The right to establish, contribute capital, buy shares, purchase capital contributions and manage enterprises according to legal regulations

How to handle the case of not contributing enough charter capital when establishing a business according to the law?

1. The right to establish, contribute capital, buy shares, purchase capital contributions and manage enterprises in accordance with the law

In Article 17 of the Law on Enterprises 2020, it is stipulated as follows:

– Organizations and individuals have the right to establish and manage enterprises in Vietnam according to the provisions of this Law, except for the case specified in Clause 2, Article This.

– The following organizations and individuals do not have the right to establish and manage businesses in Vietnam:

+ State agencies and units of the people’s armed forces use state assets to establish business enterprises to make private profits for their agencies and units;

+ Officials, civil servants and public employees according to the provisions of the Law on Cadres, Civil Servants and Law on Officers;

+ Officers, non-commissioned officers, professional soldiers, workers, defense officials in agencies and units of the Vietnam People’s Army; officers, professional non-commissioned officers, police workers in agencies and units under the People’s Police of Vietnam, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises or manage state-owned enterprises;

2. How to pay for shares registered to buy when registering to establish a business?

Pursuant to Article 113 of the Law on Enterprises 2020 as follows:

“1. Shareholders must pay in full for the number of shares registered to buy within 90 days from the date of issuance of the Business Registration Certificate, except in the case of the company charter or purchase registration contract Shares stipulate a shorter period. In case a shareholder contributes capital with assets, the time for importing and carrying out administrative procedures to transfer ownership of that asset is not included in this capital contribution period. The Board of Directors is responsible for supervising and urging shareholders to pay in full and on time for the shares registered to buy.

2. During the period from the date the company is granted the Business Registration Certificate to the last date to fully pay for the number of shares registered to buy as stipulated in Clause 1 of this Article, the number of votes of shareholders is calculated according to the number of common shares registered to buy, unless the company charter has other provisions.

3. In case after the deadline specified in Clause 1 of this Article, a shareholder has not paid or can only partially pay for the shares registered to buy, the following regulations shall apply:

a) Shareholders who have not paid for the shares registered to buy are automatically no longer shareholders of the company and may not transfer the right to buy those shares to others;

b) Shareholders who have only paid partially for the shares The registered shares have the right to vote, receive dividends and other rights corresponding to the number of shares paid; The right to buy unpaid shares is not allowed to be transferred to another person;

c) Unpaid shares are considered unsold shares and the Board of Directors has the right to sell;

d) Within 30 days from the end of the deadline to fully pay for the number of shares registered to buy according to the provisions of Clause 1 of this Article, the company must register to adjust charter capital equal to the par value of the shares has been paid in full, unless the outstanding shares have been sold within this period; Register to change founding shareholders.

Accordingly, at the end of 90 days from the date of issuance of the Certificate of Business Registration, if there are shareholders who have not paid or can only partially pay for the shares registered to buy, the company must register to adjust the charter capital equal to the par value of the fully paid shares and change the founding shareholders within 30 days.

3. How to handle the case of not contributing enough charter capital when establishing a business according to the law?

While the deadline for registering to adjust the charter capital as above expires, if the company does not register to adjust the charter capital as prescribed, it may be fined according to the provisions of Article 46 of Decree 122/2021/ND-CP as follows:

– Fine Fine from 10,000,000 VND to 20,000,000 VND for acts of not ensuring the number of members and shareholders according to regulations.

– Fine from 20,000,000 VND to 30,000,000 VND for one of the following acts:

+ Contributing capital to establish an enterprise or registering capital contribution, purchasing shares, repurchasing capital contributions at other economic organizations not in the correct form as prescribed by law;

+ Do not have the right to contribute capital, buy shares, or contribute capital but still do it.

– Fine from 30,000,000 VND to 50,000,000 VND for one of the following acts:

+ Failure to carry out procedures to adjust capital or change members and founding shareholders according to regulations at the business registration authority after the end of the capital contribution period and the end of the capital adjustment period due to members and founding shareholders not contributing enough capital but no member or founding shareholder has made a commitment to contribute capital;

+ Intentionally valuing assets contributed as capital at incorrect value.

– Fine from 50,000,000 VND to 100,000,000 VND for one of the following acts:

+ Doing business in the form of an enterprise without registration;

+ Continuing to do business after having the Business Registration Certificate revoked or being requested by a competent state authority to temporarily suspend business, suspend operations, or terminate business.

In case there is a violation of tax law, it will be handled according to regulations on sanctioning administrative violations in the tax field.

– Remedial measures:

+ Forced change of capital contributing members, purchase of shares, or contributed capital for violations specified in Point b, Clause 2 of this Article;

+ Forced to carry out procedures to adjust capital or change members and founding shareholders for violations specified in Point a, Clause 3 of this Article;

+ Forced registration of enterprise establishment for violations specified in Point a, Clause 4 of this Article.