To conduct the procedures for establishing a joint stock company, founders must satisfy the legal conditions and regulations of state agencies such as capital, qualifications, founders, etc. On the other hand, without a clear understanding of legal regulations founders may face difficulties when carrying out the procedures. Recently, people intending to set up a joint-stock company usually wonder about the limited number of members. So, in this article, LSX legal firm will help you to answer the question: “How many members you need to establish a joint-stock company in Vietnam?”
- Law on Enterprise 2020
Joint-stock company under the law
Joint-stock companies belong to enterprises under management of the provisions of the Law on Enterprises 2020.
Firstly, a joint stock company is an enterprise in which:
- The charter capital is divided into units of equal value called shares;
- Shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders;
- A shareholder’s liability for the company’s debts and liabilities is equal to the amount of capital contributed to the company by the shareholder;
- Shareholders may transfer their shares to other persons except for the cases specified in Clause 3 Article 120 and Clause 1 Article 127 of this Law.
Secondly, a joint stock company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
Thirdly, a joint stock company may issue shares, bonds, and other kinds of securities.
How many members you need to establish a joint-stock company in Vietnam?
A shareholder (member) means a person who owns at least one share of a joint stock company and only takes liability for debts and other financial obligations to the extent of the contributed capital. According to Article 111 of the Law on Enterprises 2020, a joint stock company must have at least 03 founding shareholders. On the other hand, the law does not limit the maximum number of shareholders.
As analyzed above, a Joint Stock Company must have at least 03 founding shareholders and no limitation to the maximum number of shareholders.
A joint stock company has 03 types of shareholders, including:
- Founding Shareholders: Founding shareholders must own at least one ordinary share and sign on the list of founding shareholders of a joint-stock company. As can be seen, founding shareholders are also common shareholders.
- Ordinary shareholders: shareholders that own ordinary shares.
- Preference shareholders: Owners of preferred shares.
Capital and capital mobilization
Charter capital is divided into equal parts called shares, buying shares is the main way to contribute capital to a joint-stock company;
Joint-stock companies have the ability to mobilize capital flexibly. Like other types of companies, joint stock companies can raise capital from loans from domestic and foreign organizations as well as individuals. Also, a joint stock company can raise capital by issuing stocks and bonds, specifically:
- Shares are certificates issued by a joint-stock company, recorded book entries, or certified electronic data on the ownership of one or more shares of that company.
- Joint-stock companies have the right to issue bonds, convertible bonds, and other types of bonds in accordance with the law and the company’s charter.
Unless otherwise prescribed by securities laws, a joint stock company may choose one of the following models:
- A joint stock company with the GMS, Board of Directors, Board of Controllers, and Director/General Director. If the joint stock company has fewer than 11 shareholders and the shareholders that are organizations hold less than 50% of the company’s total shares, the company does not have to establish a Board of Control.
- A joint stock company with the GMS, Board of Directors, and Director/General Director. In this case, at least 20% of the members of the Board of Directors shall be independent members and there has to be an audit committee affiliated with the Board of Directors. The organizational structure, functions, and duties of the audit committee specified in the company’s charter or the audit committee’s operating regulations promulgated by the Board of Directors.
The General Meeting of Shareholder and The Board of Directors
- The General Meeting of Shareholders (GMS) shall consist of all voting shareholders and play the role of the supreme body of a joint stock company. The General Meeting of Shareholders holds an annual meeting once a year. In addition to the annual meeting, the General Assembly may hold extraordinary meetings.
- Board of Directors: the management body of the company, having full power on behalf of the company to decide and exercise the rights as well as obligations of the company, except for the rights of the General Meeting of Shareholders. The Board of Directors shall have 03 – 11 members. The Chairman belongs to the Board of Directors; elected, relieved of duty, or dismissed by the Board of Directors.
The General Meeting of Shareholders and the Board of Directors mean the two main bodies that govern the activities of a joint stock company. These two agencies have a link and control each other, no one has higher power than the other.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
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.
Finally, hope this article is useful for you to answer the question about “How many members you need to establish a joint-stock company in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: firstname.lastname@example.org
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First of all, these two types attract enterprises the most in Vietnam today. This is not a coincidence because they have much superiority over other types of businesses.
Both Joint Stock Company and LLC with 2 or more members are similar in form of ownership when many members/shareholders are holding the charter capital. Also, both types of companies have legal status. That means the company and its owners will be legally independent of each other.
If the company makes a loss, the company bears it. The members/shareholders of the company will only take responsibility for all risks to the extent of the capital they have contributed to the business.
At present, there are three ways to apply for company registration:
Firstly, submit directly at the business registration office where the company’s headquarters is located.
Secondly, submit business registration documents by post office.
Thirdly, submit online through the electronic portal.
Publication of business registration
Open bank account
Purchase digital signature (Token)
Other kinds of fee