Contributing capital to establish a company is the crucial first step, laying the legal and financial foundation for the business. However, this is also a stage fraught with potential risks if the founders do not thoroughly understand legal regulations. From delays in capital contribution deadlines, choosing the wrong type of assets, to valuation procedures… all can lead to internal disputes or administrative penalties. In this article, VN Law Firm will summarize “golden” tips to help you fulfill your capital contribution obligations legally, ensure your rights, and have a smooth start.
1. What assets can be used for capital contribution when establishing a company or enterprise?
According to the provisions of Article 34 of the Law on Enterprises of Vietnam 2020, assets for capital contribution when establishing a company or enterprise can be Vietnamese Dong, freely convertible foreign currency, gold, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong.
Assets contributed as capital that are not Vietnamese Dong, freely convertible foreign currency, or gold must be valued by founding members, shareholders, or a valuation organization and expressed in Vietnamese Dong.
Note: Only individuals or organizations that are legal owners or have legal rights to use the aforementioned assets are entitled to use those assets for capital contribution in accordance with the law.
2. Forms of capital contribution when establishing a company or enterprise
2.1. For enterprises contributing capital to establish a company
According to Article 6 of Decree 222/2013/ND-CP, enterprises are not allowed to make cash payments for capital contribution transactions; or for buying or transferring capital contributions in other enterprises. Instead, enterprises contribute capital to establish a company or enterprise in the following forms:
- Payment by check;
- Payment by payment order – money transfer;
- Other non-cash payment methods.
Enterprises can also contribute capital, buy or transfer capital contributions in other enterprises using various types of assets (other than cash) as prescribed.
2.2. For individual members contributing capital to establish a company
Individuals can contribute capital to establish a company by cash, bank transfer, or other assets as prescribed.
Summary of capital contribution forms for company establishment:
| Capital Contributor | Cash Form | Bank Transfer Form (Check, Payment Order…) | Other Assets Form |
|---|---|---|---|
| Enterprise | ⛔ Not allowed | ✅ Mandatory (If contributing money) | ✅ Allowed |
| Individual | ✅ Allowed | ✅ Allowed | ✅ Allowed |
3. What is the deadline for charter capital contribution?
3.1. Deadline for charter capital contribution
– Company members/shareholders agree and commit to the amount of capital contributed to the company. At the time of commitment, the total capital will be considered the company’s charter capital.
– Within 90 days from the date of issuance of the enterprise registration certificate, members must fully contribute the committed capital.
3.2. Issuance of capital contribution certificate
Upon full and timely capital contribution, individuals/organizations will be granted member status. Specifically, the company must establish and maintain a member registration book/shareholder registration book. These documents clearly record information such as capital contribution ratio, shares, type of assets contributed… Along with that is a capital contribution certificate/share certificate to confirm the capital contribution activity of each member.
The content of the capital contribution certificate includes:
- Name, enterprise code, main office address of the company;
- The company’s charter capital;
- Full name, contact address, nationality, legal document number of the individual for individual members; name, enterprise code or legal document number of the organization, main office address for organizational members;
- Capital contribution, percentage of capital contribution of the member;
- Number and date of issuance of the capital contribution certificate;
- Full name, signature of the company’s legal representative.
Note:
– Except for single-member limited liability companies, partnership companies, two-member limited liability companies, and joint-stock companies all have capital contribution certificates/share certificates.
– If a capital contribution certificate is lost, damaged, or destroyed in any other form, the company will reissue the capital contribution certificate according to the procedures specified in the company’s charter.
4. Some notes when an enterprise does not contribute enough charter capital
– After 90 days from the date of issuance of the enterprise registration certificate, if the enterprise has not contributed enough capital as initially registered, it must complete procedures to reduce its charter capital within 30 days for limited liability companies/joint-stock companies; for partnership companies, members will register a specific capital contribution deadline.
– If, after the aforementioned period, the enterprise fails to register the change in charter capital with the business registration authority, it may be fined from 10,000,000 VND to 20,000,000 VND. In addition, the violating enterprise must rectify the consequences by registering to adjust the charter capital to the amount of capital already contributed.
– In cases where the enterprise does not carry out procedures to adjust its charter capital, it may carry out procedures for enterprise dissolution and establish a new enterprise with new charter capital.
