The topic of legal procedures for registering to establish a household business will cover basic issues such as: What is a household business, the features of a household business, the necessary conditions when registering a household business, the business code of household business, and procedures for registering.
1. What is a household business? Features of household business
Household businesses, according to Article 79 of Decree 01/2021/ND-CP dated January 4, 2021 on business registration are regulated as follows:
“1. A household business is established by an individual or family household members that shall take responsibility for business operations of the household business with all of their property. If a household business is established by members of a family household, one of them shall be authorized to act as the representative of the household business. The individual applying for registration of household business or the person authorized by the family household members to act as the representative of the household business shall be the owner of the household business.”
In addition, some other types of production are also classified as household businesses, but do not require business registration at state agencies, specifically according to Clause 2, Article 79 of Decree 01/2021. /ND-CP:
“2. Households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic or seasonal businesspeople, and service providers earning low revenues are not required to apply for the establishment of household businesses, except for conditional business lines. The provincial People’s Committees shall specify the low revenues applied within their provinces.”
Thus, this is a simple model among current business models, with different characteristics under the current Enterprise Law as follows:
- Household businesses are not juridical persons like most other types of businesses such as Partnerships, Limited Liability Companies or Joint Stock companies.
- A household business is owned by an individual who is a Vietnamese citizen or registered household members and is responsible with all of his or her assets for the household's business activities. For a business owned by an individual, that individual has full decision-making authority over all business activities of that household business.
- Business households are allowed to do business in many locations but must register one location as their headquarters;
- Business households are not allowed to open additional branches or representative offices.
Above are some characteristics of business households that any business owner should keep in mind when registering a business household. In the next section, we will learn about some necessary conditions for establishing a business household when registering a business household.
2. Some necessary conditions when establishing a household business
Household businesses are registered by an individual or household members.
Fully meet the following conditions (specified in Clause 1, Article 82 of Decree 01/2021/ND-CP):
a) The registered business lines are not banned;
b) The name of the household business is conformable with regulations of Article 88 hereof;
c) The application for household business registration is valid;
d) Fees for household business registration are fully paid.
The household business registration certificate is issued based on information in the household business registration application declared by the household business founder and is responsible for himself.
3. Business code of household business
Circular No. 02/2023/TT-BKHDT of the Ministry of Planning and Investment: Amending and supplementing some articles of Circular 01/2021/TT-BKHDT dated March 16, 2021 of the Minister of Planning and Investment. According to the latest guidance on business registration, household business registration procedures will be linked between business registration agencies and tax authorities from July 1, 2023. Specifically, the household business's code is also its tax code. After registration, this code will be transferred from the tax registration agency to the business registration office where the household business is registered and recorded directly on the business registration certificate.
4. Document required when registering a household business
Documents required when registering a business household according to Clause 2, Article 87 of the Government's Decree dated January 4, 2021, on business registration include:
An application for household business registration includes:
a) The application form for household business registration;
b) Legal documents of the owner of the household business or family household members applying for household business registration;
c) The copy of the minutes of the meeting of family household members on the establishment of household business in case the household business is established by family household members;
d) The copy of the letter of authorization made by the family household members to authorize a person to act as the owner of the household business in case the household business is established by family household members.
e) Degree certificates for conditional occupations (notarized copies).
5. Household business registration procedures
Location for receiving documents: District business registration agency where the business household is headquartered.
Procedure for registering business households in case of direct submission:
Step 1: After receiving the application, the district business registration office issues a receipt within 3 working days from the date of receiving valid information
Step 2: The district business registration office issues a Household Business Registration Certificate to the household business within 3 working days from the date of receipt of valid documents.
In case the information is invalid, the district business registration office is responsible for notifying the applicant or the founder in writing within 3 working days from the date of receiving the information. The notice must clearly state the reason and request for document amendments and supplements (if any).
If after 03 working days from the date of submitting the registration application, you do not receive the Household Business Registration Certificate or do not receive a notice requesting amendments or supplements, then the person establishing the household business or the household business has the right to complain or denounce according to the provisions of law on complaints and denunciations.
Step 3: The district business registration office will send a list of household businesses registered last month to the tax authority, the business registration office, and the specialized management agency on the first working week of every month.
6. Procedure for registering via electronic network using digital signature:
The information on the Household Business Registration Certificate is legally valid from the date of issuance, and the household business has the right to do business from the date of issuance, except in cases of conditional business investment and business lines. In case a household business registers the start date of business operations after the date of issuance of the Household Business Registration Certificate, the household business has the right to operate the business from the date of registration, except in the case of conditional business investment and business lines.
Business households can receive the Household Business Registration Certificate directly at the district business registration office or register and pay a fee to receive it by post mail.
Household businesses have the right to request the district-level Business Registration Authority to issue a copy of the registration certificate and pay fees according to regulations.