What are capital contribution assets? What types of assets are contributed as capital to an enterprise?

What are contributed assets? What types of assets are contributed to corporate capital?

Pursuant to Article 34 of the Law on Enterprises 2020 has the following provisions:

Contributed assets
1. Capital contributed assets are Vietnamese Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong.
2. Only individuals and organizations that are legal owners or have legal use rights to assets specified in Clause 1 of this Article have the right to use those assets to contribute capital according to the provisions of law.

According to the above regulations, assets contributed as capital to the enterprise include:

– Capital contribution assets are Vietnam Dong

– Foreign currencies are freely convertible

– Gold

– Land use rights

– Intellectual property rights

– Technology

– Technical know-how

– Other assets that can be valued in Vietnam Dong.

Thus, capital contribution assets are the types of assets listed above that are used by individuals and organizations that are the legal owners or have legal use rights over the assets to contribute capital according to the provisions of law.

How to transfer ownership of assets to contribute capital to a business?

Pursuant to Article 35 of the Law on Enterprises 2020, the transfer of ownership of contributed assets is regulated as follows:

(1) Company members transfer ownership of assets contributed as capital to the company

Members of limited liability companies, partnerships and shareholders of joint stock companies must transfer ownership of assets contributed as capital to the company according to the following regulations:

– For assets with registered ownership or land use rights, the capital contributor must carry out procedures to transfer ownership of that asset or land use rights to the company according to the provisions of law. The transfer of ownership and land use rights for assets contributed as capital is not subject to registration fees;

– For assets whose ownership rights are not registered, capital contribution must be made by handing over and receiving the contributed assets with confirmation by minutes, except in cases where it is done through an account.

(2) Contents of the asset handover record, including:

– Name and address of the company’s headquarters;

– Full name, contact address, legal document number of the individual, legal document number of the capital contributor’s organization;

– Type of assets and number of units of assets contributed as capital; total value of assets contributed as capital and the ratio of the total value of that asset in the company’s charter capital;

– Delivery date; Signature of the capital contributor or authorized representative of the capital contributor and legal representative of the company.

When is it necessary to value contributed assets?

Pursuant to Article 36 of the Law on Enterprises 2020, there are provisions as follows:

Valuation of capital contribution assets
1. Contributed assets other than Vietnamese Dong, freely convertible foreign currencies, or gold must be valued by members, founding shareholders or valuation organizations and expressed in Vietnamese Dong.
…

Thus, when the assets contributed as capital to the enterprise are not Vietnamese Dong, freely convertible foreign currencies, gold must be valued by members, founding shareholders or valuation organizations and expressed as Vietnamese Dong.

(1) Assets contributed as capital when establishing a business:

Must be valued by members and founding shareholders according to consensus principles or by a valuation organization.

In case a valuation organization determines the value, the value of contributed assets must be approved by more than 50% of the members and founding shareholders.

In case the assets contributed as capital are valued higher than the actual value of that asset at the time of capital contribution, the members and founding shareholders jointly contribute equal to the difference between the appraised value and the actual value of the assets contributed as capital at the time of completion of valuation; At the same time, jointly responsible for damages caused by intentionally valuing contributed assets higher than the actual value.

(2) Assets contributed as capital during operations:

Assets contributed as capital during the course of operations are determined by the owner, the Board of Members for limited liability companies and partnerships, the Board of Directors for joint stock companies, and capital contributors by agreement on valuation or by a valuation organization.

In case a valuation organization determines the value, the value of contributed assets must be approved by the capital contributor and the owner, the Board of Members or the Board of Directors.

In case the assets contributed as capital are valued higher than the actual value of that asset at the time of capital contribution, the capital contributor, owner, member of the Board of Members for limited liability companies and partnerships, members of the Board of Directors for joint stock companies jointly contribute equal to the difference between the appraised value and the actual value of the contributed assets at the time of completion of valuation; At the same time, jointly responsible for damages caused by intentionally valuing contributed assets higher than the actual value.