In the process of conducting business, enterprises tend to expand the scale of their operations, and often ponder which form of branch and/or business location would be in their best interests and advantageous to the organization. Outlined below is a clarification of the differences and an objective perspective of branch and business locations.
1. Definition of branch and business location
1.1. Branch
A branch is understood to be a dependent unit of the enterprise, taking on the task of performing – completely or partially – the company’s functions, including that of authorized representatives. The branch’s business line is consistent with that of the enterprise’s.
A branch is a dependent enterprise unit, and is not a legal entity. However, the branch possesses a certificate of business registration and can also register and use its own seal.
1.2. Business location
A business location is a place where particular businesses are conducted and may belong to the enterprise or to the branch.
The business location is not a legal entity, but similar to a branch, a business location also has a business registration certificate, but it does not have its own seal.
2. Features of branch and business locations
2.1. Branch
The name of a branch may be both in Vietnamese and English, however, it must consist of the enterprise’s name and the phrase “Chi nhanh”.
The branch has its own tax identification number.
A branch – completely or partially – performs the functions of For this reason, the branch may directly sign the contract when it has legal authorization from the enterprise, and the signing must be done through the authorized representative.
The branch may collect and process the results of business activities by itself, in other words, the economic transactions arising at the branch will be recorded in the accounting sheets at the unit, from which to declare and pay taxes. Additionally, the branch may also apply as the dependent unit, that is, the branch will transfer the records of revenue and expenses to the enterprise and the enterprise will declare and pay tax.
2.2. Features of the business location
The name of the branch may be both Vietnamese and English and it must consist of the enterprise’s name and the phrase “Dia diem kinh doanh”.
The business location does not have its own tax identification number.
A business location may only conduct particular business and it cannot directly sign a contract.
A business location is a dependent unit, which means the revenue and expenses ledger will be transferred to the enterprise to declare and pay taxes. However, the business location will declare the license tax on its own.
3. The procedures for establishing a branch and a business location
3.1. The branch establishment procedure
Step 1: Submitting the notification of the branch’s establishment
The enterprise will submit the branch registration application to the Business Registration Office where the branch is established.
Step 2: Receipt of application
Within 3-buisness days since the receipt of the application:
3.2. Business location establishment procedure
Step 1: Submitting the notification of the business location’s establishment
Within 10-days from the day on which the business location has been decided, the enterprise must send a notice of business location establishment to the business registration authority.
Step 2: Receipt of application
Within 3-business days since the receipt of the application:
4. Distinguish between a branch and a business location
A branch and a business location are one in the same with respect to:
- Both branch and business location are forms of expanding the scale of business, and they are not legal entities.
- The procedure of declaring the establishment is the same in some steps.
A branch and a business location also have significant differences:
For more information, please contact us at +84 916-545-618 or at hung.le@cnccounsel.com and thanh.tran@cnccounsel.com.
