Procedures for partial division for limited liability companies and joint stock companies in Vietnam

Procedures for partial division for limited liability companies and joint stock companies in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Form of partial division for limited liability company and joint stock company in Vietnam 

According to Clauses 1 and 2, Article 199 of the Law on Enterprise 2020, a limited liability company or joint stock company may be partially divided by transfer part of the divided company’s assets, rights, obligations, members/shareholders to one or some new limited liability companies or joint stock companies without ceasing the existence of the divided company.

The divided company shall register the change in charter capital, quantity of members/shareholders in proportion to the decrease in the stakes/shares and quantity of members/shareholders and apply for registration of the new companies.

2. Procedures for partial division for limited liability companies and joint stock companies in Vietnam

Procedures for separating limited liability companies and joint stock companies according to Clause 3, Article 199 of the Law on Enterprise 2020, are as follows:

- The Board of Members, the owner or General Meeting of Shareholders of the divided company shall ratify the resolution or decision on partial division of the company in accordance with the Law on Enterprise 2020 and the company's charter.

The resolution or decision on partial division of the company shall contain the name and headquarters address of the divided company; name of each new company; employment plan; method for division; values of assets, rights and obligations transferred from the divided company to the new company/companies; division time.

This resolution or decision shall be sent to all creditors and employees within 15 days from its issuance date or ratification date;

= The members, owner or shareholders of each new company shall ratify its charter, elect or designate the President of the Board of Members, President of the company, Board of Directors, the Director/General Director and apply for enterprise registration in accordance with this Law.

3. Regulations on converting limited liability companies into joint stock companies

Regulations on converting a limited liability company into a joint stock company according to Article 202 of the Enterprise Law 2020 are as follows:

- State-owned enterprises converted into joint stock companies shall comply with relevant laws.

- A limited liability company can be converted into a joint stock company by the following method:

+ Convert into a joint stock company without mobilizing other organizations or individuals to contribute capital, and without selling capital contributions to other organizations or individuals;

+ Convert into a joint stock company by mobilizing other organizations and individuals to contribute capital;

+ Convert into a joint stock company by selling all or part of the capital contribution to one or several other organizations or individuals;

+ Combine the methods specified in Points a, b and c, Clause 2, Article 202 of the Enterprise Law 2020 and other methods.

- The company must register company conversion with the Business Registration Authority within 10 days from the date of completion of the conversion. Within 03 working days from the date of receiving the conversion dossier, the Business Registration Authority will re-issue the Business Registration Certificate and update the company's legal status on the National Registration Database. business registration.

- The converting company naturally inherits all legal rights and interests, and is responsible for debts, including tax debt, labor contracts and other obligations of the converted company.

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