Vietnam: What is the form of certificate of capital contribution to a joint stock company? What are the penalties for failure to issue the certificate of capital contribution?
Do joint stock companies in Vietnam issue certificates of capital contribution?
According to the provisions of the Law on Enterprise 2020, there are no regulations related to the capital contribution certificate of a joint-stock company. The capital contribution to a joint-stock company will be kept and monitored by the shareholder register specified in Article 122 of the Law on Enterprise 2020 as follows:
“Article 122. Shareholder register
1. A joint stock company shall make and retain the shareholder register from the issuance date of the Certificate of Enterprise Registration. The shareholder register can be physical or electronic documents and contain information about the shareholders’ ownership of shares.
2. A shareholder register shall contain the following information:
a) The company’s name and headquarters address;
b) Total number of authorized shares, types of authorized shares and quantity of each type;
c) Total number of sold shares of each type and value of share capital contributed;
d) Full names, signatures, mailing addresses, nationalities and legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers and headquarters addresses of shareholders that are organizations;
dd) Quantity of each type of shares of each shareholder, date of share registration.
3. The shareholder register shall be retained at the company’s headquarters or another organization that is licensed to retain shareholder registers. Shareholders are entitled to inspect, access, extract names and addresses of the company’s shareholders from the shareholder register.
4. In case a shareholder’s mailing address is changed, a notification shall be promptly sent to the company in order to update the shareholder register. The company is not responsible if a shareholder cannot be contacted due to the failure to notify the change of that shareholder’s mailing address.
5. The company shall update changes of shareholders in the shareholder register as requested by relevant shareholders in accordance with company's charter..”
Thus, according to the law, a joint-stock company will not issue a certificate of capital contribution, but only prepare a shareholder register according to the above provisions.
Vietnam: What is the form of certificate of capital contribution to a joint stock company? What are the penalties for failure to issue the certificate of capital contribution?
What are the penalties for failure to issue the certificate of capital contribution in Vietnam?
Pursuant to Article 52 of Decree 122/2021/ND-CP stipulates as follows:
“Article 52. Violations against other regulations on organization and management of enterprises
1. A fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for any of the following violations:
a) Appointing a person who does not have the right to enterprise management to hold a managerial position;
b) Appointing an unqualified person as the Director (General Director).
2. A fine ranging from VND 30,000,000 to VND 50,000,000 shall be imposed for any of the following violations:
a) Failure to issue the certificate of capital contribution to a company’s member;
b) Failure to make a member register or register of share-issuing shareholders;
c) Failure to put up the enterprise’s name at its head office, failure to put up the name of branch, representative office or business location at its location;
d) Failure to retain documents at the head office or another location specified in the company’s charter.
3. Remedial measures:
The violator is compelled to:
a) dismiss the unqualified enterprise manager if the violation specified in Point a Clause 1 of this Article is committed;
b) dismiss the unqualified Director (General Director) if the violation specified in Point b Clause 1 of this Article is committed;
c) issue a certificate of capital contribution to the company’s member if the violation specified in Point a Clause 2 of this Article is committed;
d) make a member/shareholder register as prescribed if the violation specified in Point b Clause 2 of this Article is committed;
dd) put up the enterprise’s name at its head office or put up the name of the branch, representative office or business location if the violation specified in Point c Clause 2 of this Article is committed.”
According to the above regulations, the company's act of failing to issue a certificate of capital contribution to a member of the company will be subject to an administrative fine of up to VND 50 million.
However, in a joint stock company, the person who contributes capital to the company will be called a shareholder. The concept of membership is only available in limited liability companies with two or more members and partnerships.
Therefore, the law does not provide for the sanction of a joint-stock company that fails to issue capital contribution certificates to shareholders.
What is the form of certificate of capital contribution to a joint stock company in Vietnam?
As analyzed in the above provisions, a joint stock company is not required to issue a certificate of capital contribution to the company's shareholders and there are no regulations on sanctioning for failing to issue capital contribution certificates to shareholders
However, in reality, there are quite a few companies that still issue certificates of capital contribution to shareholders to prove how many shares have been bought by shareholders, how many shares are owned and how long they have contributed capital.
Download the form of certificate of capital contribution to a joint stock company in Vietnam: Here.
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