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ESTABLISHMENT OF A JOINT-STOCK COMPANY IN VIETNAM

The joint-stock company is a type of counterpart company with outstanding advantages in capital raising ability compared to other types of companies, so it is currently selected by many investors when establishing the company. However, the company must meet the strict organizational and management requirements in accordance with the law. Besides, the procedure for establishing a joint-stock company is also quite complicated.

I. About the joint-stock company

 A joint-stock company is a type of enterprise in which the company's charter capital is divided into equal parts called shares and has the right to issue shares of all kinds to mobilize capital. The owner of a share is called a shareholder, the shareholder is only responsible for the debts and other property obligations of the enterprise within the amount of capital contributed to the enterprise.

Under the provisions of the current Enterprise Law, joint-stock companies have some of the following legal characteristics:

- A member of a joint-stock company may be an individual or an organization, with a minimum of 3 members and an unlimited number of members.

- The charter capital of the company divided into equal parts called shares. Capital contribution to the company is made by buying shares. For some specific occupations, the law stipulates the minimum capital to set up a company.

- Shareholders have the right to transfer their shares to others, the degree of freedom of transfer depends on the nature of each type of shares (shareholders holding preferred shares which are voting and founding shareholders are limited to transfer of shares in the first three years;)

- The shareholders of the company are only responsible for the debts and other financial obligations of the company within the capital contribution

- A joint stock company has legal status from the date of issuance of the business registration certificate.

- Regarding the issuance of securities: Joint stock companies have the right to issue securities of all kinds to mobilize capital.

- The organization and management of incidents are very complicated and must be very strict. Procedures for establishing a joint-stock company are also quite complicated.

II. Procedures for business registration 

- First, the founder of the enterprise or an authorized person shall submit the application for enterprise registration prescribed in this Law to the business registration authority;

- After that, the business registration authority shall consider the legitimacy of the application for enterprise registration and issue the Certificate of Business registration within 03 working days from the day on which the application is received. If the application is rejected, a written notification must be sent to the founder. The notification must provide an explanation and necessary adjustments or additions. The enterprise shall be granted the Certificate of Business registration when the following conditions are satisfied: The registered business lines are not banned; The enterprise’s name is conformable with regulations in Articles 38, 39, 40, and 42 of the Enterprise Law; The application for business registration is satisfactory; The fee for enterprise registration is fully paid as prescribed by regulations of law on fees and charges.

 

III. Document for registration of a joint-stock company  

According to the Enterprise Law and the guiding documents, application for registration of a joint-stock company includes:

Number

Document

Information

1

An application form for business registration (According to the form issued by the Ministry of Planning and Investment)

- Name of the enterprise

- Address of the enterprise's headquarters; phone number, fax number, and email address (if any).

- Business lines.

- Charter capital.

- Types of shares, the face value of each type of shares, and total authorized shares of each.

- Tax registration information

- A number of employees.

9. Full name, signature, permanent residence, nationality, number of the ID card, passport, or another ID paper of the legal representative.

 

2

The company’s charter

- Name, the address of the headquarter of the enterprise; names, addresses of its branches and representative office (if any);

- Business lines;

- Charter capital; total shares, types of shares, and nominal values of each type of shares;

- Full names, addresses, nationalities, and other information of founding shareholders; the number of shares, types of shares, and the nominal value of each type of the founding shareholders;

- Rights and obligations of shareholders;

- Organizational structure;

- The legal representative;

-  Method for ratifying the enterprise’s decisions; rules for resolution of the internal dispute;

- Bases and methods for determination of wages and bonus for managers and controllers;

- Cases in which a member is entitled to request the enterprise to buy his/her shares

- Rules for distribution of post-tax profit and handling of business loss;

- Cases of dissolution; procedures for dissolution and asset liquidation;

- Rules for making amendments to the company’s charter;

- The full names and signatures of founding shareholders being individuals and legal representatives or authorized representatives of founding shareholders being organizations.

 

3

A list of founding shareholders and shareholders being foreign investors

 

4

Copies of

The ID card or other ID papers of founding shareholders and foreign investors being individuals

The decision on Establishment, Certificate of Business registration, or an equivalent document of the organization and the letter of authorization; the ID card or other ID papers of the authorized representatives of founding shareholders and foreign investors being organizations.

If shareholders are foreign organizations, the copy of the Certificate of Business registration or an equivalent document must be consular legalized.

 

5

Copy of The Certificate of Investment registration of the foreign investors as prescribed by the Law on Investment.

 

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