Procedures for converting the type of business in Vietnam

THỦ TỤC CHUYỂN ĐỔI
LOẠI HÌNH DOANH NGHIỆP Ở VIỆT NAMTRANSFER PROCEDURES TYPE OF BUSINESS IN VIETNAM

Thủ tục chuyển đổi loại hình doanh nghiệp ở Việt Nam

Figure 1. Thinh Tri Law - Procedures for transformation of enterprises in Vietnam.

Business transformation is a form of restructuring a business to suit its business size and future development orientation. In case an enterprise no longer has enough of the minimum number of members as prescribed by current law, it must be forced to convert to another type of enterprise to ensure the number of members, if they do not want to be dissolved. body. In this article, Thinh Tri Law will present in detail the procedure for converting the type of business in Vietnam.

OUTLINES

1. Forms of enterprise transformation?

Legal ground

Enterprise Law 2020;
Decree 01/2021/ND-CP on enterprise registration;
Circular 01/2021/TT-BKHDT guiding business registration issued by the Ministry of Planning and Investment.

According to the current law, an enterprise may convert from one type of enterprise to another in the following cases:
Change the type from a private enterprise to a joint stock company. Change from sole proprietorship to partnership.
Change the type from a private enterprise to a one-member limited liability company.
Change the type from a sole proprietorship to a limited liability company with two or more members.
Change the type from a one-member limited liability company to a two-member limited liability company or more.
Change the type from a one-member limited liability company to a joint stock company.
Change the type from a two-member limited liability company to a one-member limited liability company.
Change the type from a two-member limited liability company to a joint stock company.
Change the type from a Joint Stock Company to a limited liability company with two or more members.
Change the type from Joint Stock Company to one member limited liability company.

Hồ sơ chuyển đổi loại hình doanh nghiệp

Figure 2. Thinh Tri Law - Enterprise transformation.

When an enterprise converts its type, there is no need to change its business license, but only need to prepare enough documents to carry out the transformation in accordance with the law, and carry out registration procedures. Sign the change at the business registration office of the Department of Planning and Investment of the province or city where the enterprise is located. Concurrently, businesses need to change the company seal and corporate tax code, the dossier of business transformation includes:

The first thing an enterprise must do is to hold a meeting of the Shareholders' Council to decide on the transformation of the enterprise.
Draft the dossiers of enterprise transformation in accordance with current law.
In case the business uses the service at Thinh Tri Law, the lawyer of Thinh Tri Law will represent the customer to submit the application for conversion of the type to the business registration agency.
Customer representative receives the business registration certificate of the enterprise after stransformation.
Carry out the procedures to change the Seal of the legal entity.
Note:
In order to carry out the business model transformation in the most convenient way and comply with the law, it is essential to solve the problem of liabilities and fixed assets.
Before completing the procedures related to the type of conversion, enterprises must commit to be personally responsible with all their assets for the unpaid debts of the business, and commit to pay fully before transforming to another type of enterprise.

When businesses are in a difficult situation of finance and capital, survival and business development is a huge challenge. It can be seen that the number of enterprises suspending or dissolving business is constantly increasing. In addition to the solution of business suspension or dissolution, another option that businesses choose is to change their business model.
This has responded to the ability and situation of enterprise development. This plan has helped many businesses overcome the crisis of investment capital, develop in business, and restructure their organization. In addition, there are a number of reasons such as: The enterprise does not guarantee the minimum number of members or the number of members in the enterprise exceeds the number of members specified in that type of enterprise, etc.

Is it allowed to directly convert the form of a private enterprise into a joint stock company?

Yes, it is. According to the law, in the past, a private enterprise that wants to convert to a joint stock company must first convert into a limited company. After that, the next step is to convert the limited company into a joint stock company. However, according to the new regulations, from January 1, 2021, a private enterprise has been converted directly into a joint stock company without having to go through the intermediary steps of converting into a limited company as before. .

When converting the type of company, there is no need to confirm tax obligations or finalize taxes, because the newly converted enterprise still has to inherit all the rights and obligations of the business before the conversion.

.When converting the type of business, do you have to issue a value-added invoice again?

When converting the type of business, there is no need to re-issue value-added invoices.Enterprises only need to make information adjustment notices to the tax authorities.