Conditions for business merger:
According to the 2005 Enterprise Law, new companies with the same type are allowed to merge. However, when Enterprise Law 2014 takes effect to replace the old Law, the regulations for merging no longer restrict companies with the same type.
In case of merging in which the merged company has a market share from 30% to 50% in the relevant market, the legal representative shall notify the Competition Administration Agency before conducting the merger.
Any merged companies have a market share of more than 50% in the relevant market is prohibited to merge, except for the cases specified in Article 19 of the 2004 Competition Law: one or more enterprises which are participating in the merger is in danger of being dissolved or falling into bankruptcy; the merger helps to expand the exports or contribute to socio-economic development as well as technical progress.
Order and procedures for business merger:
The related companies prepare the merger contract and draft the merged company charter. The merger contract must contain the following contents:
- Name and head office address of the merged company; name and head office address of the merged company.
- Procedures and conditions for merger.
- Employee planning.
- Procedures, deadlines and conditions for converting assets, capital contributions, shares and bonds of the merging company into contributed capital, shares and bonds of the merged company
- Time limit for merging.
Members, company owners or shareholders of related companies shall approve the merger contract and the charter of the merged company. The merger contract must be sent to all creditors and notified to employees within 15 days since the date of approval.
The merged companies carry out the procedures for closing tax identification numbers at the tax office
Documents needed (for reference only):
- Minutes of the meeting and Decision of the owner/ The member's council /Shareholders' Meeting of the merged company on the merger of the company, approving the merger contract and the charter of the merged company
- Official letter requesting confirmation of tax obligation fulfillment and closing tax code;
- Merger Contract of enterprises (copy with seal of the enterprise)
Conducting business registration of the merged company
The documents that the merged company need to prepare for the business registration depend on whether the merged company has changed the business registration content or not.
- In case the merging company does not change the business registration contents:
- Notice of addition and update of business registration information;
- Merger contract;
- Resolutions and meeting minutes approving the merger contract of the merging companies;
- Resolution and meeting minutes approve the merger contract of the merged companies, unless the merging company is a member owning more than 65% of the charter capital of the merged company;
- Valid copies of Business Registration Certificates or other equivalent documents of the merged companies.
- In case the merging company changes the business registration information
- Merger contract;
- Resolutions and meeting minutes approve the merger contract of the merging companies;
- Resolution and meeting minutes approve the merger contract of the merged companies, unless the merging company is a member owning more than 65% of the charter capital of the merged company;
- Valid copies of Business Registration Certificates or other equivalent documents of the merging companies.
- Attached are the "papers" specified in Chapter VI of Decree No. 78/2015/ND-CP of the Government on business registration. (depending on the content that the company wants to change such as: company name; head office address; charter capital; legal representative information (For limited liability companies, there is more information about members of the company); content about business sector).
Notes:
- The merged enterprise is responsible for fulfilling its tax payment obligation before merging the enterprise. If the tax payment obligation has not yet been fulfilled, the merging enterprise shall have to fulfill the tax payment obligation.
- After the registration of the enterprise, the merged company ceases to exist; the merged company enjoys lawful rights and interests, is responsible for unpaid debts, labor contracts and other property obligations of the merged company.
