What is Head Office? Definition, Meaning & Importance
Head Office (or headquarters) is a crucial term in the business world. Accordingly, a company that wishes to operate officially cannot do so without registering its head office address with the competent authority. In this article,
Table of Contents
1. What is a Head Office?
A head office is the principal office or the main administrative center of a company or an organization. This is where the core functions and the leadership team, including the Chief Executive Officer (CEO) and other senior executives, are based.
The head office is responsible for overarching strategic planning, decision-making, and the overall management of the company. It coordinates with various branches, divisions, or subsidiaries of the organization, ensuring that the company’s policies and strategies are uniformly implemented across all locations.
In Vietnam, according to the provisions of the 2020 Law on Enterprises, the head office of a business is its contact address, with specific and accurate details, including: house number, alley, lane, street, ward, commune, district, town, city, telephone number, fax number (if any).
The head office address of a business must be registered with the competent state authority and reflected in the Business Registration Certificate. If a business needs to change its head office address, it must follow the procedures for changing its business registration as stipulated by the state.
2. Regulations on establishing a company’s head office
Based on the provisions of Article 42 of the 2020 Law on Enterprises:
– The head office of a business is the contact address of the business within the territory of Vietnam, with an address determined according to the administrative boundaries: house number, alley, lane, street, hamlet, village, ward, district, town, city, province, telephone number, fax number, etc.
– Administrative agencies and authorized entities contact businesses through English documents, materials, and documents sent to the head office address. Therefore, businesses need to ensure that the registered head office address is specific, clear, and does not hinder communication with relevant authorities when necessary.
– The address used to register the head office must also meet all legal requirements for business operations. Especially for industries that require a subsidiary license before official operation, the head office address must meet the conditions of the business license. For example, a business applying for a business license in the petroleum industry must ensure that the head office address meets the requirements for storing and preserving petroleum.
– Within 15 days from the date of issuance of the Business Registration Certificate, the business must notify the opening hours of the head office to the business registration authority.
3. What conditions must the head office address meet?
The Head Office plays a crucial role in establishing and developing a business. It is not only a place to store all information related to the business but also a contact point between the business and the competent authorities. Therefore, when choosing a location for the Head Office, businesses need to ensure that it meets all the following conditions as prescribed:
The head office must have a specific address.
When deciding to establish a business, the business owner needs to choose a location that complies with the regulations for registering the head office, including specific details such as house number, street name, ward (commune), district (town), city, province, etc.
– The house number should not be in dispute over ownership.
With this requirement, businesses renting office space for their head office need to pay attention to the lease agreement. It is necessary to verify and ensure compliance with ownership rights, lease terms to avoid wasting time and costs for business registration change procedures.
In cases where the head office does not have a house number, street name, commune, ward, town, etc., the business needs to obtain a confirmation document from the local authorities to prove that the address does not have a specific house number, street name.
The head office cannot be located in an apartment building.
According to the provisions of Article 3, Clause 3 of the Law on Housing in 2014: An apartment building is a building with two or more floors, consisting of several separate, independent apartments, alongside common areas or infrastructure for households, individuals, or organizations.
Apartment buildings are divided into two different forms, including:
– Apartment buildings built for residential purposes, without any other business or service activities;
– Mixed-purpose apartment buildings, used for both residential and other purposes such as offices, commerce, services.
Therefore, businesses are not allowed to establish their head office in apartment buildings or collective houses built for residential purposes. This is to ensure the safety and interests of residents living there. The regulation applies to all businesses, regardless of size.
If a business wishes to use an apartment building address to register its head office, it needs to present documents proving that it is a mixed-use apartment building. These documents should be attached to the establishment registration dossier and submitted to the business registration office for consideration.
The head office must meet business conditions.
For industries with business conditions, businesses must obtain subsidiary licenses before officially operating. Accordingly, the head office must also meet the conditions to be granted a Business License.
For example:
– Food businesses must have enough space to arrange areas for storage, preservation, and display, as well as facilitate the transportation of goods and raw materials.
– Businesses in manufacturing and processing industries are not allowed to locate their head offices near residential areas or in the city center. Instead, areas near or far from residential areas would be more suitable for the Head Office.
4. Regulations regarding hanging signs at the head office
In addition to regulations related to the head office address, business owners also need to understand the regulations regarding hanging signs at the company’s headquarters. Based on the provisions of Article 34 of the 2012 Advertising Law, company signs must include the following information:
– Name of the direct management authority (if any);
– Name of the production or business establishment exactly as stated on the business registration certificate;
– Address, telephone number.
Note that the location of the sign must not obstruct emergency exits, fire exits, extend beyond sidewalks or roadways, or disrupt traffic. Hanging a sign at the head office is a mandatory obligation of the business. Any business that violates this regulation will be subject to administrative fines ranging from 10,000,000 to 15,000,000 VND.
Furthermore, if a business declares a head office address that does not exist or is not under legal ownership or legitimate use, the business will also be subject to penalties for violation of regulations.
5. Frequently Asked Questions about Head Office
Here are some common questions related to a company’s head office as well as specific answers to each issue. Let’s take a look!
How many head office addresses can a business register?
Based on the provisions of the Law on Enterprises and related guidance documents, it can be summarized that: a business can have multiple business locations, branches, representative offices, but it is only allowed to register one head office. This helps competent state agencies to manage easily and create favorable conditions for businesses in production and business activities.
What is the difference between head office and business location?
Many people confuse the terms head office and business location. However, these two terms have several clear differences:
(1) Business location may differ from the head office address.
A business can establish a business location at an address different from the head office address. However, the registered business location must be based on the head office location. Specifically, a business is not allowed to establish a business location outside the provincial/city scope where the head office is located.
In practice, many businesses choose to register their Head Office at an address that meets the specified conditions while conducting business activities at a different location.
(2) The business location must be where business activities are carried out.
The head office is the address registered on the Business License of the business. This is the contact address between the business and customers or competent authorities and does not necessarily conduct business activities. However, the business location must be where work is performed and specific business activities take place.
(3) The business location depends on the head office.
The business location does not have its own tax identification number and must perform tax accounting based on the business through centralized declaration.
Can one address be used for multiple head offices?
Currently, there is no regulation prohibiting businesses from establishing their head office at the same address. To avoid confusion in such cases, businesses should register addresses in more detail, including floor numbers or building names.
For example: 7th Floor, Building XY, Nguyen Dinh Chieu Street, Ward 11, District 3, Ho Chi Minh City.
Hopefully, through the comprehensive information above, you have a better understanding of what the term “Head Office” means. In addition, understanding the regulations related to establishing the head office is essential, helping businesses avoid legal risks. Stay tuned to Maison Office for more useful and up-to-date information!
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