Vietnamese regulations on termination of capital contribution with land use rights
Hello lawyer. I heard that in some cases the capital contribution with land use rights will be terminated. So when will the capital contribution with land use rights stop? How to cancel registration of capital contribution with land use rights? When the capital contribution ends, will the capital contributors get back the land use rights? I hope a lawyer can help me.
Real estate and land use rights are assets of great value that are often used by individuals and organizations to contribute capital to companies. After the capital contribution was completed, there were some problems during the business process that caused this capital contribution to be terminated. So, apart from the case where the land use right is lost, there are other cases that lead to the termination of the capital contribution with the land use right. After the termination of the capital contribution, how will the land use rights be handled? To clarify this issue, Lawyer X would like to introduce the article “Termination of capital contribution with land use rights”. We invite you to read along.
Legal grounds
Enterprise Law 2020
Decree 43/2014/ND-CP
Decree 01/2017/ND-CP
Regulations on capital contribution to the company with land use rights
Can I use the land use right to contribute capital to the company?
Pursuant to Clause 1, Article 34 of the Law on Enterprises 2020, the assets contributed as capital are as follows:
“first. Assets contributed as capital are Vietnam Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how, other assets that can be valued in Vietnam Dong.
- Only individuals and organizations that are lawful owners or have lawful use rights to the property specified in Clause 1 of this Article have the right to use such property to contribute capital as prescribed by law. “
Based on the above provisions, the land use right is one of the assets that the members contribute capital to the enterprise. Therefore, the contributed capital in the enterprise is the right to use land, which is in accordance with the provisions of law. However, together with that, the right to use the land contributed as capital must be under the lawful ownership of the subject of the capital contribution.
Therefore, when contributing capital with land, the capital contributor must prove his/her ownership to that land, through documents such as certificates of land use rights; Inheritance document showing that the inherited part is the land use right;….
Assets contributed as capital must be transferred to the enterprise
Pursuant to Point a, Clause 1, Article 35 of the Enterprise Law 2020, the transfer of ownership of assets contributed as capital is as follows:
“1. Members of limited liability companies, partnerships and shareholders of joint-stock companies must transfer ownership of assets contributed as capital to the company in accordance with the following provisions:
a) For assets with registered ownership or land use rights, the capital contributor must carry out procedures to transfer ownership of such property or land use rights to the company in accordance with law. The transfer of ownership or land use rights for assets contributed as capital is not subject to registration fees.
b) For assets without registration of ownership, the capital contribution must be made by handing over the contributed assets certified in writing, unless it is done through an account.
- The minutes of delivery and receipt of assets contributed as capital must include the following principal details:
a) Name and address of the head office of the company;
b) Full name, contact address, number of legal papers of the individual, number of legal papers of the organization of the capital contributor;
c) Type of asset and number of asset units contributed as capital; the total value of assets contributed as capital and the proportion of the total value of such assets in the charter capital of the company;
d) Date of delivery and receipt; signature of the capital contributor or the authorized representative of the capital contributor and the legal representative of the company.
- The capital contribution shall be considered as completed payment only when the lawful ownership of the assets contributed as capital has been transferred to the company.
- Property used in business activities of the owner of a private enterprise is not required to carry out procedures for transferring ownership to the enterprise.
- The payment for all foreign investors’ activities of buying, selling, transferring shares and contributed capital, receiving dividends and remitting profits abroad must be made through accounts in accordance with regulations. provisions of the law on foreign exchange management, except for the case of payment by assets and other non-cash forms.”
According to the above provisions, when an individual brings the land use right to contribute capital, the land use right has been transferred to the legal entity a company, the capital contributing member will no longer have the right to dispose of this capital contribution property.
Thus, after the successful transfer of assets contributed as capital, of course, that capital contributor no longer has ownership rights to that contributed asset.
Termination of capital contribution with land use rights in the company
Termination of capital contribution or in other words no longer have any rights and obligations related to that company. According to the law, in addition to the agreement to terminate the capital contribution of the parties, in some cases the capital contribution by land use rights will also be terminated.
Cases of termination of capital contribution with land use rights
According to Clause 3, Article 80 of Decree No. 43/2014/ND-CP stipulating that the capital contribution with land use rights shall terminate in the following cases:
a) The time limit for capital contribution with land use rights has expired;
b) One party or parties request as agreed in the capital contribution contract;
c) The land is recovered according to the provisions of the Land Law;
d) The party contributing capital with land use rights in the business cooperation contract or the joint-venture enterprise is declared bankrupt or dissolved;
dd) The individual participating in the capital contribution contract dies; declared dead; loss or limitation of civil act capacity; prohibited from operating in the field of business cooperation in which the capital contribution contract must be performed by that individual;
e) The legal entity participating in the capital contribution contract has its operation terminated and the capital contribution contract must be performed by such legal entity.
Handling of land use rights upon termination of capital contribution
After the termination of capital contribution with land use rights, the contributed land use rights will be handled. Pursuant to Clause 3, Article 80 of Decree No. 43/2014/ND-CP as amended by Clause 52, Article 2 of Decree No. 01/2017/ND-CP, the handling of land use rights upon termination of capital contribution shall be carried out. appear as follows:
- In case the capital contribution term expires or the parties agree to terminate the capital contribution, the party contributing capital with land use rights may continue to use that land for the remaining term.
- In case the land user contributes as capital with the land use right and then the investor carries out the procedures for registration or application for permission to change the land use purpose, upon the expiration of the time limit for capital contribution, the relevant rights and obligations between the parties shall be determined. capital contribution and capital contribution recipient shall comply with the agreement of the parties in accordance with law; in case the land use term has expired and the party contributing capital with land use rights no longer wishes to continue using it, the State shall recover the land.
- In case the capital contribution is terminated under a decision of a competent state agency due to a violation of the law on land, the State shall recover such land;
- Where the party receiving capital contribution or the party contributing capital with land use rights is a bankrupt organization, the land use right contributed as capital shall be handled according to the bankruptcy declaration decision of the People’s Court.
The recipient of the right to use land and assets attached to land under a decision of the People’s Court may continue to use the land for the right purpose as determined for the remaining land use term and be granted a certificate of land use right. land use, ownership of houses and other land-attached assets.
If there is no recipient of the land use right and properties attached to the land, the State shall recover such land and assets;
- In case the individual participating in the capital contribution contract dies, the land use rights contributed as capital shall be inherited according to the provisions of civil law;
- Where an individual participating in a capital contribution contract is declared dead, dead or has limited civil act capacity, the settlement shall be handled in accordance with the civil law;
- In case the joint venture enterprise is dissolved or the party contributing capital with land use rights is a dissolved organization, the contributed land use rights shall be handled according to the agreement between the parties in accordance with the provisions of the Land Law and the Law on Land. other relevant laws.
How to cancel the registration of capital contribution with land use rights?
When contributing capital with land use rights, the capital contributor must transfer the land use rights to the company. When the capital contribution is terminated according to regulations, one of the parties to the capital contribution contract shall carry out procedures for deregistration of land use right capital contribution. Whereby:
Dossier for deregistration of land use right capital contribution
According to Clause 3, Article 9 of Circular No. 24/2014/TT-BTNMT; as amended by Clause 1, Article 2 of Circular 09/2021/TT-BTNMT; supplemented by Clause 6, Article 7 of Circular 33/2017/TT-BTNM; one of the parties or the parties signing the land use right capital contribution contract shall submit 01 set of application for cancellation of registration of land use right capital contribution at the land registration office. Profile components include:
- A written document on liquidation of the contract on capital contribution with land use rights or assets attached to land or the contract on capital contribution with land use rights certified that the contract has been liquidated.
- The original Certificate of land use rights and ownership of assets attached to land.
Procedure for deregistration of capital contribution with land use rights
The cancellation of registration of land use right capital contribution shall comply with the provisions of Article 80 of Decree 43/2014/ND-CP. Specifically:
– One of the parties or parties signs a lease, sub-lease, contract of capital contribution of land use rights, ownership of property on land, and submits a dossier at the provincial land use right registration office.
– The dossier-receiving agency shall record all information in the dossier-receiving book and return the results, hand over the application-receiving slip and return the results to the applicant.
The land registration office is responsible for checking the dossier and, if it is in accordance with the provisions of law, shall perform the following tasks:
- Confirm the cancellation of lease, sub-lease, cancellation of capital contribution in the certificate and hand it to the lessor, sub-lessor and capital contributor. In case of lease or sub-lease of land in an industrial park and in case of capital contribution of land use rights, which has been granted a Certificate to the lessee, sub-lessee or recipient of capital contribution, the issued Certificate shall be revoked; The capital contribution recipient shall be re-granted a certificate of land use rights and ownership of houses and other land-attached assets.
- In case the land use term ends together with the time of cancellation of lease, sub-lease of land, cancellation of capital contribution with land use rights, but the land user has no need to continue using the land or is not authorized by the competent authority to continue using the land. If the State has the authority to extend the land use term, the issued certificate shall be revoked.
Please see more
- Collecting yields from public land funds in Vietnam
- Guidance on how to calculate residential land tax in Vietnam
- Land valuation income method in Vietnam
Services of Lawyer X
Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.
On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, Lawyer X’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
Confidentiality of client information: Finally, all brand personal information of client Lawyer X will be 100% confidential.
Please contact us immediately with questions about the “Vietnamese regulations on termination of capital contribution with land use rights”
Contact LSX Lawfirm
Finally, we hope this article is useful for you to answer the question: “Vietnamese regulations on termination of capital contribution with land use rights”. If you need any further information, please contact LSX Law firm: at +84846175333 or Email: [email protected]
Frequently asked questions
Enterprise Law 2020 stipulates:
For a limited liability company with two or more members specified in Clause 2, Article 48: Making capital contribution to establish the company and granting a certificate of capital contribution: “Members must contribute capital to the company in full and the right type of assets as committed when registering for the business establishment within 90 days from the date of issuance of the Certificate of Business Registration”;
For a one-member limited liability company specified in Clause 2, Article 74: Making capital contribution to establish the company: “The owner must fully and correctly contribute assets as committed when registering for business establishment in within 90 days from the date of being granted an enterprise registration certificate.
Therefore, if within the above time limit, individuals or organizations fail to make or do not perform enough to contribute capital with land use rights, the time limit for capital contribution shall be considered as expired.
According to Clause 3, Article 80 of Decree 43/2014/ND-CP, only in the following cases, individuals and organizations that contribute capital have the right to land use rights after the capital contribution is terminated:
In case the capital contribution term expires or the parties agree to terminate the capital contribution, the party contributing capital with land use rights may continue to use that land for the remaining term.
In this case, the time limit for capital contribution has expired, so the right to use that land is returned to the ownership of the capital contributor.
Conclusion: So the above is Vietnamese regulations on termination of capital contribution with land use rights. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
