Stipulates administrative sanctions for violations of partnership and sole proprietorship

Decree 122/2021/ND-CP stipulates administrative sanctions for violations of partnership and sole proprietorship

Violations of partnership

 - A penalty ranging from VND 30 million to VND 50 million for one of the following acts:

+ Not having at least 02 members who are joint owners of the company;

(Previously, the act of failing to change the form of business when the company no longer had enough of the minimum number of members as prescribed within 06 consecutive months, was penalized from 2 million VND to 5 million VND).

+ A partnership member is concurrently the owner of a sole proprietorship or a partner of another partnership (unless otherwise agreed upon by the remaining partnership members); 

+ A partnership member or capital contributor fails to fully pay the amount of capital committed to contribute within 15 days from the date of approval, unless the Members' Council decides otherwise.

- Remedial measures: be forced to add enough partnership members for acts of not having at least 02 members who are joint owners of the company.

Thus, from January 1, 2022, violations of partnerships will be penalized up to VND 50 million.

Violations of sole proprietorship

- A penalty of between VND 20 million and VND 30 million shall be imposed for one of the following acts:

+ Contributing capital to the establishment or purchasing shares or contributed capital in a partnership or a limited liability company or a joint stock company;

+ Failing to completely record in the accounting books the increase or decrease in investment capital; all capital and assets including borrowed capital and leased assets  that are used in business activities;

+ Failing to register with the business registration agency before reducing investment capital to less than registered investment capital (Newly added content);

+ Establishing many sole proprietorships or concurrently being the owner of a business household, a partnership member of a partnership company (Newly added content);

+ Buy a sole proprietorship but do not register to change the owner of a sole proprietorship (New content added).

- Remedy: be forced registration to change the owner of a sole proprietorship for the act of buying a sole proprietorship but not registering to change the owner of a sole proprietorship.

Decree 122/2021/ND-CP takes effect from January 1, 2022 and replaces Decree 50/2016/ND-CP.

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