STEPS TO ESTABLISH A COMPANY

Step 1: Prepare the profile

Note: A valid dossier means a dossier that contains all the
papers in accordance with this Law and the contents of those
papers are declared fully according to the provisions of law.

A joint stock company establishment dossier comprises the

following documents:

- Application form for the establishment of a joint stock

company (specify the name of the enterprise; head office
address; contact information; business lines; charter capital;
types of shares, par value; tax registration information number
of personnel; full name, signature and some information of the
legal representative)

- Charter of the joint stock company (or draft charter if there is

no official decision)

- Document clearly stating a list of founding shareholders of the

company (list of shareholders) and foreign investment
shareholders (if any).

- Copies of personal identification papers of shareholders

(identity card, passport, ID card) in case the shareholder is an
individual.
- Copies of business registration certificates of organizations;
personal identification papers of the representative in case the
shareholder is an organization.

- Shareholders who are foreign organizations will need a

legalized copy of the business registration certificate (or can be
replaced with equivalent documents).

- Finally, if it is a foreign investor, it is necessary to have a copy

of the investment registration certificate

Step 2: Submit the application

Enterprise founders or authorized persons conduct enterprise
registration with business registration agencies by the following
method:

a) Direct enterprise registration at the business registration

authority;

b) Enterprise registration via postal service;

c) Enterprise registration via electronic information network.

Step 3: Get results

Processing time limit: 03 (three) working days from the date of
receipt of complete and valid dossiers.

* Handling fee:

- 50,000 VND / time for the application submitted directly to the

Business Registration Office under the Department of Planning
and Investment (according to Circular 47/2019 / TT-BTC).

- Free of fees for online registration documents.

Advantages of a joint stock company:

- Point b, Clause 1 of Article 111 of the Enterprise Law 2020:
The shareholders are: personal organizers, the minimum number
of shareholders is 3 and the maximum number is unlimited.
- Point c, Clause 1 of Article 111 of the Enterprise Law 2020:
the regime of responsibility of company shares is limited (only
responsible for the debts and obligations of other assets of the
enterprise within the amount of capital contributed) - > the risk
of the shareholders is not high.
- Point d, Clause 1, Article 111 of the Law on Enterprises 2020:
Shareholders have the right to freely transfer their shares to
others -> The scope of the participants is very wide, employees
can also buy share
- Clause 2, Article 111 of the Enterprises Law 2020: a joint
stock company has a legal status from the date of being granted
the enterprise registration certificate.
 - Clause 3, Article 111 of the Enterprises Law 2020: A joint
stock company has the right to issue shares, bonds and other
securities of the company to raise capital. -> high ability to
mobilize capital.

Disadvantages of a joint stock company when applying the Law

on enterprise establishment:
- The management and administration of joint-stock company is
very complicated, because: the number of shareholders can be
very large, company shares unrestricted shareholders so it is
easy to have different groups of shareholder opposing each other
in terms of benefits.
- The establishment of joint stock company is also more
complicated than other types of company because it is bound by
the law on financial and accounting regimes.
- For a joint stock company, it will be more difficult to make a
certain decision whether it is about business management or
operation because it must be added by the Board of Directors,
General Meeting of Shareholders ...

Separation of Ownership and Management: The shareholders

of a company are widely scattered. A shareholder may like to invest
money but may not be interested in its management. The companies
are managed by the Board of Directors. The ownership and
management are in two separate hands. The shareholders do not get
any right to participate in company management. The right to manage
company affairs is vested in the directors who are elected
representatives of the shareholders.
Centralised and Delegated Management:
A Joint Stock Company is an autonomous and self-governed body. The
shareholders being large in number cannot look after the day-to-day
activities of the company. They elect Board of Directors in general
body meeting for managing the company. All policies of the company
are decided by a majority vote. All important decisions are taken in a
democratic way. The centralised management and democratic
functioning brings in unity of action.

The company is created under law. It has a separate legal entity apart
from its members. A company acts independently of its members. The
company is not bound by the acts of its members and members do not
act as agents of the company. A person can own its shares and can be
its creditor too. The life of the company is independent of the lives of
its members. The company can sue and be sued in its own name.