tóm tắt luận án tiếng anh pháp luật về mua bán doanh nghiệp

The urgency of the topic The terms “Merger and Acquisition” abbreviated as M & A means that merging and acquisition of or trading businesses, which are the activities to gain control, t

MINISTRY OF EDUCATION AND TRAINING MINISTRY OF JUSTICE

HANOI LAW UNIVERSITY

TRAN THI BAO ANH

THE LAW ON ENTERPRISE ACQUISITION

Training instituation:

HANOI LAW UNIVERSITY

Supervisor: 1 Assoc Prof Dr Nguyen Viet Ty

2 Dr Phan Chi Hieu

Opponent 1: Prof Dr Le Hong Hanh

Opponent 2: Assoc Prof Duong Dang Hue

Opponent 3: Assoc Prof Dr Nguyen Minh Man

This thesis will be defended before the University Thesis Evaluation Board at

Hanoi Law University on , dated / /2014

This thesis can be studied more at:

1) National Library of Vietnam;

2) Library of Hanoi Law University;

INTRODUCTION

1 The urgency of the topic

The terms “Merger and Acquisition” (abbreviated as M & A) means that merging and acquisition of (or trading) businesses, which are the activities to gain control, to dominate partly or entirely business operations of enterprises through owning a portion or the entire enterprise

M & A has drawn the attention of investors, scientists in economic and legal fields by the popularity and the various impacts to the entire world economy M &

A is reviewed under two main angles which are economic perspective as a problem

of business finance and corporate strategic management, and legal perspective as the object of a legal framework for the implementation of M & A The author of the thesis has selected one of the two activities of M & A which is acquisition or enterprise trading as the research topic for the jurisprudential thesis originated from the following basic reasons:

First, the scientists have mainly studied M & A in term of economic angle,

very few have the legal scientific works on M & A in general and on Acquisition

in particular In Vietnam, the legal provisions on mergers have been relatively clear, while the laws on acquisitions have been inconsistent, have lacked comprehensiveness Most studies on acquisitions under narrow perspective as business trading (not involved in researches on purchases and sales of private enterprises, cooperatives) or studies on business trading contracts in the workshop articles have not evaluated the overall legislation on acquisitions For that reason, there should be legal scientific works with more intensive research on acquisitions Therefore, research the law on acquisitions has suggested a topic idea for the student to develop into the jurisprudential doctor dissertation

Second, in view of competition, acquisition is understood as acts of

economic concentration associated with the process by which the number of competitive-free independent businesses in the market has been reduced through the acts of merger, consolidation, acquisition, joint-ventures, and other behaviors

of economic concentration Karl Marx discovered a law full of paradox: Competition leads to economic concentration but economic concentration to a certain level destroys competition and forces the State to adjust law to economic concentration For that reason, there should be a jurisprudential research on

assessing the situation of law and competition law enforcement to control the business acquisitions in order to protect competition in the market and general welfare of the society

For all the above-mentioned reasons, I have selected “THE LAW ON ENTERPRISE ACQUISITION IN VIETNAM” as my doctoral thesis topic

2 The object and scope of the dissertation research

The object of the thesis research is the present activities of acquisitions in Vietnam

The scope of the thesis research: As a jurisprudential doctoral thesis, it emphasizes on the research of acquisitions in terms of legal science The dissertation only focuses on analyzing acquisition research without consolidation

or merger activities

Seen from legal perspective, acquisition is a complex investment operation, involving in many different issues such as contract law, securities law, corporate law, competition law, labor law, land law, environment law, financial law, law on intellectual property etc The thesis does not analyze all the law related to acquisition It does not in-depth study the after-trading procedures such as tax procedures, business transformation process It nor have the analysis on state management for acquisition activity (in aspects of competition law, securities law) and the law on the settlement of disputes arising from business purchasing and selling operation Buying and selling businesses is a topic research with very wide content and quite complicated However, in terms of a doctoral thesis, it focuses within the following scope:

Research on acquisitions in Vietnam with the nature of the investment is to gain ownership and control of enterprises with the following specific content: subjects of acquisitions, trading object is a part or whole of the business, acquisition forms, acquisition procedures, control of acquisitions from the perspective of competition law In practice, acquisitions are shown through many different diverse forms Within the limit of the jurisprudential doctoral thesis, acquisition is studied under the form of the business holders to transfer all shares, the dominated capital to the purchaser Therefore, the forms of increasing charter capital of enterprises and the shareholders contributed to the charter capital for the purpose of governing and controlling business activities of enterprises are excluded from the scope of the dissertation research

3 The purpose and tasks of the thesis research

The purpose of the thesis:

The purpose of the thesis is to study acquisition activity under legal perspective and build a number of solutions to complete the law on acquisitions in Vietnam

To achieve this purpose, the thesis poses the following basic tasks:

- Analyze the theoretical basis of acquisition activity by clarifying the concept

of acquisition in a number of countries and that in Vietnam; clarify the features of acquisitions in comparison with some other legal relations; analyze the basic contents of the law on acquisition During analysis, the trading activities are considered under the comparable view with the provisions of a number of countries around the world in order to give a richer and more systematic as well as more comprehensive view on this activity

- Look at the provisions of the existing laws on acquisition activity, indicating the existence of the inadequacies of the legal system on acquisitions and analyzing, giving comments on the experiences of regulating laws on acquisitions in several countries Analyze and evaluate the operating acquisitions as the basis for proposed solutions accordingly

- Propose measures to improve the law on acquisitions in Vietnam in the current period

4 The methodology and the research method of the thesis

The thesis is formed on the basis of the methodology of Marxism – Leninism, Ho Chi Minh Ideology and the perspective of the Communist Party about State and Law The methodological basis of the dissertation is dialectical materialism and historical materialism

To solve the problems posed in the tasks of the research topic, different research methods such as analysis, synthesis, and jurisprudential comparison are used in combination

5 New features and significance of the thesis

The thesis has achieved the following new findings:

- The thesis analyzes the concept of buying and selling businesses in the world, from which builds a concept of trading businesses in Vietnam; pointing out the basic legal characteristics of acquisitions versus asset trading, business leasing, donating, merging, share transfer, or capital share

- The thesis builds scientific theoretical system of laws on acquisitions in Vietnam It is expressed through the construction of concepts, clear identification of the content of laws on acquisitions including norms of acquisition forms, subjects of acquisition, acquisition contract, the procedures, and control of business trading under the adjustment of competition law

- The thesis is the first scientific research work which comprehensively and systematically evaluates the current status of legislation on acquisitions in Vietnam, pointing out the inadequacies of existing laws on acquisitions Simultaneously, it analyzes and reviews international experiences in regulating laws on business trading activities This is one of the important foundations for reference in the process of finalizing legislations on acquisitions

- The dissertation sets out specific solutions to improve the law on acquisitions with a view to meeting the need of developing enterprise trading activities in the market economy, especially in the trend of international economic integration

6 The structure of the thesis

Apart from the Preamble, the overview of the situation of the thesis research, conclusion, list of references, the dissertation includes three chapters, concretely as follows:

Chapter 1: The theoretical issues of acquisitions and legislation on

acquisitions

Chapter 2: The current status of legislation on acquisitions in Vietnam

Chapter 3: The demands and solutions to complete the laws on acquisitions

in Vietnam

THE OVERVIEW OF THE SITUATION OF

THE THESIS RESEARCH

There are many scientific works from law textbooks, reference books, dissertations, essays, journal articles to presentations at the workshops studying on acquisitions It can be typically told as follows:

M&A Mergers & Acquisition Basics The Key Steps of Acquisition, Divestitures, and Investments by author Michael E.S Frankel, Knowledge Publishing House, Hanoi (2009); Mergers and Acquisitions from A to Z by Andrew J.Sherman, Milledge A Hart, Knowledge Publishing House, Hanoi (2009); Intelligent M&A: Navigating the Mergers and Acquisitions Minefield by Scott Moeller, Chris Brady, Knowledge Publishing House, Hanoi (2009); Issues to Consider When Embarking on M & A Transactions in Vietnam by Gregory Crovo, Partner (Foreign Lawyer), Kelvin China Partnership; Report on Economic Concentration in Vietnam – Current Status and Forecast (2012), Competition Management Department, Ministry of Industry and Trade, Hanoi; Scientific Research: A handbook for Mergers and Acquisitions in Vietnam by Vietnam Mergers and Acquisitions Network (2009); Ministry-level scientific research project: Mergers and Acquisitions Activity – The Rationale, international experience, and recommended policy for Vietnam (2009), Central economic management research Institute; Ministry-level scientific research project: The legislations in governing mergers and acquisitions in Vietnam – scientific workshop proceedings of laws on mergers and acquisitions: Theoretical and practical issues organized and chaired by Ho Chi Minh Law University (2010); Monographs: Laws on contracts in commerce and investment – The basic legal issues, National Political Publishing House, Hanoi edited by Dr Nguyen Thi Dung

in 2009 etc

In different facets, the study of corporate trading activity has been mentioned by the above authors, however, it has just stopped at each specific content without comprehensively and deeply addressing all aspects of acquisition activity Therefore, an in-depth study with fuller, more comprehensive and

systematic content on acquisitions in Vietnam in the current period is absolutely necessary

The author evaluates legislation on acquisitions in two perspectives: (i) acquisition is business freedom, so the thesis specifies a legal framework for implementing acquisition procedures; (ii) acquisitions under adjustment of competition law, the contents of the Report on Vietnam economic concentration in

2012 are used for reference by the author to give personal statements in order to complete the law on acquisitions in Vietnam The thesis analyzes to identify acquisition relations on the basis of evaluating the research content of M & A in conjunction with the analysis of legal regulations on acquisitions, regulations on M

& A of several countries This is the thesis’ new approach to acquisitions that is different from other foreign and local authors’ scientific works

Chapter 1 THE THEORETICAL ISSUES ON

ACQUISITIONS AND LEGISLATIONS ON

ACQUISITIONS 1.1 An overview of acquisition

1.1.1 Concept of acquisition

Based on the analysis of interpretation of acquisition in a number of countries and the provisions of the Competition Act (2004), Corporate Law (2005), the thesis puts forward the concept of acquisition as follows:

Acquisition is a corporate action in which the business owner transfers the entire capital or contributed stakes, controlling shares to the transferee The transferee has the ownership of the whole or a part of the enterprise and control over the business operations of the acquired enterprise

1.1.2 Characteristics of acquisition

First, the object of trading relationship is business with the nature of special

“commodity” in acquisition relationship

Second, the consequence of the acquisition is the purchaser to take control of

operations of the target business

Third, the subject who has the right to sell the business must be the business

owner, the purchase subjects should be the organizations or individuals who wish and have the right to purchase enterprises

Fourth, the legal forms which recognize acquisition relationships are

enterprise sale contracts, share transfer agreement, the dominant stake (generally referred to as acquisition contracts)

Fifth, acquisition must be allowed or recognized, controlled by State

agencies under certain legal procedures

1.1.3 Differentiate acquisition with some other legal relations

Discriminate acquisition with business leasing, donation, leveraged out

buy-Acquisition is different from business leasing In the relation of leasing business, the lessor does not transfer the business ownership to the lessee The lessee only has the right of managing and operating the business under agreement in the lease contract and regulations of the relevant law Acquisition is different from business donation In the relation of acquisition, the seller transfers the enterprise ownership to the purchaser, and the purchaser is obliged to pay the seller (with compensation) For business donation, the donor transfer the enterprise ownership to the done without compensation requirements; the donee agrees to take over the business without payment Acquisition is different from leveraged buyouts because acquisition means the business ownership is transferred to the purchaser but a leveraged buyout only changes the creditor, not the owner of the business The exception in which a leverage buyout becomes an acquisition happens when the creditor and the owner of the business change the debt into the equity capital

Distinguish acquisitions and business asset purchases

First, the objects of acquisitions and business asset purchases are different The object of asset purchases and sales is the assets of the target enterprise Buying and selling the business assets only change the ownership of some

certain assets from the seller to the purchaser The objects of acquisition are enterprises

Second, the asset salesperson is different from the subject who has the right

to sell the business

Businesses are only the objects of acquisitions, they are not able to sell themselves Therefore, the subject who has the right to sell the business is the owner of that business Unlike acquisitions, according to the general theory of the right of property owners to the assets, the subject who has the right to sell the assets of the enterprise is the business

Differentiate acquisitions with mergers

The objects of acquisitions and mergers are different Acquisition means the ownership of the entire or partial target business is transferred to the purchaser While merger is the transfer of all assets, rights, obligations, and legal interests of the merged enterprise to the merging business

The legal consequences after mergers and after acquisitions are different The merged enterprise ceases existing after the merger Unlike corporate merger, the target business in the acquisition transaction still exists before, during, and after the purchase process

Distinguish acquisitions and other forms of financial investment through the transfer of shares, stakes of members and shareholders of the company

It is considered acquisitions only when the transfer of stakes leads to the consequence that the transferee of stakes and capital shares can control and govern the operations of the target business

on the business seller, buyer, and on social economy

The thesis has evaluated the different impacts of acquisitions on social economy, including the positive effects on increasing economic benefits derived from the implementation of corporate acquisition deals At the same time, the thesis also examines acquisitions under the competition aspect and sees that acquisition is a economic concentration, is the “gateway” leading to the formation of enterprises with market power and may negatively influence on the market competition

1.2 Legislations on acquisitions

1.2.1 Legal concept on acquisitions

Acquisition is complex It covers all the issues of property, capital, market, brand, management structure, personnel, culture etc Acquisition is studied under the economic, financial, and legal perspectives The research contents of acquisitions are different due to the different approaches at different angles Acquisition law can be interpreted in broad sense and narrow sense

In broad terms: Acquisition law is a combination of many legal norms under

different law fields, regulates social relations arising in the process of conducting acquisitions

In narrow terms: Legislation on acquisition is a system of legal norms which

directly adjusts social relations arising between the buyers and the sellers of the businesses during the acquisition contract signing process, and the relation between the authorized state and the enterprise to register to change the business owners or to implement State control on economic concentration

Legislation on acquisition in the narrow sense includes specific provisions to directly adjust the relationship between the parties involving in acquisition deal Specifically, the legislation on acquisition in the narrow sense with internal content: regulations on forms of acquisitions, regulations on subjects

as enterprise seller and buyer; regulations on acquisition contracts; regulations on acquisition procedures; provisions on business control under the competition law perspective

1.2.2 Law content on acquisitions

The content of law on acquisitions is understood in a narrow sense as described in the above subsection 1.2.1 consists of the following specific rules: Regulations on forms of acquisitions; Provisions on subjects of acquisitions; Legal rules on contracts – the method to implement acquisition transactions; and legal regulations on acquisition procedures

Chapter 1 Conclusion

1 Acquisition not only changes the status of business ownership but also the enterprise operating management activities

2 The objects of acquisition are enterprises The enterprise which is the subject of acquisition should maintain legal status after acquisition transaction and only change the business owner

3 Acquisition forms in Vietnam include: (i) entire acquisition shown by the owner

of the business transfer the entire stakes and shares to the purchaser; (ii) partial acquisition implemented by the owner assigns the dominant stakes to the assignee

to take control of the business operations The ratio of dominant stakes to get control of the business operations are prescribed in legal documents or regulated in The business Charter of the acquired enterprise

4 The thesis studies the provisions of the law on acquisitions in Vietnam in the narrow sense Accordingly, the legislation on acquisition is a system of conduct rules issued or recognized by the State, directly adjusts social relations arising between buyers and sellers during the signing contract process and the relation between authorized state agencies and enterprises in registering to change the business owners or to implement state control in economic concentration

CHAPTER 2 LEGAL STATUS ON ACQUISITIONS IN

VIETNAM 2.1 Regulations on acquisition forms

2.1.1 Entire business acquisition

Purchase the entire business means the purchaser is transferred the ownership of the entire business by the owner of the enterprise The entire business acquisition form include as follows: private business acquisition, the assignation of all the stakes and shares to the assignee The buyer of the private enterprise and the transferee of the stakes and shares should register to change the owner of the business according to the regulated law The legal basis for implementation of entire business acquisition is prescribed in corporate law, securities law, and investment law

In a number of areas related to economic security, the acquisition legislation may

be different from the nature of the acquisitions in other areas, such as the State will limit the forms of acquisitions, strictly control the procedures on the acquisition of credit organizations etc The reasons that the State develops legal regulations to govern the acquisition activities in some specific areas such as acquisitions of credit institutions are in order to stabilize the national economy in the recession time or to restrict the negative impacts of the market economy on the social economy

2.1.2 Partial business acquisition

Partial business acquisition means the owner of the enterprise transfer the ownership of a part of the business to the buyer so that the buyer can control the target enterprise This form includes: members and shareholders of the company transfer the stakes and dominant shares (generally called as the dominant stakes) to the assignee so that the person can take control of the operations of the target business The proportion of the dominant stakes is regulated in law or prescribed in the business charter The buyer now becomes the co-owners of the business and must perform registration procedures to change the ownership as prescribed by law The legal basis for implementation of partial business acquisition is prescribed

in corporate law, securities law, and investment law