Procedures for registration of change of owner when contributing capital to a company in Vietnam

The company is a legal entity; operates independently and is responsible for its own assets. Therefore, when establishing a company, capital contributors must register to change the owner of assets used for capital contribution. This is to ensure the operation of the business. So, Procedures for registration of change of owner when contributing capital to a company
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Legal grounds:

Enterprise law 2020

Concept

Establishing a business is the formation of a new business in the economy. Business establishment activities are conducted by investors on the basis of the law on legal form of enterprises; business lines, capital contribution methods; enterprise management organization; rights and obligations of enterprises; Entrepreneurs start a business…

Economic perspective

Establishing a company is a process of preparing all the issues; business conditions for the establishment of economic organizations. Then, the Business Entity needs to prepare relevant conditions such as name; Head office address, machinery, equipment, receiving, etc.

Legal perspective

Establishing a company is considered a legal procedure conducted by business owners at regulatory agencies; competent state agencies. And these procedures will be simple, or complex depending on the type of company.

Assets contributed as capital to establish the company
Article 34 of the Enterprise Law 2020 sets out specific regulations on assets contributed as capital, according to which:

Assets contributed as capital are Vietnam Dong; freely convertible foreign currency, gold, land use rights; intellectual property rights, technology, technical know-how; other assets that can be valued in Vietnam Dong.
Therefore, Only individuals and organizations are lawful owners; or have the lawful use right of the property, they shall have the right to use such property to contribute capital in accordance with the provisions of law.

Valuation of contributed assets

Article 36 of the Enterprise Law 2020 sets out regulations on the valuation of assets contributed as capital; in order to ensure the interests of capital contributors, specifically as follows:

General rules

Firstly, the assets contributed as capital are not Vietnam Dong; freely convertible foreign currency, gold must be founded by members and shareholders; or valuation organization and expressed in Vietnam Dong.
Second, assets contributed as the capital when establishing an enterprise must be owned by members; founding shareholders determine the price according to the principle of consensus; or by a valuation organization. However, in case of valuation by a valuation organization, the value of assets contributed as capital must be more than 50% of the members; approved by founding shareholders.

Other rules

In case the assets contributed as capital are valued higher than the actual value of such assets at the time of capital contribution, founding members and shareholders jointly contribute an additional amount equal to the difference between the value of the assets contributed as capital and the value of the assets contributed as capital valuation and actual value of assets contributed as capital at the time of closing valuation; at the same time jointly liable for damage caused by intentionally valuing the assets contributed as capital higher than the actual value.

Assets contributed as capital in the course of operation are owned by the owner; Members’ Council for limited liability companies and partnerships; The Board of Directors for joint-stock companies and capital contributors agree on valuation; or by a valuation organization. However, in the case of valuation organizations; the value of assets contributed as capital must be contributed by the capital contributor and the owner; Board of members or Board of Directors for approval.

Procedures for registration to change the owner of assets contributed as capital to the company

The company is a legal entity; business activities for the purpose of earning profits and taking responsibility with their own assets in the course of operation; Therefore, after contributing capital to the company, the members are obliged to transfer the ownership of their contributed assets to the company. Accordingly, Article 35 of the Enterprise Law 2020 stipulates the transfer of ownership of contributed capital as follows:

For properties with registered ownership or land use rights; the capital contributor must carry out procedures for transferring ownership of such property; or the right to use land for the company in accordance with the law. Transfer of ownership; The transfer of land use rights to assets contributed as capital is not subject to registration fees.
For properties without registration of ownership; the capital contribution must be made by handing over the assets contributed as capital, certified in writing; unless it is done through the account.

Time limit for registration of change of owner of contributed assets

For the purpose of ensuring capital for business operations as well as the legitimate interests of capital contributors; The Enterprise Law stipulates the time limit for registration of change of owner of contributed assets depending on the type of enterprise, specifically as follows:

Firstly, Limited company: Clause 2, Article 47 of the Enterprise Law 2020 regulates members; the owner must contribute capital to the company in full and with the right type of assets as committed when registering for business establishment within 90 days; from the date of issuance of the business registration certificate.

Secondly, Joint-stock companies: Clause 1, Article 113 of the Enterprise Law 2020 stipulates that shareholders must pay in full for the number of shares registered to buy within 90 days; from the date of issuance of the Certificate of Business Registration, except for the case of the company’s charter; or the share subscription contract stipulates another shorter term.

Finally, Partnership: Clause 1, Article 178 of the Enterprise Law 2020 stipulates that shareholders must pay in full for the purchased shares as committed.

Related article:

• Capital contribution to establish multiple-member limited liability companies under Viet Nam law
• Procedures to establish a security company in Vietnam

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