Procedure for company mergers under Vietnamese Law

When operating a business in Vietnam, there might be cases where entrepreneurs wish to merge their businesses with another. Under this circumstance, the enterprise law requires businesses to carry on the procedure for company mergers; which may sound complex. Therefore, in this article, LSX will give you a brief on the issue.

Legal ground

• 2020 Enterprise Law

What is company mergers?

Company mergers mean one or several companies (hereinafter referred to as the merged company) may merge into another company (hereinafter referred to as the merging company); by transferring all assets, rights, obligations, and legitimate interests to the merged company, and at the same time terminate the existence of the merged company.

Dossier for company mergers

Basically, a dossier that enterprises need to prepare for company mergers will contain the following documents:

• Merger contract; which must include:
  • 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
  • The time limit for implementation of the merger
• Draft Charter of the merged company
• Resolution, decision on the approval of the merger contract and a copy of the minutes on the approval of the merger contract of the merging company of:
  • the Members’ Council meeting, in case of multiple-member LLC, partnerships
  • the General Meeting of Shareholders, in case of joint-stock companies
• Resolution, decision on the approval of the merger contract and a copy of the minutes on the approval of the merger contract of the merged company of:
  • the Members’ Council meeting, in case of multiple-member LLC, partnerships
  • the General Meeting of Shareholders, in case of joint-stock companies

On the condition that the merging company is a member, shareholders owning more than 65% of the charter capital, or voting shares of the merged company; the dossier will not contain the resolution, decision on the approval of the merger contract, and a copy of the minutes on the approval of the merger contract of the merged company.

Besides, the merger contract must be sent to all creditors and notified to employees within 15 days from the date of approval.

Procedure for company mergers

Step 1: Submit the dossier

Initially, the applicants must prepare the required dossier. Then, they could submit it at the Business Registration Office.

Step 2: Recieve the certificate

Secondly, after receiving the business registration application, the Business Registration Office shall issue a receipt, check the validity of the application, and issue a Certificate of Business Registration; a Certificate of the change in business registration contents for enterprises.

Step 3: Update the legal status of the company

Thirdly, the business registration authority shall update the legal status of the merged company on the National Business Registration Database; and make changes to the business registration contents for the merged company.

Subsequently, after the merging company registers its business, the merged company ceases to exist; the merged company enjoys lawful rights and interests, is responsible for the obligations, unpaid debts, labor contracts, and other property obligations of the merged company. The merging companies automatically inherit all legal rights, obligations, and interests of the merged companies under the merger contract.

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Conclusion: So the above is Procedure for company mergers under Vietnamese Law. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com