LEARNING ENGLISH WITH FDVN'S NEWSLETTER NO. 03/2021

THE PROCESS OF HAVING AUTONOMY FOR ENTERPRISE WITH ITS OWN “SEAL” – PART 1

HÀNH TRÌNH DOANH NGHIỆP ĐƯỢC TỰ CHỦ VỚI “CON DẤU” CỦA MÌNH – PHẦN 1

(Lawyer Mai Quoc Viet – FDVN’s Newsletter No. 4)

I. VOCABULARY IN USE:

“In the morning of June 17, 2020, with 90.68 percent of votes from National Assembly deputies (đại biểu Quốc Hội), the National Assembly has approved the Law on Enterprise 2020 (LDN 2020), which will take effect on January 1, 2021. Compared with the Law on Enterprises 2014 (current), LDN 2020 has some changes, in which state agencies gradually renounce their binding to have autonomy for enterprises in using their own seals.”

From mindset for managing all

The provisions from the  Private Enterprise Law 1990, the Enterprise Law 1999  and the  Enterprise Law 2005 prove that Vietnam has already begun slow-moving steps of innovation, market opening. The thought of “centralized economy” (kinh tế tập trung), and that the state participates in economic management activities everywhere, including the private sector (khối doanh nghiệp tư nhân), still exists. Therefore, the state strictly regulates the management and use of the seal (con dấu), considering the seal as an important object, for instance, Article 8 of Decree No. 58/2001/ND-CP on the management and use of seals stipulates as follows: “The Ministry of Public Security shall uniformly prescribe the specimens of seals of all types and the engraving of symbols or foreign languages on seals; grant seal engraving permits (giấy phép khắc dấu), keep seal specimens and grant seal specimen registration certificates (giấy chứng nhận đăng ký mẫu dấu); manage the seal engraving activities; inspect the management and use of seals and carry out (thực hiện) other works according to the provisions of this Decree”

Afterwards, according to Article 36 of the Enterprise Law 2005 about the enterprise's seal:

“1. Every enterprise shall have its own seal. Enterprises must keep and preserve their seals at their head offices. The design and contents of seals, conditions for making seals and regulations on (quy định về) seal usage shall comply with (tuân thủ) regulations of the Government.

2. Seal is a property of an enterprise. The representative-at-law (đại diện theo pháp luật) of an enterprise must be responsible for managing the use of its seal in accordance with the provisions of law. In case of necessity, an enterprise can have a duplicate of its seal if it obtains approval (sự chấp thuận) from the seal-issuing agency.”

 Accordingly, the seal is the property of enterprise, but the enterprise must register with the police agency, in order to use a second seal, the consent of the seal issuer (the Police) is required. Thus, the seal from an information logger of the enterprise (such as the enterprise name, the enterprise number) becomes an object showing the legal position and affirming the legal validity (giá trị pháp lý) of the documents and papers of the enterprise, agencies, organizations and businesses

Perhaps, the regulators think that it is necessary to strictly manage the seal to avoid objects using the seal for infringing purposes, or to rely on the seal to identify legitimate transactions (giao dịch hợp pháp). With this management, the state controls from the beginning, however, with the enhancement of legal value, if the seal is managed so strictly, it also causes barriers to the business operation of the enterprise. Because an enterprise has only one seal, if it requests for more, it must be really necessary and must get the approval of the seal issuer. Thereby, if the issuer does not accept, the enterprise may not engrave or use additional seals. Therefore, the inanimate seal naturally becomes a hindrance to the normal operation of the enterprise, the belief in the existence of the enterprise in the arising transactions is based on the seal, and the lack of a seal is considered as no implementation in business activities, no means to establish relevant legal relations. This issue also leads to many disputes and lawsuits related to the seal, but if opening space in the management and use of the seal, these unnecessary disputes do not arise.

Typically, an internal dispute (tranh chấp nội bộ) related to the seal that has been criminalized (hình sự hóa). Accordingly, in the 2000s, when the Huu Nghi Joint Stock Company (Hanoi) was equitized, internal conflicts and disputes arose. A group of shareholders (cổ đông) convened the General Meeting of Shareholders to remove the old Board of Directors (Hội đồng quản trị) and elect a new BOD. The parties brought the dispute to the Court and the letter throughout the agencies.

 Thereafter at the end of 2005, the People's Committee (Ủy ban nhân dân) of Hanoi issued a document recognizing the new Board of Directors and requesting the old BOD to hand over the seal to the new BOD. The old Board of Directors did not accept and file a complaint (khiếu nại). The dispute led to a climax when the police agency decided to prosecute the case (khởi tố vụ án) of "Appropriation of the seal" under the provisions of Article 268 of the Penal Code (Bộ luật Hình sự); ordered an urgent search to confiscate the seal, business registration certificate and all documents related to the legal status (tư cách pháp lý) of the Company. After a period of investigation, the case is suspended. In the early July 2019, Standing Deputy Prime Minister (Phó Thủ tướng thường trực) Truong Hoa Binh asked to re-examine the settlement process of the above mentioned "criminalization of the seal" case.

II. EXPLANATION AND DEMONSTRATION:

1. Name of some Laws and authorities:

2. representative-at-law = legal representative (compound noun): đại diện theo pháp luật

3. legal value = legal validity (compound noun): giá trị pháp lý

4. shareholder (n): cổ đông

general partner (compound noun): thành viên hợp danh

capital contributors (compound noun): thành viên góp vốn

5. Board of Directors: Hội đồng quản trị

6. Member Council/Board of members: Hội đồng thành viên

7. prosecute the case = file of criminal charges (v): khởi tố vụ án (hình sự)

Decision on filing criminal charges: Quyết định khởi tố vụ án hình sự

Decision on filing charges against suspects: Quyết định khởi tố bị can

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