No matter who you are, you should still have a good understanding of all types of businesses. This knowledge will help you get a full picture of business models in Vietnam. For those of you who intend to start a business, this knowledge should not be ignored.
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1.What is the type of business?
Every business is an economic organization that works for a certain purpose. Depending on the individual or organization that owns, the business will have different ways of operating. Each type of enterprise will have a different system, built and developed in accordance with the law. Just by looking at the type of business, one can know the structure of the enterprise and its operational goals.
2.Types of enterprises currently in Vietnam
Vietnam is in a period of economic development, businesses in Vietnam are also allowed to expand to more diverse types. The types of enterprises in our country today are established based on certain criteria promulgated by law. Each type will have different points, depending on the purpose and way of operation. Diversifying business types will also help the market become more competitive and developed.
State enterprises
These are state-invested enterprises, in other words, these are enterprises wholly or partially owned by the state. Therefore, these businesses will also be governed by the government. However, this does not mean that the state will take care of it all or that there will be subsidies. In Vietnam, state-owned enterprises are still responsible for costs, production and benefit according to the initial capital level.
State-owned enterprises in Vietnam are: Vietnam Oil and Gas Group, Vietnam Posts and Telecommunications Group, Vietnam Electricity Group,...
Private enterprise
This enterprise is owned and responsible by an individual who has the right to decide on all matters related to the operation of the enterprise. Companies in the form of private enterprises will not be allowed to issue securities, without capital contribution.
Joint stock company enterprise
With this type of enterprise, the charter capital is divided into several parts. The management members in the business are called shareholders, all shareholders will be responsible for all issues related to profits and assets. Unlike private enterprises, joint stock companies have the right to issue securities.
Enterprise limited liability company
This is one of the popular types of businesses today, the organizational structure is also neat. With this type of business, the company has the right to issue bonds and can raise capital. This type of business is further divided into two more sub-categories: One-member limited liability companies and two-member limited liability companies or more.
Partnership company
Among the types of businesses, this is the most typical type. People operating in the same business under the same firm will be responsible for issues related to profits, debts, and assets. Companies operating in the form of partnerships will have their own legal characteristics that need to be noted.
Enterprises and joint ventures
These enterprises are established on the basis of joint venture contracts or signed agreements with foreign countries with foreign investment capital. The establishment of joint venture enterprises can be considered as a form of foreign direct investment in Vietnam.
Cooperative
The current type of cooperative enterprise is no longer common and rarely seen, but in the 80s it was a common type. Cooperatives will carry out business and production activities to bring profits to households and individuals who contribute capital. Two common forms of cooperatives are capital contribution and contribution.
With today's market economy, when the competition is getting higher and higher, profit is the priority, the cooperative model is no longer used much, even gradually disappearing.
3. Things to keep in mind when choosing a business type for your company
Choosing the type of business for the company is mandatory and very necessary. So how do you know which type of business is the right one? Here are the basic criteria to "review" to see what type of company your company is suitable for.
Number of members participating in capital contribution: Each type will stipulate a different number of members. With the type of private enterprise, only one individual can establish, the type of joint stock enterprise requires at least 3 members,...
Ability to contribute capital: Depending on your ability to contribute capital and the form of capital contribution you want, choose the appropriate type of business. Joint-stock companies allow the transfer of capital to shareholders inside and outside the company
However, private enterprises are not allowed to raise capital or issue shares.
Organizational structure: If you want a model that is owned and operated by an individual, a sole proprietorship is the most appropriate choice. If you want to organize an operating system with many members, a limited liability company or a joint stock company is the right choice. Therefore, determine the operating structure, then decide on the type of business.
Above is information about the types of businesses that business people should know, hope that the article has helped you understand more about the model and how businesses operate today.
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