Currently, with the strong start-up trend and the development of the economy, the establishment of businesses increase day by day. In the promotion of the economy, businesses want to increase the scale of investment in production and business as well as mobilize large capital from outside. However, not all businesses are free to raise capital to expand production and business, only joint-stock companies (JSCs) are entitled to issue shares to raise capital freely. So, in this article, LSX legal firm provides you the conditions to establish Joint-stock company in Vietnam?
Legal ground
- Law on Enterprise 2020
Conditions for establishment and management rights.
Not every individual has the right to establish an enterprise, Article 17 of the Law on Enterprise 2020 specified the conditions for establishing a company:
Article 17. The rights to establish, contribute capital, buy shares/stakes and manage enterprises
1. Organizations and individuals have the right to establish and manage enterprises in Vietnam under this Law, except for the cases specified in Clause 2 of this Article.
2. The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
a) State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their interests;
b) Officials and public employees defined by the Law on Officials and the Law on Public Employees;
…
3. Organizations and individuals have the right to contribute capital, buy shares and stakes of joint-stock companies, limited liability companies, and partnerships under this Law, except:
a) State authorities, People’s armed forces contributing state-owned assets to enterprises to serve their interests;
b) The entities that are not allowed to contribute capital to enterprises prescribed by the Law on Officials, the Law on Public Employees, and Anti-corruption Law.
4. The act of serving one’s interests mentioned in Point a Clause 2 and Point a Clause 3 of this Article means the use of incomes from business operation, capital contribution, acquisition of shares/stakes for any of the following purposes:
a) Any kind of distribution to some or all of the persons specified in Point b and Point c Clause 2 of this Article;
b) Inclusion in the operating budget of the organization/unit against state budget laws;
c) Establishment or contribution to an internal fund of the organization/unit.
To establish a joint-stock company (JSC), first of all, individuals and organizations must allowed to establish by law. therefore, Vietnamese and foreign individuals, as well as organizations, must not fall into the prohibited cases.
Conditions on business lines
Conditions on business lines are applied to conditional business lines that must be licensed by a competent authority. For example, representation, legal advice, notarization activities,…
Conditions on company name
Article 41. Identical and confusingly similar names
1. Identical name means a Vietnamese name that is chosen by the applying enterprise and is identical to the Vietnamese name of a registered enterprise.
2. A name is considered identical to a registered enterprise’s name in the following cases:
a) The Vietnamese name of the applying enterprise is pronounced similarly to a registered enterprise’s name;
b) The abbreviated name of the applying enterprise is identical to the abbreviated name of a registered enterprise;
c) The foreign language name of the applying enterprise is identical to the foreign-language name of a registered enterprise;
d) The proper name of the applying enterprise is only different from the proper name of a registered enterprise by a natural number or a letter in the Vietnamese alphabet or any of the letters F, J, Z, W that is written right after the proper name with or without a space;
dd) The proper name of the applying enterprise is only different from the proper name of a registered enterprise of the same type by the word “và” (“and”) or the symbol “&”, ”, “.”, “,”, “+”, “-”, “_”;
e) The proper name of the applying enterprise is only different from the proper name of a registered enterprise of the same type by the word “tân” or “mới” (“new”) that is written right before or after the proper name;
g) The proper name of the applying enterprise is only different from the proper name of a registered enterprise of one of the phrases “miền Bắc” (“north”), “miền Nam” (“south”), “miền Trung” (“central”), “miền Tây” (“west”), “miền Đông” (“east”);
3. The cases specified in Points d, dd, e, g, h Clause 2 of this Article do not apply to subsidiary companies of the registered company.
Conditions on the number of members and founding shareholders to establish Joint-stock company
Article 111. Joint-stock companies
1. A joint-stock company is an enterprise in which:
b) Shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders;
Article 120. Ordinary shares of founding shareholders
1. A new joint-stock company shall have at least 03 founding shareholders. A joint-stock company converted from a state-owned enterprise or limited liability company or after division, consolidation, or acquisition of another joint-stock company is not required to have founding shareholders. Instead, the company’s charter in the enterprise registration application shall contain the signatures of the company’s legal representatives or ordinary shareholders.
2. The founding shareholders shall subscribe for at least 20% of the total authorized ordinary shares upon enterprise registration.
Thus, at least 3 founding shareholders must take part in the registration to establish a joint-stock company. Not limit the maximum unless otherwise provided by law.
LSX legal firm’s service on company establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself. We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
Procedure to set up a Joint-stock company under Vietnam’s Enterprise law
Procedures to establish Joint-stock company under Vietnamese legislation
Procedures and dossier for dissolution of Joint-Stock Company at Vietnamese.
Related questions
Choose the type of business that suits your actual conditions.
Name the company.
Address to locate the company’s headquarters.
Choose suitable business lines.
Select the appropriate level of charter capital.
Prepare to pay the tax corresponding to the registered charter capital.
Select a qualified legal representative to run the business.
Prepare application for business registration.
…
Firstly, register the investment project
Secondly, apply for Certificate of investment registration
Thirdly, apply for the certificate of business registration
Fourthly, publish the content of the business registration
Then, registered business stamp
Next, notice of use of stamp
Equally important, open bank account
After all, the post licensing procedures
Contact LSX
Finally, hope this article is useful for you to answer the question about “Conditions to establish Joint-stock company in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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