Set up a company in Vietnam based on division

For companies established based on company division, business registration is an important step. The business registration process ensures legal compliance and creates favorable conditions for the operations of newly established companies. To support clients in this procedure, Viet An Law provides legal advice on procedures to set up a company in Vietnam based on division according to current regulations in the article below.

Legal basis

• Law on Enterprise 2020;
• Decree 01/2021/ND-CP on business registration.

Regulations on company partial division

Concept of company partial division

Partial division of a company is one of the corporate restructuring forms as prescribed in Article 199 of the Law on Enterprises 2020. Accordingly, partial division of a company does not lead to the dissolution of the divided company but only transfers part of its assets, rights, liabilities, members, and shareholders of the company to one or several new limited liability companies or joint stock companies.

Legal consequences

The consequence of the company division procedure is the formation of one or more new legal entities independent of the old legal entity (the divided company). Therefore, the divided company is obliged to simultaneously carry out the following procedures:

• Register to change charter capital, number of members, shareholders corresponding to the capital contribution, shares, and decrease number of members, shareholders (if any);
• Business registration for new divided companies.

Regarding legal liability, the divided company and the new divided company after completing the above procedures will take joint responsibility for obligations, unpaid debts, labor contracts, and other financial obligations of the divided company, unless otherwise agreed. The divided companies naturally inherit all legal rights, obligations, and interests divided according to the resolution and/or decision to divide the company.

Procedures to set up a company in Vietnam based on partial division

Procedures for partial division of a limited liability company and a joint stock company are prescribed as follows:

• The Board of members, the company owner, or the General Meeting of Shareholders of the divided company shall pass a resolution and decision to divide the company under the provisions of the Enterprise Law and the company’s charter.
• Resolutions and decisions to division the company must be sent to all creditors and notified to employees within 15 days from the date of decision or adoption of the resolution;
• The members, company owners, or shareholders of the divided company, through the Charter, elect or appoint the Chairman of the Members’ Council, Company President, Board of Directors, Director, or General Director and register the new company according to regulations.

Conditions for business registration

An enterprise is granted a Enterprise Registration Certificate when it meets the following conditions:

• Registered business lines and occupations are not prohibited from business investment;
• The name of the enterprise is set by the provisions of Articles 37, 38, 39, and 41 of the Enterprise Law 2020;
• Have valid business registration dossiers;
• Fully pay the business registration fee according to the law on fees and charges.

Business registration dossiers based on company division

Pursuant to Decree 01/2021/ND-CP, business registration dossier include:

Business registration procedures

Enterprises can choose one of two current forms of business registration, including direct registration or via postal service at the one-stop unit, or online registration via the electronic network.

The form of submitting business registration documents online is using a public digital signature or business registration account. Applicants carry out procedures at the national information portal on business registration (https:// dangkykinhdoanh.gov.vn ).

After the applicant declares information, downloads electronic documents, signs and certifies the business registration application via the electronic information network, and pays regulated fees, the system will send and receive a Receipt of business registration documents via the electronic information network.

Within 15 days from the date of receipt of the application:

• If the application meets the conditions for business registration, the Business Registration Office shall issue business registration and notify the business of the business registration.
• In case the dossier does not meet the conditions for business registration, the Business Registration Office sends a notice via electronic information network to the enterprise to request amendments and supplements to the dossier.

Publication of business registration information

The request to publish the business registration information is made right at the time the enterprise submits the business registration application along with the business publication fee.

Implementing agencies

Business Registration Office – Department of Planning and Investment

Business registration fees and charges

• Business registration fee: 50,000 VND. In case of online registration, businesses are exempt from this fee.
• Business publication fee: 100,000 VND

Time limit: Within 03 (three) working days from the date of receipt of complete and valid documents.

Payment method: submit directly to the Business Registration Office or transfer to the Business Registration Office account or use electronic payment service.

Note:

• The applicant pays the business publication fee and the registration fee at the time of submitting the business registration application.
• The business registration fee is not refunded to the enterprise in case the enterprise is not granted a business registration. However, the business publication fee will be refunded in case the enterprise is not granted a business registration.

Business registration service of Viet An Law

• Consulting on drafting documents to establish a business based on company partial division;
• Representing clients to carry out registration procedures with competent authorities;
• Monitor and process notifications from the business registration agency during the application processing process;
• Receive results and hand over to clients;
• Providing post-establishment services, tax accounting, intellectual property registration, and regular consulting for businesses after establishment.

If Clients wish to set up a company in Vietnam based on division, please contact Viet An Law for the best support and advice.