PROFILE AND PROCEDURES FOR JOINT STOCK COMPANY ESTABLISHMENT
Figure 1. Thinh Tri Law - Consultancy on documents and procedures for registration of establishment of a joint stock company.
- Joint stock company is a fairly common type of business today, stemming from the very needs of the socio-economic needs to have a capital link. A joint stock company is the only type of enterprise that has the right to issue shares and participate in raising capital on the stock market. So, how is a joint stock company established? Let's find out with Thinh Tri Law in the following article.
OUTLINES
1. What is a joint stock company ?
2. Dossier and procedures for establishing a joint-stock company.
a. Profile of a joint stock company.
b. The process of setting up a joint stock company.
3. Procedures to be carried out after the establishment of a joint stock company.
4. Advantages and disadvantages when establishing a joint stock company.
5. Frequently asked questions when establishing a joint stock company.
a. What are the conditions to establish a joint stock company?
b. What conditions must the legal representative of a joint stock company meet?
LEGAL GROUND
- Enterprise Law No. 59/2020/QH14 takes effect from January 1, 2021;
- Decree No. 01/2021/ND-CP on business registration takes effect from January 4, 2021;
- Circular No. 01/2021/TT-BKHDT guiding business registration takes effect from May 1, 2021.
- According to the provisions of Article 111 of the Enterprise Law 2020, a joint-stock company is an enterprise with charter capital, divided into equal parts and called shares, shareholders may be organizations or individuals. The number of shareholders in a joint stock company is 03 shareholders and no limit for the maximum shareholders.
- Joint-stock companies are entitled to issue shares, are entitled to issue shares and bonds to the public through the stock exchange. This is a fundamental difference to distinguish joint stock companies from other types of enterprises.
→ More articles: Steps to register a business online.
- When setting up a joint stock company, the following documents need to be prepared:
- An application for enterprise registration of a joint-stock company;
- The charter of the joint-stock company;
- List of founding shareholders;
- Valid copy of valid ID/Passport of founding shareholder, legal representative;
- For institutional shareholders, the following documents need to be provided:
- A valid copy of the Establishment Decision, Business Registration Certificate or other equivalent document;
- A document appointing an authorized representative of the organization;
- A valid copy of the ID card/Passport of the legal representative, the authorized representative of the shareholder being an organization;
- Power of attorney for the individual or organization to submit the application (if any);
- A valid copy of valid ID/Passport of the person authorized to submit the application.
- Submission of documents: After the enterprise has fully prepared the above documents, the enterprise can directly submit the application to the Business Registration Office of the Department of Planning and Investment in the province or city where the enterprise is located. Head office or enterprise can submit online via the link: https://dangkytinhdoanh.gov.vn/.
- However, currently, many provinces and cities such as Hanoi, Ho Chi Minh City, Binh Duong, Hai Phong are only allowed to submit documents online, so businesses need to pay attention to comply with regulations where the head office is located.
- Processing time: Within 05 days - 07 working days since the application submission date. The business registration office will check the validity of the application. If the application is valid, the Business Registration Office will issue a business registration certificate. In case the dossier is not valid, the department will issue a notice instructing the enterprise to amend and supplement the dossier.
Figure 2. Thinh Tri Law - Procedures to follow after establishing a joint stock company.
- After obtaining an enterprise registration certificate, a joint-stock company needs to do the following things before going into production business to avoid penalties:
- Engrave seal of legal entity;
- Hang signs at head office, representative office, branch, business location;
- Buy digital signatures;
- Buy e-invoices and make invoice issuance notices;
- File an initial tax return;
- Open a business bank account;
- Register for social insurance for employees.
→ More articles: What is the company's charter capital? Cases of an increase or decrease in the company charter capital.
- Advantages of joint stock company
- The ability to raise capital of a joint stock company is very high and flexible in many ways;
- There is no limit on the number of shareholders contributing capital to a joint-stock company;
- Joint stock companies may issue shares to the public through commercial exchanges;
- Procedures for transferring shares are easy, attracting many people to contribute capital to the company;
- Shareholders in a joint-stock company are only responsible for debts and property obligations within the amount of capital contributed to the company.
- Disadvantages of joint stock company.
- The management and administration is very complicated because the number of shareholders in a joint stock company is very large, many shareholders may not know each other and may be divided into many groups of shareholders in the company with opposing interests.
- The decision-making process of the manager and executive of a joint-stock company often takes a long time because it has to go through many Boards of Directors, General Meeting of Shareholders, etc... so it may miss business opportunities.
- Enterprises must fully meet the following conditions:
- Enterprises must have at least 03 founding shareholders;
- Fully meet the conditions of name, head office address, business lines, capital,...
- Having a complete application for registration of establishment in accordance with current laws.
- A joint-stock company may have one person or many people acting as its legal representative.However, the following conditions must be met:
- The legal representative must be an individual, from full 18 years of age, with full civil act capacity;
- It is not necessary to be a capital contributor to the company;
- Can be Vietnamese or foreigner;
- Not being prohibited from managing and establishing an enterprise;
- Enterprises must always ensure to have a legal representative residing in Vietnam.
Hopefully, this article will help customers have more information about the documents, procedures as well as conditions for establishing a joint stock company.
→ More articles: Rights and obligations of shareholders in a joint-stock company..
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