What is time limit for members of multiple-member limited liability companies to contribute sufficient capital in Vietnam?
What is time limit for members of multiple-member limited liability companies to contribute sufficient capital in Vietnam? I and some other people contribute capital to establish a limited company. I want to know when do I have to contribute fully capital? What should I do if I don't contribute enough capital?
1. What is time limit for members of multiple-member limited liability companies to contribute sufficient capital in Vietnam?
Pursuant to Clause 2, Article 47 of the Enterprise Law 2020 has the following provisions:
2. The members shall contribute sufficient and correct assets as promised when applying for enterprise registration within 90 days from the issuance date of the Certificate of Enterprise Registration, excluding the time needed to transport or import the contributed assets and for completing ownership transfer procedures. During this period, the members shall have rights and obligations that are proportional to their promised contribution. The members may only contribute assets that are different from the promised ones if the change is approved by more than 50% of the remaining members.
Thus, according to the above provisions, you must fully contribute the committed capital within 90 days from the issuance date of the Certificate of Enterprise Registration, excluding the time needed to transport or import the contributed assets and for completing ownership transfer procedures in Vietnam.
2. What should I do if I don't contribute enough capital in Vietnam?
Pursuant to Clause 4 of Article 47 of the Enterprise Law 2020, there are provisions as follows:
4. In the cases mentioned in Clause 3 of this Article, the company shall register the change in charter capital and the members’ holdings within 30 days from the deadline for contributing capital specified in Clause 2 of this Article. The members who fail to contribute or fully contribute capital shall be responsible for the financial obligations incurred by the company during the period before the company registers the change in charter capital and the members’ holdings in proportion to their promised contributions.
According to this Article, if the capital contributors have not contributed the full amount of capital as committed, your company must registers the change in charter capital within 30 days from the date of expiration of the capital contribution time limit in Vietnam.
2. Are there penalties for failure to follow procedures for decreasing capital in Vietnam?
Pursuant to Clause 3, Article 46 of Decree 122/2021/ND-CP, 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 follow procedures for changing capital or changing members or founding shareholders as prescribed at the business registration authority upon expiry of the time limit for capital contribution and time limit for capital change because members or founding shareholders fail to fully contribute capital but there is not any member or founding shareholder that undertakes to contribute capital;
b) Deliberate contribution of assets with false value.
Thus, if your company fails to carry out the procedures for changing capital after 30 days from the expiration of the time limit for capital contribution, it may be fined from VND 30,000,000 to VND 50,000,000. And forced to carry out this procedure in Vietnam.
Best Regards!
