PROCEDURES AND ORDER FOR TRANSFORMING THE TYPE OF COMPANY

During the operation of the enterprise, there is a change in shareholders and capital contributors, leading to a change in the type of enterprise. MVA Law Firm Vietnam will carry out the transformation of the type of business so that the client can change to be more suitable for the operation of the enterprise. The transformation of the type of enterprise as well as the restructuring of the organization and operation of the enterprise is always necessary, there are forms of enterprise transformation as follows:

According to the current Law on Enterprises 2014, the following types of enterprises can be converted

   Article 196. Conversion of limited liability companies into joint stock companies

1. For state-owned enterprises converted into joint-stock companies, the law on transformation of state-owned companies into joint-stock companies shall be complied with.
2. A limited liability company may be converted into a joint stock company by the following methods:
3. a) Converting into a joint-stock company without mobilizing other organizations or individuals to contribute capital or selling contributed capital to other organizations or individuals;
4. b) Converting into a joint stock company by mobilizing other organizations and individuals to contribute capital;
5. c) Converting into a joint stock company by selling all or part of the contributed capital to one or several other organizations and individuals;
6. d) Combine the methods specified at points a, b and c of this clause.
7. The company must register the company transformation with the Business Registration Office within 10 days from the date of completion of the conversion. Within 05 working days from the date of receipt of the application for conversion, the enterprise registration agency shall re-issue the Certificate of Business Registration.
8. The converted company automatically inherits all legal rights and interests, is responsible for all debts, including tax debts, labor contracts and other obligations of the converted company.
9. Within 07 working days from the date of issuance of the Business Registration Certificate, the business registration authority must notify the relevant state agencies as prescribed in Clause 1, Article 34 of this Law; and at the same time update the legal status of the company on the National Business Registration Database.

   Article 197. Conversion of a joint stock company into a one-member limited liability company

1. A joint-stock company may be converted into a one-member limited liability company by the following methods:
2. a) One shareholder receives the transfer of all shares and corresponding capital contributions of all remaining shareholders;
3. b) An organization or individual who is not a shareholder receives the transfer of all shares of all shareholders of the company;
4. c) The company has only one shareholder remaining for a period exceeding the time limit required for the minimum number of joint stock companies as prescribed in Article 110 of this Law.
5. The transfer or receipt of investment capital in shares or contributed capital in the process specified in Clause 1 of this Article must be carried out at market prices, prices determined by asset method, discounted cash flow method or other methods. .
6. Within 15 days from the date of completion of the transfer of shares as prescribed at Points a and b, Clause 1 of this Article and the case at Point c, Clause 1 of this Article, the company shall send or submit a dossier for conversion of shares. at the business registration office where the enterprise has registered. Within 05 working days from the date of receipt of the application for conversion, the business registration authority shall issue an enterprise registration certificate.
7. The converted company automatically inherits all legal rights and interests, is responsible for all debts, including tax debts, labor contracts and other obligations of the converted company.
8. Within 07 working days from the date of issuance of the Business Registration Certificate, the business registration authority must notify the relevant state agencies as prescribed in Clause 1, Article 34 of this Law; and at the same time update the legal status of the company on the National Business Registration Database.

   Article 198. Conversion of joint stock companies into limited liability companies with two or more members

1. A joint-stock company may be converted into a limited liability company by the following methods:
2. a) Converting into a limited liability company without raising more or transferring shares to other organizations or individuals;
3. b) Converting into a limited liability company at the same time as mobilizing other organizations and individuals to contribute capital;
4. c) Conversion into a limited liability company concurrently with the transfer of all or part of all or part of shares to other organizations or individuals contributing capital;
5. d) Converting into a limited liability company combining the methods specified at Points a, b and c of this Clause.
6. The company must register the company transformation with the Business Registration Office within 10 days from the date of completion of the conversion. Within 05 working days from the date of receipt of the application for conversion, the business registration authority shall issue an enterprise registration certificate.
7. The converted company automatically inherits all legal rights and interests, is responsible for all debts, including tax debts, labor contracts and other obligations of the converted company.
8. Within 07 working days from the date of issuance of the Business Registration Certificate, the business registration authority must notify the relevant state agencies as prescribed in Clause 1, Article 34 of this Law; and at the same time update the legal status of the company on the National Business Registration Database.

   Article 199. Conversion of a private enterprise into a limited liability company

1. A private enterprise may be converted into a limited liability company at the discretion of the private business owner if the following conditions are satisfied:
2. a) Satisfy the conditions prescribed in Clause 1, Article 28 of this Law;
3. b) The owner of a private enterprise must be the owner of the company (in case of conversion into a one-member limited liability company owned by an individual) or a member (in the case of conversion into a single member limited liability company). limited liability companies with two or more members);
4. c) The owner of the private enterprise undertakes in writing to be personally responsible with all his assets for all unpaid debts of the private enterprise and commits to pay the full amount of the debt when it is due. ;
5. d) The owner of the private enterprise has a written agreement with the parties of the contract that has not been liquidated on the receipt and performance of such contracts by the converted limited liability company;

dd) The owner of the private enterprise commits in writing or has a written agreement with other capital contributors on the receipt and use of existing labor of the private enterprise.

2. Within 05 working days from the date of receipt of the application, the business registration agency shall consider and issue the Certificate of Business Registration if all the conditions specified in Clause 1 of this Article are satisfied.
3. Within 07 working days from the date of issuance of the Certificate of Business registration specified in Clause 2 of this Article, the business registration authority must notify relevant state agencies as prescribed in Clause 2 of this Article. 1 Article 34 of this Law; and at the same time update the legal status of the business on the National Database of Business Registration.