Is a household business allowed to operate in many different locations?
Question: DTD & Associates LLP please give me advice about this situation. Currently, I am planning to trade cosmetics in two different locations but I do not want to establish an enterprise because my business scale is not too large. Therefore, please let me know that what kind of business operation can I conduct in two different places? I sincerely thank you!
Answer: Hello. Thank you for your trust and for sending your question to the legal consulting department of DTD & Associates LLP. The content of your question has been researched and consulted by our lawyers as follows:
* Legal grounds:
- Law No. 59/2020/QH14 dated June 17, 2020, of the National Assembly on Enterprises (“Law on Enterprises”);
- The Government's Decree No. 01/2021/ND-CP dated January 4, 2021, on enterprise registration;
- Circular No. 105/2020/TT-BTC dated December 3, 2020 on guidelines for tax registration;
- Other relevant regulations of law
Firstly, according to your wishes, we see that you can conduct a cosmetic business in the form of a household business.
Article 79 Decree 01/2021 / ND-CP regulations that “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”.
→ Under this rule, you can register for the establishment of a household business to carry out a cosmetics business instead of registering a business.
Pursuant to Clause 2, Article 87 of Decree No. 01/2021 / ND-CP, an application for household business registration includes:
* Composition profile:
- The application form for household business registration;
- Legal documents of the owner of the household business or family household members applying for household business registration;
- The copy of the minutes of meeting of family household members on establishment of household business in case the household business is established by family household members;
- The copy of the Power Of Attorney made by the family household members to a representative in case the household business is established by family household members;
- Power Of Attorney, Authorization documents enclosed with personal legal papers for the person authorized to carry out business household registration procedures.
* Number of documents: 01 set
* Place of submission: After preparing the above documents, the individual or the representative of the household submits to the business registration office of the district where the business household is located. Specifically, submit to the OSS (public service department) of the District People's Committee where the household business is located
* Processing time: 03 working days from the day on which the application is received, the district business registration office will issue a receipt and issue a business household registration certificate.
Secondly, can household businesses operate in two different locations?
For your wish to open a store to trade cosmetics in two different locations, in the past, according to the provisions regulated in Clause 1, Article 66 of Decree No. 78/2015 / ND-CP, business households were only allowed to register their business at one location, except for the case of business households trading trips, doing mobile business (Article 72 of Decree 78/2015 / ND-CP).
However, pursuant to Clause 2, Article 86 of Decree 01/2021 / ND-CP, the above regulation has been removed and business households are officially allowed to do business in many locations, namely: “2. A household business can conduct business in many locations, but must choose one location to register its head office and notify the tax authority and market authority where the operation is conducted. business for the rest of the business locations. "
It can be seen from the above that you can run your business in different locations. However, you must select a location to register the head office and notify the tax administration, market regulator where the activity is conducted for the remaining business locations.
In addition, according to the provisions of Point h, Clause 3, Article 5 of Circular No. 105/2020 / TT-BTC guiding the tax registration:
“h) For the taxpayers being households, household businesses, individual businesses and other individuals, specified in points i, k, l, n clause 2 Article 4 of this Circular, a 10-digit TIN shall be issued to the representatives of the households, household businesses, individuals, and a 13-digit shall be issued to the places of business of the household businesses and individual businesses.”
→ Accordingly, for the case of a household doing business outside of the head office, those locations must be issued with a 13-digit tax code.
Above is DTD's preliminary advice to your question based on. In case you still have any unclear question or need other legal assistance, please contact the Lawyer Department of the Company.
