IU - Business Registration and Re-Organization - 2021

3/22/2021
Outline
• Business Registration
• Business Re-organisation
Business Registration
and Re-organization
www.company.com www.company.com
Law on Enterprises 2020

Law on Investment 2020
Starting a business?
Where to apply?
Registration procedure?
Starting
Property
Property
a business
• Invested capital:
Lines of business
A mechanism for
the management • “…means money and other
assets ….used invested in
business”.
A certain number
Name and address – Article 3(23) Law on Investment 2020
of members
Competence of persons who

establish, contribute and
operate the enterprise
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Property The Civil Code 2015

• Compulsory (for all kinds of enterprise Article 105. Property
1. Property comprises objects, money, valuable papers and
• Must be registered (all enterprises) property rights.
2. Property includes immovable property and movable
Legal Capital: minimum amount of property. Immovable property and movable property may be
existing property or off-plan property.
capital required by law for the

establishment of an enterprise in certain Article 107. Immovable property and movable
property
1. Immovable property includes: Article 115. Property rights
fields a) Land; Property rights are rights which are able to be valued in
b) Houses and constructions attached to land; money, including property rights to subjects of
• Legal capital vs charter capital? c) Other property attached to land, houses and intellectual property rights, right to use land and other
constructions; property rights.
d) Other property as prescribed by law.
2. Moveable property is property which is not
immovable property.
Legitimate property can be invested?
Shares or share
certificates or Bonds.
Liabilities and other • What kind of property can be invested?
forms from debts
valuable documents
Creditor’s rights with

regard to loans or
Rights under
valuable contractual
contracts
rights arising from
contracts
Legitimate property can be invested? Art. 34 Law on Enterprises 2020
Technology and
intellectual property • Contributed assets include:
rights (trademark, Assigned rights – Vietnamese Dong
patent, invention, trade – convertible foreign currencies,
name)
– gold, land use right (LUR),
– intellectual property rights, technologies, technical
secrets,
Profits from investment – other assets that can be converted into Vietnamese
activities: dividends,
Real estates, rights to Dong
profits, shares interests,
real estate
payment from • Must be lawful ownership!
copyrights
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Lines of Business Lines of Business (cont.)

Art. 6,7 of the IL 2020
Annexes I, IV of the IL 2020
• Free to select as investors’ desire Prohibited

Conditional
• Must comply with the law (LOEs, IL 2020) (affect national (prescribed by law)
defense, security social Unconditional
 can conduct
order and safety, business if conditions (Encouraged) under
historical, cultural and are met. Enterprise investment law
ethical tradition)  must register with state
cannot conduct management agencies
business
Investment Law 2020: prohibited lines of business Investment Law 2020

 Trade in the narcotic substances
 Trade in the chemicals and minerals
 Trade in specimens of wild flora and fauna specified in Appendix
1 of Convention on International Trade in Endangered Species of
Wild Fauna and Flora; chemicals
narcotic wild flora and fauna
 specimens of rare and/or endangered species of wild fauna and substances and
flora minerals
 Prostitution;
 Human trafficking; trade in human tissues, corpses, human
Art. 6,7 of the IL 2020 organs and human fetuses;
Annexes I, IV of the IL 2020
 Business activities pertaining to asexual human reproduction;
 Trade in firecrackers. Prostitution Human trafficking; trade in Business pertaining
 Provision of debt collection services. human tissues and body parts to human cloning
Conditional Investment Name of business: Art. 37 LOEs 2020
Two aspects: conditional

sector and conditions for
conducting business
• It is compulsory?
Conditions are specified in the • In Vietnamese or in a
Law, sub-laws and guidance foreign language?
(such as Art. 7 of the IL 2020
and Annex IV of the IL 2020)
• What must it contain?
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Name of the enterprise: Rules for enterprise’s name

Must contain: Type of
enterprise: P.E,
LLC, SC… Proper name: particular
• Name to be restricted
The business name of the enterprise
registration body has (Vietnamese alphabet, • Name in foreign languages?
the right to reject the letters F, J, Z, W
proposed name numbers and signs) • Identical name?
• Name with confusion?
Must be printed or
written on transaction
papers, documents, Must be written or attached at
materials and printed the head offices, branch,
matters of the representative office of the
enterprise enterprise.
Restrictions in
naming
• a State body,
• a unit of the Name in a foreign language
people’s armed
enterprises forces,
• a political
As the whole organization, a
MUST or a part of
socio-political
organization, an Vietnamese
NOT: the proper
name of:
occupational socio-
political
name
organization, • Translated from Foreign name: Abbreviated
• a social Vietnamese into name: an
organization, a • must be printed or
socio-occupational one of the Latin abbreviation of
organization languages written Vietnamese or
Identical or Contravene • Smaller font
cause national • except where such • Can be original or foreign name
confusion with historical body, unit or translated in
already organization so corresponding
traditions, approves.
registered culture, ethics meaning
enterprises’ and fine
name customs
Identical names? Names causing confusion

The Vietnamese name:
• is pronounced the same as the name of a registered enterprise;
when written and • is different from the name of a registered enterprise only by
the sign "&";
pronounced in
Vietnamese, is
completely identical to The abbreviated name: is identical to the
the name of a abbreviated name of a registered enterprise;
registered enterprise.
The name in foreign language:is identical to the

name in foreign language of a registered
enterprise;
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by the word “TAN” Address of the enterprise

Names causing immediately BEFORE or
the word “MOI”
confusion By the signs immediately
BEFORE/AFTER the
(cont.) “&”, “.”, “+”, “-“, proper name of a
“_” registered enterprise;
Must be definite
(house number,
The place for where the head
In Vietnamese street name,
by the words "the contact and office is
by an ordinal
North", "the territory ward, district,
number, a cardinal transaction located,
number or South", "the telephone, fax,
Vietnamese letters The proper Central part", "the email.).
and letters F, J, Z, name is West", "the East”
W immediately or words of similar
after the proper ONLY
meanings
name of such different
enterprise
The enterprise’s stamp

Where to find • National Business Registration Portal
https://dangkykinhdoanh.gov.vn/vn/Pages/Trangchu.aspx
necessary
information?
The
The enterprise Used in the management
will decide: Must inform to
cases provided and use of the
registration body seal in
- Name by law or
(to have it
- Enterprise Code agreement of accordance with
publicised
parties the company’s
charter
Competence Art. 17, LOE 2020

Establish and Manage
• Every legal person and individual can be competent: Enterprises
– to establish an enterprise, or Vietnamese
organizations or Exceptions:
– To contribute capital to an enterprise, individuals • State bodies and units of people’s armed forces
• Exception: certain persons prohibited by law. of Vietnam
Foreign • State officials and employees
– For example: state officers, minor, incompetent persons, convicts, organizations or • Officers, non commissioned officers, career
military officers servicemen, national defence workers
individuals • Management personnel in enterprise with state
owned capital (except for authorised personall to
represent the state’s contribution
• Minors, prisoners
• Persons – capacity for civil acts is restricted or
lost
• Organizations having no legal entity status
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LLCs and SCs may have

Members and Management Legal To implement rights and
obligations arising from more than one legal
Representative the enterprise’ representatives (must be
transactions, other provided in the
company’s charter)
rights/obligations
• Representatives at law and company’s charter are compulsory provided by law
• Company charter must: If there is only one legal

representative  must
– Be registered with registration authority, and authorize one person
To act as defendant,
residing in Vietnam before
– Contain major contents as provided by the LOEs plaintiff or interest- going overseas
related person before
• Any changes with regard to member, company charter must be courts/tribunals
noticed and registered with state authority Must ensure at least
one legal
representative resides
in Vietnam
Where to apply? Business Registration Procedures

• Business operates under the • Household business: District
LOEs: Provincial/City business business registration office or
registration offices Finance/Economic Division at the
District level
Business Registration: How to register?
Direct application at the business

registration authority
Submission of the application by post
Online enterprise registration
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Business Registration Procedures (cont._) Business Registration Procedures (cont._)
Application file
Application file for a Business Household:
for a PE (Art. Business • Request for business registration (standard form)
19 LOEs 2020) registration Copies of legal • Copy of people’s identity card.
form documents of the
owner
Business Registration Procedures (cont._) Business Registration Procedures (cont._)
Business registration application form Business List of

Draft charter of
registration
the company
company’s
application form members
Draft charter of the partnership
Application
files for List of partners
Partnership Legal documents of
members being
(Art. 20 LOEs Copies of legal documents of the foreign investors: Legal documents
Application organizations,
copy of of members who
2020) partners. files for LLCs investment
documents about
are individuals
designation of
registration and legal
Copy of investment registration (Art. 21 LOEs certificate
authorized
representatives
2020) representatives and
certificate of foreign investor their legal documents.
Business Registration Procedures (cont._) Contents of Business Registration Request
Name of the enterprise.

Tax registration Number of
information employees
Full name, signature,

Address of the head Types of share; par value mailing address,
Application office; telephone number, of each type of share, nationality and legal
facsimile number, email total shares eligible to documents of each
files for SCs address (if any). offer partner (for partnerships)
or the owner (PE);
(Art. 22 LOEs
2020) Art. 23
LOEs Full name, signature,
2020 mailing address,
Charter capital,
Lines of business. investment of the owner nationality and legal
of PE documents of the legal
representative (LLC, SC)
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Contents of the Company’s Charter Contents of the Company’s Charter (cont.)
Charter capital, Rights and

Name, addresses of
total of shares, obligations of Management and Legal
the head office,
types of share and - members (LLCs organizational representatives
branch, Lines of business
par value of each and Partnerships); structure; (LLCs and SCs)
representative
type of share (for
office. - shareholders (SCs)
SC)
Art. 23 Art. 23
LOEs LOEs
2020 2020
Full names, addresses, Circumstances
Full names, addresses,
nationalities and basic allowing member to Bases and method
Total number of nationalities and basic Procedures for
other basic of calculating
shares, types of other basic
characteristics of all require the company passing resolutions
share and par characteristics of the
unlimited liability to redeem: remuneration,
company’s owners and of the company;
values of founding partners, portion of wages and bonuses
members; portion of - capital rules for resolution
shareholders (SC) capital contribution of managers and
capital contribution contribution (LLCs) of internal disputes;
and its value (LLC)
and its value inspectors.
(Partnership) - shares (SCs)
Contents of the Company’s Charter (con.t)
Cases of dissolution,
Rules for distribution of Procedures for
procedures for dissolution
after tax profits and amendments of or
and procedures for
dealing with losses in the additions to the charter of
liquidation of the assets of
business the company;
the company;
Art. 23
LOEs
2020 - ULPs (Partnerships)
- Company’s owner or
Individual founding
legal representative of the
shareholders or legal
owner (LLCs with one
representatives or
authorised reprsentative
member) Signatures
of founding shareholders - Individual members or
being organisations (SCs) legal representatives or
authorised representatives
(Multiple member LLCs)
Name of the
enterprise
Address of head
office,
Telephone number,
Fax, Email Address
I.
Lines of Business
Initial Investment
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Business
Re-organization
Re-organization/Restructuring of business Re-organization/Restructuring of business
Re-organization = Making it more

restructuring of business profitable, or
The act of reorganizing the

Reasons
legal, ownership,
operational, or other Better
organized for its
structures of a company present needs.
Re-organization/Restructuring of business Roles of business restructuring

To restructure
Other reasons? invested capital 
• A change of ownership or ownership
enhance efficiency
structure, demerger, or
• A response to a crisis, or To acquire To settle
• Major change in the business such as targeted disagreements
bankruptcy, repositioning, or buyout. companies among investors
For
Investors/
Owners To catch up and To acquire
May include: corporate market power and
take advantage of
restructuring, debt develop market
business
restructuring and identity
opportunities
financial restructuring.
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Roles ofofbusiness
Roles businessrestructuring
restructuring Roles of business restructuring
For the Market

To create opportunity
to enhance
effectiveness of
For businesses
To bring stronger
Business and more
Entities To evaluate the
To make it To create more competitive
compatibility of
possible for To widen market businesses 
businesses to economics of market
participants increasing
concentration on scale and regulations
specific targets increase competitiveness
 increasing competitiveness of the economy
investment on the market
efficiency
Re-organization/Restructuring of businesses in
Vietnam
Division and Separation of Businesses
Division
Dissolution Separation
Conversion Merger
Consolidation
Division of Business Separation of Business

A business is
Transferring part of the
divided into a assets of the existing The separated
business continues
number of business to establish
The divided one or more new to exist, but deducing
businesses (Art. its identity (reducing
198 of the LOEs business no ones (Art. 199 of the of assets or lines of
2020) longer exists LOEs 2020) business…ect.)
Two or more Two or more

new business business after
separation
after division
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Characteristics Consequences
Apply only to LLCs and

SCs – Division:  new businesses bear
Increasing the number of

joint liability for:
businesses participating in • Unpaid debts, – Separation:
the market
• Employment contracts, and both businesses
Businesses may still • Obligations concerning properties of bear joint
maintain ownership
relations (when arranging the divided business liability
conflicts among owners)
Consequences Procedure for Division (Art. 198(2)

Resolution for
Joint liability? “1. A joint civil division/separation must
obligation is an obligation which must be have the following
performed by many obligors and the contents:
obligee may request any one of the
obligors to perform the entire obligation”
(Art. 298(1) of the Civil Code 2005) • Name, head office’s address of the company
Stage 1 being divided;
• Names of divided companies to be established;
• Principles, method and procedure for dividing of
MC or Owner for a LLC, SM assets
for a SC approves the • Plan for employment of employees;
These businesses must reach
resolution on division of • Method, procedure and time limit for dividing and
the business converting capital contribution, shares and bonds
an agreement on the
• Principles for implementation of obligations of the
settlement of matters company being divided
concerning third parties before
the time of division/separation • Time line for the division
Procedure for Division (Art. 198(2) (cont.) Procedure for Division (Art. 198(2) (cont.)
• Approve a charter,
• Elect or appoint a chairman
of the Member’s Council,
The business
The time limit is 15 chairman of the company, registration file must
days from the date the Board of Management, include the resolution on
Stage 2 of approval director or general director; division of the business
• Register business in
accordance with the LOEs
The business being 2020 Stage 3
divided send
resolution on its
division to all Members, owners or
creditors and notify shareholders of the
to its employees divided businesses shall:
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Procedure for Separation (Art. 193(3) Procedure for Separation (Art. 199(3) (cont.)
Resolution for separation
must have the following
contents:
The time limit is 15
days from the date of
• Name, head office’s address of the Stage 2 approval
Stage 1 company being separated;
• Names of separate companies to be
established; The business being
• Plan for employment of employees; divided send
MC or Owner for a LLC, • Method for separating of the company resolution on its
SM for a SC approves the • Asset value, rights and obligations being division to all
resolution on separeation transferred from separated company to creditors and notify to
of the business separate companies its employees
• Time line for the separation
Procedure for Separation (Art. 199(3) (cont.)
• Approve a charter,
• Elect or appoint a chairman The business
of the Member’s Council, registration file must
chairman of the company,
the Board of Management,
include the resolution on
separation of the
Merger and Consolidations
director or general director; business
• Register business in
accordance with the LOEs
2020 Stage 3
Members, owners or
shareholders of the
divided businesses shall:
Consolidation (Art. 200(1) of the LOEs 2020) Merger (Art. 201(1) of the LOEs 2020)
One or more
enterprises (merging At the same time,
Two or more enterprises enterprises ) is termination of the
(enterprises being Terminating the
existence of the merged into another existence of the
consolidated) are merging enterprises.
consolidated into a new enterprises being enterprise (merged
enterprise (consolidated consolidated. enterprise)
enterprise)
How?  transfer of
How?  transfer of all all lawful assets,
lawful assets, rights, rights, obligations
obligations and interests and interests to the
to the consolidated merged enterprise
enterprise
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How is merger different from Characteristics

Cause a decrease of the number
consolidations? of enterprises in the market 
can lead to a harm to
competition  must conform to
Merger DOES NOT bring about a new the Competition Law 2018
enterprise, but the internal change
within the merged enterprise (ownership
structure, asset values, chartered capital or
line of business)
Apply to all enterprises

Merger/consolidation is a result
Consolidation creates a new (different from division and
separation)  can apply to of re-buying a enterprise or of a
enterprise partnerships re-organization within a group of
enterprises
Consequences Procedure for consolidation: Art. 200(2) LOEs 2020

The The contract must have
merged/consolidated the following main
enterprises: particulars:
Stage 1 • Name and address of the head office of the

The enterprise being enterprises being consolidated
• Assume legal rights and • Procedures and conditions for the
merged/consolidated obligations, consolidation;
ceases to exist after the • Plan for employment of employees;
• Be liable for unpaid debts, Enterprises being
registration of business of labor contracts and • Procedures, time-limit and conditions for
merged/consolidated consolidated prepare a
property related conversion of assets; capital contribution,
enterprises consolidation contract of shares and bonds of the enterprises being
obligations of the
enterprises being
the enterprise. consolidated into capital contribution, shares
and bonds of the consolidated enterprise;
merged/consolidated
• Time-limit for implementing the consolidation
• Draft charter of the consolidated enterprise
Procedure for consolidation: Art. 200(2) LOEs 2020 Procedure for merger: Art. 201(2) LOEs 2020
Members, the company’s
owner or shareholders of The contract must have
Stage 2 the enterprises being the following main
consolidated approve the particulars:
consolidation contract,
Inform competition the company’s charter Stage 1
Vote/assign • Name and address of the head office of the
authority before President of the MC, merged enterprise
consolidation (if may Company’s
cause negative • Name and address of the head office of the
President, Chairman merging enterprises
effects on the of the BM, Director
Relevant enterprises
market) prepare a merger • Procedures and conditions for the merger
or General Director • Plan for employment of employees;
contract + Draft of Charter
• Procedures, time-limit and conditions for
of the merged enterprise conversion of assets; capital contribution,
Send consolidation
contracts to all shares and bonds of the merging enterprises
Register of business • into capital contribution, shares and bonds of the
creditors and notify
(consolidation merged enterprise;
their employees
contract, minute and • Time-limit for implementing the merger
within 15 days from
resolution included)
the date of its
approval.
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Procedure for Merger: Art. 201(2) LOEs 2020
Members, the enterprise’s

Inform competition authority
owner or shareholders of
before merger(if if may
relevant enterprises approve
cause negative effects on the
the merger contract + the
market)
company’s charter
Stage 2
Send merger contracts to all

Register of business (merger
creditors and notify their
contract, minute and
employees within 15 days
resolution included)
from the date of its approval.
Conversion Reasons?
A current form of converted into Changing of owners

business another form
The current form of business does not suit

purposes of the owners
to suit capability and making better The requirement of the law regarding the
investment demand efficiency of number of members, shareholders…etc.
of investors investment
Consequences Characteristics After business The conversion’s

registration, the decision is made
company being by the owner or
converted shall the highest
Enlarge cease to exist. competent body
economics of
scale of the Avoid the risk of dissolution due to
business the lack of minimum number
Increase capital Under procedures Purpose:

mobilization set forth by the law diversified,
for each particular according to
case particular cases
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Characteristics Forms of conversion

be liable for unpaid • (Art. 202 • (Art. 203
debts, labor LOEs 2020) LOEs 2020)
Assumes all lawful contracts and other
rights and interests property obligations SC 
of the business LLC One
being converted.  SC member
LLC
The PE  LLC, SC 
converted SC, Multiple
Partnership LLC
enterprise
• (Art. 205 • (Art. 204
LOEs 2020) LOEs 2020)
Purposes of conversion a LLC Purposes for Conversion a SC into a LLC

into a SC
Enhancing
The number the
of members Relaxing from
mobilization strict regulations
is over 50 of capital of the law
The number of concerning
shareholders organization and
does not meet management of
the
a SC
Increase capital requirement
The (particularly,
from joining mobilization of corporate
securities capital from governance
market society is not a issue)
main purpose
of shareholders
Purposes for
conversion a PE into a
Dissolution
Mobilization of An administrative
LLC, SC, Partnership capital
action that
terminates the
existence of a
Must pay all of its business Voluntary
debts, discharge of dissolution (the
contracts which is decision of owners)
No need to close the in valid till the day or authoritative
Reasons business of dissolution dissolution
(decision of a
competent
authorization
Can only dissolute if
Transfer part of the its assets are Implemented by
owner’s capital sufficient to pay all the business,
contribution to other of its debts at the according to
investors time of taking provisions and
dissolution activities procedures
stipulated by law
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the existence of
such business is
not necessary
Cases for • the PE’s owner
(PE);
Dissolution (Art. • all unlimited
Reasons for 207 LOEs 2020) Operation
duration
liability partners
(partnership);
• the Members’
Dissolution Does not satisfy unsuccessful or stated in the
company’s As decided Council or the
conditions for its failure of charter
by: company owner
operation or achieving its (LLC)
expires and no
violation of law business targets extension • the SM (SC);
Business The minimum

number of
registration members
certificate is stipulated by
revoked the LOEs for
six (6)
decided by the Previous set of consecutive
owner or the date and no months
highest competent expiration
body
Cases of and Conditions

for Dissolution
• Procedure and steps:

– Art. 208 of the LOEs 2020
– Dissolution File: Art. 210
– Prohibited practices: Art. 211
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3/22/2021

Law on Enterprises 2020

Competence of persons who

Property The Civil Code 2015

capital required by law for the

Legitimate property can be invested?

Creditor’s rights with

Legitimate property can be invested? Art. 34 Law on Enterprises 2020

Lines of Business Lines of Business (cont.)

• Free to select as investors’ desire Prohibited

Investment Law 2020: prohibited lines of business Investment Law 2020

Conditional Investment Name of business: Art. 37 LOEs 2020

Two aspects: conditional

Name of the enterprise: Rules for enterprise’s name

Identical names? Names causing confusion

The name in foreign language:is identical to the

by the word “TAN” Address of the enterprise

The enterprise’s stamp

Competence Art. 17, LOE 2020

LLCs and SCs may have

• Company charter must: If there is only one legal

Where to apply? Business Registration Procedures

Business Registration: How to register?

Direct application at the business

Submission of the application by post

Online enterprise registration

Business Registration Procedures (cont._) Business Registration Procedures (cont._)

Business Registration Procedures (cont._) Business Registration Procedures (cont._)

Business registration application form Business List of

Business Registration Procedures (cont._) Contents of Business Registration Request

Name of the enterprise.

Full name, signature,

Contents of the Company’s Charter Contents of the Company’s Charter (cont.)

Charter capital, Rights and

Contents of the Company’s Charter (con.t)

Re-organization/Restructuring of business Re-organization/Restructuring of business

Re-organization = Making it more

The act of reorganizing the

Re-organization/Restructuring of business Roles of business restructuring

For the Market

Division of Business Separation of Business

Two or more Two or more

Apply only to LLCs and

Increasing the number of

Consequences Procedure for Division (Art. 198(2)

Procedure for Separation (Art. 199(3) (cont.)

How is merger different from Characteristics

Apply to all enterprises

Consequences Procedure for consolidation: Art. 200(2) LOEs 2020

Stage 1 • Name and address of the head office of the

Procedure for Merger: Art. 201(2) LOEs 2020

Members, the enterprise’s

Send merger contracts to all

A current form of converted into Changing of owners

The current form of business does not suit

Consequences Characteristics After business The conversion’s

Increase capital Under procedures Purpose:

Characteristics Forms of conversion

Purposes of conversion a LLC Purposes for Conversion a SC into a LLC

Business The minimum

Cases of and Conditions

• Procedure and steps:

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