How Is the Conversion of a Joint Stock Company into a Single-Member Limited Liability Company Regulated?

How is the conversion of a joint stock company into a single-member limited liability company regulated?

Under Article 203 of the Law on Enterprises 2020 on the conversion of a joint stock company into a single-member limited liability company, as follows:

(1) A joint stock company may be converted into a single-member limited liability company by one of the following methods:

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– One shareholder receives the transfer of all corresponding shares of all remaining shareholders;

– An organization or individual that is not a shareholder receives the transfer of all shares of all shareholders of the company;

– The company has only 01 shareholder remaining.

(2) The transfer or receipt of investment capital contributions prescribed in Clause 1 of this Article must be conducted at market prices, prices determined by the asset method, the discounted cash flow method, or other methods.

(3) Within 15 days from the date the company has only one shareholder remaining or completes the share transfer as prescribed at Points a and b, Clause 1 of this Article, the company sends the conversion dossier to the business registration agency where the enterprise was registered. Within 03 working days from receipt of the conversion dossier, the business registration agency issues the Enterprise Registration Certificate and updates the company’s legal status on the National Database on enterprise registration.

(4) The converted company automatically inherits all lawful rights and interests and is responsible for debts, including tax debts, labor contracts, and other obligations of the converted company.

What does the enterprise registration dossier for conversion from a joint stock company into a single-member LLC include?

Pursuant to Clause 4, Article 26 of Decree 168/2025/ND-CP on the dossier components for conversion from a joint stock company into an LLC as follows:

“Article 26. Enterprise registration dossiers for cases of enterprise type conversion

[…]

4. For conversion of a limited liability company into a joint stock company and vice versa, the conversion registration dossier includes the documents prescribed in Articles 23 and 24 of this Decree, excluding the Investment Registration Certificate prescribed at Point c, Clause 4, Article 23 and Point c, Clause 3, Article 24 of this Decree. The dossier must be accompanied by the following documents:

a) The resolution or decision of the company owner for a single-member limited liability company, or the resolution or decision and a copy of the meeting minutes of the Members’ Council for a multi-member limited liability company, or the resolution and a copy of the meeting minutes of the General Meeting of Shareholders for a joint stock company on the company conversion;

b) The transfer contract or documents proving completion of the transfer in case of transfer of shares or capital contributions; the donation contract in case of donation of shares or capital contributions; a copy of the document certifying the lawful inheritance rights of the heir in case of inheritance as prescribed by law;

c) Documents certifying capital contributions of new members or shareholders;

d) The written document of the investment registration agency approving the capital contribution, share purchase, or capital contribution purchase of foreign investors or foreign-invested economic organizations where registration procedures for capital contribution, share purchase, or capital contribution purchase must be carried out under the Law on Investment.

[…]”

Accordingly, the dossier includes:

(1) The enterprise registration application.

(2) The company charter.

(3) The list of founding shareholders and the list of shareholders being foreign investors for joint stock companies.

(4) Copies of the following documents:

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

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

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

(6) The resolution or decision of the company owner for a single-member limited liability company, or the resolution or decision and a copy of the meeting minutes of the Members’ Council for a multi-member limited liability company, or the resolution and a copy of the meeting minutes of the General Meeting of Shareholders for a joint stock company on the company conversion;

(5) The transfer contract or documents proving completion of the transfer in case of transfer of shares or capital contributions;

How are the order and procedures for converting a joint stock company into a single-member limited liability company carried out?

Step 1: Prepare the dossier.

Step 2: Submit the dossier to the business registration agency where the enterprise was registered.

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

From the above article, your receipt of the transfer of all shares from the remaining shareholders must be conducted at market prices, prices determined by the asset method, the discounted cash flow method, or other methods. You need to prepare a complete dossier and submit it to the business registration agency; within 03 days from receipt of the conversion dossier, the business registration agency issues the Enterprise Registration Certificate for your company.

The order and procedures for converting a joint stock company into a single-member limited liability company are carried out as prescribed above.