CASES OF CHARTER CAPITAL ADJUSTMENT OF SINGLE-MEMBER LIMITED LIABILITY COMPANY

Changing charter capital is a decision that has a great impact on the business activities of a single-member limited liability company, with an important role in promoting the company’s development and being an opportunity to legal basis for business transactions. In today’s business environment, adjusting charter capital is an indispensable part of business management. So what are the cases of charter capital adjustment of single-member limited liability company along with the legal processes and procedures that need to be kept in mind?

Charter capital of a single-member limited liability company

A single-member limited liability company is an enterprise owned by a single organization or individual (hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.

According to current Enterprise law, the charter capital of single-member limited liability company when registering upon enterprise establishment is the total value of assets committed to contribute by the company owner and recorded in the company’s Charter.

Charter capital during the company’s operations can be adjusted to suit the situation and business needs.

Cases of charter capital adjustment of single-member limited liability company

Charter capital adjustment of single-member limited liability company includes cases of increasing or decreasing charter capital. Note, changing charter capital here must meet certain legal requirements.

Charter capital increase of single-member limited liability company

Single-member limited liability company may increase its charter capital when its owner contributes capital or raises capital from other persons. The owner shall decide on the specific increase and the method.

In case of raising capital from other persons, the company shall be converted into suitable form of enterprise. To be specific:

– Conversion into a multiple-member limited liability company;

– Conversion into a joint stock company

Charter capital decrease of single-member limited liability company

Charter capital increase of single-member limited liability company:

–  Part of the contributed capital is returned to the company’s owner after the company has operated for at least 02 consecutive years from the enterprise registration date and the company is able to fully pay its debts and other liabilities after the return of capital;

– Charter capital is not fully and punctually contributed by the owner.

Legal procedures need to be followed upon charter capital adjustment of single-member limited liability company

In case a single-member limited liability company registers to change its charter capital, the company sends the application for changes to enterprise registration information complying with regulations.

>> PROCEDURES ON CHARTER CAPITAL DECREASE OF SINGLE-MEMBER LIMITED LIABILITY COMPANY https://linconlaw.vn/procedures-on-charter-capital-decrease-of-single-member-limited-liability-company/

>> NOTES ON CAPITAL RAISING FORMS OF REAL ESTATE ENTERPRISE https://linconlaw.vn/notes-on-capital-raising-forms-of-real-estate-enterprise/