To carry out the procedures for establishing a joint stock company, you have to satisfy the legal conditions and regulations of state agencies such as capital, qualifications, founders, etc. So, how many members do you need to establish a joint stock company in Vietnam? How does the law regulate procedures for setting up a joint stock company? In this article, LSX legal firm provides: “Number of members you need to establish a joint stock company in Vietnam”
- Law on Enterprise 2020
Joint-stock company in Vietnam
Article 111 of the Law on Enterprises 2020 defines a joint stock company as:
Article 111. Joint stock companiesA 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.
A joint stock company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
A joint stock company may issue shares, bonds, and other kinds of securities.
Number of members you need to establish a joint stock company in Vietnam
A shareholder (member) owns at least a share of a joint stock company and only has liable for debts and other financial obligations to the extent of the contributed capital.
Article 111 of the Law on Enterprises 2020 stipulates that shareholders can be organizations and individuals, the minimum number of shareholders is 03 and there is no limit on the maximum number of shareholders.
Characteristics of joint-stock company
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.
The nature of company type
Counter-capital means the relationship between the owners of the company base on the percentage of shares holdings of the company. Shareholders who hold a large percentage of shares with voting rights will have a lot of influence in the company and vice versa. In fact, in joint-stock companies with several dozen to several hundred shareholders is relatively common for the shareholders in the company to not know each other.
Under the current law on enterprises, the Joint-stock company can perform fully and diversified forms of capital mobilization such as borrowing from banks, issuing shares, bonds, etc.
- Stocks are certificates issued by a joint-stock company, recorded by book entries, or certified electronic data on the ownership of one or more shares of that company. Issuing shares is a mobilization method that a limited liability company can not conduct.
- 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.
According to the provisions of the Law on Enterprise 2020, a joint stock company has its organizational structure under the following 02 models:
|Model 1||Model 2|
|General meeting of shareholders; – Board of Directors; – Board of Controllers and Director or General Director.||General meeting of shareholders; – Board of Directors; – Director or General Director.|
|Note: In case the company has less than 11 shareholders (as organizations), holding less than 50% of the total shares of the company, the law does not require the company to have a Board of Controllers.||Note: 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.|
Shares transfer of a joint-stock company
In principle, shareholders can freely transfer their shares. However, transfer limits still exist, specifically as follows:
- Restricted by the provisions of the company’s charter and must clearly state such restriction on the respective shares;
- Shares of founding shareholders may only be transferred to other founding shareholders within the first 3 years after establishment. In case they are transferred to a person who is not a founding shareholder, the approval of the General Meeting of Shareholders must be obtained;
- Shareholders can not transfer voting shares.
Procedures to establish Joint-stock company
Step 1: Prepare dossiers
Dossier to establish a Joint Stock Company includes:
- Application for establishment (the joint-stock type);
- Charter of Joint-Stock Company;
- Individual identification papers of shareholders (as individuals): identity card, citizen identification, passport, etc.
- Legal papers of the individual as the legal representative.
- Relevant legal papers of business registration, operation registration, establishment decision… for shareholders as legal entities.
- List of founding shareholders of the company.
- Authorization document: In case the owner does not directly carry out the procedure.
Step 2: Submit dossiers
Submit the application at the Business Registration Office of the Department of Planning and Investment at the province level where you plan to locate the head office of your Company.
Currently, there are two forms to submit an application:
- Register directly: apply at the “one-stop” department of the Business Registration Office. However, in Hanoi, this method is no longer applied.
- Online business registration: submit your application on the National Business Registration Portal (Address: https://dangkykinhdoanh.gov.vn). After the online application is valid, you will have to go directly to the “one-stop” department to return the scanned copy (hard copy) when submitting it online.
Once you have submitted your application, you will receive a receipt for your application. The usual processing time for applications will be 3 working days.
Step 3: Receive result
According to the schedule on the appointment, you return to the “one-stop” department of the Business Registration Office to receive the results. There are two possible scenarios:
- Dossiers valid: You will receive a Certificate of Business Registration as a result and a notification to the tax authorities.
- Dossiers invalid: The Business Registration Office will have a document instructing you to amend the dossiers in accordance with the provisions of the law. After the amendments and supplements to your application according to this guide, then resubmit your application as in Step 2.
Step 4: Post-establishment procedures.
Receiving a Business Registration Certificate is just the first step in putting your company into operation. After that, you have to do the following series of procedures:
- Notice the use of the company’s seal sample.
- Bank account notice (if your company registers a bank account).
- Tax procedures such as license declaration and payment of license fees, Tax on corporate headquarters inspection,…
- Trademark protection (if you need it).
After carrying out these procedures, your Company can go into operation.
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;
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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.
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Finally, hope this article is useful for you to answer the question about “Number of 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
– Submit directly at the business registration office where the company’s headquarters is located.
– Submit business registration documents by post office.
– Apply online through the electronic portal.
Firstly, company’s name
Secondly, address of head office
Thirdly, company’s business lines
Lastly, charter capital
According to the provisions of the Law on Enterprise 2020, enterprises that are in the period of registration for temporary suspension of operation can register to resume operation before the deadline, but must perform the obligation to notify the business registration office in advance. when working again.