Business activities are not only buying and selling goods and providing services, but also business activities are considered as potential business activities. So how is buying and selling a business going? How many forms of business buying and selling are there? If you are still having trouble buying and selling your business. In the following, Lawyer X will Guidance on business buying and selling procedures in Vietnam that you do not know or do not understand. You can refer to the following article here!
Legal grounds
- Enterprise Law 2020
- Decree 47/2021/ND-CP
- Decree 01/2021/ND-CP
What is business buying and selling?
In Vietnam, the term “enterprise purchase and sale” is mainly mentioned in the following documents: Enterprise Law 201 (currently implementing the Enterprise Law 2020, Competition Law 2018, Decree No. 128/ 2014/ND-CP dated December 31, 2014 on the purchase, sale and transfer of companies in which 100% charter capital is held by the State (hereinafter referred to as Decree No. 128/2014/ND-CP)
The Enterprise Law 2014 mentioned the concept of “selling an enterprise” when stipulating the right to sell businesses of private business owners (Clause 1, Article 187 of the Enterprise Law 2014). However, the Enterprise Law 2014 only stops at naming without any specific definition of selling a business.
In the Enterprise Law 2020, the issue of “selling an enterprise” is specified in Article 192 with the content:
Article 192. Sale of a private enterprise
- Owners of private enterprises have the right to sell their private enterprises to other individuals or organizations.
- After the sale of the private enterprise, the owner of the private enterprise shall still be liable for the debts and other property obligations of the private enterprise arising in the period preceding the date of the transfer of the enterprise, except in the case of The owner of the sole proprietorship, the purchaser and the creditor of the sole proprietorship may otherwise agree.
- Owners of private enterprises and buyers of private enterprises must comply with the provisions of the law on labor.
- The purchaser of a private enterprise must register the change of the owner of a private enterprise in accordance with the provisions of this Law.
Regulations on buying and selling businesses in Vietnam
Clause 1, Article 192 of the Enterprise Law 2020 provides for the sale of private enterprises as follows: The owner of a private enterprise has the right to sell his business to another individual or organization.
Regarding the conditions for acquiring private enterprises, according to the provisions of Clause 1, Article 17 of the Enterprise Law 2020, “Organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law, except for the case specified in Clause 2 of this Article”.
If they are not allowed to establish and manage enterprises in Vietnam according to the provisions of Clause 2, Article 17 of the Enterprise Law 2020, individuals or organizations may purchase private enterprises.
After the sale of the business, the owner of the private enterprise shall still be liable for the debts and other obligations of the enterprise arising in the period prior to the date of the transfer of the enterprise, unless otherwise agreed by the buyer, seller and other parties other agreement the company’s creditors.
Forms of business purchase and sale in Vietnam
Buy and sell part of the business
A sale of a part of a business is the transfer of part of the ownership of the business from the owner of the business to the buyer so that the buyer takes control of the business. The form of purchase and sale of a part of a company includes: members and shareholders of the company transfer their contributed capital and controlling capital (collectively referred to as the controlling capital contribution) to the buyer so that the buyer can transfer interest contributed. Capital can control the activities of the target company.
The contributed capital is controlled under the provisions of law or the company’s regulations. The party that acquires a part of the company to become a co-owner must carry out the procedures for registration of ownership conversion in accordance with the law. The basis for implementing the form of buying and selling the entire enterprise is formed by the provisions of the Enterprise Law, the Securities Law and the Investment Law.
The forms of purchase and sale of part of an enterprise include the following cases:
The owner of a one-member limited liability company transfers the controlling capital to another organization or individual.
A member of a limited liability company with two or more members transfers the controlling capital to the remaining members or other organizations and individuals.
Shareholders in the company transfer control rights to other shareholders or other organizations or individuals.
General partners transfer capital contributions to other general partners or individuals.
Buy and sell the whole business
A whole business sale is the transfer of ownership of the entire business from the business owner to the buyer. Forms of purchase and sale of the entire enterprise include: shares for the transferee, purchase and sale of private enterprises, transfer of the entire contributed capital; the purchaser of contributed capital, the purchaser of a partnership, of shares must register the change of the company’s owner in accordance with the law on contributions or shares to the lawful successor. In order to identify the forms of buying and selling the whole business, it is necessary to base on the following basic criteria:
The business seller must be the business owner. Business owners are members, shareholders, private contractors and private owners. Business purchaser means an organization or individual that receives the transfer of all members’ contributed capital, transfers the entire contributed capital from the owner of a one-member limited liability company, and receives the transfer of all shares. part of the company. shareholders of the company, purchasing the entire investment capital from the owner of the private company. The ownership transfer relationship between the company owner and the acquiree is established by the contract of transfer of contributed capital, the contract of transfer of shares;
The purchase and sale relationship of a partnership or a single-member limited liability company is expressed in the form of a partnership purchase and sale contract, a single-member limited liability company purchase and sale contract.
The object of purchase and sale in a commercial transaction is an enterprise. Legal regulations in Vietnam define a company as a separate legal entity and each company is assigned a tax code called a company number. The company code exists for the lifetime of the company. If the company ceases to do business, the company code is no longer valid.
Procedures for buying and selling businesses in Vietnam
Buying and selling private businesses
Regarding the procedures for buying a private enterprise, according to the provisions of Clause 4, Article 192 of the Enterprise Law 2020, “Business buyers must register to change the owner of a private enterprise in accordance with the provisions of this Law”. Accordingly, the buyer of a private enterprise must carry out the registration procedures to change the owner of a private enterprise after acquiring this business.
Dossier for registration of changes includes:
Notice of change of business registration contents signed by seller and buyer
Copy of personal legal documents for business buyers
Contract of sale or documents proving the completion of the sale in case of sale of a private business
Power of attorney to carry out business registration procedures and a copy of legal papers of the authorized person
Competent authority: Business Registration Office
Application processing time: 3 working days from the date of receipt of valid application
Result: issue a new business registration certificate for the enterprise.
The process of buying and selling a one-member limited liability company
Step 1: Sign the application for transfer of contributed capital and pay the transfer value
The buying and selling parties agree on the transfer price and sign a contract for the transfer of contributed capital.
For individuals receiving capital transfer, payment can be made in two forms: transfer via bank account or payment in cash.
For organizations being capital transfer enterprises, they are not allowed to use cash for payment when making transactions of buying, selling and transferring capital contributed to other enterprises.
Step 2: Submit application to change business registration, declare personal income tax
Within 10 days from the date of change of business registration, the company is obliged to notify the change of business registration to the business registration authority;
Within 10 days from the date of signing the transfer contract, the individual or company must submit the personal income tax declaration dossier to the transferor at the tax authority.
Dossier to change business registration
Notice of change of company owner;
Notice of change of legal representative of the company;
Decision of the company owner;
The transfer contract and the minutes of liquidation of the transfer contract;
Notarized copy of the actual personal document of the individual transferee or the legal document of the transferee organization;
Authorization to submit dossiers; personal identification papers of notarized filers.
Step 3: Receive the result of Business Registration and complete the company transfer procedure
Customers using the services of Lawyer 247 will receive the results within 06-08 working days for business registration change procedures, 06-10 working days for income tax declaration procedures. personal entry.
The purchase and sale parties hand over documents as prescribed in the capital contribution transfer contract.
Procedures for buying and selling joint stock companies
Step 1: Check information about the joint stock company you intend to buy
Organizations and individuals that acquire a joint-stock company before buying need to check the company’s information, specifically:
Information about the operating status of the company;
Employee status, employee’s insurance;
Tax information: Check the use of invoices, input and output invoices, company revenue during operation, financial statements and other accounting documents…;
Tax obligations of the company: Check the fulfillment of tax obligations, tax reports, tax debts (if any), tax finalization status of the company.
In order to avoid the risk of acquiring a joint stock company, the acquiring organization or individual should request the company to carry out tax finalization procedures with the tax authority.
Step 2: Transfer of shares
The transfer of shares is carried out through two methods: by a transfer contract between the individual, the transferring organization and the individual or organization receiving the transfer or through a transaction on the stock market, in sequence. , procedures and recognition of ownership comply with the law on securities. To carry out the procedures for transferring shares, customers should note the following contents:
For individuals transferring shares, they must declare personal income tax and pay personal income tax due to the transfer of shares at the corporate tax authority (the Tax Department or the Department of Taxation) with the following methods: Tax calculation is as follows: Personal income tax payable = Securities transfer price each time x Tax rate of 0.1%
Note: The deadline for submitting the personal income tax return is 10 days from the date of signing the transfer contract.
For an organization being a legal entity, the revenue from the share transfer will be included in corporate income tax and the enterprise is obliged to declare it in the quarterly provisional declaration and finalization annually.
Step 3: Complete the procedure
Make a minutes to confirm that the procedures for transferring shares have been completed.
After that, hold a General Meeting of Shareholders to approve the transfer of shares.
Edit and supplement information in the register of shareholders of the company.
Register to change shareholders according to regulations.
Related articles
- Conditions for establishing specialized libraries in Vietnam
- Which court to file a lawsuit when fired illegally in Vietnam?
- Experiences for foreigners to rent houses in Vietnam should note
Lawyer X services consulting on business purchase and sale
Carrying out legal checks, warning of possible risks in the transaction process, comprehensive enterprise medical examination of target enterprises in key areas;
Support in completing legal and financial documents and records of enterprises;
Support and coordinate with auditing, price appraisal, tax and accounting consulting companies when evaluating business purchase and sale;
Proposing investors not to perform or carry out business transactions and transfer projects;
Drafting contracts for purchase and sale of shares and contributed capital of the company or enterprise;
Representatives of the parties to negotiate and sign M&A contracts;
Consulting on personal income tax, corporate income tax for buyers and sellers in transactions;
Assist in handing over documents, records and assets of the target enterprise;
Support the parties in investment and land procedures such as changing land users, terminating investment projects;
Advising on business consolidation for buyers after completing the transaction.
Contact LSX Lawfirm
Finally, hope this article is useful for you to answer the question about: “Guidance on business buying and selling procedures in Vietnam”. If you need any further information, please contact LSX Law firm : +84846175333 or Email: [email protected]
Frequently asked questions
Performing the act of buying and selling assets as businesses will generate two types of taxes: corporate income tax/personal income tax and Value Added Tax
Before making a plan to buy or sell a business, it is necessary to make a reasonable assessment. Assessment of the market, the potential for development after the acquisition, the financial difficulties the acquired company is facing. Request business records, accounting records, labor-insurance records, existing assets, company brand image. From there, make judgments and appropriate prices, future-oriented plans. The valuation can be made by an independent buyer or by a third party with a valuation function or on the price offered by the seller. The parties then negotiate the terms and the appropriate price. Proceed to sign the contract and carry out the change registration procedures.
Conclusion: So the above is Guidance on business buying and selling procedures in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
