business operation.

2. Business registration agencies and competent state agencies shall request cooperatives and unions of cooperatives:

a/ To suspend or terminate business operation in conditional business lines and sectors; business lines and sectors in which foreign investors are subject to conditional market access upon detecting that the cooperatives and unions of cooperatives fail to satisfy the relevant law-specified conditions;

b/ To temporarily suspend business operation at the request of competent state agencies in accordance with the laws on tax administration and environmental protection and relevant laws;

c/ To cease operation or terminate business operation in one or more than one business line or sector or in a number of fields under court rulings.

3. During the period of suspension of business operation, cooperatives and unions of cooperatives shall fully pay outstanding tax amounts and social insurance premiums; continue to pay debts, complete the performance of contracts signed with customers and employees, unless otherwise agreed upon.

4. The Government shall detail this Article.

Article 97. Cases of dissolution of cooperatives and unions of cooperatives

1. A cooperative or union of cooperatives shall carry out dissolution procedures in either of the following two cases:

a/ Voluntary dissolution under resolutions of the General Meeting of Members;

b/ Compulsory dissolution under a court ruling or when its registration certificate is revoked, unless otherwise provided by law.

2. A cooperative or union of cooperatives may only be dissolved when its capacity to pay all debts and fulfill other property obligations is secured and not being in the process of dispute resolution at court or arbitration. The at-law representative(s), chairperson and members of the Board of Directors, Director (General Director) and persons holding relevant positions in the cooperative or union of cooperatives shall take joint responsibility for debts of the cooperative or union of cooperatives, and take personal responsibility for damage caused by failure to implement or to properly implement the provisions on dissolution of this Law.

Article 98. Voluntary dissolution of cooperatives and unions of cooperatives

1. The General Meeting of Members shall adopt resolutions on dissolution of cooperatives and union of cooperatives. A resolution on dissolution of a cooperative or union of cooperatives must have the following main contents:

a/ Name and head office address of the cooperative or union of cooperatives;

b/ Dissolution reason(s);

c/ Time limit and procedures for handing over indivisible common assets and the indivisible common fund;

d/ Time limit and procedures for contract liquidation and debt payment, and debt settlement plan. The debt settlement plan must state the name(s) and address(es) of the creditor(s); debt amounts, term, location and method of debt payment; method of and time limit for resolving creditors’ complaints;

dd/ Plan on settling obligations arising from labor contracts.

2. The Board of Directors, for cooperatives or unions of cooperatives organized after the  full governance model, or the Director, for cooperatives or unions of cooperatives organized after the simplified governance model, shall directly organize the liquidation of assets of the cooperative or union of cooperatives under the resolution of the General Meeting of Members, except where it is required by the  Charter to establish a separate liquidation organization.

3. Within 7 working days after the resolution is adopted, the at-law representative of the cooperative or union of cooperatives shall:

a/ Send the dissolution resolution to the business registration agency, People’s Committee of the locality where the cooperative registration certificate is granted, concerned tax office, and employees of the cooperative or union of cooperatives;

b/ Publicly notify the dissolution resolution at the head office, branches and representative offices of the cooperative or union of cooperatives;

c/ In case there remain unsettled financial obligations, send the dissolution resolution to creditors and persons with related rights, obligations and interests.

4. The business registration agency shall notify the status of undergoing dissolution procedures of the cooperative or union of cooperatives on the electronic information system of business registration agencies, together with a notice requiring the publication of the dissolution resolution.

5. The handling of assets of the cooperative or union of cooperatives must comply with Article 101 of this Law.

6. Within 5 working days after all debts are paid, the at-law representative of the cooperative or union of cooperatives shall submit a dossier for registration of dissolution of the cooperative or unions of cooperatives to the concerned business registration agency. Before submitting the dissolution registration dossier, the cooperative or union of cooperatives shall carry out procedures for terminating operation of its branches, representative offices and business locations under regulations of the Government.

7. The business registration agency shall update the dissolution status of the cooperative of union of cooperatives on the electronic information system of business registration agencies in either of the following cases:

a/ Within 5 working days after receiving the dissolution registration dossier;

b/ Past 6 months after receiving the dissolution resolution under Point a, Clause 3 of this Article it still receives no dissolution registration dossier and written opinions of related parties.

8. The Government shall detail this Article.

Article 99. Compulsory dissolution of cooperatives and unions of cooperatives

1. The business registration agency shall notify the status of undergoing dissolution procedures of the cooperative or union of cooperatives to the People’s Committee of the locality where the cooperative registration certificate is granted and on its e-information system simultaneously with the issuance of a decision to revoke the cooperative registration certificate or immediately after receiving the legally effective court ruling on dissolution; and at the same time publish the decision on revocation of the cooperative registration certificate or the legally effective court ruling;

2. Within 10 days after receiving the decision on revocation of the cooperative registration certificate or the legally effective court ruling, the cooperative or union of cooperatives shall comply with Clauses 1, 2, 3, 5 and 6, Article 98 of this Law. The dissolution resolution under Point a, Clause 3, Article 98 of this Law shall be sent together with a copy of the decision on revocation of the cooperative registration certificate or the legally effective court ruling.

3. Past 6 months from the date of notifying the status of undergoing dissolution procedures of the cooperative or union of cooperatives under Clause 1 of this Article, if receiving no written objection from related parties, or within 5 working days after receiving of the dissolution registration dossier, the business registration agency shall update the dissolution status of the cooperative or union of cooperatives on its e-information system.

4. The Government shall detail this Article.

Article 100. Prohibited acts in the dissolution of cooperatives and unions of cooperatives

1. From the date of issuance of a dissolution resolution, decision on revocation of the cooperative registration certificate or the court ruling on dissolution, the at-law representative, chairperson of the Board of Directors, other members of the Board of Directors, Director (General Director), and members of the cooperative or union of cooperatives may not:

a/ Conceal or disperse assets;

b/ Waive or lessen the right to claim debts;

c/ Convert unsecured debts into debts secured with assets of the cooperative or union of cooperatives;

d/ Enter into new contracts, except those for the purpose of dissolution of the cooperative or union of cooperatives;

dd/ Make a pledge or mortgage, or donate or lease out assets;

e/ Terminate the performance of contracts that have taken effect;

g/ Raise capital in any form.

2. Depending on the nature and severity of their violations, persons who violate Clause 1 of this Article shall be administratively sanctioned or examined for penal liability; and pay compensations for any damage caused to their cooperatives and unions of cooperatives in accordance with law.

Article 101. Handling of assets of cooperatives and unions of cooperatives upon their dissolution

1. Upon their dissolution, cooperatives and unions of cooperatives shall recover and handle their indivisible common funds and indivisible common assets; recover other assets; and transfer and liquidate assets;

 2. Upon their dissolution, indivisible common funds of cooperatives and unions of cooperatives shall be handled on the following principles:

a/ Indivisible common funds formed from proceeds from the transfer and liquidation of indivisible common assets partially or fully supported by the State shall be remitted into the state budget;

b/ Indivisible common funds specified in Clause 4, Article 84 of this Law shall be handled under agreements between lawful individual or institutional donors and cooperatives or unions of cooperatives. In case of no agreement, Clauses 4 and 5 of this Article will be complied with;

c/ Indivisible common funds specified in Clauses 1 and 2, Article 84 of this Law shall be handled under Clauses 4 and 5 of this Article.

3. Indivisible common assets of cooperatives and unions of cooperatives upon their dissolution shall be handled on the following principles:

a/ Indivisible common assets specified at Points a, c and dd, Clause 2, Article 88 of this Law shall be transferred to competent state management agencies for handling based on their sources of formation in accordance with law;

b/ Indivisible common assets specified at Point d, Clause 2, Article 88 of this Law shall be handled under agreements between lawful individual or institutional donors and cooperatives or unions of cooperatives. In case of no agreement, Clauses 4 and 5 of this Article will be complied with;

c/ Indivisible common assets specified at Points b and e, Clause 2, Article 88 of this Law shall be handled under Clauses 4 and 5 of this Article.

4. Assets remaining after the dissolution shall be used according to the following order of priority:

a/ For payment of dissolution expenses, including expenses for the recovery, valuation and liquidation of assets;

b/ For payment of unpaid salaries, severance allowance, social insurance premiums in accordance with law, and other benefits for employees under signed collective labor agreements and labor contracts;

c/ For payment of tax debts;

d/ For payment of other debts.

5. After the division of assets under Clause 4 of this Article, remaining assets shall be divided to official members and associate members with capital contribution according to their capital contribution ratios.

6. The Government shall detail this Article.

Article 102. Bankruptcy of cooperatives and unions of cooperatives

1. Procedures for bankruptcy of cooperatives and unions of cooperatives must comply with the law on bankruptcy.

2. Indivisible common funds and indivisible common assets of cooperatives and unions of cooperatives upon their bankruptcy shall be handled in the same way as handling of indivisible common funds and indivisible common assets of cooperatives and unions of cooperatives upon their dissolution under Article 101 of this Law.

Article 103. Revocation of cooperative registration certificates

1. A cooperative or union of cooperatives may have its cooperative registration certificate revoked in the following cases:

a/ Contents declared in its registration dossier are false;

b/ It has ceased operation for more than 12 months without notifying such to the business registration agency and tax office;

c/ It fails to send reports on the compliance with this Law within 12 months form the date of receiving the request of the business registration agency;

d/ It fails to satisfy the condition on the minimum number of members for 12 consecutive months; it fails to satisfy the condition on the maximum number of members being foreign-invested economic organizations or individual foreign investors specified in this Law for 6 consecutive months;

dd/ It fails to satisfy the condition on the maximum capital contribution of members specified in this Law for 12 consecutive months;

e/ It fails to hold the annual General Meeting of Members for 18 consecutive months from the time of the latest General Meeting of Members, except for force majeure events;

g/ Under a court ruling or at the request of a competent state agency in accordance with relevant regulations.

2. The Government shall specify order and procedures for revocation of cooperative registration certificates.

Article 104. Termination of operation of branches, representative offices and business locations

1. A branch or representative office of a cooperative or union of cooperatives shall terminate its operation in the following cases:

a/ The cooperative or union of cooperatives decides to terminate the operation of such branch or representative office;

b/ The cooperative or union of cooperatives has the operation registration certificate of such branch or representative office revoked under regulations;

2. A business location of a cooperative or union of cooperatives shall terminate its operation under the decision of the Director (Director General) of the cooperative or union of cooperatives.

3. The at-law representative of a cooperative or union of cooperatives and the head of a branch or representative office subject to operation termination shall be jointly responsible for truthfulness and accuracy of the dossier for termination of operation of the branch, representative office or business location.

4. A cooperative or union of cooperatives with one of its branches having terminated operation shall perform contracts, pay debts, including outstanding tax debts, of such branch, and continue to employ employees or to fully settle lawful benefits for employees who have worked for such branch in accordance with law.

5. The Government shall detail this Article.

Chapter VIII

AUDIT OF COOPERATIVES AND UNIONS OF COOPERATIVES

Article 105. Internal audit

1. Cooperatives and unions of cooperatives operating in the fields of finance and banking shall organize internal audit in accordance with the Law on Credit Institutions.

2. The State encourages cooperatives and unions of cooperatives not operating in the fields specified in Clause 1 of this Article to organize internal audit in accordance with the law on internal audit.

Article 106. Independent audit

1. The following cooperatives and unions of cooperatives shall have their annual financial statements audited by independent audit firms:

a/ Large-sized cooperatives;

b/ Unions of cooperatives having 10 members or more each;

c/ Cooperatives and unions of cooperatives requesting to be entitled to the State’s preferential and support policies in accordance with such policies;

d/ Cooperative development support funds operating as cooperatives.

2. Frequency of independent audit of financial statements

a/ Cooperatives and unions of cooperatives specified at Points a and b, Clause 1 of this Article shall have their financial statements audited as frequently as stated in their charters but at least once every 2 years;

b/ Cooperatives and unions of cooperatives specified at Point c, Clause 1 of this Article shall comply with provisions of their charters, regulations of competent state agencies and relevant regulations;

c/ Cooperatives and unions of cooperatives specified at Point d, Clause 1 of this Article shall have their financial statements audited on an annual basis.

3. Cooperatives and unions of cooperatives shall organize compliance audit and operational audit at the request of the General Meeting of Members or of competent state agencies.

Chapter IX

COOPERATION GROUPS

Article 107. Establishment and operation of cooperative groups

1. Cooperative groups shall be established and organized and operate on the basis of cooperation contracts in accordance with the civil law.

2. Cooperative groups that have capital contributions and indefinite-term cooperation contracts or cooperation contracts of a term of 12 months or more, or cooperative groups wishing to be entitled to the State’s preferential and support policies shall make registration at business registration agencies; to encourage other cooperative groups to make registration.

3. Cooperative groups have the following rights:

a/ To have their own names;

b/ To do business in business lines and sectors not banned by law; to carry out business activities in law-specified conditional business lines and sectors;

c/ To enter into business cooperation with organizations and individuals for expansion of their production and business activities in accordance with law;

d/ To open and use payment accounts at payment service providers in accordance with relevant regulations;

dd/ To establish and perform civil transactions;

e/ To be entitled to the State’s preferential and support policies when fully satisfying the law-specified conditions;

g/ Other rights as specified by law and cooperation contracts.

4. Cooperative groups have the following obligations:

a/ To ensure lawful and legitimate rights and interests of their members, employees, and related individuals and organizations;

b/ To fully and promptly perform obligations toward their members, and related individuals and organizations;

c/ Other obligations specified by law and cooperation contracts.

5. The Government shall detail Clauses 1, 2, 3 and 4 of this Article.

6. The Minister of Planning and Investment shall promulgate forms for carrying out procedures for cooperative group registration.

Article 108. Transformation of cooperative groups into cooperatives

1. A cooperative group may be transformed into a cooperative if fully satisfying the following conditions:

a/ Having a cooperative group registration certificate;

b/ Having operated for at least 12 consecutive months from the date of grant of its cooperative group registration certificate;

c/ Obtaining approval of all members.

2. The establishment of cooperatives on the basis of transformation from cooperative groups must comply with this Law’s provisions on establishment of cooperatives.

3. Cooperatives established on the basis of transformation from cooperative groups may take over the latter’s rights and obligations from the date cooperative registration certificates are granted.

Article 109. Support policies for cooperative groups transformed into cooperatives

1. Business registration agencies shall provide free consultancy and guidance on dossiers and procedures for transformation of cooperative groups into cooperatives.

2. Free consultancy and guidance on tax-related administrative procedures and accounting regimes may be provided within 3 years from the date of first-time grant of cooperative registration certificates under the Government’s regulations.

3. The fee for first-time grant of cooperative registration certificates, the appraisal charge and fee for first-time grant of business licenses for conditional business lines and sectors, the license fee may be exempt for 3 years from the date of first-time grant of cooperative registration certificates.

4. Enterprise income tax exemption or reduction may be given to cooperatives transformed from cooperative groups in accordance with the law on enterprise income tax.

5. Land use levy may be given for cooperatives transformed from cooperative groups in accordance with the land law.

Chapter X

REPRESENTATIVE ORGANIZATIONS OF COOPERATIVE GROUPS, COOPERATIVES AND UNIONS OF COOPERATIVES

Article 110. Representative organizations of cooperative groups, cooperatives and unions of cooperatives

1. Representative organizations of cooperative groups, cooperatives and unions of cooperatives shall be established and organized and operate in accordance with the law on associations and relevant laws.

2. Representative organizations of cooperative groups, cooperatives and unions of cooperatives have the following tasks:

a/ To represent their members and protect their lawful rights and interests;

b/ To publicly communicate, guide, share information on, and urge the implementation of, the State’s policies on development of cooperative groups, cooperatives and unions of cooperatives;

c/ To provide consultancy, support, services, human resource training and retraining for the establishment and development of cooperative groups, cooperatives and unions of cooperatives;

d/ To implement programs, projects and public services assigned to them to support the development of cooperative groups, cooperatives and unions of cooperative;

dd/ To participate in the formulation of policies and laws on cooperative groups, cooperatives and unions of cooperatives;

e/ To represent their members in coordinative relations with domestic and foreign organizations in accordance with law;

g/ To carry out risk assessment, and provide consultation and support to increase transparency of the financial management, ensure compliance with law in operation and improve production and business efficiency of cooperative groups, cooperatives and unions of cooperatives;

h/ To evaluate the operation efficiency and economic, social and cultural contributions of cooperative groups, cooperatives, unions of cooperatives and their members.

3. The State shall provide financial support for operation of representative organizations in association with their tasks assigned by the State.

4. To encourage cooperative groups, cooperatives and unions of cooperatives to become members of their representative organizations.

Article 111. The Vietnam cooperative alliance system

1. The Vietnam cooperative alliance system means representative organizations of cooperative groups, cooperatives and unions of cooperatives, protecting the latter’s lawful rights and interests and playing the core role in the promotion of development of the collective economy.

2. The Vietnam cooperative alliance system consists of the Vietnam Cooperative Alliance established at the central level and provincial-level cooperative alliances established in provinces and centrally run cities. The Charter of the Vietnam Cooperative Alliance must be adopted by its General Meeting and approved by the Prime Minister. The charter of a provincial-level cooperative alliance must be adopted by its General Meeting and approved by the chairperson of the provincial-level People’s Committee. Contents, form and effect of charters of provincial-level cooperative alliances must be consistent with the Charter of the Vietnam Cooperative Alliance.

3. The Vietnam cooperative alliance system has the following tasks:

a/ To perform the tasks of representative organizations specified in Clause 2, Article 110 of this Law;

b/ To protect lawful rights and interests of cooperative groups, cooperatives and unions of cooperatives that are not their members;

c/ Other tasks assigned by the State.

4. The State shall support and create favorable conditions for the Vietnam cooperative alliance system to perform its assigned tasks.

Chapter XI

STATE MANAGEMENT OF COOPERATIVE GROUPS, COOPERATIVES AND UNIONS OF COOPERATIVES

Article 112. Main activities involved in the state management

1. Formulating, and organizing the implementation of, strategies, plans, programs and schemes on development of cooperative groups, cooperatives and unions of cooperatives nationwide and in each sector, field, region or locality.

2. To formulate, promulgate, publicly communicate, disseminate, guide, and organize the implementation of, legal documents, mechanisms, policies, and solutions related to the development of cooperative groups, cooperatives and unions of cooperatives.

3. To inspect and examine the implementation of laws by cooperative groups, cooperatives and unions of cooperatives; to handle their violations in accordance with law.

4. To carry out international cooperation for the development of cooperative groups, cooperatives and unions of cooperatives.

5. To build, manage and operate the National Information System on Cooperatives.

Article 113. Responsibilities of state management agencies

1. The Government shall perform the unified state management of cooperative groups, cooperatives and unions of cooperatives nationwide.

2. The Ministry of Planning and Investment shall act as the focal agency assisting the Government in the state management of cooperative groups, cooperatives and unions of cooperatives.

3. Ministries and ministerial-level agencies shall, within the ambit of their tasks and powers, perform the state management of cooperative groups, cooperatives and unions of cooperatives in accordance with law.

4. People’s Committees at all levels shall perform the state management of cooperative groups, cooperatives and unions of cooperatives according to their competence, and implement measures to develop cooperative groups, cooperatives and unions of cooperatives under local socio-economic development programs.

5. Ministries, ministerial-level agencies and related agencies and People’s Committees at all levels shall, within the ambit of their tasks and powers, connect, ensure interconnectivity of, and share information with, the National Information System on Cooperatives.

6. State management agencies shall coordinate with the Vietnam Fatherland Front and its member organizations, representative organizations, the Vietnam cooperative alliance system and other organizations in publicly communicating, disseminating, and organizing the implementation of, the law on cooperative groups, cooperatives and unions of cooperatives; and implement programs and projects on development of cooperative groups, cooperatives and unions of cooperatives.

Chapter XII

IMPLEMENTATION PROVISIONS

Article 114. Implementation provisions

1. This Law takes effect on July 1, 2024, except Clause 2 of this Article.

2. Clauses 3 and 4, Article 115 of this Law take effect on September 1, 2023.

3. Cooperative Law No. 23/2012/QH13 ceases to be effective from the effective date of this Law, except Clause 5, Article 115 of this Law.

4. Pending the connection of the National Population Database to the database on registration of cooperative groups, cooperatives and unions of cooperatives, individual Vietnamese citizens may use copies of legal papers in substitution for their personal identification numbers upon carrying out administrative procedures in accordance with this Law.

Article 115. Transitional provisions

1. Cooperatives and unions of cooperatives that are established before the effective date of this Law and are organized and operate not in contravention of this Law may continue to operate without having to make re-registration. In case the charter of a cooperative or union is inconsistent with this Law, it shall be amended or supplemented within 18 months from the effective date of this Law.

2. Cooperative groups that are established before the effective date of this Law and are subject to registration under Clause 2, Article 107 of this Law shall make registration in accordance with this Law within 18 months from its effective date.

3. Cooperatives and unions of cooperatives shall terminate internal credit activities as specified in Cooperative Law No. 23/2012/QH13 on September 1, 2023. For internal credit contracts signed before September 1, 2023, contracting parties may continue to exercise their rights and perform their obligations under such contracts but may not extend them.

4. From September 1, 2023, cooperatives that have established enterprises, contributed capital or purchased shares, and enterprises established, having contributed capital to, or purchased shares from, these cooperatives that are their members may not increase their capital contribution ratios or shares; and within 24 months from September 1, 2023, they shall apply Articles 81 and 82 of this Law.

5. The State’s policies on cooperatives and unions of cooperatives promulgated under Cooperative Law No. 23/2012/QH13 may be further implemented until they expire or superseding or annulling documents are issued.

This Law was passed on June 20, 2023, by the 15^th National Assembly of the Socialist Republic of Vietnam at its 5^th session.-

Chairman of the National Assembly
VUONG DINH HUE