What are procedures for Converting State-Owned Companies to Single-Member LLCs with 100% State-Owned Charter Capital in Vietnam from September 1, 2024?
What are procedures for Converting State-Owned Companies to Single-Member LLCs with 100% State-Owned Charter Capital in Vietnam from September 1, 2024?
According to Article 5 of Decree 89/2024/ND-CP, the procedure for converting state-owned companies to single-member limited liability companies (LLCs) with 100% state-owned charter capital is as follows:
- Step 1: Develop the Conversion Scheme
+ The state-owned company develops the conversion scheme according to the contents stipulated in Point a, Clause 2, Article 7 of Decree 89/2024/ND-CP.
The charter of the single-member LLC (with 100% state-owned charter capital) is submitted to the agency representing the owner for review and approval.
- Step 2: Issue the Conversion Decision
+ The agency representing the owner issues the conversion decision based on the proposal of the state-owned company.
The decision to convert a state-owned company into a single-member LLC is organized and operated in accordance with the provisions of the Law on Enterprises Download and issued according to the form provided in Appendix I attached to Decree 89/2024/ND-CP.
- Step 3: Submit the Conversion Registration Documents to the Business Registration Authority
+ The state-owned company submits the conversion registration documents as stipulated in Article 6 of Decree 89/2024/ND-CP to the provincial-level business registration authority where the company’s headquarters are located.
- Step 4: Review and Issue the Certificate of Enterprise Registration
+ Within 3 working days from the date of receipt of the documents, the business registration authority reviews the validity of the registration documents.
The authority issues the certificate of enterprise registration to the enterprise and updates the information in the national database on enterprise registration.
If the documents are invalid, the business registration authority is responsible for notifying in writing the content that needs to be amended or supplemented to the state-owned company.
If the certificate of enterprise registration is denied, a written notification must be provided to the state-owned company explaining the reasons.
What are procedures for Converting State-Owned Companies to Single-Member LLCs with 100% State-Owned Charter Capital in Vietnam from September 1, 2024? (Internet image)
What are tesponsibilities of the Agency Representing the Owner During the Conversion of the Company?
According to Clause 1, Article 7 of Decree 89/2024/ND-CP, the agency representing the owner is responsible for:
(1) Issuing the Conversion Decision, which includes:
- Information about the legal representative of the single-member limited liability company based on the proposal of the state-owned company in the conversion scheme.
In case the legal representative at the time of conversion reaches retirement age, dies, is missing, is under criminal prosecution, is detained, is serving a prison sentence, is under administrative measures at a compulsory treatment facility, educational establishment, escapes from residence, has restricted or lost civil act capacity, has difficulty in awareness and behavior control, or is prohibited by the court from holding certain positions or practicing certain professions or activities, the agency representing the owner appoints a legal representative (hereinafter referred to as the legal representative appointed by the agency representing the owner) to carry out the enterprise conversion registration procedures in accordance with Decree 89/2024/ND-CP;
- Personal information of the individual assigned to exercise the rights and responsibilities of the state owner’s representative at the enterprise;
A list and information of branches, representative offices, and business locations of the state-owned company that need to be re-registered (if any);
The asset inventory and financial statement of the state-owned company in the conversion scheme as stipulated at point a, clause 2, Article 7 of Decree 89/2024/ND-CP. The asset inventory and financial statement approved by the agency representing the owner are the basis for the single-member limited liability company with 100% state-owned charter capital to implement the principle of rights and obligations inheritance stipulated at points a and b, clause 1, Article 3 of Decree 89/2024/ND-CP.
(2) Approving the Charter of the single-member limited liability company with 100% state-owned charter capital as stipulated in clause 3, Article 6 of Decree 89/2024/ND-CP;
(4) Guiding and supervising the state-owned company in organizing the conversion;
(5) Consolidating the management positions and the direct owner’s representative of the single-member limited liability company with 100% state-owned charter capital according to authority within 6 months from the date the business registration authority issues the certificate of enterprise registration for the enterprise;
(6) Exercising the rights and obligations of the owner’s representative authority at the single-member limited liability company with 100% state-owned charter capital according to regulations;
(7) Reviewing, reorganizing, converting ownership, transferring the representation rights of the owner at the single-member limited liability company with 100% state-owned charter capital based on the inherited policies approved by the authority.
In case the policy has not been approved or the approved policy needs changes, the owner’s representative authority requires the single-member limited liability company with 100% state-owned charter capital to review and submit a plan for reorganization, conversion of ownership, and transferring of representation rights to report to the Prime Minister of the Government of Vietnam for consideration and decision.
What Does the Conversion Registration Dossier for State-Owned Companies into Single-Member LLCs with 100% State-Owned Charter Capital in Vietnam Include?
According to Article 6 of Decree 89/2024/ND-CP, the registration dossier for conversion includes the following documents:
- Business registration application (following the form provided in Appendix II attached to Decree 89/2024/ND-CP).
- Conversion Decision.
- The charter of the single-member limited liability company with 100% state-owned charter capital as stipulated in the Law on Enterprises 2020.
- Copies of the following documents:
+ Legal documents of the individual legal representative of the single-member limited liability company as stipulated in the Conversion Decision;
+ Legal documents of the individual assigned to exercise the rights and responsibilities of the state owner’s representative at the enterprise as stipulated in the Conversion Decision;
+ Business registration certificate or equivalent valid legal documents; taxpayer registration certificate of the state-owned company.
Note: Decree 89/2024/ND-CP takes effect from September 1, 2024.
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