Tiếng Việt
中文 (中国)
In the legal system of Vietnam, the concepts of legal entities and natural persons play an important role in distinguishing and managing organizations and individuals participating in business and social activities. The difference between these two concepts not only lies in their legal nature but also reflects the diversity and complexity of organizational structures and management in Vietnam’s developing economy.
On this basis, understanding and analyzing the difference between legal entities and natural persons will help businesses and individuals have a more comprehensive and profound understanding of legal regulations as well as their rights and obligations in the operating process. In this article, we will delve into the characteristics and differences between these two concepts, while also exploring their impact on business activities and management in Vietnam.
Legal Entities
Although not specifically defined in the Civil Code, Article 74 of the Civil Code of 2015 stipulates the conditions for an organization to be recognized as a legal entity.
Accordingly, a legal entity is understood as a legally established organization, with a structure consisting of governing bodies and other bodies according to the decision/articles of the legal entity or according to the provisions of the law. Legal entities have independent assets, bear responsibilities with those assets, and legally participate in relationships in their own names.
Natural Persons
Natural persons are not defined in the Civil Code. Vietnamese law currently only regulates individuals. The term “natural person” is an informal term in the legal system of Vietnam.
In the common understanding, a natural person is an individual, the subject in civil relationships, representing themselves in civil relationships.
Natural persons have personal rights, civil legal capacity, and the five states of civil behavior capacity, as well as rights and obligations regarding residence, guardianship, etc., as stated in Chapter IV of the Civil Code of 2015.
The Difference between Legal Entities and Natural Persons
Legal entities and natural persons have many differences, specifically including some points as follows:
Regarding civil liability capacity, legal entities have liability capacity regulated through documents issued by competent authorities such as business registration, investment certificates, etc., while natural persons naturally have civil liability capacity.
Regarding the time of occurrence, legal entities are created when established or permitted to establish, terminated when their names are removed from the registration list or from the time of termination decision by the competent authority, while natural persons arise from birth and terminate upon death.
Regarding classification, legal entities include commercial and non-commercial legal entities, while natural persons are classified into those with full civil behavior capacity, those lacking civil behavior capacity, those with only partial civil behavior capacity, etc.
Regarding nationality, legal entities established according to Vietnamese law are Vietnamese legal entities, while natural persons may hold Vietnamese nationality or multiple nationalities simultaneously with Vietnamese nationality.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to info@aslgate.com.
ASL LAW is the top-tier Vietnam law firm for doing business in Vietnam. If you need any advice, please contact us for further information or collaboration.
