Procedures for converting enterprise types in Vietnam

Understanding the legal procedures for converting enterprise types in Vietnam is crucial for business owners seeking to adapt their organizational structure to changing market demands. While the Enterprise Law of Vietnam establishes the fundamental framework for these transformations, business owners must carefully navigate documentation requirements, licensing procedures, and regulatory compliance to complete their enterprise conversion journey. In this article, Viet An Law will guide clients procedures for converting enterprise types in Vietnam.

Questions related to enterprise types converting

Can a limited liability company convert into a joint stock company and vice versa?

Yes. According to the Enterprise Law 2020 and Decree 01/2021/ND-CP on enterprise registration, a limited liability company can completely convert into a joint stock company and vice versa.

Can a business household convert into a limited liability or joint stock company?

Yes. According to Article 27 of Decree 01/2021/ND-CP on enterprise registration, a business household can convert into a limited liability company or a joint stock company without any restrictions as before January 1, 2021.

When converting enterprise type, will the enterprise registration number change?

No. When converting the type of enterprise, the enterprise code will remain the same as the old code of the enterprise before the conversion. The enterprise code of the business household converting to an enterprise is taken from the tax code of the business household.

When converting a company type, do I need to confirm tax obligations or make a tax settlement?

No, because the newly converted enterprise still inherits all rights and obligations of the enterprise before the conversion.

When converting enterprise type, do I have to reissue value added invoices?

No, enterprises only need to notify the tax authorities of changes to enterprise information.

Forms of procedures for converting enterprise types in Vietnam

Converting private enterprise into partnership, limited liability company, joint stock company  

• The converted enterprise must meet all the conditions of that type of enterprise;
• The owner of the private enterprise commits in writing to be personally responsible with all of his/her assets for all unpaid debts and commits to pay the full amount of debt when due;
• The owner of the private enterprise has a written agreement with the parties to the unliquidated contracts that the converted company will take over and continue to perform those contracts;
• The owner of the private enterprise commits in writing or has a written agreement with other capital contributors to take over and use the existing labor of the private enterprise.

Converting from LLC to a joint stock company and vice versa

Case of converting a joint stock company into a single-member LLC

• A shareholder receives the transfer of all corresponding shares of all remaining shareholders;
• An organization or individual that is not a shareholder receives the transfer of all shares of all shareholders of the company;
• The company has only 01 shareholder left.

Case of converting a joint stock company into a multiple-member LLC

• Converting into a multiple-member LLC without raising additional capital or transferring shares to other organizations or individuals;
• Converting into a multiple-member LLC and simultaneously raising additional capital from other organizations or individuals;
• Converting into a multiple-member LLC and simultaneously transferring all or part of the shares to other organizations or individuals;
• The company has only 02 shareholders left;
• Combining methods.

Case of converting an LLC into a joint-stock company

A limited liability company can be converted into a joint stock company through the following methods:

• Converting into a joint stock company without mobilizing other organizations or individuals to contribute capital, without selling capital contributions to other organizations or individuals;
• Converting into a joint stock company by mobilizing other organizations or individuals to contribute capital;
• Converting into a joint stock company by selling all or part of the capital contributions to one or several other organizations or individuals or
• Combining different methods to ensure that the minimum number of shareholders of a joint stock company is three shareholders.

Some notes when conducting procedures for converting enterprise types in Vietnam

• There are no regulations on joint stock companies and limited liability companies converting into private enterprises, so this conversion cannot be done
• Companies with less than two members cannot convert into joint stock companies
• Companies wishing to convert to another type must prove that they meet the conditions of that type as prescribed by law

Procedure: Pursuant to the Law on Enterprise, when converting the enterprise type, Enterprises must prepare a dossier to convert the type of Enterprise and carry out the registration procedures for changes at the Enterprise Registration Office – Department of Planning and Investment of the province or city where the Enterprise is headquartered.

Dossier for converting enterprise type

• Application for business registration (according to form)
• Written decision and copy of meeting minutes on change of:
• Company owner (for a single-member LLC)
• Company members’ council (for a multiple-member LLC)
• Shareholders’ meeting (for a joint stock company)
• Company charter (for LLCs and joint stock companies)
• List of members (for multiple-member LLCs and joint stock companies)
• Valid copy of investment registration certificate or investment license
• Documents proving the legal status of the new investor: Identity card, passport, or other valid personal identification documents
• For investors who are legal entities, the following are required: A valid copy of the decision on establishment; Enterprise registration certificate or other equivalent documents;
• For foreign investors, personal documents must be consumerized.
• Attached are some documents:

In case of converting a private enterprise into a partnership, limited liability company, or joint stock company

• Written commitment of the private enterprise owner to take personal responsibility with all of his/her assets for all unpaid debts and to fully pay the debts when due;
• Written agreement of the private enterprise owner with the parties to the unliquidated contracts on the transfer of and continued performance of such contracts by the converted company;
• Written commitment or written agreement of the private enterprise owner with other capital contributors on the acceptance and use of the existing labor force of the private enterprise;
• Transfer contract or documents proving the completion of the transfer in case of transfer of capital of the private enterprise; Donation contract in case of donation of capital of the private enterprise; Copy of document confirming the legal inheritance rights of the heir in case of inheritance according to the provisions of law;

In case of converting a multiple-member LLC into a single-member LLC

• Contract for transfer of capital contribution and proving documents
• Resolution, decision, and copy of meeting minutes of the Board of Members of a multiple-member LLC on converting operations to a single-member LLC;

In the case of converting a joint stock company into an LLC and vice versa

• Contract for transfer of capital contribution and supporting documents or investment capital contribution agreement
• Resolution, the decision of the company owner for a single-member LLC or resolution, decision, and copy of the meeting minutes of the Board of Members for a multiple-member LLC or resolution and copy of the meeting minutes of the General Meeting of Shareholders for a joint stock company on company conversion;
• Documents confirming the capital contribution of new members and shareholders;

Time to process the dossier for converting enterprise type in Vietnam

03 working days

If you need to convert or seek a advice for enterprise types in Vietnam, please contact Viet An Law for detailed support!