Changing the company's charter capital is an important part of the business management and development process. Below is a detailed guide on the forms of change of charter capital and implementation procedures.
1. Forms of capital increase
Joint Stock Company
- Issuance of new shares: The company may issue additional shares to raise capital from existing shareholders or new shareholders. Existing shareholders have the right to buy new shares.
- Increase capital through investment from existing or new shareholders: Existing shareholders can contribute more capital to the company or the company can offer shares to new investors.
1-member limited liability company
- Owners contribute more capital themselves: Owners can put more capital into the company themselves.
- Raising capital from other sources: The company may seek and receive capital from outside, such as from individual or institutional investors.
Limited liability companies with 2 or more members
- Increase capital from existing members: Existing members can contribute more capital to the company.
- Raise more capital from new members: The company can receive capital from new members who join the company.
2. Forms of capital reduction
Joint Stock Company
- Return part of contributed capital to shareholders: The company can refund part of contributed capital to shareholders if the company has been operating continuously for 02 years or more and ensure full payment of debts and other property obligations.
- Repurchase of issued shares: The company can repurchase issued shares to reduce charter capital.
- Capital reduction due to shareholders not fully paying their capital contributions: If shareholders do not fully pay their committed capital, the company can reduce its charter capital accordingly
1-member limited liability company
- Return part of the contributed capital to the owner: Similar to a joint stock company, if the company operates continuously and pays its debts in full, the company can return the capital to the owner.
- Reduction of capital due to the owner's failure to fully pay the contributed capital: Reduction of charter capital if the owner fails to fully pay the committed capital.
Limited liability companies with 2 or more members
- Return part of the contributed capital to members: Similar to a joint stock company, the company can return capital to members based on the percentage of capital contribution.
- Repurchase of members' contributed capital: The company may repurchase the contributed capital of one or several members to reduce the charter capital.
- Capital reduction due to members not fully paying their capital contributions: If members do not fully pay their capital, the company can reduce its charter capital for adjustment.
1. Procedures for increasing charter capital
Step 1: Prepare and submit the dossier
- Components of the dossier:
- Notice of changes in enterprise registration contents: Provide information on changes in charter capital.
- Decision and minutes of the meeting: Decision of the Board of members (limited liability company with 2 or more members) or the General Meeting of Shareholders (joint stock company).
- Decision of the owner: Decision of the owner of a 1-member limited liability company on the change of charter capital.
- Written confirmation of capital contribution of new members: If there are new members, it is necessary to have a written confirmation of their capital contribution.
- Notarized copy of CCCD/ID card/passport of shareholders/new members: For shareholders/new members contributing capital.
- Power of attorney: For individuals who carry out procedures for changing charter capital.
- Notarized copy of CCCD/ID card/passport of the authorized person.
- Form of application:
- Submit directly to the Business Registration Office of the Department of Planning and Investment where the enterprise is headquartered.
- Register online at the National Business Registration Portal with public digital signatures (for Hanoi and Ho Chi Minh City). Ho Chi Minh City).
Step 2: Review your application
- Receive and check the dossier: The Business Registration Office issues a receipt and checks its validity.
- Issuance of Business Registration Certificate: If the dossier is valid, the Certificate will be issued within 03 working days.
- Notice of request for amendment and supplementation: If the dossier is invalid, the enterprise is required to amend and supplement it.
- Amendment period: Businesses have 60 days to amend after receiving the notice. After this time, the application will be canceled if no amendment is received.
2. Procedures for reducing charter capital
- Capital Reduction Dossier: The dossier requirements are similar to the capital increase dossier, but additional Financial Statements are required to demonstrate the ability to pay debts and property obligations after the capital reduction.
- Financial statements: Ensure there is enough cash to repay the contributed capital and pay off debts. For joint-stock companies with foreign ownership of more than 50%, the financial statements need to be certified by an independent auditor
- Capital reduction for industries with legal capital conditions: Enterprises must maintain the legal capital level or adjust business lines if the capital reduction is lower than the required level.
- Complete the actual capital increase before registration: To avoid incomplete capital contribution after registration.
- Conversion of the type of company for a 1-member limited liability company: If the capital is increased by mobilizing from outside, the company needs to be converted into a joint stock company or a limited liability company.
– License tax adjustment: Declare and pay additional license tax if the change in charter capital affects the tax rate.
- Notify relevant agencies: If the capital reduction affects the previously recorded obligations.
- Check the regulations that are not registered: Make sure you do not violate the prohibitions according to Clause 1, Article 65 of Decree 01/2021/ND-CP.
- Responsibility of owners and shareholders: Responsible for their capital after the change
Please contact us:
A DONG IP – TRANSLATION – CONSULTANCY COMPANY
Room F2&F3, No. 2 Phung Khac Khoan Street, Da Kao Ward, District 1, Ho Chi Minh City, Viet Nam
Tel: 84-28 3926 0120 – 39260125
Email: consultant@a-dong.com.vn; info@a-dong.com.vn
Website: a-dong.com.vn
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