Legal regulations on leasing an entire private enterprise

In an increasingly dynamic economy, many owners of private enterprises wish to lease out their entire business to take advantage of existing assets, brands, and resources, while generating passive income or focusing investment on other sectors. However, to ensure the legal rights and interests of both the lessor and the lessee, leasing an entire private enterprise must strictly comply with current legal regulations.

I. The need to lease an entire private enterprise

The decision to lease out an entire private enterprise stems from various reasons, such as: the owner wishing to temporarily stop running the business to focus on other projects, shift business direction, or simply to maximize the enterprise’s asset value. This is a reasonable solution that allows the business to continue operating without having to sell off its assets or brand outright.

II. Legal regulations on leasing an entire private enterprise

1. What is a private enterprise?

According to Clause 1, Article 188 of the Law on Enterprise 2020:

- A private enterprise is an enterprise owned by an individual who is liable with all of its assets for all activities of the enterprise.

Thus, a private enterprise is owned by an individual who is personally liable with all of its assets for all activities of the business.

2. Is it allowed to lease an entire private enterprise?

Article 191 of the Law on Enterprise 2020 stipulates:

- The owner of a private enterprise has the right to lease out the entire private enterprise but must notify in writing, accompanied by a notarized copy of the lease contract, to the business registration authority and the tax authority within 03 working days from the date the lease contract takes effect.

Thus, the owner of a private enterprise has the right to lease out the entire enterprise under this provision.

3. Procedures and processes for leasing an entire private enterprise

- Step 1: Sign a lease contract for the private enterprise.

- Step 2: Notify in writing, accompanied by a notarized copy of the lease contract, to the business registration authority and the tax authority within 03 working days from the effective date of the lease contract.

After completing the notification, the lessee is entitled to act on behalf of the enterprise owner to manage business operations under the contract and the provisions of law.

III. Questions on leasing an entire private enterprise

1. Does the owner still have legal liability for the enterprise during the lease period?

Article 191 of the 2020 Law on Enterprises provides:

- During the lease term, the owner of the private enterprise shall still be liable before the law as the owner of the private enterprise. The rights, obligations, and responsibilities of the owner and the lessee regarding the business operations of the private enterprise are stipulated in the lease contract.

Thus, even after leasing out the private enterprise, the owner still takes legal liability as the enterprise’s owner.

2. Procedures for notifying the lease of an entire private enterprise

The procedures for notifying the lease of an entire private enterprise is currently as follows:

- Step 1: Prepare a complete dossier including:

+ A notification on the lease of the private enterprise according to the form in Appendix II-6 issued with Circular No. 01/2021/TT-BKHĐT;

+ A notarized copy of the lease contract.

- Step 2: Submit the dossier to the business registration authority and the tax authority within 03 working days from the effective date of the lease contract.

- Step 3: The competent authority updates the information in the National Business Registration Database.

3. What are the conditions for leasing an entire private enterprise?

According to Article 191 of the Law on Enterprise 2020, the owner of a private enterprise has the right to lease the entire private enterprise, provided the following conditions are met:

- The lease must be made in writing and notarized according to the law.

- The owner notifies procedures with competent authorities within the prescribed time limit.

Thus, the parties must ensure the correct sequence and conditions for leasing the private enterprise to avoid future legal risks.

4. Does leasing an entire private enterprise require registration with State authorities?

According to Article 191 of the Law on Enterprise 2020 :

Thus, when leasing the entire private enterprise, it is required to notify the business registration authority and disclose information about the lease in accordance with legal procedures.

5. How are the rights and obligations of the lessor and the lessee regulated when leasing an entire private enterprise?

According to Article 191 of the Law on Enterprise on leasing private enterprises:

- The rights, obligations, and responsibilities of the owner and the lessee regarding the business operations of the private enterprise are stipulated in the lease contract.

Thus, the rights and obligations of the owner and the lessee concerning the operations of the private enterprise are specifically defined in the lease contract.

6. Does leasing an entire private enterprise affect the owner’s legal responsibility?

According to Article 191 of the Law on Enterprise 2020:

- During the lease term, the owner of the private enterprise shall still be liable before the law as the owner of the private enterprise.

Therefore, even after leasing out the private enterprise, the owner still takes legal responsibility as the owner of the enterprise during the lease period.

IV. Legal consulting services on leasing an entire private enterprise

The above is the article by NPLaw on leasing an entire private enterprise. With a team of experienced lawyers and legal specialists, NPLaw provides reputable, professional legal services, ensuring the best protection of the legitimate rights and interests of our clients. If you need legal assistance, please contact NPLaw for support and consultation.