(Tiểu luận) group reportcourse law on business activitiessubject commercial processing auctions of goods

HO CHI MINH CITY OPEN UNIVERSITYLAW FACULTY

-⸹ -GROUP REPORT

COURSE: LAW ON BUSINESS ACTIVITIESSUBJECT: COMMERCIAL PROCESSING

& AUCTIONS OF GOODSGROUP 5

CLASS: DH21BL02CACADEMICS: LÊ THỊ TUYẾT HÀMEMBERS:

NGUYỄN NAM BẢO TRÂN NGUYỄN HOÀNG NGỌC ANH

I PROCESSING 3

1 Concept– Features: 3

1.1 Subject of commercial processing: 3

1.2 Features of commercial processing: 3

2 Types of commercial processing: 3

3 Processing contracts: 4

3.1 Subjects of the processing contract 4

3.2 Legal characteristics of the processing contract 5

4.Rights and Obligations: 5

3 Goods Auction Service Contract: 10

4 Rights and obligations of the parties: 10

5 Auction procedure 14

LIST OF REFERENCES 20

I PROCESSING1 Concept– Features:

1.Concept

“Article 178, Commercial Law 2005 amending and supplementing 2017, 2019 provides for processing in commerce:

Commercial processing means a commercial activity whereby a processor uses part or whole of raw materials and materials supplied by the processee to perform one or several stages of the production process at the latter’s request in order to receive remuneration.”

1.1.Subject of commercial processing:

- The processee is a person who has a need for molded products - The party receiving the processing of raw materials or purchasing

materials, organizing the processing in order to create products of the right design and method at the request of the processee.The processor must be a trader trading in trades suitable to the processed products.

1.2.Features of commercial processing:

+ Property: Commercial processing is a commercial activity, so at least one subject must have a profitable purpose.

+ Legal relationship: Processing relations in commerce are expressed in the legal form of processing contracts.

+ Purpose: In commercial, entities (or at least one entity) in outsourcing relations have the purpose of profit.

+ Goods for processing: Goods of all types can be processed, except for goods banned from business In case of processing of goods for foreign traders for overseas consumption, goods banned from business, goods banned from export or import may be processed if so permitted by competent state agencies.

(according to Article 180 of the Commercial Law 2005)

2 Types of commercial processing:

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- Based on market services:

+ Processing to serve the domestic market + Processing for export

- Based on the level of raw material supply:

+ Processing in which the processee assigns all raw materials to the processor + Processing in which the processee does not deliver any materials to the processor The processee must take care of the raw materials themselves to perform the processing and the processor will pay the raw materials together with the processing remuneration.

+ Processing in which the processee only delivers main materials according to norms, as for the auxiliary materials, the processee can exploit it itself to ensure the requirements.

- Based on the stages in the production process:

+ Processing: production and processing, assembling, dismantling, demolishing, recycling, selecting, sorting, cleaning, refreshing, packing, marking codes,

dispensing…

3 Processing contracts:

- According to Article 179 of the Commercial Law 2005 “Processing contracts must be made in writing or in other forms of equivalent legal validity.”

3.1.Subjects of the processing contract

- The subject matter of the arbitration agreement is a pre-determined material according to the form, according to the standards agreed upon by the parties or prescribed by law.

- Object is a type of product or goods ordered by the outsourcing party under the contract This specimen may be appointed by the outsourcer or given by the processor and accepted by the outsourcer The template used by the parties must not be contrary to law and social ethics.

- For example, the production of children's toys, when used for non-violent propaganda purposes, or the appearance of the goods must conform to the aesthetic judgment of Vietnamese people, etc…

3.2.Legal characteristics of the processing contract

- Outsourcing contract is a bilateral contract

The processor has the right to require the ordering party to deliver to him/her materials that meet the standards of quality, type, uniformity and quantity together with samples and drawings for manufacturing The processor requires the contractor to accept the new property created by himself and pay the remuneration as agreed

- Outsourcing contract is a contract of compensation

The amount that the processing hirer must pay to the processor is the compensation This compensation is the remuneration agreed upon by the parties in the GC.

- Outsourcing contract with materialized results

Objects are pre-determined according to a pattern, according to a standard agreed upon by the parties or prescribed by law in advance The sample or standard of the workpiece is realized (materialized or become a commodity) only after the processing party has completed the processing RIGHTS - To take back all processed

products, leased or lent machinery and equipment, raw materials, auxiliary materials, supplies and discarded materials after

- To receive processing remunerations and other reasonable expenses - In case of processing for foreign organizations and individuals, to be entitled to

the liquidation of processing contracts, unless otherwise agreed - To sell, destroy, donate or give as gifts on the spot processed products, leased or lent machinery and equipments, raw materials, auxiliary materials, redundant supplies, faulty products and discarded borrowed machinery and equipment, raw materials, materials, redundant supplies, faulty products and discarded materials under the authorization of processees.

- In case of processing for foreign organizations and individuals, to be exempt from import tax on machinery, equipment, raw materials, auxiliary materials and supplies, that are temporarily imported for the performance of processing contracts according to the provisions of tax law.

OBLIGATIONS - To hand over part or

whole of raw materials and materials for processing in accordance with processing contracts or transfer money for purchase of materials with agreed quantities, quality and at agreed

- To supply a part or whole of raw materials and materials for processing as agreed upon with processees in terms of quantities, quality, technical standards and prices - To be responsible for the

- To be responsible for the legality of the intellectual property rights over processed goods, raw materials, materials, machinery and equipment for processing handed over to processors.

legality of goods processing activities in cases where goods being processed are those banned from business, export or import.

5 Processing remuneration:

According to Article 183 Commercial Law 2005:

.

6 Benefits of processing:

- Goods processing not only brings profits to the outsourcing business, but also has certain benefits for the economy and businesses:

+ Helping businesses have the opportunity to learn and access new technologies and scientific advances to modernize production and improve labor productivity.

+ Take advantage of available production facilities, machinery, equipment, factories, and raw materials, helping businesses take advantage of the "brand" and distribution channels of goods of the outsourcing party inside and abroad, increasing the proportion of direct self-produced goods and exported goods.

+ Reduce unemployment rate, increase people's income Because outsourcing activities attracts a large part of cheap unskilled labor, it also contributes to reducing hiring costs and increasing profits for businesses + Attracting foreign capital and technology for goods processing.

II AUCTIONS OF GOODS1 Concept:

- According to Article 185 Commercial Law 20005, amending and supplementing 2017, 2019, Auction of goods means a commercial activity whereby sellers themselves conduct or hire auction organizers to conduct public sale of goods to select purchasers that offer the highest prices.

- Thus, the essence of auction activity is a buying and selling relationship in which buyers compete on price and eventually, the goods are sold at the highest price.

a Features:

- This is a special sale In which the seller himself/herself or hires an auction organizer (a trader providing auction services) to conduct the public sale of goods at a place and within a

pre-announced time for the buyer to pay price The right to buy the goods will belong to the highest price.

- Objects of auction are goods that are allowed to circulate on the market But usually, people only organize auctions of goods with specific properties and use values These are goods that are difficult to determine the true value, buyers can bid higher or lower than the starting price depending on the auction method on the basis of fair competition.

- The form of auction relationship exists in two forms: auction service contract and goods auction document

b Subject:

- According to Articles 186 and 187 of the Commercial Law 2005, Goods auction activities include the following subjects: auction organizers, sellers; auction participants and auctioneers - Auction organizers are traders that register the business of

providing auctioning services or sell their own goods in cases where goods sellers conduct auctions by themselves.

- Goods sellers are owners of such goods or persons mandated by goods owners to sell goods or persons entitled to sell goods of others according to the provisions of law.

- Auction participants are organizations and individuals that register to participate in auctions.

- Auctioneers are auction organizers or persons authorized by auction organizers to run auctions.

2 Method - Principle2.1.Method:

- There are 2 methods: Upward bidding mode and Downward bidding mode

- Upward bidding mode, which is an auctioning mode whereby the person who offers the highest price as compared with the reserve price shall have the right to purchase the auctioned goods; - Downward bidding mode, which is an auctioning mode whereby

the person who first accepts the reserve price or the lower price next to the reserve price shall have the right to purchase the auctioned goods.

2.2 Principle

The principles of publicity, honesty, and assurance of legitimate rights and interests of auction participants.

3 Goods Auction Service Contract:

- (According to Article 193 of the Commercial Law 2005) - The goods auction organization service contract must be made in

writing or in another form with equivalent legal validity - - In case the auctioned goods are the subject of pledge or

mortgage, the auction organization service contract must be approved by the pledgee or mortgagee and the seller must notify the auction participants prices of goods being pledged or mortgaged

- - In case the pledge or mortgage contract has an agreement on auction, but the mortgagor or mortgagor is absent without plausible reasons or refuses to enter into a service contract to organize the auction of goods, the auction organization service contract is entered into between the pledgee or mortgagee and the auction organizer.

4 Rights and obligations of the parties:Auction Organizers( Article 189 - 190)

Goods Sellers that are not auction

organizers ( Article 191 – 192)RIGHTS - Unless otherwise agreed,

auction organizers shall have the following rights: - To request goods sellers to provide fully, accurately and promptly necessary information on auctioned goods, to create conditions for auction organizers or auction participants to examine auctioned goods and hand over auctioned goods to goods purchasers in cases where auction organizers are not goods sellers;

- To determine reserve prices in cases where auction organizers are sellers of auctioned goods or persons authorized by goods sellers; -To organize auctions; - To request goods purchasers to make payments;

- To receive auction service charges paid by goods sellers according to the provisions

- Unless otherwise agreed, goods sellers shall have the following rights: - To receive money amounts for auctioned goods and differences collected in cases specified in Clause 3, Article 204 of this Law or receive goods back

of Article 211 of this Law.

OBLIGATIONS

- To organize auctions of goods in compliance with the principles and procedures provided for by law and by auction modes agreed upon with goods sellers -To notify and post up in a public, full and accurate manner necessary information on auctioned goods.

- To preserve auctioned goods when they are entrusted by sellers for auctions of goods and send them to goods sellers and purchasers and relevant parties according to the agreed, goods sellers shall have the following obligations: - To deliver goods to auction organizers, create conditions for auction organizers and

contracts for provision of goods auctioning services -To carry out the procedures for transferring ownership rights over auctioned goods which are subject to the ownership registration as provided for by law, unless otherwise agreed with goods sellers.

- To pay to goods sellers proceeds from the sale of goods, including differences collected from persons that withdraw their offered prices defined in Clause 3, Article 204 of this Law or return unsold goods to goods sellers according to agreements In case of no agreement, to pay money to goods seller within three working days after receiving money from goods purchasers, or to return the goods immediately within a reasonable time after auctions;

5 Auction procedure

Step 1: Establish a service contract for organizing a goods auction

♦ Goods auction activities by current laws may be carried out by sellers or auction organizations through service contracts for organizing goods auctions.

♦ Form of contract: made in writing or other forms with equivalent legal validity such as telegraph, fax, lexer, (Clause 1 of Article 193 LTM 2005)

– Where the goods to be auctioned are pledged or mortgaged, the auction organization service contract must be agreed by the pledgee or mortgagee and the seller must notify the auction parties about the goods being pledged or mortgaged.

– In case there is an agreement on the auction sale in the pledge or mortgage contract but the pledgee or mortgagee is absent for no legitimate reason or refuses to enter into a service contract for organizing goods auction, the auction organization service contract shall be entered into between the pledgee, mortgage with the auction organizer.

Step 2: Prepare for the auction of goods

♦ Determine the starting price

This is the responsibility of the person conducting the auction of goods: the responsibility of the Seller if it is he who conducts the auction of goods; Hold an auction if authorized by the seller.

The notification is made before the listing of the auction Note:

– Where auctioned goods are the object of pledge or mortgage, the pledged or mortgaged recipient must reach an agreement with the pledgee or mortgagee to determine the starting price.

– In case there is an agreement in the contract of pledge or mortgage on the auction but the pledgee or mortgagee is absent without a legitimate reason or refuses to enter into a service contract for organizing the auction of goods, the starting price shall be determined by the pledged or mortgaged recipient.

♦ Announcement and listing of goods auction

Deadline: At least seven working days before the auction of goods.

Place of execution: at the place where the auction is held, the place where goods are displayed, and the headquarters of the auction organizer.