Contribution of capital to a joint-stock company
08:39 - 28/07/2021
Contribution of capital to a joint-stock company
According to the provisions of the enterprise law, a capital contribution means the contribution of capital as charter capital to establish a new company or the contribution of additional capital to an existing company. This is an activity that often occurs during the operation of a joint-stock company or a limited company.
Contribution of capital to a joint-stock company
According to the provisions of the enterprise law, a capital contribution means the contribution of capital as charter capital to establish a new company or the contribution of additional capital to an existing company. This is an activity that often occurs during the operation of a joint-stock company or a limited company.
Legal basis
- Law on investment 2020;
- Law on Enterprises 2020;
- Decree No.31/2021/ND-CP dated March 26, 2021, on the elaboration of some articles of the Law on Investment;
- Circular No.03/2021/TT-BKHDT dated April 09, 2021, on regulations for forms of documents and reports related to investment activities in Vietnam, investment from Vietnam to abroad, and investment promotion promulgated by the Ministry of Planning and Investment.
- Official Dispatch No. 8909/BKHĐT-PC dated December 31, 2020, on implementation of the Law on Investment
Contributed assets (Article 34 of Law on enterprises 2020)
- Contributed assets include VND, convertible foreign currencies, gold, land use right (LUR), intellectual property rights, technologies, technical secrets, other assets that can be converted into VND.
- Only the individual or organization that has the lawful right to ownership or right to use the asset mentioned in Clause 1 of this Article may contribute it as capital as prescribed by law.
Duration of capital contribution for the joint-stock company (Clause 1, Article 113 of Law on enterprises 2020): Shareholders shall fully pay for the subscribed shares within 90 days from the issuance date of the Certificate of Enterprise Registration unless a shorter time limit is specified by the company's charter or the shares registration contract. In the case of capital contribution by assets, the time needed to transport or import the contributed assets and for completing ownership transfer procedures shall be added to this time limit. The Board of Directors shall supervise the shareholders fully and punctually paying for the subscribed shares.
Valuation of contributed assets (Article 36 of Law on enterprises 2020)
- Contributed assets that are not VND, convertible foreign currencies, or gold shall be valued by members/partners/shareholders or a valuation organization and expressed as VND.
- Assets contributed upon establishment of an enterprise shall be valued by members/partners/founding shareholders by consensus or by a valuation organization. In the latter case, the value of contributed assets must be accepted by more than 50% of the members/partners/founding shareholders.
Note: In case a contributed asset is valued at a value higher than its actual value at contribution time (overvalued), the members/partners/founding shareholders shall jointly contribute an amount equal to the difference and are jointly responsible for the damage caused by the overvaluation.
- Assets contributed during the operation shall be valued by the owner or the Board of Members/Partners (for limited liability companies and partnerships) or the Board of Directors (for joint-stock companies) and the contributor or by a valuation organization. In the latter case, the value shall be accepted by the contributor and the owner, the Board of Members/Partners/Directors.
Note: In case a contributed asset is overvalued, the contributor, the owner, and members of the Board of Members/Partners/Director shall jointly contribute an amount equal to the difference and are jointly responsible for the damage caused by the overvaluation.
An application for registration of capital contribution or purchase of shares/stakes consists of (Article 3.2.2 of Official Dispatch No.8909/BKHĐT-PC):
A registration form for capital contribution or purchase of shares/stakes, which specifies enterprise registration information about the business entity to which foreign investors expect to contribute capital or whose shares/stakes are expected to be purchased by foreign investors; business lines; list of founding shareholders, list of shareholders that are foreign investors (if any); holding of charter capital by the foreign investor before and after capital contribution or purchase of shares/stakes; transaction value of the contract for capital contribution or purchase of shares/stakes; information about the business entity's investment project (if any);
Copies of legal documents of the individual or organization that contributes capital or purchases shares/stakes and of the business entity to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;
A written agreement on the capital contribution or purchase of shares/stakes between the foreign investor and the business entity receiving capital contribution from or selling shares/stakes to the foreign investor;
A declaration document enclosed with the copy of the certificate of land use rights of the business entity (in the case specified in Points b and c Clause 2 Article 24 of the Law on Investment 2020). The business entity shall take legal responsibility for the accuracy and truthfulness of the declaration document.
The above is the contribution of capital to a joint-stock company of Hnlaw & Partners Law Firm. If the enterprise still has problems, unknown, or needs other legal assistance, please contact the online legal consulting department through the hotline: 0912.918.296 for answers. We hope to receive the cooperation of customers!
For more details, please contact Hnlaw & Partners Law Firm
Address: DBS Tower, No.N028, lot 31 Ha Tri commercial service, and housing area, Ha Tri ward, Ha Dong District, Ha Noi.
Email: tuvan.hnlaw@gmail.com
