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Registering a Registering a Shareholding Company

A shareholding company is an enterprise that has legal person status, starting from the date of issuance of its business registration certificate. As such, the owners of the shareholding company and the shareholding company itself are separate legal entities: in a court of law, the company is a legal person and its owners are natural persons, with rights and obligations in respect of their ownership of the company.

What do the owners of a Shareholding Company own?

 

The charter capital of a shareholding company is divided into equal portions that are known as shares. The owners (called shareholders) of a shareholding company buy and own the shares of the company in proportion to the capital contribution they make.

Is there a restriction on the number of shareholders in a Shareholding Company?

Yes, the minimum number of shareholders must be at least 3. But there are no limits on the total number of shareholders of this type of company.

Who can be shareholders of a Shareholding Company?

Individuals (natural persons) and/or organizations (legal persons such as enterprises or otherwise authorized entities, for example, government agencies) can be shareholders by owning shares of a shareholding company.

Are there different types of shares?

Yes, there are two types of shares: ordinary shares (also called common stock in English) and preferred shares (also called preferred stock in English). Preferred shares usually have guaranteed priority by a shareholding company's charter over ordinary shares in the payment of dividends and usually in the distribution of assets.

According to Enterprise Law 2005, a shareholding company issues both ordinary shares and preferred shares that may be: a) voting preference shares, b) dividend preference shares, c) redeemable preference shares, d) other types of preference shares as stipulated by the company charter.

Only government-authorized organizations and founding shareholders may own voting preference shares. Voting preference is effective for 3 years from the date of business registration, after which voting preference shares of founding shareholders have to be converted into ordinary shares.

What is the financial liability of the shareholders (owners) of a Shareholding Company?

Shareholders are responsible for the debts and other liabilities of the enterprise within the amount of capital that they contributed.

Can a Shareholding Company issue shares to the public?

Yes, shareholding company is entitled to issue shares to the public to mobilize capital.

Shareholders can transfer and sell their shares freely at any time, except when they own voting preference shares and shares owned by founding shareholders which can be transferred to other founding shareholders 3 years from the registration date of the company and to other persons, if approved by the shareholders’ meeting.

Who is responsible for the management of a Shareholding Company?

The highest-level decision making organ in a shareholding company is the General Meeting of Shareholders. Shareholders nominate the Board of Management and the Board of Supervision.

Ordinary shareholders that own 10 percent (or a smaller ratio stipulated by the company charter) of total ordinary shares for at least 6 months have the right to nominate members of the Board of Management and the Board of Supervision.

Board of Management appoints either a member of the Board to act as director or director general of the company or may appoint another person to do this job. The director or director general of a shareholding company cannot be the director or director general of another company.

What about seal, branches, representative offices and business locations of a Shareholding Company?

A shareholding company has the right to make and use a seal for its business. Please study the requirements for obtaining a seal-engraving permit on this Portal.

There are no limitations on the number of business locations, branches and representative offices a shareholding company have. Please study Government Decree 88/2006/ND-CP, dated 29 August 2006 on business registration and the Circular No. 3/2006/TT-BKH dated 19 October 2006 or contact GBS at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it to learn more about how to register branches, representative offices and additional business locations.

Where do we apply to register a Shareholding Company?

You need to apply to the Provincial Business Registration Office under the Department of Planning and Investment in the province where you plan to locate the head office of your business, after completing all the documents for business registration.

Which documents do we need to complete when we register a Shareholding Company?

  1. Application form for registering a Shareholding Company. You can obtain this form from the Business Registration Office.
  2. Draft of the company charter
  3. List of members, attached with a) Copies of the identification cards, passports or other relevant personal certification of members that are natural persons (individuals) b) Copy of a decision of establishment, certificate of business registration or other relevant certification of the institutional members (other legal persons such as enterprises or other authorized agencies such as those that belong to government and are authorized to be a member of a shareholding company) and copy of the identification card, passport or other relevant personal certification of the authorized representative of the institutional members. If such institutional members are foreign entities, their documents must be certified by competent agencies where they are established and such certification should not be older than 3 months from the date of submission of application dossiers.
  4. Certification of legal capital issued by the competent organization for enterprise that is going to operate in a business line where legal capital is required.
  5. Valid copy of the practice certificate of the general partners or another individual(s) in a business line where such a certificate is required.

What kinds of documents are accepted as legally valid personal identification of members that are individuals?

  1. Valid personal ID card or passport for Vietnamese citizens resident in Viet Nam
  2. One of the following papers that are valid for overseas Vietnamese:
    • Vietnamese passport
    • Foreign passports (or papers that can replace the foreign passport) and one of the following papers that are valid:
      • Certificate of Vietnamese nationality
      • Certificate of losing Vietnamese nationality
      • Certificate of citizen registration
      • Certificate of Vietnamese origin
      • Certificate of having Vietnamese origin
      • Certificate of having Vietnamese blood relations
      • Other papers as regulated by laws
  3. Valid Resident Card issued by a Vietnamese competent authority and passport for foreigners residing in Vietnam
  4. Valid passport for foreigners not residing in Vietnam.

What kind of information is provided in the application dossier when registering a Shareholding Company?

Shareholding companies are registered by the legal representative of the company. Unless the charter of the company indicates otherwise, the director or general director of a shareholding company acts as the legal representative. Who would be the legal representative of the company must be indicated in the company charter.

During registration, the following information must be submitted:

  1. Name, ethnicity, nationality, birth date and gender, the number of personal ID card or other personal identification papers, name of issuing authority for personal ID card and date of issue, registered address of the household book, current residence address, telephone, fax, e-mail or website, if applicable, of the legal representative and the members who are individuals
  2. Business registration certificate or establishment decision and address of head office of institutional members
  3. Name of the enterprise in Vietnamese, and in foreign language or the abbreviated name of enterprise, if applicable
  4. Head office address, telephone, fax, and e-mail, website, if applicable
  5. Business lines according to Vietnam Standard Industrial Classification (VSIC)
  6. Registered capital (also called charter capital);
  7. Total number of shares to be issued, face value of a share, number and kinds of shares that are registered to be bought by founding shareholders, number and kinds of shares that are expected to be offered for sale
  8. Legal capital, if the business line(s) require so.
  9. Name and address of branch, if applicable
  10. Name and address of representative office, if applicable
  11. Name and address of business location(s), if applicable
  12. Signature of the legal representative

The list of members must show the amount of capital contributions by each member, the type and value of assets towards the capital contribution as well as the timing when such capital would be contributed. Members must sign this list and submit it together with draft charter of the company.

Do we need to give a name to the Shareholding Company?

Yes, every enterprise, including shareholding companies, must have a name.

Are there rules when naming an Enterprise?

Yes. Please study carefully Chapter III, Articles 10-13 of Government Decree 88/2006/ND-CP, dated 29 August 2006 on business registration and Articles 31-34 of the Enterprise Law 2005 to learn more about how to name your enterprise.

According to the Enterprise Law and Government Decree 88/2006, names of enterprises must not overlap or be confused with the name of another enterprise registered in the same business line within the same province or city directly under the Central Government.  Therefore, you are required to check the registered names of all enterprises currently in operation in the archive of the Business Registration Office of the province where you intend to locate your head office. If the name you choose overlaps with an already registered enterprise name, your application would be rejected.

How long does it take to register an Enterprise?

The statutory time limit for the issuance of business registration certificate is 10 working days, from the date of the submission of a fully valid application dossier.

When you submit your application dossier, the business registration office will give you a receipt slip that shows your application date. If the contents of your dossier do not fully comply with the regulations, the registry has to inform you to modify or supplement your application dossier within 10 working days in writing. In this notification, the registry has to clearly indicate what you have to modify or supplement.

Which regulations apply to the registration of an Enterprise?

Enterprise Law 2005, Government Decree 88/2006/ND-CP dated 29 August 2006 on Business Registration and the Circular No. 03/2006/TT-BKH dated 19 October 2006 on the implementing regulations of the Government Decree 88/2006/ND-CP on Business Registration.

Where can I find other useful information on starting a business?

Contact us today via email:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it , our office phone (84) 08 62928505 or +84 907344909 for more information on our services or to request an estimate for your project.

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