ASK
Me and a friend are planning to open a restaurant that sells breakfast and lunch. We made an oral agreement that I would be the one to put the capital and my friend to contribute the premises to open the shop. Both will work together and the profit will be divided in half. But after nearly 2 months of official operation, because the business is not going well, my friend often invites friends to eat without paying for the reason is to attract customers slowly, so I want to quit, stop working. I determined that I would lose all my capital and did not intend to claim anything that I bought to serve the business, but my friend said, I must compensate my friend 10 million more. because if I leave it, my friend will sue me in court on the grounds that I illegally used the premises. Please, will I be penalized for leaving like that?
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ANSWER
DHP LAW answers your questions as follows:
In life in general and in business activities in particular, cooperation is an essential need of individuals and organizations. Thanks to the cooperation, each work or goal of the subjects is done faster and more strongly promotes the process of civil exchange and trade in business life and social life. Therefore, the Civil Code 2015 has adjusted regulations on this issue. Specifically, in Clause 1, Article 504 of the 2015 Civil Code stipulates: “ Cooperation contract is an agreement between individuals and legal entities to jointly contribute assets and efforts to perform certain jobs and benefit together. and share responsibility ”.
Accordingly, the fact that you and your friend agree to open a restaurant, contribute capital, work together to enjoy profits is considered a cooperation contract. However, Clause 2, Article 504 of the Civil Code 2015 also stipulates that the form of a cooperation contract must be in writing, so the fact that you and your friend agree with each other verbally but not in writing will lead to The contract is void due to a breach of the contract’s formality. Then, according to the provisions of Clauses 1 and 2, Article 131 of the provisions on the legal consequences of invalid civil transactions, in this case, the oral cooperation contract between you and your friend will not give rise to any legal consequences. birth, change or termination of civil rights and obligations of the parties from the time the transaction is established. Accordingly, your termination as stated is not considered a breach of contract (in case you have such an agreement) or unilateral termination of the contract, so you will not bear any responsibility. On the other hand, because the contract is void, the parties will return to each other what they have received.
However, the fact that you and your friend have opened a restaurant and your restaurant has been operating for nearly 2 months in fact, this is considered a commercial activity according to the provisions of the Commercial Law 2005, so you must business registration in accordance with the law. In case you do not register your business, you may be administratively sanctioned from 5,000,000 to 10,000,000 according to the provisions of Clause 1, Article 6 of Decree 183/2013/ND-CP on penalties for administrative violations. mainly in commercial activities, production and trading of counterfeit and banned goods and protection of consumers’ interests.
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