Joint Stock Company is a very popular type of business in Vietnam as it’s many advantages. The need to establish a joint stock company from clients is also very large and continuous, so Hong Bang Law Firm would like to give advice on the procedure for establishing a joint stock company as follows:
Legal basis
- Vietnam’s law on enterprises 2020;
- Decree No. 01/2021/ND-CP on enterprise registration;
- Circular No. 01/2021/TT-BKHDT guidance on enterprise registration;
- Circular No. 47/2019/TT-BTC on amounts, collection, payment, management and use of fees for providing information about enterprises, charges for business registration.
Overview of Joint Stock Company
According to Article 111 of Law on enterprises 2020, a joint stock company (JSC) is an enterprise, in which:
- Charter capital is divided into equal parts called shares;
- Shareholders can be organizations and individuals; the minimum number of shareholders is 03 and the maximum number is not limited;
- Shareholder’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise
- Shareholders are entitled to sell their shares to others, except for the cases specified in Clause 3, Article 120 and Clause 1, Article 127 of this Law.
- Joint stock companies have juridical persons from the date of issuance of enterprise registration certificates.
- Joint stock companies have the right to issue shares of all kinds to raise capital.
Some of the advantages of the joint stock company can be mentioned as:
- The liability regime of the joint stock company is limited liability, the shareholders are only responsible for debts and other asset obligations of the company within the scope of capital contribution, so reducing the level of risk of shareholders;
- The ability of joint stock company is extremely wide, in almost fields and industries (in fact, this advantage is not absolute since all types of companies have the equally right to operate in industries and fields, even limited company has more advantages in operating in industries of nature’s reciprocity – not for capital such as accounting services, law consulting …).
- The capital structure of the joint stock company is very flexible to create conditions for many people to contribute capital to the company;
- The ability of the joint stock company to raise capital is very high through the issuance of shares to the public, this is a unique feature of the joint stock company;
- The transfer of capital in the joint stock company is relatively simple, so the scope of subjects to join the joint stock company is very wide, even civil servants have the right to buy shares of the joint stock company (for public companies, companies listed on the Stock Exchange, only joint stock companies are entitled).
Procedures for establishment of joint stock company
In case of registration in person or through the postal service
- The applicant of the enterprise registration dossier as prescribed in Decree No. 01/2021/ND-CP shall submit the dossier at the Business Registration Office where the enterprise is headquartered.
- After receiving the enterprise registration dossier, the Business Registration Office shall hand over the receipt of the dossier to the applicant. The Business Registration Office issued the Enterprise Registration Certificate within 03 working days from the date of receipt of the valid dossier.
- In case the application is invalid or the name of the enterprise requesting registration does not comply with regulations, the Business Registration Office shall notify in writing the contents to be amended or supplemented to the applicants within 03 working days from receiving the application.
In case of registering via electronic network by using business registration account
- Applicants use business registration accounts to declare information, download electronic documents and verify enterprise registration dossiers via electronic information networks and pay business registration fees and charges according to the process on the national portal on enterprise registration (https://dangkykinhdoanh.gov.vn). In case of authorizing the implementation of business registration procedures via an electronic information network using the Business Registration Account, the authorization document must have contact information of the authorized person to verify the submission of the enterprise registration dossier via the electronic information network.
- After completing the submission of the application, the applicant will receive the enterprise registration dossier receipt via the electronic information network.
- The Business Registration Department grants Enterprise registration certificate to the enterprise in case the dossier is eligible and notifies the enterprise of issuing Enterprise registration certificate. In case the dossier is not eligible, the Business Registration Office shall send a notice via electronic information network to the enterprise to request amendments and supplements to the dossier.
Dossier
- Enterprise registration application;
- Company’s charter;
- List of founding shareholders and list of shareholders who are foreign investors;
- Copies of legal documents of individuals for legal representatives of enterprises;
- Copies of legal documents of founding shareholders and foreign shareholders that are individuals; legal documents of founding shareholders and foreign shareholders that are organizations; legal documents of authorized representatives of founding shareholders and foreign shareholders that are organizations and their letters of appointment of authorized representatives. If shareholder is a foreign organization, copies of legal documents of that organization must be legalized;
- A copy of the Investment registration certificate if the enterprise is founded or co-founded by foreign investors or foreign-invested business entities in accordance with the Law on Investment and its guiding documents.
- Commitment to the realization of social and environmental objectives (must be signed by the founding shareholder as an individual, other shareholders as individuals, if this shareholder agrees to the above commitment and wishes to sign this commitment together with the founding shareholder; legal representative or authorized representative for the founding shareholder is the organization, legal representative or authorized representative for another shareholder is the organization, if this shareholder agrees with the above commitment and wishes to sign this commitment together with the founding shareholder).
In case of enterprise registration for securities companies, securities investment fund management companies, securities investment companies need more:
- A copy of the establishment and operation license or a copy of the written approval of the State Securities Commission.
Competent agency and time of implementation
Competent authority: Department of Planning and Investment, Business Registration Department
Time: Within 03 (three) working days from the date of receiving valid dossier.
Services of Hong Bang Law Firm
- Advise on the appropriate type of business for clients;
- Draft, prepare and check the validity of the dossier;
- Work with state authorities;
- On behalf of the customer to receive the results;
- Hand over the results to the customer.
If you need more detailed advice and answers as well as how to access this service, please contact directly our Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the toll free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com
Wishing you and your family good health, peace and success!
Best regards!
