Unit 7 : Business Law PDF

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ASSIGNMENT 2 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 7: Business Law
Submission date July 5, 2021 Date Received 1st submission
Re-submission Date Date Received 2nd submission
Group number:
Student names & codes Final scores
PHAN PHÚ TR NG - GBS200816ƯỜ
D NG KHÁNH NGÂN - GBS200168ƯƠ
NGUY N NG C PH NG TRANG - GBS200271 ƯƠ
Class GBS0904_NX Assessor name
Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I u
a form of malpractice.
P3 P4 P5 P6 M2 M3 M4

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OBSERVATION RECORD
Student 1 PHAN PHÚ TR NG -GBS200816ƯỜ
Description of activity undertaken
1. Invalid contracts
2. The overview of a real contract
3. Assets for contributing capital to the enterprise
4. Sole proprietorship & advantages and disadvantages of sole proprietorship
5. Joint - stock company & advantages and disadvantages of the joint - stock company
6. Evaluate the effectiveness of court and arbitration in Vietnam
7. Analyse the most popular type of enterprise and a legal solution in Vietnam
Assessment & grading criteria
How the activity meets the requirements of the criteria
Student
signature: Phu Truong Date:
Assessor
signature: Date:
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Assessor
name:
Student 2 DƯƠNG KHÁNH NGÂN - GBS200168
Description of activity undertaken
1. Introduction of Contract law
2. Introduction of Enterprise
3. A legal trouble and a solution of contract law, company law, and labor law
4. Partnership & advantages and disadvantages of partnership
5. Advantages & disadvantages of limited liability company
6. Evaluate the effectiveness of court and arbitration in foreign countries
7. Analyse the most popular type of enterprise and a legal solution in Vietnam
Assessment & grading criteria
How the activity meets the requirements of the criteria
Student
signature: Khanh Ngan Date:
Assessor
signature: Date:
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Assessor
name:
Student 3 NGUY N NG C PH NG TRANG - GBS200271 ƯƠ
Description of activity undertaken
1. Introduction of Contract law
2. Invalid contracts
3. Distinguish charter capital and legal capital
4. Limited liability company
5. Advantages and disadvantages of 4 dispute resolutions
6. Advantages and disadvantages of 4 types of enterprise
7. Analyse the most popular type of enterprise and a legal solution in Vietnam
Assessment & grading criteria
How the activity meets the requirements of the criteria
Student
signature: Phuong Trang Date:
Assessor
signature: Date:

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Assessor
name:
Student 4
Description of activity undertaken
Assessment & grading criteria
How the activity meets the requirements of the criteria
Student
signature: Date:
Assessor
signature: Date:
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Assessor
name:
Student 5
Description of activity undertaken
Assessment & grading criteria
How the activity meets the requirements of the criteria
Student
signature: Date:
Assessor
signature: Date:
Document Page
Assessor
name:
Summative Feedback: Resubmission Feedback:
Grade: Assessor Signature: Date:
Internal Verifier’s Comments:
Signature & Date:

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I. INTRODUCTION ...................................................................................................................... 11
II. MAIN BODY ............................................................................................................................. 11
A. CONTRACT LAW ........................................................................................................................... 11
1. Introduction of Contract Law ............................................................................................ 11
a) Definition: .......................................................................................................................... 11
b) Types of contract: ........................................................................................................... 11
c) Invalid contracts: ............................................................................................................ 13
2. A real contract & An overview .......................................................................................... 16
a) A real contract: ................................................................................................................ 16
b) An overview: .................................................................................................................... 16
3. Legal problem - Contract law ............................................................................................ 18
a) A trouble: ............................................................................................................................ 18
b) A legal solution: ............................................................................................................... 19
B. COMPANY LAW ............................................................................................................................. 21
1. Introduction of Enterprise .................................................................................................. 21
a) Definition: .......................................................................................................................... 21
b) Charter capital & Legal capital: ................................................................................ 21
c) Assets for contributing capital to the enterprise: ............................................. 23
2. Main different types of enterprises ................................................................................. 24
a) Sole proprietorship: ...................................................................................................... 24
b) Partnership company: .................................................................................................. 27
c) Limited liability company: .......................................................................................... 30
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d) Joint stock company: ..................................................................................................... 33
4. Legal problem - Company law ........................................................................................... 37
a) A trouble: ............................................................................................................................ 37
b) A legal solution: ............................................................................................................... 38
C. LABOUR LAW ................................................................................................................................. 40
a) A trouble: ............................................................................................................................ 40
b) A legal solution: ............................................................................................................... 40
D. ANALYSIS & EVALUATION ...................................................................................................... 42
1. The effectiveness of Court and Arbitration ................................................................. 42
2. The most popular type of Enterprises - Vietnam ...................................................... 43
3. The most popular Dispute Resolutions - Vietnam .................................................... 45
III. CONCLUSION ......................................................................................................................... 47
IV. REFERENCES ......................................................................................................................... 47
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I. INTRODUCTION
Haelen is a Two-member limited liability company about manufacturing furniture in Vietnam, with a
specific address: 10B Street No. 11, Son Ky, Tan Phu, Ho Chi Minh City, website:
https://hosocongty.vn/cong-ty-tnhh-hai-thanh-vien-haelen-viet-nam--hcmc--com.htm. There
are shareholders: Ms. Nguyen Thi Loan, ordinary shareholder owns 100 ordinary shares, Mr.
Tran Van Binh is a voting preference shareholder owns 50 dividend preference shares, Mr. Vo
Phung and Ms. Nguyen Chi Mai jointly founded the company and each owns 35% of the company's
charter capital which is recorded in the list of founding shareholders of the company.
Haelen Limited Liability Company has three issues related to company law, contract law and labor
law, which is a capital contributor failure to contribute capital adequate and on time, contract
for the sale and purchase of building materials with a company construction of Russia, and
employee severance contract.
This report will give solution and resolution for those problems based on four dispute Resolution:
Negotiation, Reconciliation, Arbitration, Court. Through which people will understand more about
the concept, rules and operation according to the law of company law, labor law and contract law.
II. MAIN BODY
A. CONTRACT LAW
1. Introduction of Contract Law
a) Definition:
A contract is a legal promise made by two or more parties (legal entities) to do or not do anything
within the legal structure. Contracts are frequently connected with projects, in which one party
undertakes to carry out the project or a portion of a project for himself with the help of other
parties. Contracts can be economic civil agreements (economic contracts) or social ones, just as
there are socio-political projects, manufacturing and commercial initiatives.
b) Types of contract:
There are three main kinds of contract:
Oral contract
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An oral contract is a type of commercial contract in which the conditions are communicated and
agreed on orally rather than in written. Although proving the requirements of an oral contract in the
case of a crisis may be difficult, this particular deal is valid and binding.
Written contract
In contrast to an oral contract, a sort of contract in which the provisions have been committed to
writing or physical form.
Electronic contract
An electronic contract is one that is formed by the use of data that is produced, transferred,
obtained, and stored technologically
Advantages & disadvantages
Contract ADVANTAGES DISADVANTAGES
ORAL - Best used for simple agreements
- More quickly and easily
The simpler the contract, the
lower the chances that the parties
involved will need to go to court
- Save time
- More likely to fall apart when held up to
the scrutiny of a court
WRITTEN - Protect people’ interests more
effectively. Some types of contracts are
only binding when written.
- Time-consuming to create and complete
- Complex to understand
- Limits Flexibility: formalizing an
agreement puts restrictions on the ability
to operate flexibly in the future
ELECTRONIC - Ease of access: getting documents
attested via online is fast, which saves
considerable time for both sides
- Improve Document Accuracy
- Save Time and Money.
- Restricted Storage
- Unassured Security
- Dependency on Proprietary Software
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c) Invalid contracts:
There are two types of invalid contracts:
Void contracts & Voidable contracts
When the parties to a contract disagree, it is up to a court to decide whether the contract is valid,
invalid, or voidable. The major distinction between void and voidable contracts is that a void
contract is invalid from the start, whereas a voidable contract is valid at first but may become void
later at the decision of one of the parties.
i. VOID CONTRACTS:
A contract breaches a legal restriction and ethical standards
A contract whose purpose or content violates the prohibition of the law or is contrary to social
ethics shall be invalidated. The object (i.e. the subject matter of the agreement) cannot be unlawful;
for example, the law will not uphold an Employment Contract requiring someone to commit a crime,
such as stealing.
The prohibition of the law is the provisions of the law that do not allow the subject
to perform certain acts.
Social ethics are common standards of behavior in social life, which are recognized
and respected by the community.
The statute of limitations for requesting the Court to declare the contract invalid in this case is not
limited.
A contract is performed by people with incapacity
Persons who are incompetent to perform a contract are: people who have lost their civil act
capacity, people who have difficulty with cognitive and behavioral control problems, people who are
underage. For the age to be eligible to enter into a contract:
Individuals aged 6 to 15 are permitted by law to enter into modest contracts with the
main objective of centering within daily life.
Residents aged 15 to 18 can trade any sort of contract, with the exception of real estate
contracts.

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The legislation takes age as a requirement for capability, defining adulthood as being 18,
19, or 21 years old. When a person reaches the age of 18, mental competency comes into
play. The parties must establish their legal competence to enter into a contract, which
implies they grasp the nature and impact of the deal completely.
For businesses or organizations, when performing a contract, it is necessary to have a legal
representative of the organization to be responsible for the process of making and signing the
contract.
A contract is void due to inconsistent form
A contract that violates regulations on formal validity conditions shall be invalid, except in the
following cases:
A contract established in accordance with the provisions must be in written form, but
the document is not in accordance with the provisions of law and one party or the
parties have performed at least two-thirds of the obligations in the contract, the Court
shall issue a decision to recognize the validity of such contract at the request of one
party or the parties.
If a contract is made in written form but violates the mandatory provisions on
notarization and authentication, but one party or parties has performed at least two-
thirds of the obligations in the contract, the Court shall make a decision based to
recognize the validity of such contract at the request of one party or the parties. The
parties are not required to undertake the notarization and authentication in this
scenario.
ii. VOIDABLE CONTRACTS:
A contract is voidable since the creators are unaware of and has no control over their conduct
A person with civil act capacity who signs a contract at the inappropriate time without being aware
of and directing his or her acts has the right to seek that the contract be declared legally enforceable
by the Court. Copper is invalid.
When seeking that the Court declare a contract invalid, the requester must prove and have evidence
to substantiate that the contract was created at the appropriate period, but he was unaware of
his/her actions.
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In this scenario, the statute of limitations for seeking the Court to declare the contract unlawful is
two years, beginning with the date on which the person who is not aware of and has mastered
his/her acts enters into the contract.
A contract is void due to coercive, fraud, mistake
Mistake:
A confusing contract is a case where such a contract is established when there is a mistake that
causes one or the other parties to fail to achieve the purpose of the establishment of the contract.
When detecting that a contract is mistaken, the mistaken party has the right to request a court to
declare the contract invalid, except for the following cases:
The purpose of establishing the contract has been achieved or the parties can immediately
remedy it. Confusion makes the purpose of the conclusion of the contract achievable.
The statute of limitations for requesting the Court to declare the contract invalid in this case
is 2 years from the date on which the mistaken or deceived person knows or should have
known that the contract was established due to confusion or deception.
Fraud:
When parties enter into a contract in order to hide another contract, that contract is forged and
declared unlawful, but the concealed contract remains legal, unless such contract is also invalidated
by the rules of the Civil Code or other applicable legislation.
If a false contract is created in order to avoid duties to a third party, that contract will be considered
invalid as well. In this situation, the statute of limitations for petitioning the Court to declare the
contract void is unrestricted.
Coercive:
When a party enters into a contract due to being deceived or threatened or coerced, it has the right
to request the court to declare the contract null and void.
Deception in a contract is an intentional act of one party or a third party to mislead the
other party about the subject, nature of the object, or the content of a civil transaction,
so a contract has been established.
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Threat or coercion in a contract is an intentional act by one party or a third person to
force the other party to perform a contract to avoid damage to life, health, honor,
reputation, dignity, property of his or her relatives.
This invalidity of the contract is a violation of the condition that the subject participating in the
contract must be completely voluntary.The statute of limitations for requesting the Court to declare
the contract invalid in this case is 2 years from the date on which the threatening or coercive person
ceases the threatening or coercive act.
2. A real contract & An overview
a) A real contract:
Contract for opening an account and registering for the service
(Attached appendix)
b) An overview:
i. FORM:
This is the form of written contract and have the endorsement of both parties on the agreement on
the content and the terms attached
ii. CONSIDERATION:
Benefits of customers: Customers can open securities trading accounts and are
provided with securities information and services to support effective investment from
HSC.
Responsibility of customers: Paying the service fee and complying with the terms of
the signed contract.
Benefits of HSC: Customers reimbursed it for brokerage and consulting costs.
Furthermore, if the service quality is high, it will be known by a substantial proportion
of customers, increasing its reputation and gain a competitive advantage.
Responsibilities of HSC: Assuring reliability, honesty, fairness, and trustworthiness, as
well as professionalism, security, and legal compliance.
iii. LEGALITY:

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Securities trading services, derivatives trading, margin trading at HSC.
These are the types of legal services in Vietnam.
iv. CAPACITY:
Customers are not people who lack of full civil abilities, are serving jail terms, or have been barred
from conducting business by a court, nor are they directors, deputy directors, department heads, or
employees of other trading members.
v. CLAUSES IN THE MENTIONED CONTRACT:
Condition
Customers register to open securities trading accounts, derivatives trading accounts, securities
margin trading accounts at HSC.”
Warranty
The Customer affirms that the information Customer provides to HSC is up-to-date,
complete, accurate and true, and acknowledges that such information shall form part of the
Terms and Conditions. Open a Securities Trading Account; Terms and Conditions of
Derivatives Trading; Terms and Conditions Securities Trading Utilities Service, Securities
Margin Trading Contract; Annexes (if any). The Customer undertakes to promptly notify
HSC of any changes related to the provided information”.
The Customer affirms that the information Customer provides to HSC is up-to-date,
complete, accurate and true, and acknowledges that such information shall form part of the
Terms and Conditions. Open a Securities Trading Account; Terms and Conditions of
Derivatives Trading; Terms and Conditions Securities Trading Utilities Service, Securities
Margin Trading Contract; Annexes (if any). The Customer undertakes to promptly notify
HSC of any changes related to the provided information.”
The Terms and Conditions and the Addendums are an integral part of the Contract”
Exclusion
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The Customer understands that HSC is under no obligation to approve the customer's
account opening request and is not required to give a reason for disapproval of the
customer's account opening request.”
Penalty
The Customer is not an individual who does not have full civil act capacity, is serving a
prison sentence, or is banned from doing business by a court; or Director (General Director),
Deputy Director (Deputy General Director), department heads, employees of other
transaction members.”
Force majeure
No Mention
3. Legal problem - Contract law
a) A trouble:
Contract for the sale and purchase of building materials by sea lanes
Situation
An Italian group (A) signs a contract to buy building materials (iron) from a Russian group (B) on
September 2. B signed a contract with an agreement to deliver the goods on December 1. But on
November 15, B sent a notice to extend the delivery time on January 1 due to the freezing sea
surface, unable to transport goods. A refused and filed a lawsuit against B.
Problem
A asked B for compensation for not satisfying the "Force Majeure" clause in the contract, because on
December 1, the winter in Russia is frozen every year, B can predict the weather yet still agree to
sign the contract.
B committed to deliver goods on December 1, which means they can still deliver on time when using
an icebreaker like every year, but this year, the winter came early, and the temperature dropped to a
record low, the ice is so thick that icebreakers can't be used (they provide documents proving that
the temperature this year is lower than usual and the ice is thicker than every year).
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b) A legal solution:
Solution
Since this is a dispute of two parties A and B arising from commercial activities so it can be resolved
by arranging through third party that is the arbitration to solve the problems mentioned above.
Based on these circumstances, the problem occurred, as well as the desire of both parties, after
consideration, commercial arbitration with a final judgment as Party B does not pay compensation
for Party A for Party B have been met " Case of force majeure". Specifically, because B had foreseen
the weather factor, but they did not expect this year's temperature to drop so sharply.

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Advantages & disadvantages
ADVANTAGES DISADVANTAGES
The method is simple and quick, importantly
the parties can be active in deciding when
and where to settle the issue without going
through many phases of adjudication
Saving time and money for business.
The costs of resolving conflicts through
arbitration can be quite high, based on the
value of the case.
The parties have the option of selecting their
own arbiter (have a high level of expertise)
Solving issues rapidly and precisely
The arbitral judgement is totally reliant on
the willingness of the disputing parties.
The concept of arbitration is not publicly
exposed, which helps the parties preserve
their market reputation.
In this case, party B don not suffer much
damages and still maintain its company’
credibility with other organizations.
The arbitration agreement is a condition
required to dispute settlement under the
jurisdiction of the arbitrator.
Having formed by the parties' agreement,
adjudicating for the parties' goals rather
than in the behalf of state power
In case it is necessary to apply provisional
urgent measures to secure evidence
Cannot make a binding decision on that but
must ask the court to enforce the arbitration
award.
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B. COMPANY LAW
1. Introduction of Enterprise
a) Definition:
Enterprise is an economic organization having its own property, name, as well as a steady
transaction office, and is provided with a certificate of registration in compliance with the law to
carry out market business activities.
The continuous operation of some or all phases of the investment process, from manufacturing
through consumption of products or provision of services in the market for the goal of profit.
Enterprise is a for-profit economic organization, despite the fact that some commercial
organizations engage in non-profit activities.
b) Charter capital & Legal capital:
Definition
Charter capital:
It is the total value of assets owing to members contributing or committing to contribute to the
formation of limited liability companies, partnerships; the total par value of shares sold or
subscribed to the formation of businesses to joint-stock companies
Legal capital:
It is the minimum capital required by a business line with conditions. Currently, legal capital is
commonly utilized in specialized legal documents for each specific industry.
For example: In Vietnam, according to Enterprise Law 2005
Real estate business: 20 billion VND
Business in domestic travel services: 100 million VND (enterprises deposit 100 million
VND)
Business travel services for international tourists to Vietnam: 250 million VND
(enterprises deposit 250 million VND)
Credit information activities: 30 billion VND
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Distinguish charter capital and legal capital
CHARTER CAPITAL LEGAL CAPITAL
SIMILARITIES Charter capital and legal capital are both assets of the firm generated by the
company's members and shareholders.
According to the company's capital to determine the responsibility, tax rates,
and criteria for defining enterprise size (medium or small).
DIFFERENCES When establish a company, it is
required to register a charter
capital.
No specific provisions on
minimum and maximum.
Charter capital may increase or
decrease in the course of business
operations.
Capital contribution within 90
days after registration.
The members of the company are
responsible for corresponding
capital contribution or
contribution commitment,
depending on the type of
enterprise.
Not be less than the legal capital
to industries with the respective
conditions.
Minimum regulations for each
sector.
Must be satisfied when conducting
business with conditional lines.
The legal capital is fixed for each
business line.
Some cases required to deposit
prescribed.

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c) Assets for contributing capital to the enterprise:
Convertible foreign currencies or Gold
This is the kind of property which enterprise members/shareholders prefer to commit the greatest
capital. Because it is fast and easy to contribute capital using assets from this category without
having to sign up and change ownership as with the other assets contributed as capital.
Value rights to use land
Before making a capital contribution to this sort of asset, the founding members/shareholders
must undertake an assessment or convert the value into currency through a specialist
evaluation organization.
The value of land use rights is used by the founding members/shareholders to contribute capital to
establish the enterprise's assets. After contributing capital in the form of land use rights, the
founding member/shareholder no longer owns such rights. The company whose money is supplied
by a land user with land use rights will become the legal owner of that land.
Value rights to use intellectual property
When people or organizations wish to contribute capital using intellectual property rights, they
must conduct the valuation and convert it into currency, comparable to the capital contribution
by the value of land holdings.
Capital contributions with intellectual property rights will only be used to the property rights and
moral rights linked to the property of authors, artists, and scientists. That is, moral rights that are
not associated with property rights, such as the right to name on the work or the right to publish the
work, will not be the subject of capital contribution. Other forms of intellectual property rights, such
as industrial property rights to innovations, trademarks, layout plans, business secrets, trade names,
and rights to plant varieties, are also utilized to contribute capital.
Other types of assets contributed
Contribute capital with other assets such as technology, business know-how, or other special assets
such as relationships, existing customer base, or other help, etc. As long as these assets are approved
by the company's members/shareholders and priced appropriately, they can be considered a
legitimate asset class.
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2. Main different types of enterprises
a) Sole proprietorship:
Definition
A sole proprietorship is a business owned by one person who is entirely accountable for all of the
company's assets and all of the company's operations and may not issue any type of securities.
It is the only type of enterprises established by an individual. A single proprietorship owner cannot
also be the owner of a business home or a participant in a partnership.
In contrast to corporations (corp.), limited liability companies (LLCs), or limited liability
partnerships (LLPs), a sole proprietorship does not constitute a separate legal entity. As a
result, the sole proprietorship's owner is not exempted from the entity's responsibilities.
For example:
The obligations of a sole proprietorship are also the debts of the owner. However, because all
earnings flow directly to the business's owner, the profits of a sole proprietorship are also the
profits of the owner.
Characteristics
Having no private property because when established a company, the default that the
company property and personal property are 1 as the liability is attached to the personal
property.
The owner is responsible for the operation of the business and has unlimited liability in the
event of bankruptcy.
Do not issue securities and participate in the stock market.
Has no legal status
Flexible capital ownership.
Owners have completed control over the assets of the business as well as are not subjected
to personal income tax.
Owners have the right to lease for the time allowed but is still responsible for the operation
of the business. There is also the right to sell, assign and the business owner is still
responsible for the business obligations arising before the sale but not yet performed.
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Increase & decrease the capital
A Sole Proprietorship owner's investment capital is registered by the business founder personally.
The owner of a Sole Proprietorship has the responsibility to pursue or decrease the investment
capital in the enterprise's commercial operations during the operation. If the registered investment
capital of a private business increases or decreases, the owner must send a Notice of Change of
Capital to the Business Registration Office where the enterprise is formed.
Organizational structure
The owner of a sole proprietorship has completed discretion overall business activities of the
enterprise, the use of profits after tax payment, and other financial obligations.
The owner of a sole proprietorship can directly or hire someone else to manage and operate the
business. In case of hiring another person to act as the managing director of the enterprise, the
owner of the business still has to take responsibility for all business activities of the enterprise.

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Advantages & disadvantages
STRENGTHS LIMITATIONS
A private business owner is fully active in
deciding all matters related to the business
also is the legal representative of the
business
Being able to respond more quickly to day-
to-day changes and decisions.
The death, physical impairment, or mental
incapacitation of the owner can immediately
result in the termination of the business.
Less tightly bound by law than other types
of businesses
Experiencing less government control and
taxation
No legal status and be responsible for 100%
of all business debts and obligations
The unlimited liability regime is prescribed
help private enterprises, so freely create
trust from partners
Raising capital and cooperate in business
more easily
Typically more difficult for sole proprietors
to raise operating cash or arrange long-term
financing because they have fewer assets.
The organizational structure of a private
enterprise is relatively simple
Controlling all of the money made by the
business.
Less professional than a corporation or an
LLC.
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b) Partnership company:
Definition
The term partnership, is employed to mean a business structure whereby two or a lot of people,
close for enterprise a lawful business and have in agreement to share the profits and losses arising
from it. The management and operation of the business should be performed either by all the
partners or any of them, acting for all the partners.
General partners and limited partners: Participating in managing the partnership and
having liability for partnership debts and obligations. Limited partners invest but do not
participate in management.
Different levels of partners: For example, there may be junior and senior partners. These
partnership types may have different duties, responsibilities, and levels of input and
investment requirements.
Characteristics
Membership: A minimum of 2 people needed to start a partnership whereas the utmost
range of members is restricted to one hundred. All the people have to enter into a contract
to become partners. Besides, minor is admitted to a partnership to share profits.
Sharing profits and losses: This is the most important purpose of the partnership within
the united magnitude relation. However, when there are no agreements between partners,
the business profits or losses are divided equally among all the partners.
Mutual Agency: The partnership business is undertaken by all the partners or any agencies
act on behalf of the partners. As a result, each partner not only be a principal in addition as
associate agent but they bind the others as well
Voluntary Registration: The registration of partnership isn't necessary, but it should be
fulfilled because of offering sure benefits
For example: In case there are conflicts among partners, any partner will file suit against
different partner or if there's any disputes between company and external parties, the company will
file a case against that party.
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Continuity: Typically, there's a scarcity of continuity in partnership, like death, bankruptcy,
retirement or mental disease of any partner will lead to the end of partnership
Contractual Relationship: The relation subsisting between partners is because of the
contract, which can be oral, written or implicit .
Increase & decrease the capital
Increase:
The company may accept additional general partners or capital contributors. The admission
of new members of the company must be approved by the Members' Council.
New general partners must be jointly liable with all their assets for the company's debts and
other property obligations, unless that member and the remaining members agree
If approved by the Council of Members, the company can completely accept new members and
thereby increase the charter capital of the company
Decrease:
According to current law, a partnership can reduce its charter capital by terminating the
partnership membership or reduce its capital by carrying out the procedures for
registration of capital changes in accordance with the law.
Cases of termination of general partner membership:
Voluntarily withdrawing capital from the company
Has died, has been declared missing by a court, has limited civil act capacity or has lost civil
act capacity
Being expelled from the company
Other cases prescribed by the company's charter.
General partners have the right to withdraw capital from the company if approved by the
Members' Council. In this case, a member who wants to withdraw capital from the company
must notify in writing of the capital withdrawal request at least 06 months before the date of
capital withdrawal.
Organizational structure
The organizational and management model of a partnership includes: Council of
members, chairman of the members' council, director (general director).

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The Members' Council: This is the highest authority in a partnership. The Members'
Council includes all members (general partners and capital contributors). The Members'
Council elects a general partner to act as the chairman of the Members' Council and make a
decision on every business activities of the company.
Director (general director): Unless otherwise provided for in the company's charter, the
chairman of the Members' Council is concurrently concurrently the director (general
director).
The Chairman of the Members' Council, the Director (General Director) has the main tasks such
as: Managing and operating the daily business of the company, assigning business
cooperation, representing the company in disputes.
Advantages & disadvantages
STRENGTHS LIMITATIONS
More capital thanks to the cooperation and
the investment of partners
Better chances for growing in the future
Share profits equally
Conflicts arise because of the difference of
working productivity among partners
Good cooperation of many people
Flexibility and ease in decision - making
Disagreements in any issues
Damaging the whole integrity of the
company
Combine the personal prestige of each
individual seperately
Create a reliable reputation for an
enterprise
Lifespan limitation when one of the partners
withdraws interests of has problems
Interrupt the company’s development
Shared responsibility to partners according
to the ability and expertise
Operating and managing with high
efficiency
Unlimited liability regime
High risk level of general partners
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c) Limited liability company:
Definition
A limited liability company is a company in which the members are only accountable for the
company's liabilities to the extent of the capital contributed to the company. The amount of
capital agreed to invest to a limited company is stated in the firm's charter at the time of formation.
A limited liability company includes two types:
A single-member limited liability company is an enterprise owned by an organization or an
individual. The company owner is responsible for the company's debts and other property
obligations to the extent of the company's charter capital.
A multi - member limited liability company has two and no more than 50 members (In
Vietnam). If the number of members is from 11 onwards, a company control committee must be
established. Members are only responsible for debt obligations and obligations other assets within
the amount of capital contributed to the company.
Characteristics
Has a legal status:
The company has assets independently, with its own seal, its own head office and can on behalf of its
participating legal relations independently from the date of issuance of the certificate of registration
of business without being dependent on the status of the owner.
Only limited liability:
Members/owners are responsible for debts and other property obligations of the enterprise to the
extent of the amount of capital contributed to the enterprise.
Ability to raise capital:
The limited company has the authority to raise money by borrowing funds and credit from persons
and organizations, as well as the authority to issue bonds but not shares.
Capital-contributing members:
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For the single - member LLC, only one capital - contributing member is the sole owner of the
company. If you want to add capital contributors, a one-member limited liability company must
convert into a multi - member limited liability company or a joint-stock company.
For the multi - member LLC, there will be at least two members and at most fifty capital
contributors. If more than fifty members are desired, a limited liability company with two or more
members must be converted into a joint stock company.
Increase & decrease the capital
SINGLE - MEMBER LLC MULTI - MEMBER LLC
Adjusting the
charter capital
Increase charter capital through
the company owner contributing
more capital or mobilizing
additional capital contributed by
others.
In case the charter capital is
increased by mobilizing additional
capital contributed by others, the
company must organize
management in the form of a
limited liability company with two
or more members or a joint-stock
company.
2 ways to raise capital
+ Increase the member's contributed
capital;
+ Receive additional capital
contributed by new members.
The company can reduce capital
by buying back the member's
contributed capital according to
regulations
Transferring
the contributed
capital
The company owner has absolute
power to transfer and dispose of
all or a portion of the company's
charter capital.
Members may transfer their
capital contribution to others,
they must offer such capital for
the remaining members.
The remaining members have
priority to buy. If the remaining
members do not buy, that
member has the right to transfer
to a third party with the same
terms and conditions as offered
to the remaining members.

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Organizational structure
SINGLE - MEMBER LLC
The organizational structure of a one-member limited liability company varies from case to case the
owner is an individual or an organization, but there are two main models as follows:
Company President > Director/General Director > Controllers
Members' Council > Director/General Director > Controllers
MULTI - MEMBER LLC
A muliti - member limited liability company must have: a Board of Members, a Chairman of the
Members' Council, a Director or a General Director.
Advantages & disadvantages
SINGLE - MEMBER LLC
STENGTHS:
The investor can be an individual or an organization
Expanding the audience more than a sole proprietorship
The owner has complete authority over all aspects of the operating performance
Easy to operate
Having legal status and the investor has limited liability within the charter capital
Minimizing risks in manufacturing and business operations
LIMITATIONS:
When contributing capital, the owner must follow several processes in order to transfer
ownership of the assets donated as capital to the enterprise.
Limiting the investor's ability to use the assets
Be not permitted to raise capital by issuing shares
Can’t carry out large-scale business activities
Complicated in raising capital
MULTI - MEMBER LLC
STENGTHS
Relatively suitable number of members
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Not having much difficulty in running the company
Tight capital transfer conditions
Easily control members and limit the penetration of strangers into the
company.
LIMITATIONS
Restricted capital mobilization due to the prohibition of issuance shares
Limited in size and ability to expand business fields.
Restrictive members
Miss some good opportunities from other investors
Both have benefits and weaknesses, whether it is a one-member limited liability company or a
two-member limited liability company. But it is clear that the limited company is best suited for
small and midsize enterprises.
d) Joint stock company:
Definition
The joint-stock company is a type of enterprise in which the charter capital is divided into equal
parts as shares and is issued to the market to mobilize capital for investment from all economic
sectors. The owners of shares are called shareholders.
Joint-stock corporations are established to finance endeavors that would be too costly for an
individual or for a government to sponsor. A joint-stock company's shareholders expect to share in
its earnings.
A joint-stock company's shares are convertible. If the joint-stock company is publicly listed,
its shares are exchanged on regulated stock markets. Shares of private joint-stock company
shares can be transferred between parties, although the procedure is frequently restricted
by an agreement.
Characteristics
Having a minimum number of members during the operation of the company is three and
no maximum limit. Shareholders can be individuals or organizations;
The charter capital is divided into equal parts and is called a share
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Having a legal status from the date of issuance of the Certificate of Business Registration;
Shareholders take responsibility just for the debts and other property obligations of the
enterprise to the extent of the amount of capital contributed to the enterprise
Shareholders are free to transfer their contributed capital to shareholders or other
individuals and organizations
During its operation, the joint-stock company can issue shares of all kinds to raise capital.
Increase & decrease the capital
The charter capital of JSC is the total par value of shares sold all kinds and at the time of
registration of the establishment is the sum of the value of shares of the kinds which has been
subscribed and recorded in the Charter of company.
Increase:
Offering shares to existing shareholders
The nature of this activity is that the existing shareholders make additional capital contributions.
According to the law, this is an action of buying shares offered for sale by the company to increase
capital
Private share offering
A joint-stock company is not allowed to present shares directly to a person who is not a
shareholder of the company. Besides, new shareholders can contribute capital in two official
ways:
Offering private shares to new shareholders
Transferring shares of the old shareholders to the new one in order to record
existing shareholders, then offer to sell to existing shareholders.
Dividend payment in the company
The payment of dividends in the company is the division of business profits after deducting all
expenses and taxes. The profits are passed on to the shareholders and become reinvested capital
immediately.

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In addition, the company can raise capital by offering shares to the public, this case applies to
joint-stock companies that have been listed under the securities law.
Decrease:
Charter capital drop as the demand for the company's capital reduction by the company
to change business lines, reorganize small-scale than before, especially when
companies make losses and accumulated losses by 50% of the shareholders capital
upwards
Companies buy back shares issued
Specifically, the company shares will be bought back shares at 02 cases:
Acquisition of shares at the request of shareholders.
Acquisition of shares under the company's decision.
The Company repaid a capital contribution under the decision of the General Meeting of
Shareholders to the shareholders in proportion to their shareholding in the company
Shareholders must pay in full for the number of shares registered to buy within 90 days from
the date of issuance of the Business Registration Certificate. If after 90 days shareholders have
not paid or only partially paid, the company must register to adjust the charter capital equal to
the par value of the paid shares.
Organizational structure
The organizational and management structure of a Joint Stock Company includes
General Meeting of Shareholders, Board of Directors, Director (General Director),
Board of Supervisors.
In a joint-stock company with more than 11 individual shareholders or an organization
shareholder holding more than 50% of the total shares of the company, there must be a Board of
Supervisors.
General Meeting of Shareholders: Consisting of all shareholders with voting rights is the
highest decision-making body of a joint-stock company.
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The Board of Directors: Has full authority to decide on behalf of the company all issues
related to the purposes and interests of the company, except for matters falling under the
authority of the General Meeting of Shareholders.
The Board of Directors has not less than three members, not more than eleven members unless
otherwise provided for in the company's charter. Members of the Board of Directors are not
necessarily shareholders of the company.
Director or General Director: Runs the day-to-day business of the company. They are
under the supervision of the Board of Directors and are responsible for the performance of
their assigned rights and duties.
If the company's charter does not stipulate that the Chairman of the Board of Directors is the
legal representative, the Director or General Director is the legal representative of the company.
The term of the Director or General Director shall not exceed five years; maybe reappointed for
an unlimited number of terms.
Board of Supervisors: Has the same task as the judicial authorities in the model of
separation of powers to help shareholders control the company's governance and
management.
The Supervisory Board has from 3 to 5 members, unless otherwise provided for in the
company's charter. The term of the Supervisory Board shall not exceed five years. Members of
the Supervisory Board may be re-elected for an unlimited number of terms. The Supervisory
Board must have more than half of its members permanently residing in Vietnam.
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Advantages & disadvantages
STRENGTHS LIMITATIONS
Issuance of shares and bonds to the public
Allow the vast mobilization of capital
Encourage reckless speculation in shares
An evil of great magnitude of many cases
stock exchanges
The vast capital collected by shares leads to
the enormous earnings
Ultimate the scope expansion and
sustainable growth of an enterprise
Must approach the large number of people
for its capital
Has difficulties in an establishment
Shareholders are just reliable for debt within
the extent of their contributed capital
Low risk level of shareholders
An excessive manipulation of Law
Harms the proper functioning of the
company
Shares are unrestrained transferable in any
ways
Permanent existence of the company
Management of company remains in hands
of lots of people
Lack of maintaining the secrecy
Risk of loss are divided equally by a huge
numbers of shareholders
Diffused risk
Decisions are not made by a single individual
A postpone in decision-making
4. Legal problem - Company law
a) A trouble:
Failure to contribute capital sufficiently and on time
Situation
Company A is a 2-member limited liability company with 100% Korean capital, registered capital of
3 billion VND. Member B signed a capital contribution contract with company A on December 20,
2019. In the terms of the contract, the members commit to contribute the full amount of capital
within 50 days. However, capital-contributing member B has not done its obligations until the 52nd.
Problem

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If member B fails to contribute in full and on time, it is considered a debt of that member to the
company A and must be in charge of compensating for any arising damage.
If within a certain period of time, that member B still does not pay the full amount, then of course
that person is no longer a member of the company and the company must register to change the
business registration.
b) A legal solution:
Solution
First, member B and company A's side can negotiate with each other on registering to change the
capital contribution term and member B must fulfill the financial obligations previously committed
to company A. By then, if member B still does not complete the capital contribution and after 90
days as prescribed by law, company A can ask the court to intervene and hold member B
responsible for the damages incurred.
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Advantages & Disadvantages
NEGOTIATION COURT
OVERVIEW Dispute settlement is quite simple,
but the negotiation results depend
on the goodwill of the parties.
Dispute settlement at adjudication
agencies in the name of state power
shall be conducted according to strict
and strict order and procedures.
PROS Being simple, effective, convenient,
and less costly for both parties
Be not constrained by strict
regulations on the process
Self - settlement
Protect the reputation of relevant
party (In this case, it means
protecting the credibility for member
B in the market).
The principle public is deterrent
Avoid worse problems from happening
High coercive
Parties are forced to comply with the
court’s ruling (In this case, member B is
required to strictly abide by the law and
pay a fine in accordance with regulations
for company A)
CONS All things have to depend on the
good will of both sides to resolve
Without the involvement of the
Law
Results are not subject to legal
regulation
The principle of an open trial
Secrets are revealed and reputation is
diminished
Court decisions are usually appealed
The proceeding may be prolonged
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C. LABOUR LAW
Dismissal of employees between A and the Limited liability company B
a) A trouble:
Situation
Currently, A is working at a limited liability company, A has a labour contract from January 1, 2019,
to December 31, 2019. However, on July 1, 2019, the company stopped working and asked the
employee to apply for leave, but A didn’t agree.
The legal trouble is: “Dismissal of employee”
Problem
In case of business suspension, the enterprise B must fully pay the outstanding tax amount also
continue to pay debts, complete the performance of contracts signed with customers and employees.
Besides, for employees, during the temporary suspension of business, the company must reach an
agreement with the employee on benefits and employment, such as: payment of wages pending
work, suspend the performance for the benefit of the company suspending business, etc. When the
business suspension period expires, the company must continue to perform a labour contract with
the employee. In order to represent and protect the interests of workers, the grassroots trade union
considers the matter from a legal perspective in order to have a neutral voice to represent and
protect the interests of employees.
However, the enterprise can also terminate the labour contract and the company carries out the
procedures for paying job loss allowance to the employee as follows:
Severance allowance: In case the employee has continuously worked for 12 months or
more
Wages for stopping work: The company's termination of work for A for objective
economic reasons. Therefore, the salary the company pays A will depend on the agreement
between the two parties
b) A legal solution:
Solution

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The company will ask a mediator to mediate with the employee. If according to the law, employee A
will not be entitled to unemployment benefits (because he only works for 7 consecutive months,
according to the law, he will receive this amount after 12 months). Therefore, in order to achieve the
best dispute result and satisfy both employee A and company B, the decision will be: The company
will pay the employee A the amount of time off work due to the company's economy. Thus, the
salary of the remaining months will depend on the agreement of the two parties; it will be lower
than the salary agreed in the contract but not lower than the minimum salary prescribed by the
government. This settlement has met the goodwill of both parties and this dispute is considered
to have been settled successfully.
Advantages & disadvantages
This is a method of resolving business disputes with the participation of an independent
third party acting as a mediator - namely, a mediator agreed by company B and employee A’
option. Third parties should have an independent position for the parties to the dispute, not
in a position of conflict of interest of one of the parties are in dispute. This means that the
mediator will have certain objective opinions, not in terms of the interests of employee A or
company B in this case.
ADVANTAGES DISADVANTAGES
Pleasant resolution
Maintain and strengthen business
relationships for the benefit of both parties as
well as their collaboration
Depends on the goodwill of both parties.
No mandatory enforcement
Has a third party mediate
Increased chances of succeeding
Closed form of settlement
Illegally negative consequences
Basic conciliation procedure
Unconstrained and saving time
The participant of the third party
Costly services for third parties
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D. ANALYSIS & EVALUATION
1. The effectiveness of Court and Arbitration
VIETNAM
Vietnamese are get used to using Court to solve disputes as they they do not voluntarily
fulfill their obligations
Arbitration Court
Costly because the arbitration is a non-
governmental organization with independent
finance. The main source of income is the
arbitration fee per case
Fees are lower
However, if the trial is prolonged, the total
cost may be much higher than the arbitration
fees
The conflict can be resolved amicably and the
two sides can continue to maintain a cooperative
relationship with each other due to the non-
public settlement principle
The conflict is resolved, but the two parties may
not be able to maintain a cooperative relationship
due to the public settlement principle
Non - governmental organization
The award is not affected by state power.
The method has only been applied in recent
years (since 2010) so it has not been
popular
Guaranteed secrecy
Judgment does not guarantee enforcement
The authority of the state.
The court is trusted by lots of people.
Publicly, judgments are often announced
Affecting the reputation of businesses.
Court proceedings have to go through
numerous steps take more time.
Ensure enforcement
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FOREIGN COUNTRIES
Court Arbitration
To decide on disagreements and civil and
commercial disputes of individuals or
organizations
The use of public power by the State is
both time-consuming and costly
Less time, money and more convenience
Not suitable for the nature of civil
transactions, business, commerce
Everyone has the right to agree on what is
fair to them. When they want cooperation,
agreement, then the desire between them
is fair, efficient and solve their own
problems.
Relationship between the state and citizens The civil transaction relationship between
the parties
Foreigners and capitalist citizens are fond of using Arbitration to solve their problems since
it appropriates with their desires also requirements
2. The most popular type of Enterprises - Vietnam
The most popular type of business in Vietnam today is LIMITED LIABILITY COMPANY.
According to the below statistics, from March 16 to March 21, 2020, the single limited liability
company had 1,732 enterprises, the multi - member limited liability company had 688
enterprises, joint stock company had 492 enterprises, and finally partnership company has no
new registered enterprises. The proportion for those kinds of firms are accounted for respectively:
59.1% (Single - member LLC), 23.5% (Multi - member LLC), 16.8% (JSC), and 0% (Partnership).
( Vanluat.vn.2019)

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In terms of the rate of
newly established
enterprises, in general,
all categories tended to
decline considerably,
excluding the single -
member LLC, which
gained by 1.2%
compared to week 11.
Major Reasons
The fear of cooperation of most Vietnamese individuals when opening a company for business
The compact and simple organizational structure is suitable for an organization which
wants to establish a subsidiary
The owners are only responsible for activities within the amount of capital contributed
Less risk
The number of members of a limited liability company is usually small
Management and operation are not too complicated.
Strictly capital transfer regime
Easily control the change of members
Why the others are less popular?
PARTNERSHIPS:
The nature of the company's business type is built on trust between people. However, trust
is difficult to build and it is difficult to cooperate for long-term development.
The members of a partnership are all legal representatives who directly conduct business
activities. So the risk is great for the rest of the members.
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The liability regime is unlimited liability with one's own assets for all activities of the
Company.
JOINT STOCK COMPANY:
The number of shareholders can be huge and has a division into groups of shareholders
with contrast interests
The management is extremely complex
Strictly bound by the provisions of law, especially on the financial regime
The establishment is more complicated.
3. The most popular Dispute Resolutions - Vietnam
The most popular type of business in Vietnam today is COURT.
In accordance with the survey statistics in 2018 - 1029 of the Ministry of Justice, the preferred
method of dispute resolution that businesses use is negotiation 57.8%, court 46.8%, conciliation
22.8%, and finally arbitration 16.9%.
However, in reality, the negotiation of the two sides is difficult to achieve because there is no
mechanism for binding. Therefore, in all disputes, the Court is chosen as the most effective
approach of resolution, leading to a high priority rate for the Court.
In particularly, from December 1, 2018 to November 30, 2019, the total of all civil cases that
the Court had to deal with was 141,850 cases which increased of 1,742 cases compared to
2018. The commercial business cases that the Court had to deal with were 14,517 cases, mainly
disputes in the fields of financial investment, banking (4,698 cases), and buying and selling of
goods (3,014 cases). The number of labor cases that the Court has to deal with are 2,395 cases,
mainly disputes over disciplinary action, dismissal, and unilateral termination of labor contracts
(685 cases).
(The summary report 2019 of The People's Tribunal)
Major Reasons
The cost to settle a contract dispute by the Court will be low compared to other methods.
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Coercive enforcement by state power
Has high enforceability
Strict procedure due to the provisions of law
Why the others are less popular?
ARBITRATION:
In Vietnam, arbitration is not a new form of dispute resolution and it has existed since the 60s of
the twentieth century. However, due to many different reasons, the arbitration - as a method of
dispute resolution in the economy has not been recognized or even appreciated.
Regulations on arbitration agreements are not strict and there is no regulation on
summoning witnesses
Enterprises do not have the habit of using arbitration to settle disputes
They are not very confident about the enforceability of arbitration
Organizational system agencies nationwide arbitration are too sparse
Affect the operational efficiency of arbitration.
NEGOTIATION:
Results of negotiations depends on the knowledge and attitude, goodwill and cooperation of
the parties in dispute
Difficulty in recognizing the problem in an objective fact.
Not guaranteed by legal mechanisms
RECONCILIATION:
Vietnam does not have many organizations or individuals specializing in Reconciliation.
Not known by many businesses.
Trust in this method is still low
People often tend to choose more certain methods like Court

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Information about Reconciliation is limited
Businesses do not have a comprehensive view
III. CONCLUSION
This have report analyzed, compared and drawn conclusions on the advantages and disadvantages
of four dispute resolution methods and proposes the most popular method.This report is also relate
back to the findings in the body of the issues, include a clear summary of the main points, outline the
findings of the research of three issues. Haelen Company has solved three issues related to contract
law, labor law and company law completely in accordance with Vietnamese law and bringing
fairness and benefits to both parties.
IV. REFERENCES
Viac.vn 2019 [online] Available at: https://www.viac.vn/tin-tuc-su-
kien/hoa-giai-thuong-mai-tai-viet-nam-
n694.html?fbclid=IwAR0s6wVx77A05Ut-
AXUMTFuAAJymo6yBF66NbTi6LC1UB-FA5MFlDS0-q6o. [Accessed 30 June
2021].
Dangkykinhdoanh.com.2020 Available at:
https://dangkykinhdoanh.gov.vn/vn/tin-tuc/598/5077/thong-tin-tinh-
hinh-doanh-nghiep-dang-ky-tuan-12tu-ngay-16-3---21-3-
2020.aspx?fbclid=IwAR3Jb_8CFPh-
uA3DiUjuo616qXcyzdw28q5Uxzt3eMtCFvW3jFaACRvMQ68 [Accessed 30
June 2021].
Ketoansongkim.vn. 2020. Available at: https://ketoansongkim.vn/danh-
sach-cac-loai-hinh-doanh-nghiep-pho-bien-hien-
nay.html?fbclid=IwAR25kyoNvCKLn8yRF5zwPgU9uAIJVJKGqPwSbJsLfCzZ-
51bOAWE9CO1a9s [Accessed 30 June 2021].
Vanluat.vn 2019. Available at: https://vanluat.vn/cac-loai-hinh-doanh-
nghiep-tai-viet-nam-
Document Page
2508.html?fbclid=IwAR3joXjSstVRuODo1CT4hfUxHlu_NcUfy5l7iURAzCBcJX
CPh_7yk3KF0fI [Accessed 30 June 2021].
Luatminhkhue.vn 2019.Available at: https://luatminhkhue.vn/so-sanh-giai-
quyet-tranh-chap-kinh-doanh-quoc-te-bang-trong-tai-va-toa-an-thuong-mai-
.aspx?fbclid=IwAR1arXBmljs_AsRgN6B5_FYrchYYwJdGTGtTv_m5xfAP8_vknl
yNZsLPlQk. [Accessed 30 June 2021].
Thuvienphapluat.vn 2019. Available at: https://thuvienphapluat.vn/van-
ban/Thu-tuc-To-tung/Luat-Trong-tai-thuong-mai-2010-108083.aspx .
[Accessed 30 June 2021].
Tsk.edu.vn 2019. Available at: https://tks.edu.vn/thong-tin-khoa-hoc/chi-tiet/81/732.
[Accessed 30 June 2021].
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