Precedent No. 78/2025/AL was adopted by the Council of Justices of the Supreme People’s Court on December 24, 2025, and published under Decision No. 339a/QD-CA dated December 25, 2025, by the Chief Justice of the Supreme People’s Court.
1. What is a precedent?
Precedents are arguments and rulings in legally effective judgments and decisions of the Courts regarding specific cases selected by the Council of Justices of the Supreme People’s Court and published by the Chief Justice of the Supreme People’s Court as precedents for Courts to study and apply in adjudication. (Article 1 of Resolution 04/2019/NQ-HDTP)
A selected precedent must meet the following criteria:
– It contains value in clarifying legal provisions that have different interpretations, analyzing and explaining legal issues and events, and pointing out principles, handling methods, legal norms to be applied in a specific case, or demonstrating justice for issues not yet specifically prescribed by law;
– It is exemplary;
– It has guidance value for the uniform application of law in adjudication.
2. Precedent No. 78/2025/AL on determining the purpose of capital contribution to a company
2.1. Source of the precedent
Cassation Decision No. 17/2022/KDTM-GDT dated December 13, 2022, of the Council of Justices of the Supreme People’s Court regarding the business and commercial case “Dispute between a company member and the company” between the plaintiff, Mr. Tran Manh H, and the defendant, D Co., Ltd.
Location of the precedent content:
Paragraphs 4, 5, and 7 of the “Court’s Findings” section.
2.2. Overview of the precedent content
– Precedent situation:
A company has been established, and the enterprise registration certificate shows the contributing members and the amount of charter capital. Subsequently, the contributing party and the company have an agreement on capital contribution and profit sharing but no agreement on increasing the company’s charter capital. The enterprise registration certificate does not reflect an increase in charter capital.
– Legal solution:
In this case, the Court must determine that the capital contribution is for business purposes, not for increasing the company’s charter capital.
Legal provisions related to the precedent:
Clause 13, Article 4 of the Law on Enterprises of Vietnam 2014 (corresponding to clause 18, Article 4 of the Law on Enterprises of Vietnam 2020, as amended and supplemented in 2022 and 2025).
Precedent keywords:
“Capital contribution”; “No agreement on charter capital contribution”; “Capital contribution for business purposes”.
CASE CONTENT:
According to the Petition dated February 2, 2019, and testimonies during the proceedings, the plaintiff, Mr. Tran Manh H (represented by Mr. Lai Ngoc T1 under authorization), stated:
Before 2001, Mr. Tran V (brother-in-law of Mr. Nguyen Van T) and Mr. T (brother-in-law of Mr. V and Mr. H) jointly established the D Cooperation Group, later changed to D Electrical Equipment Production and Installation Company (hereinafter referred to as D Co., Ltd.) according to Business Registration Certificate No. 0102001784 dated January 9, 2001, issued by the Business Registration Office of the Hanoi Department of Planning and Investment, leasing a production site at Q Mechanical Factory in Hanoi, and registering the headquarters at Mr. T’s house at 104 B4, B Ward, H District (now M District), Hanoi. At that time, the company’s land lease had expired. Without a premises, they could not continue production and business. Mr. V and Mr. T proposed that Mr. H, who was working in the Czech Republic (Czechoslovakia) and had idle capital, return to the country to participate as a member of D Co., Ltd. to mobilize more investment capital for premises and production workshops. Mr. H agreed to join Mr. V and Mr. T in contributing capital to D Co., Ltd.
At the beginning of 2001 (Lunar New Year), Mr. Tran Manh H’s family organized a party and meeting at Mr. Nguyen Van T’s private home at 104 B4, B Ward, with attendees including: Mrs. Nguyen Thị H1, Mr. Tran Manh H, Mr. Tran V and his wife Mrs. Nguyen Thi Bich T2, Mr. Nguyen Van T and his wife Mrs. Tran Thi Ngoc B. At this meeting, Mr. H, Mr. V, and Mr. T discussed and agreed to admit Mr. H as a new member to the Company and agreed on a capital contribution ratio of 1/3 each in D Co., Ltd. to expand the company’s scale and do business together, while assigning Mr. T as the Director – the legal representative of the Company. Mr. H, Mr. V, and Mr. T clearly identified that each person had a 1/3 capital contribution in D Co., Ltd., and each would enjoy benefits and bear obligations corresponding to this contribution ratio. However, the business registration remained the same, listing only two members, Mr. V and Mr. T, because Mr. H at that time did not have an identity card and had not yet re-registered his household residency in Vietnam. Additionally, since Mr. H was frequently abroad, it would be inconvenient for him to sign documents if his name were on the business registration.
Separately, Mr. H contributed an additional 500,000,000 VND because he was not in Vietnam and did not participate in business operations. Mr. T and Mr. V each contributed 2,251,000,000 VND, and Mr. H contributed 2,751,218,000 VND.
Precisely because of the aforementioned money contribution, every year Mr. H received a portion of the company’s operating profit paid by Mr. T. Specifically: Over 12 years of business, from 2003 to 2015, Mr. Tran Manh H was shared profits from D Co., Ltd. totaling approximately 7,000,000,000 VND in cash. In some years, Mr. T deposited the money into 3 savings books in Mr. T’s name; then, for the portion shared with Mr. H, Mr. T let Mrs. T2 (Mr. V’s wife) hold one of the 3 books on Mr. H’s behalf since he was abroad. When Mr. H needed to withdraw money from the savings account, Mr. T would authorize Mrs. T2 to withdraw the money from the Bank (this event was confirmed by Mrs. T2).
– On March 22, 2017, in the Minutes of the Meeting of the Capital Contributing Members Council of D Co., Ltd., in which Mr. H participated, the members named in the Business Registration (5th amendment dated May 9, 2012) confirmed the amount of capital contribution in D Co., Ltd. as follows:
Mr. T contributed 2,251,218,000 VND – equivalent to 31% of the Company’s charter capital;
Mr. V contributed 2,251,218,000 VND – equivalent to 31% of the Company’s charter capital;
Mr. H contributed 2,751,218,000 VND – equivalent to 38% of the Company’s charter capital.
The Minutes also showed that Mr. H contributed 500,000,000 VND more than the other two members, but since he did not manage the Company’s business, all profits earned and income from the liquidation of the Company’s assets would be divided equally among the three members at a rate of 33.33% (1/3) each. Although Mr. H’s capital ownership ratio was higher than the other two members, the agreement was that profits were divided equally among all three.
However, since then, Mr. T has not proceeded to change the Business Registration Certificate to include Mr. H as a member of D Co., Ltd., nor has he held a meeting of the Members’ Council as prescribed by the Law on Enterprises to approve the financial statements for 2015, 2016, 2017, and 2018, as well as the profit distribution to capital contributing members.
Since September 2008, after Mr. H obtained residency and an identity card in Vietnam, he wished to have his name added to the Company and discussed/requested this with Mr. T many times, but Mr. T did not agree.
Mr. H filed a lawsuit requesting the Court to resolve:
1. Determine Mr. H as a capital contributing member of D Co., Ltd. and his capital contribution portion in D Co., Ltd.;
2. Request D Co., Ltd. to add Mr. H as a member of the Company with the actual capital he contributed;
3. Request D Co., Ltd. to hold a meeting of the Members’ Council to approve the financial statements for 2015, 2016, 2017, and 2018 in accordance with the Law on Enterprises 2014.
During the court process, the plaintiff withdrew part of the claim and requested the Court to resolve:
1. Determine Mr. Tran Manh H’s capital contribution in D Co., Ltd. as 2,751,218,000 VND according to the minutes dated March 22, 2017, but only request the ratio to be 1/3 (the 500,000,000 VND portion contributed more than the other two members is voluntarily agreed to be divided equally among the 3 people so that the ratio for Mr. T and Mr. V is 33.4% each, and Mr. H is 33.2%).
2. Request D Co., Ltd. to perform procedures at the competent authority to add Mr. Tran Manh H as a company member with the capital he contributed. Otherwise, Mr. H has the right to contact the competent authority to perform procedures to register his name as a member of D Co., Ltd.
The defendant, D Co., Ltd. (represented by Mr. Nguyen Van T), stated:
Before 2001, Mr. V and Mr. T jointly established D Cooperation Group, later changed to D Electrical Equipment Production and Installation Company, according to Business Registration Certificate No. 0102001784 dated January 9, 2001, issued by the Business Registration Office of the Hanoi Department of Planning and Investment.
From late 2001 to 2003, Mr. H transferred money directly to Mr. T several times, totaling 2,751,000,000 VND. The purpose was to send it to Mr. T and Mr. V for business and annual profit sharing (the profit was not fixed but depended on business performance). Mr. T asserted that this money was not a capital contribution to the Company.
Mr. T confirmed that from 2003 to 2015, Mr. H received 11,000,000,000 VND, not 7,000,000,000 VND. The annual payment methods were: First, creating a savings book in Mr. T’s name; when Mr. H needed money, Mr. T would authorize Mrs. T2 to withdraw it and transfer it to Mr. H; second, direct bank transfer; third, Mr. H received cash directly, and none of these had signatures for receipt.
Regarding the document dated March 22, 2017, Mr. T confirmed his, Mr. V’s, and Mr. H’s handwriting and signatures in this document, but the content was incorrect. The reason for this document was because of the 2,751,000,000 VND Mr. H had sent him from 2001 – 2003. This document was drafted by Mr. V, and Mr. V and Mr. H brought it to ask Mr. T to sign it for the purpose of verifying Mr. H’s financial capacity so that Mr. H could move his family from Czechoslovakia to Australia. Therefore, Mr. T signed the document dated March 22, 2017.
Regarding Mr. H’s application to join as a member of the Company (dated March 16, 2018), Mr. T received the application but it was not at his request because he did not agree; Mr. T is currently holding this application and has submitted a copy to the Court.
Therefore, Mr. T, as the legal representative of D Co., Ltd., did not accept the plaintiff’s claims.
In First-instance Business and Commercial Judgment No. 49/2019/KDTM-ST dated November 11, 2019, the Hanoi People’s Court decided:
1. Accept the lawsuit of Mr. Tran Manh H, born in 1966, ID card number: 011420517 issued on September 20, 2008, by the Hanoi City Police against D Co., Ltd. (formerly D Electrical Equipment Production and Installation Company).
2. Confirm Mr. Tran Manh H, born in 1966, ID card number: 011420517 issued on September 20, 2008, by the Hanoi City Police as a member of D Co., Ltd. with a capital contribution ratio of 1/3.
3. Compel D Co., Ltd. to perform procedures at the Business Registration Office – Hanoi Department of Planning and Investment to add Mr. Tran Manh H’s name as a member of the Company. Record the voluntariness of Mr. Tran Manh H in requesting his capital contribution ratio to be 33.2%.
In case D Co., Ltd. does not perform procedures to change the business registration to add Mr. H’s name as a member, based on clause 21, Article 1 of Decree No. 108/2018/ND-CP dated August 23, 2018, of the Government, Mr. Tran Manh H has the right to perform business registration procedures at the Business Registration Office – Hanoi Department of Planning and Investment and other competent authorities (if any) to add himself as a member of the Company with a capital contribution ratio of 33.2%.
4. Suspend the claim that D Co., Ltd. must hold a meeting of the Members’ Council and approve the financial statements for 2015, 2016, 2017, 2018, as the plaintiff withdrew this claim to be resolved later.
Additionally, the first-instance court decided on court fees and the right to appeal.
On November 24, 2019, D Co., Ltd. filed an appeal.
In Appellate Business and Commercial Judgment No. 15/2020/KDTM-PT dated July 10, 2020, the High People’s Court in Hanoi decided:
Not to accept the appeal of D Co., Ltd. Uphold the decisions of First-instance Business and Commercial Judgment No. 49/2019/KDTM-ST dated November 11, 2019, of the Hanoi People’s Court.
Additionally, the appellate court decided on court fees and the right to request judgment enforcement.
On September 28, 2021, D Co., Ltd. filed a petition for cassation review of the aforementioned appellate business and commercial judgment.
In Cassation Protest Decision No. 12/2022/KN-KDTM dated September 22, 2022, the Chief Justice of the Supreme People’s Court protested against Appellate Business and Commercial Judgment No. 15/2020/KDTM-PT dated July 10, 2020, of the High People’s Court in Hanoi; proposed that the Council of Justices of the Supreme People’s Court conduct a cassation trial, annul the aforementioned appellate judgment and annul First-instance Business and Commercial Judgment No. 49/2019/KDTM-ST dated November 11, 2019, of the Hanoi People’s Court; and transfer the case file to the Hanoi People’s Court for retrial according to first-instance procedures in accordance with the law.
At the cassation trial, the representative of the Supreme People’s Procuracy agreed with the Protest Decision of the Chief Justice of the Supreme People’s Court.
COURT’S FINDINGS:
[1] To prove the lawsuit claim regarding determining the capital contribution to D Co., Ltd., thereby determining Mr. H’s status as a member of D Co., Ltd., Mr. Tran Manh H (plaintiff) needs documents and evidence including: Agreement between the parties on jointly establishing the Company, signatures in the list of founding shareholders (if it is a joint-stock company); being named in the Company’s Charter; being named in the list of members when registering the business; being named in the certificate of capital contribution corresponding to the value of the contributed capital; being named in the member register; and performing rights and obligations in managing and operating the Company’s Members’ Council. However, Mr. H does not have these documents or evidence to prove that his lawsuit claim is well-founded.
[2] All parties admit that Mr. H contributed 2,751,000,000 VND to the Company according to the Minutes of the Meeting of the Capital Contributing Members Council of D Co., Ltd. dated March 22, 2017, with a total capital contribution of 7,253,656,000 VND (from all 3 people: Mr. Tran V, Mr. Tran Manh H, and Mr. Nguyen Van T). Also according to these Minutes, the parties agreed that all profits earned and income from the liquidation of the Company’s assets would be divided equally among the 3 members at the same rate of 33.33% (1/3) each; Mr. H voluntarily contributed 500,000,000 VND more but did not manage the Company’s business. All parties signed these minutes as evidence of capital contribution and profit sharing without any content agreeing to recognize or add Mr. H as a member of the Company.
[3] According to clause 13, Article 4 of the Law on Enterprises 2014, “Capital contribution” is the contribution of assets to form the “charter capital” of the Company. Capital contribution includes contributing capital to establish an enterprise or contributing additional charter capital to an already established enterprise.
[4] In fact, D Co., Ltd. was established in 2001 with 02 contributing members, Mr. Nguyen Van T and Mr. Tran V, with a registered charter capital of 1,000,000,000 VND; subsequent enterprise registration changes (2nd, 3rd, 4th, 5th times) in 2006, 2010, 2012 according to the Enterprise Registration Certificates showed the Company had 02 members, Mr. T and Mr. V, with a registered charter capital of 6,000,000,000 VND.
[5] According to the aforementioned Minutes of the Company’s Members’ Council meeting dated March 22, 2017, the parties only confirmed the capital contribution without any content confirming that this was the capital contributed to establish the Company or to increase the Company’s charter capital as prescribed. The parties only determined the profit sharing and income for each person at 33.33% without any content expressing the rights and responsibilities of each person corresponding to their capital contribution regarding: the Company’s debts and other asset obligations according to the Company’s Charter. On the other hand, in these minutes, Mr. H himself identified that he did not manage the Company’s business. If this is determined as a capital contribution to increase the Company’s charter capital from 6,000,000,000 VND to 7,253,656,000 VND as agreed by the parties, this capital increase has not been recognized because it has not been registered and issued a business registration certificate in accordance with the Law on Enterprises.
[6] Furthermore, it was only on March 16, 2018, that Mr. H himself applied to join D Co., Ltd. and E Company to legalize the capital contributed to these two companies as 33.3%. However, Mr. T did not agree to perform procedures according to regulations to recognize Mr. H as a company member but only acknowledged that Mr. H contributed capital to do business with the Company and was shared profits according to the ratio of contributed business capital.
[7] According to regulations, charter capital, contributing charter capital to become a company member, and contributing capital for business are two different issues. The parties had no agreement and did not register an increase in charter capital to 7,253,656,000 VND, of which Mr. H contributed 2,751,000,000 VND; therefore, the Court’s determination that Mr. H contributed 33.3% of the charter capital is insufficient. In fact, after the Company was established in 2001, due to a lack of capital, Mr. V and Mr. T discussed mobilizing capital from Mr. H to lease 42,970m2 of land to expand the production factory in Hung Yen (according to the testimony of the plaintiff’s own representative). Thus, there is only a basis to determine that Mr. H contributed capital for business, not to increase the Company’s charter capital. Therefore, the first-instance court and the appellate court’s acceptance of Mr. H’s lawsuit and confirmation of Mr. Tran Manh H as a member of D Co., Ltd. with a 1/3 contribution ratio was not consistent with the aforementioned facts. When retrying the case, if there is no other evidence, the plaintiff’s claim should be rejected.
For the above reasons,
DECISION:
Pursuant to point a, clause 2, Article 337, clause 3, Article 343, and Article 345 of the Civil Procedure Code 2015;
1. Accept Cassation Protest Decision No. 12/2022/KN-KDTM dated September 22, 2022, of the Chief Justice of the Supreme People’s Court.
2. Annul Appellate Business and Commercial Judgment No. 15/2020/KDTM-PT dated July 10, 2020, of the High People’s Court in Hanoi and annul First-instance Business and Commercial Judgment No. 49/2019/KDTM-ST dated November 11, 2019, of the Hanoi People’s Court regarding the business and commercial case “Dispute between a company member and the company” between the plaintiff Mr. Tran Manh H and the defendant D Co., Ltd.; transfer the case file to the Hanoi People’s Court for retrial according to first-instance procedures in accordance with the law.
3. The cassation decision takes legal effect from the date of issuance.
PRECEDENT CONTENT
“[4] In fact, D Co., Ltd. was established in 2001 with 02 contributing members, Mr. Nguyen Van T and Mr. Tran V, with a registered charter capital of 1,000,000,000 VND; subsequent enterprise registration changes (2nd, 3rd, 4th, 5th times) in 2006, 2010, 2012 according to the Enterprise Registration Certificates showed the Company had 02 members, Mr. T and Mr. V, with a registered charter capital of 6,000,000,000 VND.
[5] According to the aforementioned Minutes of the Company’s Members’ Council meeting dated March 22, 2017, the parties only confirmed the capital contribution without any content confirming that this was the capital contributed to establish the Company or to increase the Company’s charter capital as prescribed. The parties only determined the profit sharing and income for each person at 33.33% without any content expressing the rights and responsibilities of each person corresponding to their capital contribution regarding: the Company’s debts and other asset obligations according to the Company’s Charter. On the other hand, in these minutes, Mr. H himself identified that he did not manage the Company’s business. If this is determined as a capital contribution to increase the Company’s charter capital from 6,000,000,000 VND to 7,253,656,000 VND as agreed by the parties, this capital increase has not been recognized because it has not been registered and issued a business registration certificate in accordance with the Law on Enterprises.”.
“[7] According to regulations, charter capital, contributing charter capital to become a company member, and contributing capital for business are two different issues. The parties had no agreement and did not register an increase in charter capital to 7,253,656,000 VND, of which Mr. H contributed 2,751,000,000 VND; therefore, the Court’s determination that Mr. H contributed 33.3% of the charter capital is insufficient. In fact, after the Company was established in 2001, due to a lack of capital, Mr. V and Mr. T discussed mobilizing capital from Mr. H to lease 42,970m2 of land to expand the production factory in Hung Yen (according to the testimony of the plaintiff’s own representative). Thus, there is only a basis to determine that Mr. H contributed capital for business, not to increase the Company’s charter capital. Therefore, the first-instance court and the appellate court’s acceptance of Mr. H’s lawsuit and confirmation of Mr. Tran Manh H as a member of D Co., Ltd. with a 1/3 contribution ratio was not consistent with the aforementioned facts. When retrying the case, if there is no other evidence, the plaintiff’s claim should be rejected.”.
