Method of Conversion from Limited Liability Company to Joint Stock Company and Vice Versa

Method for converting an LLC to a JSC and vice versa - Illustrative image

According to Clause 2, Article 202 of the Law on Enterprises 2020, the methods by which an LLC can be converted into a JSC are specifically stipulated as follows:

- Conversion into a JSC without mobilizing additional organizations or individuals to contribute capital, and without selling capital contributions to other organizations or individuals;

- Conversion into a JSC by mobilizing additional organizations or individuals to contribute capital;

- Conversion into a JSC by selling all or part of the capital contributions to one or several other organizations or individuals;

- Combination of the above-mentioned methods and other methods as regulated.

Clause 3, Article 202 of the Law on Enterprises 2020 further stipulates that the company must register the conversion with the business registration authority within 10 days from the completion date of the conversion.

Within 3 working days from the date of receipt of the conversion dossier, the business registration authority shall re-issue the enterprise registration certificate and update the legal status of the company in the National Business Registration Database.

In addition, Clause 2, Article 203 of the Law on Enterprises 2020 also stipulates the methods by which a JSC can be converted into a Single-Member LLC, including:

- One shareholder acquiring all the shares corresponding to the remaining shareholders;

- An organization or individual who is not a shareholder acquiring all the shares of all shareholders of the company;

- The company is left with only one shareholder.

Note that within 15 days from the date the company has only one shareholder remaining, or upon completion of the share transfer in the case of conversion by one shareholder acquiring all the shares corresponding to the remaining shareholders, or an organization or individual who is not a shareholder acquiring all the shares of all shareholders of the company, the company must submit the conversion dossier to the business registration authority where the enterprise is registered.

Within 3 working days from the date of receipt of the conversion dossier, the business registration authority shall issue the Enterprise Registration Certificate and update the legal status of the company in the National Business Registration Database.

For the full text of the document, see Law on Enterprises 2020, effective January 1, 2021.

Le Vy

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