Procedure for conversion of type of enterprises
Company B is a one-member limited liability company that was established by Mr. Nguyen Van B with its charter capital of VND 10 billion. Mr. B would like to mobilize capital to expand the business of the company. Because of the feasibility of the project, Mr. Hoang Van D and Mr. Pham Van K would like to contribute VND 3 billion to Company B. the company’s form, at their request, should be transformed into a joint-stock company. Mr. B would like to consult lawyers about the necessary procedures to do this
- Law on Enterprise 2014;
- Decree No. 28/2015/ND-CP on Enterprise registration; and
- Circular No. 39/2014/TT-BTC on the guideline for the Government’s decree No. 51/2010/NĐ-CP and Decree No. 04/2014/ND-CP on sale/service invoices
1. Conditions of transforming a company
According to Article 196 of Law on Enterprise 2014, a one-member limited liability company may be transformed into a joint-stock company in one of the following manners:
- By raising additional capital contributed by other persons or other organizations;
- By selling part of or all of its capital contribution to other persons or other organizations; or
- By combination of the two methods above
Therefore, it is legal when company B transforms its form by raising additional capital contributed by Mr. D and Mr. K. Company B shall be organized in the form of a joint-stock company if the minimum quantity of the company shareholders is 03. After raising capital contribution, members of the company are Mr. B, Mr. D, and Mr. K. Therefore, Company B satisfies enough conditions to transform a one-member limited liability company into a joint-stock company.
2. Requisite procedures
2.1. Registration of transformation
Within 10 days after the transformation is completed, the company shall register the transformation with a business registration office.
• Components of the applications:
– An application proposal for enterprise registration;
– A charter of the joint-stock company;
– A decision of Mr. B on the transformation of the company;
– A list of founding shareholders; and
– Certificate of capital contribution
• Licensing authority: Business registration office (“BRO”)
• Processing time limit: Within 05 working days after receiving the valid applications
• Results: A certificate of enterprise registration.
2.2. Notification of change of the company’s seal sample
A seal must contain the enterprise’s name and the enterprise’s ID number. Therefore, when Company B transforms its form, its seal shall be changed. Before using a new seal, Company B must notify with BRO where it is located about the change.
• Company B will send a notification of the change of its seal sample to the BRO in order to post the change on National Business Registration Portal
• After receiving the notification, the BRO will grant a receipt to Company B and post the seal sample on National Business Registration Portal. At the same time, the BRO also grants Company B a notification that its seal design has been posted
2.3. Change of information of invoices
In case that Company B only changes its name but not its headquarter and/or tax bureau, the company can carry out the following activities to continuously use available published invoices which contain the former name of the company:
- Stamping new name and/or address next to the former name;
- Notifying about the adjustment of the former document on invoice publication