LEGAL CHARACTERISTICS OF COMPANY BRANCHES
With the aim of expanding the scale, production and business activities as well as further enhancing the exchange and transaction with business partners, businesses often tend to establish their own dependent units in different locations within a province/city administrative boundary. As for businesses that want to expand their scale, have a seal with independent accounting so that they can operate their business in another administrative boundary. Establishing a branch is a solution that many companies choose to implement after establishing a business . Depending on the business goals of the business, the choice can be made to establish an independent branch or a dependent branch.
According to the provisions of the Enterprise Law 2014: A branch is a dependent unit of an enterprise, responsible for performing all or part of the enterprise's functions, including the authorized representative function. The branch's business lines must be consistent with the enterprise's business lines.
Thus, from the above concept we can draw the basic legal characteristics of a Company Branch as follows:
Firstly , a branch is a dependent unit of an enterprise, an inseparable part of its operations.
Second , the functions and operations of a Branch are like a miniature company whose task is to perform all or part of the functions of the enterprise.
Third , a company branch has no legal status and only carries out its activities according to the registered content and regulations of the parent company.
NOTES WHEN PERFORMING PROCEDURES TO ESTABLISH A BRANCH
* First, it is the issue of naming the company Branch:
Currently, according to the provisions of the Enterprise Law 2014, the Company Branch Name must be written in letters of the Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols.
The name of the Company Branch must contain the name of the enterprise followed by the phrase “Branch”. For example: Branch in Hanoi – ABC Company Limited.
When an enterprise registers the operation of a Branch, the enterprise must register with the Branch Name in a foreign language and the Abbreviated Name of the Branch (if any);
The name of the Company Branch must be posted at the Branch's head office. The name of the Branch is printed or written in a smaller font size than the Vietnamese name of the enterprise on transaction documents, records and publications issued by the branch. Contact information (Phone number, Email; Fax; Website).
Notes when establishing a company branch
* Second, regarding the location of the Company's Branch's head office:
When declaring the branch's address information, the Company must clearly state the house number, alley, lane, street, road or village, hamlet, commune, ward, town, district, county, city, province, centrally-run city; telephone number, fax number and email (if any).
And when registering, the company needs to note that it is not allowed to register the Branch office in an Apartment or Collective House as prescribed by the Housing Law and its implementing documents.
* Third, regarding internal operations, the business lines of the Public Branch shall perform all or part of the functions of the enterprise, including the function of authorized representation. The business lines of the branch must be consistent with the business lines of the enterprise.
* Fourth, regarding the Branch Head: When appointing the Branch Head of the Company, he/she must not fall into the following cases:
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Cadres, civil servants and public employees according to the provisions of law on cadres, civil servants and public employees;
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Officers, non-commissioned officers, professional soldiers, workers, and defense officials in agencies and units of the People's Army; officers and professional non-commissioned officers in agencies and units of the Vietnam People's Public Security;
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Executives and managers of state-owned enterprises, except for those appointed as authorized representatives to manage the State's capital contribution in other enterprises;
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Minors; persons with limited or lost civil capacity; organizations without legal status;
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People who are being prosecuted for criminal liability, serving a prison sentence, an administrative decision at a compulsory drug rehabilitation facility, a compulsory education facility, or are prohibited from practicing business, holding a position or doing certain work related to business according to a court decision; other cases as prescribed by law on bankruptcy and anti-corruption.
* Fifth, a branch of a company cannot establish another branch dependent on that branch. But the director of one branch can assume the position of director of another branch.
PROCEDURE FOR ESTABLISHING A COMPANY BRANCH
Step 1: Receive customer information
Viet Tin Law's consultants will meet customers directly or transact via email to be able to discuss the exact business purpose of customers to provide the best solution on choosing the form of business registration . Consulting on registration location, business lines, how to name the branch and the branch's taxes during the operation process.
Step 2: Guide customers to prepare legal documents to establish a branch.
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Certified copy of the parent company's Business Registration Certificate.
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Certified copy of ID card/Passport/Citizen identification card of the branch manager.
Note: For parent companies that are foreign legal entities, it is necessary to prepare additional audited financial statements for the last 2 years since the licensing year and all documents provided by the foreign side must be consularized. Procedures for establishing a branch with foreign investment capital.
Step 3: Prepare documents to establish a company branch.
a) Notice of establishment of a Company Branch (Appendix II-11 - Notice of registration of Branch operations issued together with Circular 20/2015/TT-BKHĐT Guidance on business registration). The notice contents include:
Business information:
Company branch establishment profile
Information of the Branch the Company intends to establish includes:
– Name of the Company Branch to be established: Name of the Company Branch in Vietnamese; Name of the Company Branch in foreign language; Abbreviated name of the Company Branch.
– The address of the Company Branch office must clearly state the following information: House number, alley, lane, street/hamlet/village, Commune/Ward/Town, District/County/Town/City under the province, Province/City. Information about phone number, Email, Website, Fax (if any).
– Business lines of the Company Branch: The business lines of the branch must be consistent with the business lines of the enterprise.
– Information of the head of the Company Branch: Full name; Gender; Date of birth; Information on ID card or Passport or other personal identification documents; Place of permanent residence registration; Current residence of the individual; and Title of the head of the Representative Office.
– Tax registration information, including: Address for receiving tax notices; Date of commencement of operation; Accounting form; Fiscal year; Total number of employees; Import-export registration; Information on bank accounts, treasury accounts; Information on types of taxes payable and Main activities of the Company Branch;
– Full name, title, signature of the legal representative of the enterprise.
b) Decision of the owner for a one-member LLC or Decision of the members' council for a LLC with two or more members and a Partnership or Decision of the General Meeting of Shareholders for a Joint Stock Company on registration of change of the Company's head office address. It clearly states the contents of the establishment of a Company Branch as in the Notice of establishment of a Company Branch mentioned above.
c) Appointment decision for the head of the Company Branch;
d) Minutes of the meeting of the Board of Members for LLCs with two or more members and Partnerships or Minutes of the General Meeting of Shareholders for Joint Stock Companies regarding the registration of change of the Company's head office address. It clearly states the contents regarding the establishment of a Company Branch as in the Notice of Establishment of a Company Branch mentioned above.
e) Valid copy of Identity Card , Citizen Identification Card or Passport of the head of the Company Branch.
Note: In case the enterprise uses consulting services of a consulting company, it is necessary to provide a service contract. The company receiving the consulting service needs to prepare a letter of introduction for the employee who directly submits the application.
Step 4: Submit application for establishing a company branch to the Department of Planning and Investment.
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Submit Paper copy: The application is submitted to the one-stop department of the Department of Planning and Investment where the branch is headquartered.
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Submit application online: Scanned documents in PDF or Image File submitted at the business registration portal through the Department's account.
CONSULTING SERVICES FOR ESTABLISHING COMPANY BRANCHES
Establishing a company branch is easy with HLA
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Consulting on procedures for registering the operations of a company branch.
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Drafting documents, preparing papers and documents related to the registration procedures of the company's Branch.
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Carry out procedures to apply for a Certificate of Registration of Operation of a Company Branch;
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Carry out the engraving of the Company Branch Seal and the Notice of using the enterprise seal sample on the National Electronic Information Portal on business registration (If requested by the customer).
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Guide customers to submit the declaration of business license fee for Representative Office and pay business license tax for Company Branch.
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Consulting on other contents related to the operation of the company's Branch.
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Steps:
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Assess the company's current financial and accounting situation.
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