Participating in contributing capital to establish an enterprise with intellectual property rights Can you be wise? If so, what are the procedures for contributing capital to establish a business?

Can assets contributed as capital to establish a business be intellectual property rights?

According to Article 34 of the Law on Enterprises 2020, regulations on capital contribution assets of enterprises are as follows:

“Article 34. Assets contributed as capital

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.”

Pursuant to the above regulations, assets allowed to be used to contribute capital to establish a business in Vietnam include intellectual property rights.

Accordingly, intellectual property rights are defined in Clause 2, Article 1 of the 2009 Amended Intellectual Property Law as follows:

Intellectual property rights are the rights of organizations and individuals to intellectual property, including copyright and rights related to copyright, industrial property rights and rights to plant varieties.

What are the procedures for establishing a business as a limited liability company with two or more members?

* Application for business registration:According to Article 23 of Decree 01/2021/ND-CP regulating documents for registration of establishing a business as a limited liability company with two or more members, including the following documents:

– Application for business registration.

– Company charter.

– List of members for limited liability companies with two or more members; List of founding shareholders and list of shareholders who are foreign investors for joint stock companies.

– Copies of the following documents:

+ Personal legal documents 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;

+ Investment registration certificate in case the enterprise is established or participates in the establishment by foreign investors or economic organizations with foreign investment capital according to the provisions of the Investment Law and its guiding documents.

* Procedures for receiving and processing documents:

Pursuant to Article 32 of Decree 01/2021/ND-CP stipulating procedures for receiving and processing business registration documents as follows:

– The person submitting the application for business registration according to the provisions of this Decree submits the application at the Business Registration Office where the enterprise is headquartered.

– Business registration dossiers are received to enter information into the National Business Registration Information System when the following conditions are met:

+ Have enough documents as prescribed in this Decree;

+ The business name has been filled in in the Application for Business Registration, Application for Change in Business Registration Content, Notice of Change in Business Registration Content;

+ There is a contact address of the person submitting the business registration application;

+ Fully paid business registration fees and charges according to regulations.

– After receiving the business registration application, the Business Registration Office issues a Receipt of receipt of the application to the applicant.

– After giving the Receipt of receipt of the application, the Business Registration Office fully and accurately enters the information in the business registration application, checks the validity of the application and downloads the digitized documents in the business registration application into the National Information System for business registration.- The business founder or enterprise can stop carrying out business registration procedures when the business registration application has not been approved on the National Business Registration Information System. In this case, the person competent to sign the document requesting business registration sends a written request to stop carrying out business registration procedures to the Business Registration Office where the application was submitted. The Business Registration Office shall consider and issue a notice to stop carrying out business registration procedures for businesses and cancel business registration documents according to the process on the National Business Registration Information System within 03 working days from the date of receipt of the written request. In case of refusal to stop carrying out business registration procedures, the Business Registration Office shall issue a written notice and clearly state the reason for refusal to the business founder or enterprise.

Procedures for transferring ownership of assets contributed as capital to establish an enterprise

In case the assets contributed as capital to establish an enterprise are intellectual property rights or assets with registered ownership, based on Article 35 of the Law on Enterprises 2020, the regulations on transferring ownership of assets contributed as capital are as follows:

– 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;

– Capital contribution is only considered fully paid when legal ownership of the contributed assets has transferred to the company.

– Assets used in business activities of private enterprise owners do not have to go through procedures to transfer ownership to the enterprise.

– Payment for all activities of buying, selling, transferring shares and capital contributions, receiving dividends and transferring profits abroad of foreign investors must be made through accounts in accordance with the law on foreign exchange management, except in cases of payment by assets and other forms other than cash.

Thus, intellectual property rights are considered assets and can be used to contribute capital to establish a business. Enterprises registering for establishment as a limited liability company with two or more members must carry out the application and registration procedures according to regulations. For assets contributed as capital that are intellectual property rights, company members must carry out procedures to transfer ownership of the assets to the company according to the provisions of Article 35 of the Law on Enterprises 2020.