Application for conversion of a sole proprietorship into a limited liability company, joint stock company or partnership in Vietnam
Conditions for conversion of a sole proprietorship into a limited liability company, joint stock company or partnership in Vietnam
Based on Article 205 of the Law on Enterprises 2020, the provisions are as follows:
“Article 205. Conversion of a sole proprietorship into a Limited Liability Company, a Joint Stock Company, or a Partnership
1. A sole proprietorship can be converted into a limited liability company, a joint stock company, or a partnership at the discretion of the business owner if the following conditions are met:
a) The enterprise to be converted must meet the conditions specified in Clause 1 Article 27 of this Law;
b) The owner of the sole proprietorship commits in writing to bear personal responsibility with all his/her assets for all unpaid debts and undertakes to fully pay the debts when due;
c) The owner of the sole proprietorship reaches a written agreement with the parties to the unsatisfied contracts regarding the converted company's assumption and continuation to perform those contracts;
d) The owner of the sole proprietorship commits in writing or reaches a written agreement with other capital contributors regarding the assumption and use of the existing labor force of the sole proprietorship.
2. Within 03 working days from the date of receipt of the dossier, the business registration authority shall review and issue the Certificate of Enterprise Registration if the conditions specified in Clause 1 of this Article are met and update the legal status of the enterprise in the National Database on Business Registration.
3. The converted company automatically inherits the rights and obligations of the sole proprietorship from the date of issuance of the Certificate of Enterprise Registration. The owner of the sole proprietorship bears personal responsibility with all his/her assets for all debts incurred before the date the converted company is issued the Certificate of Enterprise Registration."
A sole proprietorship can only be converted into a limited liability company, a joint stock company, or a partnership when it meets all the conditions as stipulated above.
Application for conversion of a sole proprietorship into a limited liability company, joint stock company or partnership in Vietnam
Application for conversion of a sole proprietorship into a limited liability company, joint stock company or partnership in Vietnam
Based on Article 26 of Decree 01/2022/ND-CP, the provisions are as follows:
“Article 26. Enterprise Registration Dossier for Cases of Conversion of Enterprise Types
1. In the case of converting a sole proprietorship into a partnership, limited liability company, or joint stock company, the registration dossier for conversion includes the documents specified in Articles 22, 23, and 24 of this Decree, excluding the Investment Registration Certificate specified in Point b Clause 4 Article 22, Point c Clause 4 Article 23, and Point c Clause 3 Article 24 of this Decree. The dossier must also include the following documents:
a) Written commitment of the sole proprietorship owner to bear personal responsibility with all his/her assets for all unpaid debts and to pay in full the debts when due;
b) Written agreement of the sole proprietorship owner with the parties to the unsatisfied contracts regarding the converted company's assumption and continuation of those contracts;
c) Written commitment or agreement of the sole proprietorship owner with other capital contributors regarding the assumption and use of the existing labor force of the sole proprietorship;
d) Transfer contract or documents proving the completion of the transfer in case of transferring the capital of the sole proprietorship; gift contract in case of gifting the capital of the sole proprietorship; copy of the legal inheritance document of the heirs in case of inheritance according to legal provisions;
dd) Document from the Investment Registration Authority approving the capital contribution, share purchase, capital contribution purchase by foreign investors or foreign-invested economic organizations for cases requiring the registration of capital contribution, share purchase, capital contribution purchase according to the Law on Investment.”
When converting the type of enterprise from a sole proprietorship to a limited liability company, joint stock company, or partnership, it is necessary to determine the type of company to be converted to determine the conformable dossier components as mentioned above.
Application forms for conversion of a sole proprietorship into a limited liability company, joint stock company or partnership in Vietnam
Based on the Annex issued with Circular 01/2021/TT-BKHDT, guiding the application forms to be used for registration of conversion of a sole proprietorship into a limited liability company, joint stock company, or partnership as follows:
- Case of converting a sole proprietorship into a limited liability company:
Download the application form for establishing a single-member limited liability company: Here.
Download the application form for establishing a multi-member limited liability company: Here.
- Case of converting a sole proprietorship into a joint stock company:
Download the application form for establishing a joint stock company: Here.
- Case of converting a sole proprietorship into a partnership:
Download the application form for establishing a partnership: Here.
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