What is a state-owned enterprise:
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This article will clearly define the concept of state-owned enterprises under the enterprise law, to help you better understand.
State-owned enterprise is an economic organization in which the State owns the entire charter capital or has shares or contributed capital, and is organized in the form of a state-owned company, joint-stock company, or limited liability company. term .
–Reason for establishment of State–
owned enterprises Natural monopoly: natural monopoly occurs when, due to the law of increasing economies of scale, the production and distribution efficiency of an industry is maximized when only have a single supplier, such as in the electricity and water industry. Nationalization of these industries is often to ensure that private enterprises do not become monopolies and thereby exploit consumers.
Externalities: Private investors do not want to invest in industries whose benefits spill over into many other industries while they do not collect fees from this spillover. The case of POSCO is a typical example. The Korean government has pushed POSCO to the No. 1 position, and POSCO did not take advantage of this monopoly position to extract profits. Instead it shares this benefit with other industries, and thus benefits the economy as a whole.
–Social justice: The private sector sometimes refuses to reach out to poor, remote and isolated areas because of low profit. Therefore, there must be SOEs doing this to ensure the public’s right to access to minimal services and utilities.
Capital Market Failure: There are a number of capital-intensive and high-risk industries that make it very difficult to raise private capital through capital markets. Examples include the development of aircraft manufacturing in Brazil (EMBRAER), or steel in Korea (POSCO).
– Characteristics of state-owned enterprises.
– Investor: is the State or the State together with other organizations and individuals.
–Applicable law: state-owned companies that have been converted into joint stock companies and limited liability companies will organize and operate under the enterprise law. Other types of state-owned enterprises are organized and operate under the enterprise law.
Legal status: State-owned enterprises have legal status.
– Capital ownership: The State owns the entire charter capital (100%) or owns the controlling capital contribution (over 50% but less than 100% of the charter capital).
–Forms of existence: State-owned enterprises have many forms of existence. If a state-owned enterprise is 100% charter capital owned by the state, there are different types of enterprises such as state-owned companies, state-owned joint-stock companies, state-owned one-member limited liability companies, and companies. state limited liability. If an enterprise is owned by the State with more than 50% of charter capital, it may exist under the following types of enterprises: joint stock company, limited liability company.
Property liability: State-owned enterprises are liable to the extent of their assets. The State has limited liability to the extent of assets contributed as capital to the enterprise.
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MVA VIETNAM LAW COMPANY LIMITED
– Consulting on Enterprise Law:
+ Establishment of a business;
+ Change business registration contents;
+ Establish locations and branches of enterprises;
+ Enterprise dissolution.
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– Business accounting services:
+ Tax reporting services;
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+ Internal financial reporting services, loans;
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– Mergers and acquisitions of businesses:
+ Buying and selling businesses;
+ Transfer of business;
+ Merger of enterprises;
+ Equitization of enterprises.
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