CONVERSION OF LIMITED LIABILITY COMPANY INTO JOINT STOCK COMPANY

Type conversion is a form of enterprise reorganization, stemming from a variety of reasons such as changing business strategies, restructuring and adjusting the management system; issues related to tax, finance… In which conversion of limited liability company into joint stock company is quite popular with the purpose of attracting investment from variety of shareholders and expanding the operations scale.

Then, how does this process work?

1.        Method for conversion of limited liability company into joint stock company

A limited liability company can be converted into into joint stock company by one of the following methods:

–          without raising additional capital from other organizations and individuals or selling stakes;

–          by raising additional capital from other organizations and individuals;

–          by selling all or part of the stakes to one or some organizations and individuals; or

–          combining the methods specified above and other methods.

2.        Competent agency for handling conversion of limited liability company into joint stock company

Business Registration Office – Department of Planning and Investment of the province/city where the enterprise is headquartered.

3.        Procedures for conversion of limited liability company into joint stock company

a.        Step 1: To prepare dossiers

Enterprises prepare documents according to regulations. The registration dossier for conversion of limited liability company into joint stock company includes:

–          Application for business registration of a single-member limited liability company;

–          Company charter of the converted company;

–          List of founding shareholders and list of shareholders who are foreign investors of the joint stock company

–          Copies of the following legal documents:

+          Personal legal documents for the legal representative of the enterprise;

+          Personal legal documents for company members, founding shareholders, and shareholders who are foreign investors who are individuals;

+          Legal documents of the organization for members, founding shareholders, shareholders who are foreign institutional investors;

+          Personal legal documents for authorized representatives of members, founding shareholders, shareholders who are foreign institutional investors and documents appointing authorized representatives.

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

–          Decision of the company owner or Decision and valid copy of the meeting minutes of the Board of Members on the conversion of the limited liability company into joint stock company;

–          Contract on transfer of contribution capital or documents proving completion of transfer or investment capital contribution agreement;

–          Document from the Investment Registration Authority approving the capital contribution, share purchase, or purchase of capital contributions from foreign investors or foreign-invested economic organizations in cases where implementation is required. Procedures for registering capital contribution, purchasing shares, purchasing capital contributions according to the provisions of the Law on Investment.

>> SINGLE-MEMBER LIMITED LIABILITY COMPANY, PROCEDURES OF ESTABLISHMENT https://linconlaw.vn/single-member-limited-liability-company-procedures-of-establishment/

b.         Step 2: To submit application for conversion of limited liability company into joint stock company

Submitting the application dossier at the Business Registration Office under the Department of Planning and Investment where the business is headquartered.

It should be noted: The company must carry out conversion procedures with the Business Registration Authority within 10 days from the date of completing the conversion of enterprise type.

c.         Step 3: To receive results of administrative procedures

Within 03 working days from the date of receiving the application for conversion of limited liability company into joint stock company, the Business Registration Authority will issue the Enterprise Registration Certificate and update the legal status of the company on the National Information on business registration Portal.

4.         Results of registration procedures

Enterprise registration certificate of joint stock company.