Can civil servants join businesses?

(Baonghean)-Situation: According to information provided by Ms. Bui Thi P (Vinh City): Ms. P is a civil servant, she has some savings and wants to participate in a type of business by becoming a member of a specific type of enterprise.

Ask:

What types of businesses can Ms. P participate in? And through what methods?

Reply:

Pursuant to Clause 2, Article 18 of the Law on Enterprises 2014, it is stipulated that: “The following organizations and individuals are not entitled to establish and manage enterprises in Vietnam: State agencies and units of the Vietnam People's Armed Forces using state assets to establish businesses for their own benefit; Cadres and civil servants as prescribed by law on cadres and civil servants; Officers, non-commissioned officers, professional soldiers, defense workers in agencies and units of the Vietnam People's Army; officers and professional non-commissioned officers in agencies and units of the Vietnam People's Public Security; Professional leaders and managers in 100% state-owned enterprises, except those appointed as authorized representatives to manage the State's capital contribution in other enterprises; Minors; persons with limited civil act capacity or who have lost civil act capacity; Persons serving prison sentences or being prohibited by the court from practicing law. business; Other cases as prescribed by law on bankruptcy”.

And Clause 4, Article 18 stipulates: “The following organizations and individuals are not allowed to buy shares of a joint stock company, contribute capital to a limited liability company, or a partnership according to the provisions of this law: State agencies and units of the Vietnam People's Armed Forces using state assets to contribute capital to enterprises for their own benefit; Subjects not allowed to contribute capital to enterprises according to the provisions of the law on cadres and civil servants”. Comparing the above provisions, Ms. P is a civil servant and therefore does not have the right to establish and manage any type of enterprise.

Regarding participation in the form of purchasing shares of a joint stock company, contributing capital to a limited liability company or a partnership, Ms. P cannot contribute capital to a limited liability company because according to the provisions of law, the capital contributor is naturally a member of the board of members of a limited liability company and when being a member of the board of members of a company, she has the right to manage the company (as mentioned above, Ms. P is a civil servant so she is not allowed to manage the company). Ms. P can contribute capital to a joint stock company but only as a shareholder (not allowed to participate in the board of directors because the board member is the manager of the enterprise. Ms. P can contribute capital to a partnership as a capital contributor (not allowed to participate as a general partner because the general partner is the manager of the partnership).

Law Office of Trong Hai & Associates