New points on sole proprietorship in the 2020 Law on Enterprises, as well as issues raised

Abstract

The sole proprietorship is one of the types of enterprises belonging to the private sector, playing an essential role in the market economy in Vietnam. This type of enterprise was recognized for the first time in the 1990 Law on Sole Proprietorship. Legal provisions on sole proprietorship continued to be inherited and improved under the Laws on Enterprises, which were promulgated in 1999, 2005, 2014, and most recently the the 2020 Law on Enterprises. Compared with previous Laws, the 2020 Law on Enterprises has amended and supplemented several regulations on sole proprietorship, contributing to refining the legal framework for this type of enterprise. However, besides these positive points, the regulations on sole proprietorship under the 2020 Law on Enterprises still have some limitations and shortcomings, which can significantly affect the effectiveness of the law’s enforcement in practice. The following article analyzes the new highlights of sole proprietorship under the 2020 Law on Enterprises, pointing out the limitations in the regulations governing this type of enterprise. On that basis, the article makes some recommendations to improve the provision on sole proprietorship under the 2020 Law on Enterprises.