What are the methods to convert a joint stock company into a two-member limited liability company? How long is the settlement period?

What are the methods to convert a joint stock company into a two-member limited liability company?

According to Article 204 of the Law on Enterprises 2020, regulations on converting a joint stock company into a limited liability company two or more members as follows:

– A joint stock company can convert into a limited liability company with two or more members by the following method:

+ Convert into a limited liability company with two or more members without mobilizing more or transferring shares to other organizations or individuals;

+ Convert into a limited liability company with two or more members At the same time, mobilize other organizations and individuals to contribute capital;

+ Convert into a limited liability company with two or more members and transfer all or part of the shares to other organizations and individuals to contribute capital;

+ The company only has 02 remaining shareholders;

+ Combine the methods specified in Points a, b and c of this Clause and the following: Other methods.

– The company must register company conversion with the Business Registration Authority within 10 days from the date of completion of the conversion. Within 03 working days from the date of receiving the conversion dossier, the Business Registration Authority issues the Business Registration Certificate and updates the company’s legal status on the National Business Registration Database.

– The converting company automatically inherits all legal rights and interests, and is responsible for debts, including tax debt, labor contracts and other obligations of the transferred company. conversion.

Accordingly, a Joint Stock Company can convert into a limited liability company with two or more members by the following method:

• Convert into a limited liability company with two or more members without mobilizing more or transferring shares to other organizations or individuals;
• Convert into a limited liability company with two or more members At the same time, mobilize other organizations and individuals to contribute capital;
• Convert into a limited liability company with two or more members and transfer all or part of the shares to other organizations or individuals to contribute capital;
• The company only has 02 remaining shareholders;
• Combining the methods specified in Points a, b and c of this Clause and other methods.

What does the application file for conversion from a joint stock company to a two-member limited liability company include?

According to Article 26 of Decree 01/2021/ND-CP stipulates as follows:

“Article 26. Business registration documents for cases of conversion of business type
[…]
4. In case of converting a limited liability company into a joint stock company and vice versa, the conversion registration dossier includes the documents specified in Article 23 and Article 24 of this Decree, which does not include the Investment Registration Certificate specified in Point c, Clause 4, Article 23 and Point c, Clause 3, Article 24 of this Decree. Attached to the application must be the following documents:
a) Resolutions and decisions of the company owner for one-member limited liability companies or resolutions, decisions and copies of meeting minutes of the Board of Members for limited liability companies with two or more members or resolutions and copies of meeting minutes of the General Meeting of Shareholders for joint-stock companies on the conversion of the company;
b) Transfer contract or documents proving completion of transfer in case of transfer of shares or capital contribution; Donation contract in case of donating shares or capital contributions; Copy of document certifying the legal inheritance rights of the heir in case of inheritance according to the provisions of law;
c) Documents confirming capital contribution of new members and shareholders;
d) Document from the Investment Registration Authority approving capital contribution, stock purchase, capital contribution purchase by foreign investors, foreign-invested economic organizations in cases where capital contribution registration procedures, stock purchase, capital contribution purchase must be carried out according to the provisions of the Investment Law.

Accordingly, the dossier includes:

– Application for business registration.

– Company charter.

– Copies of the following documents:

+ Personal legal documents for the legal representative of the enterprise;

+ Personal legal documents for company owners who are individuals; Legal documents of the organization for the company owner being an organization (except in cases where the company owner is the State); Legal documents of the individual for the authorized representative and document appointing the authorized representative.

For company owners who are foreign organizations, copies of the organization’s legal documents must be consularly legalized;

– Resolutions and decisions of the company owner for a single-member limited liability company or resolutions, decisions and copies of meeting minutes of the Association co-membership for a limited liability company with two or more members or resolution and copy of the meeting minutes of the General Meeting of Shareholders for a joint stock company on company conversion;

– Transfer contract or documents proving completion of transfer in case of transfer of shares or contributed capital; Donation contract in case of donating shares or capital contributions; Copy of document confirming the legal inheritance rights of the heir in case of inheritance according to the provisions of law;

– Documents confirming the capital contribution of new members and shareholders;

– Document of the Investment Registration Authority approving capital contribution, share purchase, purchase of capital contribution of foreign investors, foreign-invested economic organizations in cases where formalities must be carried out Procedures for registering capital contribution, buying shares, purchasing capital contributions according to the provisions of the Investment Law.

How long is the settlement period?

According to Clause 2, Article 204 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 204. Converting a joint stock company into a limited liability company with two or more members up
[…]
2. The company must register the company conversion with the Business Registration Authority within 10 days from the date of completion of the conversion. Within 03 working days from the date of receipt of the conversion dossier, the Business Registration Authority shall issue a Business Registration Certificate and update the company’s legal status on the National Business Registration Database.

Accordingly, in Within 03 working days from the date of receipt of the conversion dossier, the Business Registration Authority will issue the Business Registration Certificate and update the company’s legal status on the National Business Registration Database.