Vietnam: If the owners of sole proprietorships increase their investment capital, are they required to register the change with the business registration authority in advance?
- If the owners of sole proprietorships increase their investment capital, are they required to register the change with the business registration authority in advance?
- What is the order of registration for change in investment capital of the owner of sole proprietorship in Vietnam?
- What are the regulations on administration of sole proprietorship in Vietnam?
If the owners of sole proprietorships increase their investment capital, are they required to register the change with the business registration authority in advance?
Pursuant to Article 189 of the 2020 Law on Enterprises in Vietnam, the investment capital of sole proprietorships is as follows:
Capital of sole proprietorships
1. The capital of a sole proprietorship shall be registered by its owner. The owner of sole proprietorship shall register the accurate amounts of capital in VND, convertible currencies, gold and other assets, types and quantities of assets.
2. All the capital, including loans and leased assets serving the sole proprietorship’s operation, shall be fully recorded in its accounting books and financial statements as prescribed by law.
3. During its operation, the owner of sole proprietorship is entitled to increase or decrease its capital. The increases and decreases in capital shall be fully recorded in accounting books. In case the capital is decreased below the registered capital, the decrease may only be made after it has been registered with the business registration authority.
Thus, during its operation, the owner of sole proprietorship is entitled to increase or decrease its capital.
The increases and decreases in capital shall be fully recorded in accounting books.
However, in Article 30 of the 2020 Law on Enterprises in Vietnam, there are provisions as follows:
Registering revisions to the Certificate of Enterprise Registration
1. Revisions to any of the information specified in Article 28 of this Law on the Certificate of Enterprise Registration shall be registered by the enterprise with the business registration authority.
Referring to Article 28 of the 2020 Law on Enterprises in Vietnam as follows:
Content of the Certificate of Enterprise Registration
A Certificate of Enterprise Registration shall contain the following information:
...
4. The charter capital (or investment capital if the enterprise is a sole proprietorship).
Thus, in case a sole proprietorship changes its investment capital, whether the capital is increased or decreased, it must register the change in the contents of the Certificate of Enterprise Registration with the business registration authority.
In case of an increase in investment capital, the owner of a sole proprietorship may increase the investment capital during the course of business operations, but must still register the change with the Business Registration Office.
However, in case the capital is decreased below the registered capital, the decrease may only be made after it has been registered with the business registration authority.
Vietnam: If the owners of sole proprietorships increase their investment capital, are they required to register the change with the business registration authority in advance?
What is the order of registration for change in investment capital of the owner of sole proprietorship in Vietnam?
According to the provisions of Article 55 of Decree No. 01/2021/ND-CP, the registration of change in investment capital of the owner of sole proprietorship is as follows:
Registration of change in capital of sole proprietor
In case of increase/decrease in registered capital, the sole proprietor shall send a notification of change in capital to the Business Registration Office of province where the sole proprietorship is headquartered. After receiving the application, the Business Registration Office shall give a confirmation slip to the enterprise, examine the validity of documents, and issue the enterprise registration certificate to the enterprise.
Specifically, the order of registration for change of investment capital of the owner of sole proprietorship is as follows:
Step 1: Enterprises prepare complete dossiers as prescribed.
Step 2: Enterprises come and submit documents at the Business Registration Office
- Time: from 7:30 a.m. to 11:30 a.m. (mornings from Monday to Saturday every week).
- Submit the application, pay the fee, get the order number and wait for the call according to the order number.
- The specialist checks the dossier for sufficient documents as prescribed, receives the dossier and issues the receipt to the enterprise.
Step 3: The Business Registration Office checks the validity of the profile and processes the enterprise's profile.
Step 4: Based on the appointment date on the Receipt, the business will go to the Business Registration Office to receive the results of processing the application (from 13:00 to 17:00 every Monday to Friday afternoon).
What are the regulations on administration of sole proprietorship in Vietnam?
Pursuant to Article 190 of the 2020 Law on Enterprises in Vietnam, the administration of sole proprietorships is regulated as follows:
- The sole proprietorship’s owner has total authority to decide all of its business activities, use of post-tax profit and fulfillment of other financial obligations as prescribed by law.
- The owner may directly or hire another person to hold the position of Director/General Director. In case of a hired Director/General Director, the owner is still responsible for every business activity of the enterprise.
- The sole proprietorship’s owner is its legal representative who will represent it during civil proceedings, as the plaintiff, defendant or person with relevant interests and duties before the court and arbitral tribunals, and in performance of other rights and obligations prescribed by law.
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