Procedures for changing property owners when merging businesses in Vietnam
“Hi Lawyer, currently our business is in need of a business merger. My lawyer asked me, does the merger of enterprises need to carry out the procedure for changing the property owner? What is the Procedures for changing property owners when merging businesses? Looking forward to helping my counsel. Thank you!”
Thank you for sending us your question. Here, Lawyer X would like to answer your questions as follows:
Legal grounds
Enterprise Law 2020
Decree 01/2021/ND-CP
Consulting content
What is a Business Merger?
The Enterprise Law 2020 stipulates that Enterprise merger is one or several companies (hereinafter referred to as the merged company) which may merge into another company (hereinafter referred to as the merging company) by way to transfer all assets, rights, obligations and legitimate interests to the merged company, and at the same time terminate the existence of the merged company.
In case of merger in which the merging company has a market share of between 30% and 50% in the relevant market, the legal representative of the company shall notify the competition authority before conducting the merger; unless otherwise provided by the Competition Law.
Prohibit mergers of companies in which the merged company has a market share of more than 50% in the relevant market; unless otherwise provided by the Competition Law.
Regulations on change of property owner upon business merger
According to the provisions of Point a, Clause 2, Article 201 of the Enterprise Law in 2020:
The related companies prepare the merger contract and draft the charter of the merging company.
The merger contract must include the following principal contents: name and head office address of the merging company; name and head office address of the merged company; merger procedures and conditions; labor use plan; methods, procedures, deadlines and conditions for converting assets, converting capital contributions, shares and bonds of the merged company into contributed capital, shares and bonds of the merging company; merger implementation period.
According to the provisions of Clause 1, Article 73 of Decree 01/2021/ND-CP:
After the company is divided, the company consolidates; the merging company is granted business registration; the divided, consolidated or merged company changes to the divided legal status; merged, merged.
The Business Registration Office where the company is divided, consolidated, or merged is headquartered to send information to the tax authority. The tax authority is responsible for sending information to the Business Registration Office about the completion of the final settlement and the transfer of tax obligations.
Procedures for changing property owners when merging businesses?
Prepare documents for change of owner
Pursuant to Clause 1, Article 53 of Decree No. 01/2021/ND-CP, a dossier includes the following papers:
Notice of change of property owner.
A valid copy of personal identification paper (ID card, citizen identification, passport) if the new owner is an individual; a valid copy of the Certificate of Business Registration; or equivalent document if the new owner is an organization.
A valid copy of the company’s revised charter.
Transfer contract and documents proving the transfer.
Service provision contract or written authorization to carry out the procedure.
A valid copy of the person’s identity card.
Submit
Enterprises shall submit dossiers for change of property owners upon business merger at the Business Registration Office; where the enterprise conducts business registration.
Get results
According to the provisions of Clause 6, Article 53 of Decree 01/2021/ND-CP:
After receiving dossiers of change of property owners upon business merger; the Business registration office conducts a validity check, and issues business registration certificates to enterprises.
Enterprises go to the Business Registration Office to receive the results of processing dossiers.
Does the property owner change due to a business merger pay a fee?
When carrying out procedures for registration of change of property owners upon business merger; Pursuant to Clause 18, Article 5 of Circular 301/2016/TT-BTC in case of change of name and change of property owner; the property must be re-registered with the competent authority; The property owner must pay a registration fee, including:
Rename and change all founding shareholders (for joint-stock companies with founding shareholders); or change all shareholders owning charter capital for the first time (for joint-stock companies without founding shareholders); or all members of the company (for other types of enterprises).
Rename and convert business type:
Limited liability companies converted into joint-stock companies; by the method of selling all contributed capital,
The joint-stock company is converted into a one-member limited liability company by the mode of one organization; or an individual who is not a shareholder receives the transfer of all shares of all shareholders of the company,
The joint-stock company is converted into a limited liability company by the method of total transfer to the organization; other individuals contribute capital; except for the case of conversion from a private enterprise to
Single-member limited liability company owned by an individual who is a converted private business owner
Related article:
- Selling shares in joint-stock companies according to Viet Nam Law on Enterprises
- DICA direct investment capital account in Vietnam
Frequently asked questions
According to the provisions of Clause 4, Article 4 of the Enterprise Law in 2020; Founding shareholder means a shareholder owning at least one common share and signing on the list of founding shareholders of a joint-stock company.
According to the provisions of Clause 21, Article 4 of the Enterprise Law in 2020; Business is the continuous performance of one, several or all stages of the process from investment, production to consumption of products or provision of services in the market for the purpose of seeking profit.
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