Dossier to register conversion from a limited liability company to a joint stock company

Converting a limited liability company into a joint stock company, what are the methods? What does the conversion profile include? How long does it take to resolve?

1. What are the methods to convert a limited liability company into a joint stock company?

According to Article 202 of the Law on Enterprises 2020 stipulations on converting a limited liability company into a joint stock company are as follows:

“Article 202. Converting a limited liability company into a joint stock company part

1. State-owned enterprises converted into joint stock companies comply with relevant laws.

2. Limited liability companies can convert into joint stock companies in the following ways:

a) Convert into joint stock companies without mobilizing other organizations or individuals to contribute capital, without selling capital contributions to organizations, other individuals;

b) Convert into a joint stock company by mobilizing additional organizations and individuals to contribute capital;

c) Convert into a joint stock company by selling all or part of the capital contribution to one or several other organizations or individuals;

d) Combining the methods specified in Points a, b and c of this Clause and the methods other.

3. 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 will re-issue the Business Registration Certificate and update the company’s legal status on the National Business Registration Database.

4. The converting company naturally inherits all legal rights and interests, and is responsible for debts, including tax debt, labor contracts and other obligations of the converted company.”

Accordingly, a limited liability company can convert into a joint stock company in the following method:

– Convert into a joint stock company without mobilizing other organizations or individuals to contribute capital, and without selling capital contributions to other organizations or individuals;

– Convert into a joint stock company by mobilizing other organizations and individuals to contribute capital;

– Convert into a joint stock company by selling all or part of the capital contribution to one or several other organizations or individuals;

– Combining the methods specified in Points a, b and c of this Clause and other methods.

2. What does the application for conversion from a limited liability company to a joint stock 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.

– 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 legal representatives of the enterprise;

+ Personal legal documents for company members, founding shareholders, shareholders who are foreign investors is personal; 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.

– 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 meeting minutes of the General Meeting of Shareholders for joint stock companies on company conversion;

– Transfer contract or documents proving completion of transfer in case of transfer of shares or capital contributions; 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 the 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, purchasing shares, purchasing capital contributions according to the provisions of the Investment Law.

3. How long is the settlement period?

According to Clause 3, Article 202 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 202. Converting a limited liability company into a joint stock company

[…]

3. 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 receipt of the conversion dossier, the Business Registration Authority will re-issue the Business Registration Certificate and update the company’s legal status on the National Business Registration Database.

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