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Business cooperation contract form – BCC [2024]
Investing followed by BCC contract form (also known as business cooperation contracts) is a form of investment that has been around for a long time. When investing in this form, investors only need to sign a cooperation contract with each other to do business and divide benefits as well as products in the business process without having to establish a business organization. Therefore, this is quite a flexible and convenient form of investment that investors choose when they want to invest but do not want to be tied down like when establishing a new business.
What is a Business cooperation contract?
BCC contract or Business cooperation contract is a type of bilateral contract in writing that is confirmed by the parties when signing the business cooperation. This is the basis for determining the rights and obligations of the members in the contract.
Why should you choose to invest in the form of a BCC contract?
????First, investing in the form of a BCC contract helps investors save a lot of time and costs by implementing investment projects without having to establish a new economic organization or operation costs after establishing the business, and dissolution costs when stopping the project. This is one of the most outstanding advantages of this form of investment.
????Second, when investing in the form of BCC, investors have very little dependence on their partners when deciding on issues related to investment projects that are independently implemented by investors on their rights and obligations in the contract.
If in the form of establishing an economic organization, investors choose the head of management based on the capital they contribute to the company, the investors’ decisions will sometimes depend on the party with more power. Yet for this form of investment, that problem has been solved, the parties are not bound to each other by a common legal entity, so this advantage has contributed to better meeting the requirements and choices of the parties. different investors.
????Third, with the BCC contract, the parties in the contract can overcome and support each other when there are shortcomings and limitations in the cooperation process. When foreign investors BCC with domestic investors: foreign investors can access the market through domestic investors, while domestic investors can take advantage of the human resources, capital, and technology of foreign investors. Thus, the BCC form can be considered a form of investment that benefits both parties.
Some limitations when investing under business cooperation contracts
????First, not establishing a legal entity in this form of investment can easily lead to certain limitations:
- There is no common seal for project activities;
- A large investment project involving many parties that only operates based on one document is a cooperation contract, which may not be tight enough and does not have a sustainable connection to carry out related investment activities such as signing new contracts to serve the project, or taking any responsibilities and obligations to third parties related to the contract;
- The parties in the contract are also required to share equal liability, which does not correspond to the capital contribution ratio;
????Second, investment procedures in this form are only suitable for projects that need to be implemented quickly with a short deadline;
????Third, there are currently no regulations on a party entering into a contract with a third party to serve the projects, and the responsibilities of the parties in the contract towards this third party;
Features of business cooperation contract form
Subject of BCC contract
According to the provisions of the Investment Law 2020, the subjects of the BCC contract are domestic investors and foreign investors. And in the BCC contract, there is no limit to the participating parties. The parties directly participating in signing the contract will directly perform the rights and obligations in that contract.
Subjects of the BCC contract include:
- Foreign economic organizations; economic organizations with foreign investment capital; Vietnamese economic organizations;
- Individuals with Vietnamese nationality; individuals with a foreign nationality;
The subjects in the BCC Contract will exist separately and independently without the need to establish a common legal entity during the cooperation process and will be responsible for their business activities.
Content of BCC business cooperation contract form
Basic content in the BCC business cooperation contract sample includes:
- Names, addresses, and representatives of the parties to the contract; location of investment project implementation or transaction address;
- Scope and objectives of business investment activities;
- Contribution levels of the parties participating in the BCC Contract and division of business investment results (can be made into an attached appendix);
- Progress and deadline for contract implementation;
- Rights and obligations of the parties to the contract;
- Regulations on modification, termination, and transfer of contracts;
- Responsibility for breach of contract and method of resolution when a dispute occurs;
- Other contents that the parties may agree on are not contrary to the law provisions;
The parties in a BCC contract can completely agree on the use of assets formed from business to establish an enterprise according to regulations.
Classification of BCC business cooperation contracts
BCC contracts are classified into the following main forms:
- Form of division according to product revenue profit before tax
- Form of division according to profit after tax
- Form of jointly controlled assets of members participating in business cooperation.
- Form of jointly controlled business activities.
Investment procedures are in the form of the BCC contract
????The BCC contract between domestic investors: Implemented under the provisions of civil law on contracts;
????The BCC contract between a domestic investor and a foreign investor or between foreign investors carries out the procedures for granting an Investment Certificate under the provisions of investment law.
????In case of investment policy approval: Investors submit documents to the competent authority (National Assembly/Prime Minister/Provincial People’s Committee) to be considered for approval of investment policy.
????The business registration agency issues the Investment Registration Certificate within 05 days from the date of approving the investment policy.
????For cases not subject to investment policy approval: Investors submit a set of documents to the investment registration agency and will be considered for issuance of an Investment Registration Certificate within 15 working days from the date of receipt of complete documents and investors meet the following conditions:
- Meet market access conditions for foreign investors
- Investment projects that do not belong to industries or occupations banned from business investment;
- Investment projects have project implementation locations;
- Investment projects following planning;
- The investment project meets the conditions of investment rate per land area and number of employees;
????The parties in the BCC Contract establish a Coordination Committee to implement the contract. The parties agree upon the tasks, functions, and powers of the coordination board.
????Foreign investors who are the subjects of BCC contracts are allowed to establish an executive office in Vietnam to implement the contract. The location of the office is selected by the foreign investor under the requirements for implementing the contract;
????The executive office of the foreign investor has a seal, and is allowed to open accounts, recruit workers, sign labor contracts, and conduct business activities within the scope of rights and obligations of the contract and Certificate Register to establish the Executive Office;
????The foreign investor in the BCC contract applies to establish an executive office at the investment registration agency where the office is expected to be located.
????The operating office certificate is issued within 15 days from the date of receiving complete documents from the investor.
????When the project in the BCC contract is completed or during any period of the project, the investor has the right to terminate the operation of the executive office. Within 07 days from the date of issuance of the termination decision, the investor must notify the investment registration agency that issued the Certificate of establishment of the executive office;
How to withdraw from the BCC Contract?
- According to the terms and conditions agreed upon in the contract.
- There is a legitimate reason & approval from the majority, more than 1/2 of the total cooperative members.
Members who withdraw from the BCC contract have the right to request their contributed assets back and be divided according to their share of the total common assets. After withdrawing from this contract, the member must pay and complete the agreed obligations.
Cases of termination of the business cooperation contract
05 cases when BCC business cooperation contracts can be terminated, including:
- According to the agreement between cooperative members.
- Terminates when the agreed time stated in the BCC contract has expired
- The parties have achieved the purpose of cooperation
- The competent state agency issues a termination decision
- Cases of termination of BCC contracts according to Vietnamese law
In case BCC business cooperation is terminated, the parties must fulfill their obligation to fully pay all debts arising from the contract. If more than common assets are needed, members use their assets to make payments.
Except in cases where there are other agreements, after paying debts, if common assets remain, the members will be divided in proportion to each member’s capital contribution.
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