How is the conversion of a private enterprise into a single-member limited liability company? How are the documents, order, and conversion procedures carried out?

How is converting a private enterprise into a single-member limited liability company?

Pursuant to Article 205 of the Law on Enterprises 2020, which regulates the conversion of a private enterprise into a single-member limited liability company. One-member limited liability company, as follows:

A private enterprise can be converted into a limited liability company, joint stock company or partnership at the discretion of the private enterprise owner if the following conditions are met:

– The converted enterprise must meet all the conditions prescribed in Clause 1, Article 27 of this Law;

– The owner of a private enterprise commits in writing to be personally responsible with all of his or her assets for all unpaid debts and commits to pay the debt in full when due;

– The owner of the private enterprise has a written agreement with the parties to the unliquidated contract that the converted company will receive and continue to perform those contracts;

– The owner of a private enterprise commits in writing or has a written agreement with other capital contributing members on the reception and use of existing employees of the private enterprise.

Within 03 working days from the date of receipt of the dossier, the Business Registration Authority shall review and issue a Business Registration Certificate if the conditions specified in Clause 1 of this Article are met and update the legal status of the business on the National Business Registration Database.

The converted company automatically inherits the rights and obligations of a private enterprise from the date of issuance of the Business Registration Certificate. The owner of a private enterprise is personally responsible with all of his or her assets for all debts arising before the date the converted company is granted a Business Registration Certificate.

What are the documents for converting a private enterprise into a single-member limited liability company?

Pursuant to Clause 1, Article 26 of Decree 01/2021/ND-CP stipulating documents for converting private enterprises into single-member limited liability companies, as follows:

“Article 26. Business registration documents for cases of conversion of business type

1. In case of converting a private enterprise into a partnership, limited liability company, or joint stock company, the conversion registration dossier includes the documents specified in Articles 22, 23 and 24 of this Decree, which does not include the Investment Registration Certificate specified in Point b, Clause 4, Article 22, 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) A written commitment by the private enterprise owner to be personally responsible with all of his or her assets for all unpaid debts and to commit to paying the debt in full when due;

b) Written agreement between the private enterprise owner and the parties to the unliquidated contract on the conversion of the company to receive and continue to perform those contracts;

c) Written commitment or written agreement of the private enterprise owner with other capital contributing members on the reception and use of existing employees of the private enterprise;

d) Transfer contract or documents proving completion of transfer in case of capital transfer of private enterprises; Donation contract in case of donating capital to a private enterprise; Copy of document certifying the legal inheritance rights of the heir in case of inheritance according to the provisions of law;

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:

– Legal documents of the individual for the legal representative of the enterprise;

– Personal legal documents for company members, founding shareholders, and shareholders who are foreign investors who are individuals; Legal documents of the organization for members, founding shareholders, shareholders who are foreign investors being organizations; Legal documents of individuals for authorized representatives of members, founding shareholders, shareholders who are foreign investors who are organizations and documents appointing authorized representatives.

For members and shareholders who are foreign organizations, copies of the organization’s legal documents must be consularly legalized;

A written commitment by the private enterprise owner to be personally responsible with all of his or her assets for all unpaid debts and to commit to paying the debt in full when due;

Written agreement of the private enterprise owner with the parties to the unliquidated contract on the conversion of the company to receive and continue to perform those contracts;

Written commitment or written agreement of the private enterprise owner with other capital contributing members on the reception and use of existing employees of the private enterprise;

Transfer contract or documents proving completion of transfer in case of capital transfer of private enterprises; Donation contract in case of donating capital to a private enterprise; Copy of document certifying the legal inheritance rights of the heir in case of inheritance according to the provisions of law;

Document of the Investment Registration Authority approving capital contribution, stock purchase, capital contribution purchase by foreign investors, foreign-invested economic organizations in cases where procedures for registering capital contribution, stock purchase, capital contribution purchase must be carried out according to the provisions of the Investment Law

The order and procedures for converting a private enterprise into a two-member limited liability company are as follows which?

Step 1: Prepare documents.

Step 2: Submit documents to the Business Registration Office where the business is registered.

Step 3: The business registration authority issues the Business Registration Certificate and updates the company’s legal status on the National Business Registration Database.