DECREES:

Article 1.- Objects of regulation

This Decree applies to the following forms of enterprises:

1. Limited liability companies, joint-stock companies, partnerships and private enterprises established under the provisions of the Law on Enterprises;

2. Limited liability companies, joint-stock companies, and private enterprises which have been established and operated under the provisions of the Law on Companies and the Law on Private Enterprises of December 21, 1990, and the Law amending and supplementing a number of articles of the Law on Companies, the Law amending and supplementing a number of articles of the Law on Private Enterprises of June 22, 1994;

3. The joint-stock companies set up from the equitization of State enterprises;

4. The joint-stock companies set up from the equitization of enterprises of the Party and enterprises of socio-political organizations;

5. The limited liability companies set up from the conversion of State enterprises;

6. The limited liability companies set up from the conversion of enterprises of the Party and enterprises of socio-political organizations.

Article 2.- Application of specialized laws

In case of disparity between the stipulations of the Law on Enterprises and those of the following specialized laws on the establishment, managerial organization and operation of the limited liability companies, joint-stock companies, partnerships and private enterprises, the provisions of the specialized laws shall apply:

1. The Law on Credit Institutions of December 12, 1997;

2. The Law on Minerals of March 20, 1996;

3. The Petroleum Law of July 6, 1993;

4. The Law on Water Resources of May 20, 1998;

5. The Law on Vietnam Civil Aviation of December 26, 1991; the Law amending and supplementing a number of articles of the Law on Vietnam Civil Aviation of April 20, 1995;

6. The Law on Publication of July 7,1993;

7. The Press Law of December 28, 1989; the Law amending and supplementing a number of articles of the Press Law of June 12,1999;

8. The Education Law of December 2, 1998;

9. The Maritime Code of June 30, 1990;

10. Other specialized laws or the laws amending and supplementing the specialized laws which are adopted after this Decree takes effect.

Article 3.- Lines banned from business

1. List of lines banned from business:

a/ Trading in weapons, ammunition, army uniforms and outfits and special-use military technical means of the armed forces;

b/ Trading in explosives, toxic and radioactive matters;

c/ Trading in narcotics;

d/ Trading in prostitution, sex procurement, trafficking in women and children;

e/ Providing gambling and places for gambling;

f/ Trading in chemicals of high toxicity;

g/ Trading in articles of historical, cultural and museum relics;

h/ Trading in reactionary, depraved, superstitious cultural products or products detrimental to ethical education;

i/ Trading in fireworks of all types;

j/ Trading in plants and wild animals listed in the international agreements which Vietnam has signed or acceded to, and other rare and precious species of animals and plants which need to be protected;

k/ Trading in toys harmful to ethical education and the health of children or which affect public security and social order and safety.

2. The Ministry of Industry and the Ministry of Science, Technology and Environment shall submit to the Government for issuance a detailed list of explosives, toxic substances, radioactive matters and chemicals of high toxicity stipulated at Point b and Point f, Clause 1 of this Article.

The Ministry of Public Security shall submit to the Government for issuance a detailed list of narcotics stipulated at Point c, Clause 1 of this Article.

The Ministry of Culture and Information shall submit to the Government for issuance a detailed list of articles in the group of historical, cultural and museum relics stipulated at Point g and a detailed list of reactionary, depraved and superstitious cultural products or products detrimental to ethical education as stipulated at Point h, Clause 1 of this Article.

The Ministry of Agriculture and Rural Development shall submit to the Government for issuance a detailed list of plants and wild animals listed in the international agreements which Vietnam has signed or acceded to and other endangered species of plants and animals that need to be protected as stipulated at Point j, Clause 1 of this Article.

The Ministry of Education and Training shall submit to the Government for issuance a detailed list of toys harmful to ethical education and the health of children or which affect public security and social order and safety as stipulated at Point 1, Clause 1 of this Article.

The ministries shall submit to the Government the detailed lists mentioned in this Clause within sixty days after this Decree takes effect.

Article 4.- Lines of business subject to conditions

1. The lines of business subject to conditions and their conditions of business shall conform with the stipulations of relevant laws, ordinances or decrees. The business conditions are stipulated in the two following forms:

a/ Business licenses issued by competent State agencies;

b/ Regulations on environmental hygiene criteria, food security hygiene; regulations on prevention and fight against fires, on social order, traffic security and on other requirements for business operations (hereafter commonly called business conditions without need of license).

The legal documents issued by the ministries, branches or different levels of the local administration which are not based on laws, ordinances or decrees concerning the lines of business subject to conditions and the business conditions of these lines shall not have implementation effect.

2. If an enterprise is set up to conduct business in lines of business subject to conditions, when it registers for business, the business registration agency must inform and guide the founder of the enterprise of the business conditions of these lines.

If the enterprise registers for supplement or alteration to the line of business subject to conditions, when it registers for supplement or alteration to the business line, the business registration agency must inform and guide the enterprise of the business conditions of that line.

3. For the lines of business requiring business licenses, the enterprise is entitled to conduct business in such line after it is granted the business license.

For the lines of business subject to conditions without need of license, the enterprise may conduct business in such line after it gathers all the conditions for business as stipulated and commits itself to fulfill these conditions throughout the process of business operation.

The founder of the enterprise and the legal representative of the enterprise are responsible for the correct fulfillment of the business conditions as prescribed. If the enterprise conducts business without all the prescribed conditions, the founder and the legal representative of the enterprise must jointly take responsibility before law for this business.

Article 5.- Lines of business requiring legal capital

1. A line of business must have a legal capital. The concrete level of this capital, the competent State management agency on legal capital, the agency competent to certify and the modalities for certifying the legal capital shall be determined according to the law, ordinance and decree on legal capital.

2. The legal representative of the enterprise is answerable for the truthfulness and accuracy of the capital certified at the time of founding and during the process of business operation of the enterprise.

3. The head of the agency with the competence to exercise State management over legal capital and the head of the agency certifying the legal capital shall be jointly responsible for the accuracy of the capital certified at the time of the founding of the enterprise.

Article 6.- Lines of business requiring practicing certificate

1. The practicing certificate stipulated in Clause 4, Article 6 of the Law on Enterprises is a document granted by the competent State agency or the professional association only to an individual with necessary specialization and professional experience in a given line.

All the practicing certificates that have been granted to organizations now cease to be effective.

2. The following lines of business must have a practicing certificate:

a/ Legal service ;

b/ Medical examination and treatment service and pharmaceuticals business.

c/ Service of veterinary examination and treatment and veterinary medicaments business;

d/ Construction designing service;

e/ Auditing service ;

f/ Stock brokerage service.

3. For the enterprises dealing in the lines stipulated in Clause 2 of this Article, the business registration must also include the conditions on the practicing certificate as prescribed below:

a/ For a limited liability company or joint-stock company, one of the managers of the enterprise as stipulated in Clause 12, Article 3 of the Law on Enterprises must have a practicing certificate;

b/ For a partnership, all the members of the partnership must have their practicing certificates;

c/ For a private enterprise, the enterprise owner or managing director must have a practicing certificate.

Article 7.- Right to register business lines

The enterprise may take the initiative in registering and begin its business without having to ask permission from any State agency if the line of business:

1. Is not among the lines banned from business;

2. Is not among the lines requiring business license;

3. Is not among the business lines requiring a legal capital;

4. Is not among the business lines requiring a practicing certificate.

Article 8.- Right to found an enterprise

1. All organizations regardless of the place of registration of their head office, all individuals regardless of their place of residence, if they are not a subject prohibited from founding an enterprise as stipulated in Article 9 of the Law on Enterprises, have the right to found an enterprise in Vietnam as provided for by the Law on Enterprises.

2. Vietnamese having settled abroad and foreigners who have their permanent residence in Vietnam are entitled to found enterprises in Vietnam as stipulated by the Law on Enterprises.

Article 9.- Persons prohibited from founding an enterprise and contributing capital to the enterprise

1. Organizations and individuals stipulated in Clauses from 1 to 8 of Article 9 of the Law on Enterprises are not allowed to found enterprises in Vietnam.

2. State agencies and units of the people�s armed forces are strictly forbidden to use State assets and public fund to establish enterprises or to contribute capital to enterprises to make profits for their agency or unit.

3. State assets and public funds stipulated in Clause 2 of this Article comprise:

a/ Assets purchased with State budget fund;

b/ Expenditures allocated by the State budget;

c/ Land assigned for use in the fulfillment of the functions and tasks stipulated by law;

d/ Assets and other revenues generated by the use of the assets and expenditures mentioned above.

4. Making profits for one�s own agency or unit is the act of using profits gained from the business of the enterprise or from the contributed capital for one of the following objectives:

a/ Distribution in any form to a number or all of the personnel of the agency or unit;

b/ To supplement the operating budget of the agency or unit in contravention of prescriptions of legislation on budget;

c/ To set up or supplement the fund in service of the interests of the personnel of the agency or unit.

5. Leading officials and professional management officials in a State enterprise stipulated in Clause 4, Article 9 of the Law on Enterprises comprise members of the Management Board, the General Director, Deputy General Director, Directors, Deputy Directors, chief accountants, members of the Control Board, heads and deputy heads of the professional departments or sections, heads of the branches and representative offices of the enterprise.

6. Leading officials and professional officials in a State enterprise are entitled to be the manager of another enterprise in their capacity as authorized representation of a State enterprise or competent State agency or, in their personal name to contribute capital to another enterprise but not work as the manager of such enterprise.

Article 10.- The company Charter

1. The company Charter is the written commitment of all members on the founding, managerial organization and operations of the company.

The first Charter of a limited liability company must be approved by all its founding shareholders.

The first Charter of a joint-stock company must be approved by all its founding members.

The Charter of a partnership must be approved by all partnership members.

The content of a company Charter must not be contrary to the stipulations of the Law on Enterprises and other relevant legal documents.

2. The Charter of a limited liability company must have the following contents:

a/ Name and address of the head office of the company; address of its branches and representative offices (if any);

b/ Objective and lines of business;

c/ The Charter capital;

d/ Names and addresses of the members, the capital amount contributed by each member, for limited liability companies having two and more members; name and address of the company owner, for one-member limited liability companies);

e/ Rights and obligations of members or owner of the company;

f/ Structure of management and control organization (if any);

g/ Rights, obligations and modalities for adopting a decision of each unit within the organizational and managerial organization of the company;

h/ Rights, obligations and working regime of the Control Board and the Head of the Control Board, for limited liability companies having more than eleven members;

i/ The legal representative of the company;

j/ Principle of settling disputes among members;

k/ Cases where members have the right to ask the company to buy back their contributed capital;

l/ Principle of distributing the profits, for companies having more than two members, principle of using the profits, for one-member companies;

m/ Cases of dissolution and procedures for liquidating assets of the company;

n/ Modalities for amending and supplementing the company Charter;

o/ Signatures of all members of the company or signature of the company owner.

The members may agree or the company owner may decide to inscribe other contents on the company Charter.

3. The Charter of a joint-stock company must have the following contents:

a/ Name and address of the head office of the company; addresses of the branches or representative offices (if any).

b/ Objectives and lines of business;

c/ Charter capital, types of share, total of shares of each type eligible for offer for sale, denominations of the shares;

d/ Rights and obligations of each type of shareholder;

e/ Cases where shareholders have the right to ask the company to buy back their shares;

f/ Structure of management and control organization of the company (if any).

g/ Rights, obligations and working regime of each unit in the structure of management organization of the company and of the Control Board and the Head of the Control Board;

h/ The legal representative of the company;

i/ Types of fund, the limit of each type of fund to be set up in the company;

j/ Principle of paying dividend;

k/ Principle of settling internal disputes;

l/ Modalities for amending or supplementing the company charter;

m/ Cases of dissolution, order and procedures for liquidation of the company assets;

n/ Signatures of all founding shareholders or signature of the legal representative of the company.

The shareholders may agree to inscribe other contents on the company Charter.

4. The partnership Charter must have the following contents:

a/ Name, address of the head office of the company; addresses of the branches and representative offices (if any);

b/ Objectives and lines of business;

c/ Names and addresses of all partnership members;

d/ Names and addresses of all capital contributing members (if any);

e/ Rights and obligations of each type of members;

f/ Charter capital and capital amount contributed by each member;

g/ Organizational and management structure of the company;

h/ Principle of coordination of work and allocation of powers and responsibilities in the organizational and management structure of the company;

i/ Modalities for adopting decisions of the company;

j/ Forbiddances or restrictions for partnership members;

k/ Cases where members have the right to withdraw from the company or may be dismissed from the company;

l/ Principle of distributing profits or bearing losses in the business operations;

m/ Method of solving differences among members;

n/ Modalities for amending or supplementing the company Charter;

o/ Term of operation and cases where the company shall be dissolved;

p/ Signatures of all members of the partnership.

Members of the partnership may agree to inscribe other contents in the company Charter.

Article 11.- Contents of the register of members and the register of founding shareholders

1. A one-member limited liability company shall not have to draw up the register of members;

2. The members register of a limited liability company having two or more members must contain the following:

a/ Name and address of each member;

b/ Capital amount contributed by each member and its value;

c/ Types and quantities of assets as contributed capital; remaining value of each asset, as contributed capital which are neither Vietnamese money, freely convertible foreign currency, nor gold;

d/ Time of the capital contribution;

e/ Signature of the legal representative of the company or signatures of all members;

3. The register of the founding shareholders of a joint-stock company must have the following contents:

a/ Names and addresses of all founding shareholders;

b/ Total number of shares, number of shares of each type of each founding member and their value;

c/ Types and quantities of assets as contributed share capital; remaining value of each asset, for assets as contributed share capital which are neither Vietnamese money, freely convertible foreign currency nor gold;

d/ Time of the contribution to the share capital;

e/ Total number of shares, the value of all the shares of all the founding shareholders.

f/ Signatures of all founding shareholders or signature of the legal representative of the company.

4. The register of members of a partnership must have the following contents:

a/ Name and place of residence of each member;

b/Occupation and specialization of each member;

c/ Contributed capital and its value;

d/ Types and quantities of assets as contributed capital; remaining value of each asset, for assets as contributed capital which are neither Vietnamese money, freely convertible foreign currency nor gold;

e/ Time of capital contribution;

f/ Signatures of all partnership members.

Article 12.- Conditions for convening a meeting of the Members� Council of a limited liability company

1. To hold a meeting of the Members� Council, the number of attending members must represent at least 65% of the Charter capital, if the Charter of the company does not prescribe another ratio higher than 65%. In cases where the Charter prescribes a higher ratio, the minimum ratio as prescribed by the company Charter shall apply.

2. Where the Members� Council is convened for the second time, to hold its meeting, the number of attending members must represent at least 50% of the Charter capital, if the Charter of the company does not prescribe another ratio higher than 50%. In cases where the Charter prescribes a higher ratio, the minimum ratio prescribed by the company Charter shall apply.

3. In cases where the meeting of the Members� Council is convened for the third time, it shall be held anyway, regardless of the number of attending members.

Article 13.- Adopting decisions of the Members� Council

1. The Members� Council shall adopt decisions by voting at the meeting or by a written opinion poll of the members.

2. In case of adoption of decisions by voting at the meeting, the following provisions must be observed:

a/ The following decisions shall be adopted when the votes representing at least 75% of the capital of the attending members are in favor, if the company Charter does not prescribe another ratio higher than 75%. If the company Charter prescribes higher ratio, the minimum ratio prescribed by the company Charter shall apply;

- Decision to sell assets valued equal to or higher than 50% of the total value of the company assets recorded in the book of accounts of the company if the company Charter does not prescribe another a ratio lower than 50%. If the company Charter prescribes a lower ratio, the ratio prescribed by the company Charter shall apply:

- Decision to amend and/or supplement the company Charter;

- Decision to reorganize the company, including division, separation, consolidation, merger and conversion of the company;

- Decision to dissolve the company.

b/ Other decisions under the jurisdiction of the Members Council shall be adopted when a number of votes representing at least 51% of the capital of the attending members are in favor, if the company Charter does not prescribe another ratio higher than 51%. In cases where the company Charter prescribes a higher ratio the minimum required ratio as prescribed by the company Charter shall apply.

3. In case of adoption of decisions by written opinion poll of the members, the decisions of the Members� Council on all matters under its jurisdiction shall be adopted when the number of members representing at least 65% of the Charter capital of the company are in favor, if the company Charter does not prescribe another ratio higher than 65%. In cases where the Charter prescribes a higher ratio, the minimum ratio prescribed by the company Charter shall apply.

4. Procedures for the written opinion poll shall be carried out as follows:

a/ The Chairman of the Members� Council shall send to each member the questionnaire enclosed with the necessary documents. The questionnaire must state clearly the matters polled for adoption of the decision and the deadline for the members to send their answers to the company;

b/ To conduct the vote count and record in writing the result of the vote count, to announce the result of the poll and the decisions which are adopted to the members within seven days from the deadline for the members to send their answers to the company.

Article 14.- Owner of a one-member limited liability company

The organization that owns a one-member limited liability company stipulated in Article 46 of the Law on Enterprises must be a legal person and may include:

1. State agencies, units of the armed forces;

2. Party agencies at the central level or of a the centrally-run province or city;

3. The Central Committee of the Vietnam Fatherland Front or the Front Committees in the centrally-run provinces and cities;

4. The Vietnam General Confederation of Labor and the Labor Federations of centrally-run provinces and cities;

5. The Central Committee of the Vietnam Women�s Union and the Union�s organizations of the centrally-run provinces and cities;

6. The Central Committee of the Ho Chi Minh Communist Youth Union and the Union organizations of the centrally-run provinces and cities;

7. The Central Committee of the Vietnam War Veterans Association and its organization of the centrally-run provinces and cities;

8. The Vietnam Peasants Association and its organizations of the centrally- run provinces and cities;

9. The Vietnam Union of Organizations for Peace, Solidarity and Friendship;

10. State enterprises;

11. Enterprises of the Party and socio-political organizations;

12. Cooperatives;

13. Limited liability companies;

14. Joint- stock companies;

15. Social organizations, socio- professional organizations;

16. Social welfare funds, charity funds;

17. Other organizations.

Article 15.- Rights of the owner of a one-member limited liability company

1. Based on Point (i), Clause 1, Article 47 of the Law on Enterprises, the company Charter may add other rights of the company owner. Other rights of the company owner to be added to the company Charter shall depend on the managerial organization model chosen and applied as prescribed in Clause 2 of this Article.

2. In cases where the managerial organization model comprising the Chairman of the company and the Director (General Director) is applied, the company owner, apart from the rights stipulated in Clause 1, Article 47 of the Law on Enterprises, shall also have the following rights and obligations:

a/ To decide the orientation for development of the company;

b/ To decide the market expansion, marketing and technological solutions;

c/ To adopt the contracts on borrowing, loaning and other contracts stipulated in the company Charter and valued equal to or higher than 50% of the total value of assets recorded in the company�s book of accounts or a lower ratio prescribed by the company Charter;

d/ To decide the organizational structure and the management rules of the company;

e/ To decide to set up dependent companies, to contribute capital to another company, to set up branches and/or representative offices;

f/ To decide the salaries and bonuses for the Chairman of the company, the Director (General Director) and other managing officials appointed by the company owner.

Article 16.- Organizational and managerial structure of a one-member limited liability company

1. As stipulated in Clause 1, Article 49 of the Law on Enterprises, the organizational and managerial structure of a one-member limited liability company shall adopt one of these two models: The first model comprises the Management Board and the Director (General Director) called Management Board model stipulated in Article 17 of this Decree. The second model comprises the company Chairman and the Director (General Director) called company Chairman model stipulated in Article 18 of this Decree.

If the scope of business is big and the line of business is diversified, the Management Board model should be chosen.

2. The rights and obligations of the Management Board and the Director (General Director) or the company Chairman and Director (General Director) shall be decided by the owner of the company and stipulated in the company Charter. The owner of the company must not authorize the Management Board and the Director to perform the rights and obligations defined in Article 47 of the Law on Enterprises.

Article 17.- Managerial organization of the company according to the Management Board model

1. If the Management Board model is adopted, the legal status, rights and obligations of the Management Board and the Director (General Director) shall comply with Clauses 2 and 3 and Clauses 4 and 5 of this Article.

2. The Management Board, as the managing agency of the company, is fully entitled to act in the name of the company in deciding all matters related to the management and operations of the company, except those falling under the competence of the company owner.

3. The Management Board has the following rights and obligations:

a/ To decide the development strategy of the company;

b/ To decide investment projects valued at less than 50% of the total value of assets recorded in the company�s book of accounts;

c/ To decide the solutions for market expansion, marketing and technology; to approve contracts of buying, selling, borrowing, lending and other contracts valued at 50% or more of the total value of assets recorded in the company�s book of accounts or at a lower rate prescribed in the company Charter;

d/ To appoint, remove or dismiss the Director (General Director) and other key management officials of the company; to decide the salaries and other benefits of these management officials;

e/ To decide the company�s organizational structure and management regulations, to decide the setting up of branches and representative offices;

f/ To submit the annual fiscal report to the company owner;

g/ To propose the plan of using the profits of the company;

h/To propose the investment projects under the decision-making competence of the company owner;

i/ To propose readjustment of the company�s Charter capital;

j/ To propose the sale of assets valued at 50% or more of the total value of assets recorded in the company�s book of accounts;

k/ To propose supplements or amendments to the Charter of the company;

l/To propose the reorganization or dissolution of the company.

Other questions related to the Management Board shall comply with Articles 81, 82, 83, 84, 86 and 87 of the Law on Enterprises.

4. The Director (General Director) is the manager of the day-to-day operations of the company and is answerable to the Management Board for the implementation of the rights and obligations assigned to him/her.

5. The Director (General Director) has the following rights and obligations:

a/ To decide questions related to the day-to-day operations of the company;

b/ To organize the execution of the decisions of the Management Board;

c/ To organize the implementation of the company�s business plans and investment projects;

d/ To propose the organizational plan and managerial regulations of the company;

e/ To appoint, remove and dismiss the managerial posts of the company, except those appointed, removed or dismissed by the Management Board;

f/ To decide the salaries and allowances (if any) of the personnel in the company, including management officials under the appointment authority of the Director (General Director);

g/ Other rights and obligations as stipulated by law, the company Charter and decisions of the Management Board.

Article 18.- Managerial organization according to the Company Chairman model

1. In cases where the company Chairman model is adopted, the legal status, rights and obligations of the company Chairman and the Director (General Director) shall comply with to the stipulations in Clauses 2 and 3 and Clauses 4 and 5 of this Article.

2. The company Chairman is the person directly assisting the company owner in exercising the rights and obligations stipulated in Article 47 of the Law on Enterprises and Clause 2, Article 15 of this Decree.

3. The company Chairman has the following rights and obligations:

a/ To propose to the company owner to decide questions under the latter�s authority;

b/ To make recommendations to the company owner on the appointment, removal or dismissal of the Director (General Director) and other managerial posts stipulated in the company Charter; on the salaries and other benefits of these management officials;

c/ To organize the supervision of the execution of the decisions of the company owner; to report to the company owner the results and situation of the business operations of the company;

4. The Director (General Director) of the company is the manager of the day-to-day business operations of the company, answerable to the company owner for the execution of his/her rights and obligations. The Director (General Director) is the legal representative of the company.

5. The Director (General Director) has the following rights and obligations:

a/ To organize the execution of the decisions of the company owner;

b/ To decide questions related to the day-to-day operations of the company;

c/ To organize the implementation of the company�s business and investment plans;

d/ To issue the management regulations of the company;

e/ To appoint, remove and dismiss managerial posts in the company except those falling under the authority of the company owner;

f/ To propose the company�s organizational plan;

g/ To coordinate with the company Chairman in submitting the annual financial report to the company owner and the plan of using the profits and handling the losses in business;

h/ To recruit labor;

i/ To exercise the rights and tasks assigned honestly and diligently in the lawful interests of the company;

j/ Not to misuse his/her position and powers or assets of the company to make personal profits or profits for others; not to disclose secrets of the company, except with the consent of the company owner;

k/ If the company fails to pay fully the debts or to fulfill other property obligations when they are due, he/she must inform the company owner thereof and the creditors of the financial situation of the company; he/she must not raise wages, must not pay bonuses to the personnel of the company including the managers; he/she must take personal responsibility for the damage caused to the creditors for failing to carry out the obligations stipulated at this point; he/she must propose measures to overcome the financial difficulties of the company.

l/ Other rights and obligations prescribed by law and the company Charter.

Article 19.- Voting preference share

1. A voting preference share is a share which carries more votes than an ordinary share. There is no maximum to the votes of a voting preference share. The specific number of votes of a voting preference share shall be prescribed by the company Charter.

2. For a newly founded company, the founding shareholders must abide by the principle of consensus when deciding the following questions:

a/ The total of voting preference shares;

b/ The number of votes of a voting preference share;

c/ The shareholder entitled to hold the voting preference share and the number of voting preference shares of each shareholder.

3. In case the company is converted from a State enterprise, the voting preference share can be used only for an enterprise operating in the following branches:

a/ Monetary, credit and other financial services;

b/ Post and telecommunications;

c/ Air transport;

d/ Other branches to be decided by of the Prime Minister.

The total of voting preference shares and the number of votes of each voting preference share shall be decided by the organization assigned to hold the voting preference share in the equitized State enterprise at the proposal of the related Minister or the related Head of the State management agency.

Article 20.- Dividend of a dividend preference share

1. The fixed annual dividend of a dividend preference share is determined by the percentage of the total of share capital actually contributed to the company. The annual fixed dividend of a dividend preference share shall be determined on the basis of the rate and the total of share capital actually contributed to the company.

2. The bonus dividend of a dividend preference share is determined on the following principles:

a/ There shall be no bonus dividend in cases where no dividend is paid to ordinary share or the dividend of an ordinary share is lower than the fixed dividend of the dividend preference share;

b/ If the dividend of an ordinary share is higher or equal to the fixed dividend of a dividend preference share, the bonus dividend must be added. The bonus dividend is determined at such a level as to ensure that the total of fixed dividend and bonus dividend of the dividend preference share is higher than the dividend of an ordinary share paid in that year;

c/ The fixed annual dividend and the method of determining the bonus dividend shall be agreed upon by the company and the related investors or shall be fixed by the company by decision of the General Assembly of shareholders.

3. The rate of dividend, the total capital contributed by the shares and the total fixed dividend received each year and the method of determining the ordinary dividend must be inscribed on the share certificate of the dividend preference share.

Article 21.- Redeemable preference share

A joint-stock company is entitled to use two kinds of shares: The redeemable preference share which is a share redeemable at any time at the request of the shareholder, and the share which is redeemable on the conditions agreed upon between the company and the related investor. These conditions must be inscribed in the share certificate of the redeemable preference share.

Article 22.- Process and procedures for sale offer of stocks

The companies shall offer for sale of shares and bonds in the form of issuance of stocks to the public as prescribed by the legislation on stocks. The offer for sale of shares and bonds in other forms shall be decided and carried out under the agreement between the company and the buyer.

Article 23.- Conditions and modalities for convening the General Assembly of shareholders

1. Shareholders may attend in person or authorize others to attend a meeting of the General Assembly of shareholders. In case of authorization, the authorized person must produce the letter of authorization and the share certificate to the chairman before the meeting opens. A shareholder who sends his/her sealed vote to the company before the opening of the meeting of the General Assembly of shareholders is deemed to attend the meeting.

2. A meeting of the General Assembly of shareholders shall take place when the number of shareholders represent at least 51% of the shares with voting right, if the company Charter does not prescribe a rate higher than 51%; in cases where the company Charter prescribes a higher rate, the required minimum rate prescribed by the company Charter shall apply.

3. Where the meeting of the General Assembly of shareholders is convened for the second time, such meeting shall be held when the number of attending shareholders represent at least 30% of the shares with voting right, if the company Charter does not stipulate a rate higher than 30%. In cases where the company Charter stipulates a higher rate, the minimum rate as prescribed by the company Charter shall apply.

4. Where the meeting of the General Assembly is convened for the third time, it shall be held anyway regardless of the number of attending shareholders and the rate of the voting shareholders that they represent.

Article 24.- Adoption of the decisions of the General Assembly of Shareholders

1. The General Assembly of Shareholders may adopt its decisions by voting at the meeting or conducting a written opinion poll of shareholders.

2. In cases where decisions are adopted by voting at the meeting, the following provisions shall be complied with:

a/The following decisions shall be adopted when approved by a number of shareholders representing at least 65% of the attending shareholders if the company Charter does not prescribe another ratio higher than 65%. If the Charter prescribes a higher ratio, the minimum ratio prescribed by the company Charter shall apply:

- Decision on the types and the number of shares of each type that may be offered for sale;

- Decision to amend and/or supplement the company Charter;

- Decision to reorganize the company;

- Decision to dissolve the company;

- Decision to sell assets valued at more than 50% of the total value of assets recorded in the company�s book of accounts.

b/ Other decisions under the jurisdiction of the General Assembly of Shareholders shall be adopted when approved by a number of shareholders representing at least 51% of the total of votes of all attending shareholders if the company Charter does not prescribe another ratio higher than 51%. If the company Charter prescribes a higher ratio, the minimum ratio prescribed by the company Charter shall apply.

3. Where the General Assembly of Shareholders adopts a decision by a written opinion poll, the decision shall be adopted when approved by a number of shareholders representing at least 51% of the total of votes of all shareholders if the company Charter does not prescribe a ratio higher than 51%. If the company Charter prescribes a higher ratio, the required ratio as prescribed by the company Charter shall apply.

4. Where the decision is adopted by a written opinion poll of the shareholders, the Management Board shall have to perform the following work:

a/ To decide the matters on which the poll is needed, the form and contents of the questionnaire;

b/ The questionnaire of the opinion poll must include at least the name and address of the head office of the company; the aim of the poll; the questions targeted by the poll and the titles of the enclosed relevant documents, the deadline for sending the opinions to the company; the plan for voting "yes", "no" or "abstention".

c/ To send the questionnaire enclosed with the relevant documents to all shareholders entitled to attend the meeting of the General Assembly of Shareholders.

d/ To count the votes and write the minutes on the result of the vote count; to announce this result and the decisions adopted to all shareholders entitled to attend the meeting of the General Assembly of shareholders within fifteen days from the deadline for the shareholders to send their written opinions to the company, unless the company Charter sets another deadline.

Article 25.- Minutes of the meeting of the Management Board

All the meetings of the Management Board must be fully recorded into the minutes book. The minutes of a meeting of the Management Board must include the following:

1. Time and place of the meeting;

2. Names of the attending members;

3. Agenda of the meeting;

4. The questions discussed and voted on and the result of the vote;

5. Summarized speeches and opinions at the meeting;

6. Decisions adopted by the Management Board;

7. Signatures with full names of all attending members.

The Chairperson and Secretary of the meeting are jointly responsible for the accuracy and truthfulness of the minutes of the meeting of the Management Board.

Article 26.- Partnership

1. There are two types of partnership: Partnership where all members are partnership members and partnership which includes both partnership members and capital contributing members.

2. The specialization and professional prestige of a partnership member are prescribed as follows:

a/ For partnerships dealing in business lines stated in Clause 2, Article 6 of this Decree, all partnership members must have a practicing certificate.

b/ For partnerships engaged in other lines of business, the partnership members are persons having been trained in these lines.

Article 27.- Rights and obligations of a partnership member

1. A partnership member has the rights:

a/ To take part in discussing and voting on all affairs of the company;

b/ To be distributed profits as agreed in the company Charter;

c/ To take part directly in managing the business operations of the company;

d/ To use assets of the company in service of the interests of the company; to be redeemed of all expenditures made in service of the interest of the company;

e/ To receive information on the business and managerial operations of the company; to see the book of accounts and other dossiers of the company;

f/ Other rights stipulated in the company Charter.

2.A partnership member has the following obligations:

a/To contribute fully the capital he/she has committed to the company;

b/ To take responsibility with all his/her assets for the obligations of the company;

c/ In case of business losses, he/she shall have to bear the losses on the principle stipulated in the company Charter;

d/ While managing or conducting business activities in the name of the company or representing the company, he/she must act in an honest and diligent manner in service of the lawful interests of the company;

e/ To abide by the internal rules and decisions of the company;

f/ A partnership member must not at the same time be a partnership member of another partnership or owner of a private enterprise;

g/ A partnership member must not on his/her own or in the name of a third person conduct business operations in the same line as the company;

h/ A partnership member must not in the name of the company sign contracts and establish or carry out other transactions with the aim of making profits of his/her own or for another;

i/ Other obligations prescribed by the company Charter.

Article 28.- Rights and obligations of capital contributing members

1. A capital contributing member has the right:

a/ To take part in discussing and voting on supplementing and amending the rights and obligations of the capital contributing members stipulated in the company Charter; on reorganization and dissolution of the company;

b/ To be distributed profits, to be distributed the residual value of the dissolved company as stipulated in the company Charter;

c/ To assign his/her contributed capital at the company to another person unless otherwise prescribed by the company Charter;

d/ To receive information on the business operations and management of the company, to see the book of accounts and other dossiers of the company;

e/ Other rights stipulated by the company Charter.

2. A capital contributing member has the obligations:

a/ To fully contribute the capital he/she has committed and to take responsibility for the debts of the company within the value of the capital he/she has committed to the company.

b/ He/she is not entitled to take part in the management of the company, or to conduct business operations in the name of the company;

c/ To observe the management rules and decisions of the company;

d/ Other obligations prescribed by the company Charter.

Article 29.- Managerial organization of a partnership

1. The Members� Council composed of all members of the partnership is the highest decision-making body of the company. The Members� Council decides all operations of the company. When voting takes place, each partnership member shall have only one vote.

2. The following decisions must be approved by all partnership members with voting right:

a/ Nomination of the director of the company;

b/ Acceptance of a member;

c/ Expelling a partnership member;

d/ Supplementing or amending the company Charter;

e/ Reorganization and dissolution of the company;

f/ Contract of the company with a member of the partnership or a related person.

3. The decisions on other matters must be approved by the majority of the partnership members.

4. All the decisions of the Members� Council must be recorded in the Book of Minutes and must be kept on file at the head office of the company;

5. In their activities, the partnership members shall assign responsibilities among themselves to manage and control the operations of the company and appoint one of them to be the director.

The partnership members must take the initiative in performing the tasks assigned aimed at attaining the objective of the company; they shall represent the company in the negotiations to sign contracts for carrying out the tasks assigned; represent the company before law and State agencies within the assigned jobs.

When performing tasks in the name of the company, the partnership members must work honestly, not in contravention of the decisions of the Members� Council, not in violation of the forbiddances or restrictions as stipulated in Clause 2, Article 27 of this Decree.

6. The Director of a partnership has the tasks:

a/ To assign duties, to regulate and coordinate the work of the partnership members;

b/ To manage the work in the company;

c/ To perform other duties as empowered by the partnership members.

Article 30.- Acceptance of members

1. A person shall be accepted as member of the partnership or as capital contributing member of the company when approved by all members of the partnership unless otherwise provided for by the company Charter.

2. A partnership member accepted into the company shall be responsible only for the obligations of the company arising after he/she has registered with the business registration agency.

Article 31.- Termination of membership status

1. The status of a partnership member shall terminate in the following circumstances:

a/ He/she has died or declared dead by the court;

b/ He/she is reported missing, is restricted in or has lost his/her capacity for civil acts;

c/ He/she withdraws from the company of his/her own free will;

d/ He/she is evicted from the company.

2. In case of termination of membership status as stipulated in Points a and b, Clause 1 of this Article, the company still has the right to use the assets of this person corresponding to his/her responsibilities to carry out the obligations of the company.

3. In case of termination of membership status as stipulated at Points c and d, Clause 1 of this Article, this person shall be jointly liable for the obligations of the company arising prior to the registration of termination of his/her membership status with the business registration agency.

4. The membership status of a capital contributing member shall terminate when he/she assigns his/her contributed capital to another person.

Article 32.- Withdrawal from the company

1. A partnership member is entitled to withdraw from the company if approved by the majority of the remaining members. When withdrawing from the company, his/her contributed capital shall be redeemed at the agreed price or at the price determined on the principle stipulated in the company Charter. After withdrawing from the company, this person still is jointly liable for the obligations of the company as prescribed in Clause 3, Article 31 of this Decree.

2. In case the name of the partnership member having withdrawn from the company has been used to name the company, this person may ask the company to change its name.

3. The capital contributing member may withdraw his/her contributed capital if approved by the majority of the partnership members. The assignment of capital by the capital contributing member to another person can be done freely except otherwise prescribed by the company Charter.

Article 33.- Division of an enterprise

1. The division of an enterprise shall be done only with regard to the limited liability companies and joint-stock companies. A limited liability company may be divided into two or several other limited liability companies. A joint-stock company may be divided into two or several other joint-stock companies.

2. The ratio of approving votes necessary to adopt the decision to divide a limited liability company shall conform to the stipulations in Point a, Clause 2, Article 13 of this Decree.

3. The ratio of approving votes necessary to adopt the decision to divide a joint-stock company shall conform to the stipulations in Point a, Clause 2 Article 24 of this Decree.

4. When dividing a limited liability company having two or more members into several companies, the members of the newly - founded company may adopt one of the two following solutions:

a/ All members of the divided company are members of the companies newly-founded from the divided company;

b/The members of the divided company are divided into corresponding groups as members of the companies newly founded from the divided company. The division of the members of the divided company into corresponding groups of members of the companies founded from the divided company must be effected according to the principle of consensus.

5. When dividing a one-member limited liability company, the owner of the divided company shall remain the owner of the companies newly founded from the divided company.

6. When dividing a joint-stock company into several other joint stock companies, the shareholders of the newly-founded companies may adopt one of these two solutions:

a/ All shareholders of the divided company are shareholders of the companies newly founded from the divided company.

b/ The shareholders of the divided company are divided into corresponding groups as shareholders of the companies newly founded from the divided company. The division of the shareholders of the divided company into corresponding groups of shareholders of the companies newly founded from the divided company must be approved by the shareholders representing at least 65% of the total votes of all shareholders attending the meeting of the General Assembly of Shareholders. The shareholders who protest against the decided plan of dividing shareholders into corresponding groups may ask the divided company to buy back their shares before to the division of the company. The procedures of buying back the shares shall be effected as stipulated in Clause 2, Article 64 of the Law on Enterprises.

7. The handling of debts and other property obligations of the divided company is prescribed as follows:

a/ The decision to divide the responsibilities of the newly-founded companies with regard to the debts and other property obligations of the divided company shall not have legal effect on the creditors and those with related rights and interests, except otherwise agreed upon by the newly-founded companies and the creditors.

b/ All the companies newly founded from the divided company shall be jointly liable for the unpaid debts and other property obligations of the divided company, except otherwise agreed upon by the creditors and the companies newly founded from the divided company. When the debts and other property obligations are due, the creditors may ask one of the companies newly founded from the divided company to pay the debts and other property obligations which are due. The company that is requested to pay the due debts is entitled to ask the remaining companies to redeem the corresponding part of the debt which it has paid.

Article 34.- Separation of enterprises

1. The separation of enterprises shall apply only to limited liability companies and joint stock companies.

2. The rate of votes in favor necessary to adopt the decision on separation of a limited liability company or a joint stock company shall conform to the stipulations of Point a, Clause 2, Article 13 and Point a, Clause 2 Article 24 of this Decree.

3. In case of separation of a limited liability company having two and more members, the members of the separated company and the separating company shall be dealt with in one of the following manners:

a/ The separated company becomes the owner of the separating company.

b/ All members of the separated company are members of the separating company;

c/ The members of the separated company are divided into corresponding groups as members of the limited liability company after separation of the company. In this case the decision on the plan of dividing the members into corresponding groups as members of the company after separation must be approved by all members.

4. In case of separation of a one-member limited liability company, the owner of the separated company is also the owner of the separating company or the separated company is owner of the separating company.

5. In case of separation of a joint-stock company, the shareholders of the separated company and separating company shall be dealt with in one of the following manners:

a/ All shareholders of the separated company shall be shareholders of the new separating company;

b/ The shareholders of the separated company are divided into corresponding groups as shareholders of the separated company and the separating company. The division of the shareholders of the separated company into shareholders of the companies after separation must be approved by shareholders of at least 65% of the total votes of all shareholders attending the meeting of the General Assembly of Shareholders, if the company Charter does not prescribe a higher ratio. The shareholders who object to the approved plan on the division of shareholders into corresponding groups may ask the separated company to buy back their shares prior to the separation of the company. The procedures for buying back the shares shall comply with the prescriptions in Clause 2, Article 64 of the Law on Enterprises.

6. After separation of a limited liability company, the outstanding debts and other property obligations of the separated company shall be dealt with as follows:

a/ In case the separated company becomes the owner of the separating company, the separated company still bear full responsibility for the outstanding debts and other property obligations; the separating company takes no responsibility for the debts and other property obligations of the separated company.

b/ In case all members of the separated company are members of the separating company or the members of the separated company are divided into corresponding groups as members of the companies after separation, the separated company and the separating company are both liable for the outstanding debts and other property obligations of the separated company arising prior to the separation except otherwise agreed upon by the creditors, the persons with related rights and interests and the separated company or the separating company. In case no such agreement exists, when the debts and other property obligations are due, the separated company must repay these debts or perform these property obligations. In case the separated company cannot repay these debts or carry out these property obligations arising prior to the separation of the company, the creditors and the persons with related rights and interests may request the separating company to pay the debts or perform other property obligations when they are due.

7. After separating a joint-stock company, the separated company and the separating company shall be jointly liable for the outstanding debts and other property obligations of the separated company arising prior to the separation of the company, except otherwise agreed upon among the creditors, the persons with related rights and interests and the separated company or the separating company. In case no such agreement exists, when the debts or property obligations are due, the separated company shall have to repay the debts or to fulfill these property obligations. In case the separated company cannot pay these debts or does not fulfill the other property obligations arising prior to the separation of the company, the creditors and the persons with related rights and interests may request the separating company to pay the debts or perform other property obligations which are due.

Article 35.- Basis to determine whether an enterprise has paid fully the debts and fulfilled other property obligations which are due

An enterprise is deemed to have fully paid its debts and fulfilled other property obligations which are due when:

1. It has no outstanding debts nor other property obligations that are overdue.

2. It does not use new loans, including debt reschedules, to pay debts and fulfill other property obligations which are due.

Article 36.- Basis to determine whether an enterprise can ensure full payment of its debts and fulfill other property obligations

A limited liability company and a joint-stock company is deemed capable of paying fully its debts and fulfill other property obligations if the total value of assets recorded on the accountancy balance sheet of the company is larger than the total of debts and other property obligations to be paid.

Article 37.- Guidance on the implementation provisions in Chapter X of the Law on Enterprises

Based on Article 6 and Clause 3, Article 122 of the Law on Enterprises, the following legal documents are now annulled:

1. Decree No.221-HDBT of July 23, 1991 of the Council of Ministers on the concretization of a number of articles of the Law on Private Enterprises.

2. Decree No.222-HDBT of July 23, 1991 of the Council of Ministers on the concretization of a number of articles of the Law on Companies.

3. Decree No.361-HDBT of October 1st, 1992 of the Council of Ministers providing for the supplementation and amendment of a number of points in the regulations issued together with Decrees No.221 and No.222-HDBT of July 23, 1991 of the Council of Ministers.

4. Decree No. 26/1998/ND-CP of May 7, 1998 of the Government on the readjustment of the legal capital of private enterprises, limited liability companies and joint-stock companies.

5. Prescriptions of Decree No. 48/1999 ND-CP of July 8, 1999 of the Government for the representative offices and branches of private traders and Vietnamese tourist enterprises in the country and abroad relative to the establishment and operations of the enterprises under the Law on Enterprises.

6. Decree No.40/1998/ND-CP of June 10, 1998 of the Government on the maritime transport business of the companies and private enterprises.

7. Circulars of the ministries, branches; decisions of the Ministers and the Heads of the ministerial-level agencies; decisions of the various levels of the local administration as legal basis for the issuance of permits, certificates, practicing certificates, the conditions for business and other requirements applied to the lines of business of the enterprises but which are contrary to the relevant laws, ordinances and decrees.

Article 38.- Implementation provisions

This Decree takes implementation effect fifteen days after its signing.

The Ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the Presidents of the People�s Committees of the centrally-run provinces and cities shall, within their functions, tasks and powers, have to organize the implementation of this Decree.

The Minister of Planning and Investment shall assume the prime responsibility in monitoring, supervising and periodically reporting to the Prime Minister on the implementation of this Decree.

On behalf of the Government

Prime Minister