Amended Enterprise Law facilitates business environment

09:46 | 16/07/2015 Society

(VEN) - The amended Enterprise Law officially took effect on July 1, 2015. The main reason for amendments to the law was to make businesses more attractive in the eyes of investors, contribute to raising capital and attracting more investment into the economy, fully institutionalize the business freedom following the amended Constitution passed in 2013 while reducing risks and enabling enterprises to widen the scope of sectors in which they could do business.

Amended Enterprise Law facilitates business environment

An enterprise registration certificate does not include information in terms of sectors, but consists of basic information such as enterprise code, headquarters address and legal representative, contributing to significantly reducing commercial and legal risks for enterprises.

The amended Enterprise Law has made important reforms to reduce the cost and duration in implementing administrative procedures such as abolishing requirements of business conditions at the time of establishment and shortening the time for settling enterprise registration procedures. In addition, the content, form and amount of stamps are decided by enterprises on the basis of ensuring enterprise name and code on each stamp. And enterprises are no longer forced to use a company seal or stamp in civil transactions. In administrative relations with state management agencies, a stamp will only be used in cases where legally required. Reforms relating to the company stamp not only help improve quality of the business environment but also are consistent with modern business practices.

The new Enterprise Law also emphasizes reducing costs, creating flexible operational mechanisms for administration, restructuring enterprises, protecting the legitimate rights and interests of investors, shareholders and company members, adding stricter rules on criteria and conditions of state capital representatives and managers in state-owned enterprises, revising the concept of state-owned enterprises to facilitate the equitization process and increase economic efficiency after equitization and publicizing information in terms of state-owned enterprises based on international practices. In particular, state-owned enterprises will have to publish information like any other listed joint-stock company.

Clearly defining the concept of economic groups and corporations to overcome inconsistent interpretations which confuse the position and the legal status of the parent company, allowing companies to be more flexible in choosing organizational models and regulating administration principles, clearly stipulating order and procedures for the dissolution of businesses and strengthening coordination between business registration agencies and those involved in procedure settlement for enterprise dissolution are mentioned.

The new law also improves effectiveness of state management for enterprises. The state is not the only agency responsible for monitoring the activities of enterprises as shareholders and customers must actively involve in due to their interests.