Procedure to set up a Joint-stock company under Vietnam’s Enterprise law

Currently, the epidemic situation is complicated all over the world. However, the need to establish a business increase day by day and the most chosen type of business is a Joint Stock Company. On the other hand, to establish a business you need to follow certain procedures. So how do people establish this type of business? In this article, LSX legal firm would like to inform you of the answer to: “Procedure to set up a Joint-stock company under Vietnam’s Enterprise law”

Legal ground

• Law on Enterprise 2020

Joint-stock company

According to article 11 of the Law on Enterprise 2020:

Article 11: Joint stock companies

1. A joint stock company is an enterprise in which:
a) The charter capital is divided into units of equal value called shares;
b) Shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders;
a) 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;
d) 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.
2. A joint stock company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
3. A joint stock company may issue shares, bonds and other kinds of securities.

Characteristics of a Joint Stock Company

Members

This business has a minimum of 03 members to unlimited members, considered an advantage of this business model. That is, during its existence and operation, the company will always have at least three members. When problems of obligations such as debt or responsibility before the law, all three or more members must take responsibility.
This company model also clearly defines the rights and interests of each shareholder. By taking limited liability for their obligations and rights, shareholders can avoid many unnecessary conflicts and risks in the process of contributing capital to the company.

Management structure

Unless otherwise provided by the securities law, the company has the right to choose the structure to manage and operate under one of the following two models:

Model 1: (In case the company has less than 11 shareholders and the shareholders are organizations holding less than 50% of the total shares of the company, the company not required to have a Supervisory Board)

1. General Meeting of Shareholders.
2. Board of Directors.
3. Control Board.
4. Director or General Manager.

Model 2: (In this case, at least 20% of the members of the Board of Directors must be independent members and have an Audit Committee under the Board of Directors. Besides, the organizational structure, functions, and duties of the Audit Committee are specified in the company’s charter or the operation regulations of the Audit Committee issued by the Board of Directors)

1. General Meeting of Shareholders.
2. Board of Directors.
3. Director or General Manager.

Types of shares

This company model has the following types of shares:

1. Common shares. Owners of common shares are ordinary shareholders; (Common shares cannot be converted into preference shares).
2. Preference shares. Owners of preference shares are called preferred shareholders. Preference shares include the following types: Dividend preference shares, Redeemable preference shares, Voting preference shares, Other preference shares as prescribed in the company’s charter and the law on securities (Preference shares can be converted into common shares according to the resolution of the General Meeting of Shareholders.)

Application for registration of a joint stock company

1. The enterprise registration application form.

2. The company’s charter.

3. The list of founding shareholders; the list of shareholders that are foreign investors.

4. Copies of:

a) Legal documents of founding shareholders and shareholders that are foreign investors who are individuals and legal representatives;

b) Legal documents of shareholders that are organizations, documents about designation of authorized representatives; legal documents of authorized representatives of founding shareholders and shareholders that are foreign organizations.

Legalized copies of legal documents of the members that are foreign organizations.

c) Lastly, the Certificate of Investment Registration of foreign investors as prescribed by the Law on Investment.

Where to submit the application for registration of a Joint-stock company

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.

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.

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Procedures for offering shares to the public of a joint-stock company in Vietnam

How to establish a Joint-stock company in Vietnam?

Related questions

Contact LSX

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