During business operations, a single-member limited liability company can face many challenges and complex situations, of which charter capital decrease is one of the important decisions can arise. Charter capital decrease of single-member limited liability company is performed to adjust the financial balance and optimize the capital structure. So what should be paid attention in this process?
Charter capital decrease of single-member limited liability company in which case?
A single-member limited liability company may decrease its charter capital in the following cases:
Part of the contributed capital is returned to the company’s owner
Note, in case of changing the charter capital of single-member limited liability company, the company must meet the following conditions:
(i) the company has operated for at least 02 consecutive years from the enterprise registration date; and
(ii) 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
The owner shall register the contributed capital as charter capital within 30 days from the deadline.
In this case, the owner shall be responsible for the financial obligations incurred by the company during the period before the change in charter capital is registered in proportion to the promised capital.
>> PROCEDURES FOR RE-ISSUANCE OF ENTERPRISE REGISTRATION CERTIFICATE https://linconlaw.vn/procedures-for-re-issuance-of-enterprise-registration-certificate/
>> INCREASE OF CAPITAL CONTRIBUTION OF COMPANY MEMBERS https://linconlaw.vn/increase-of-capital-contribution-of-company-members/
Legal procedures on charter capital decrease 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.
Competent agency for procedure handle
Business Registration Office of province where it is headquartered.
Legal procedures implementation
The company prepares and sends an application for changes to enterprise registration information to the Business Registration Office.
Documents announcing the charter capital decrease of single-member limited liability company include:
– A notification of changes to enterprise registration information;
– The resolution or decision of the owner of the single-member limited liability company;
The business registration agency will update information about the charter capital decrease of single-member limited liability company within 03 working days from the date of receipt of the notice.
Legal basis:
- Enterprise Law 2020;
- Decree 01/2021/ND-CP on business registration.
𝐋𝐈𝐍𝐂𝐎𝐍 𝐋𝐀𝐖 𝐅𝐈𝐑𝐌 – 𝐇𝐨̛̣𝐩 𝐭𝐚́𝐜 𝐯𝐮̛̃𝐧𝐠 𝐛𝐞̂̀𝐧
- Tại Hà Nội: Tầng 4, Tòa nhà Sudico, đường Mễ Trì, phường Mỹ Đình 1, quận Nam Từ Liêm, Hà Nội
- Tại TP.HCM: 272 Đỗ Pháp Thuận, phường An Phú, TP. Thủ Đức, TP. Hồ Chí Minh
- Website: http://linconlaw.vn/
- Email: Lawyer@linconlaw.vn
- Facebook: https://www.facebook.com/Linconlawfirmm
- Linkedln: linkedin.com/in/lincon-law-firm-100b96201
- Hotline: +84.987.733.358
