Corporate Legality and Common Business Legal Issues

Corporate legality holds significant importance in the realm of business, particularly during the establishment and operation of a company. Hence, it becomes imperative to understand the essence of corporate law and the common legal challenges that businesses often encounter. In this article, we delve into the intricacies of corporate law with NT International Law Firm.

Understanding Corporate Legality

Understanding Corporate Legality:

Legality goes beyond law, encompassing truths, reasons, and values associated with an entity, event, or social phenomenon. These principles form the foundation for legal development.

The Enterprise Law 2020 defines an enterprise as an organization with its own name, assets, transaction office, and establishment or registration in accordance with the law for business purposes.

Corporate legality encompasses the totality of the enterprise’s rights, responsibilities, and obligations, constituting its legal status within specific legal relationships.

Legal Characteristics of Enterprises

Legal Characteristics of Enterprises:

• Name: Includes the legal name and trade name. Both must be in Vietnamese, pronounceable, and consist of two elements: the type of business and a personal name.
• Assets: Includes tangible and intangible assets. Minimum capital levels are prescribed by the State based on the type of enterprise and industry.
• Transaction Office: The location for communication with customers and authorities, receiving and delivering goods, and conducting business activities.
• Business Registration: Enterprises must comply with legal procedures for establishment, including registering with the Department of Planning and Investment.
• Economic and Technical Explanations: Required for certain projects, such as those in conditional business lines, with investments exceeding 300 billion VND, or in the service sector with WTO commitments.

Common Legal Issues

Common Legal Issues:

For New Businesses:

• Number of Capital Contributors: Determining the number and type of capital contributors, and verifying their eligibility to establish and manage an enterprise.
• Business Field: Choosing the appropriate business field within legal limitations.
• Charter Capital: Understanding the minimum capital requirements for different business types.
• Business Name: Choosing a unique and legally permissible name.
• Business Headquarters: Ensuring the headquarters is located at a permitted address.
• Legal Representative: Selecting a qualified individual as the legal representative, who can be a capital contributor or someone hired by them.

For Operating Businesses:

• Legal Risks: Failing to keep up-to-date with new legal policies and regulations.
• Disputes Between Companies: Intellectual property infringement, unfair competition, debt settlement issues, property and contract disputes, sales and cooperation contract issues, mergers and acquisitions, and legal issues related thereto.
• Internal Disputes: Governance and operational issues; shareholder and member rights and obligations; share, stock, and dividend structure clarity.
• Disputes with State Agencies: Issues related to management, tax reporting, social insurance, and administrative violations.
• Damages Due to Lack of Understanding: Damage caused by not understanding administrative procedures and legal policies related to investment and taxes.
• Unclear Rights and Obligations: Businesses have many legal rights, but failure to comply with legal obligations can have adverse consequences.

Corporate Legality and Common Business Legal Issues

Conclusion:

Understanding corporate legality and common legal issues is crucial for businesses of all sizes. By seeking legal advice and staying informed about legal changes, businesses can navigate challenges and operate successfully within the legal framework.

NT International Law Firm is Here to Help

NT International Law Firm has addressed the question of what corporate legality is and common legal issues in doing business. If you have any further questions or concerns regarding corporate law, please contact our law firm immediately for expert legal advice.

If you require any legal assistance, please feel free to reach out to us via phone at 090 252 4567 or through email: info@ntpartnerlawfirm.com. At NT INTERNATIONAL LAW FIRM, our team is committed to offering you prompt and personalized advice.

You also might be interested in:

• The 2015 Civil Code in English
• The 2020 Law On Enterprises in English