(+84) 9 61 57 18 18
info@vietanlaw.com

Identify parent company and subsidiary company in Vietnam

The identification of the parent company and subsidiary company is an important requirement to determine the entity that must prepare the consolidated financial statements in accordance with the accounting regulations. The following Law Viet An would like to give the grounds to identify the parent company, subsidiary companies for businesses to further information.

Identify parent company and subsidiary company in Vietnam

Pursuant to the Law on Enterprise 2020, a company is considered the parent company of another company if it falls into one of the following cases:

  • It holds more than 50% of charter capital or total ordinary shares of the latter;
  • It has the right to directly or indirectly designate most or all of the members of the Board of Directors and Director/General Director of the latter; or
  • It has the right to decide revisions to the latter’s charter.

In addition, Article 8 of Circular 202/2014/TT-BTC guiding the preparation and presentation of the consolidated financial statements also provides the grounds for determining the parent company by the right of control through domination of the financial statements. financial and operating policies so as to obtain benefits from the activities of this company, in particular:

The parent company has the right to govern the financial and operating policies in the following cases:

  • Holding more than 50% of direct or indirect voting rights in the Subsidiary. In case there is a difference between the percentage of voting rights according to the Enterprise Registration Certificate and the percentage of voting rights calculated on the basis of the actual contributed capital, the voting right shall be determined according to the charter of the enterprise or the agreement between the companies. beside;
  • Having the right to directly or indirectly appoint or remove the majority of the members of the Board of Directors, the Director or General Director of the subsidiary;
  • Having the right to cast a majority of votes at meetings of the Board of Directors or equivalent management level;
  • Having the right to decide on the amendment and supplementation of the charter of the subsidiary;
  • Other investors agreed to give the parent company more than 50% of the voting rights;
  • Has the power to govern the financial and operating policies by agreement.

If you have requested for more advice on issues related to the model of subsidiaries and parent company, please contact Viet An Law Firm for more specific and detailed advice on this issue.

Related Acticle

Vietnam Ministry of Health Authority to grant a Food Safety Certificate

Vietnam Ministry of Health Authority to grant a Food Safety Certificate

The Ministry of Health is one of three agencies competent to grant Food Safety Certificates. Depending on the industry in which the owner of the food production and business institution…
Establish a business in Vinh Phuc Province

Establish a business in Vinh Phuc Province

Vinh Phuc is a province that is depended on the Red River Delta region, is a province which is located in the Hanoi Capital region planning, a Northern Center Economic…
Trademark registration procedures in Cambodia

Trademark registration procedures in Cambodia

Similar to neighboring countries such as Laos, Vietnam, and Myanmar, they follow the first-to-file system, meaning that whoever applies first will receive trademark protection in Cambodia. In recent years, economic…
Trademark registration in the Republic of the Congo

Trademark registration in the Republic of the Congo

The Republic of Congo possesses many potential advantages for economic development of the country. Natural resources are abundant, the Republic of Congo is the second largest oil producer in Central…
Patent registration in China

Patent registration in China

Patent registration in the Chinese market is becoming an urgent need for Vietnamese businesses and inventors to expand their business market, create long-term value as well as find investors for…

CONTACT VIET AN LAW

Hanoi Head-office

#3rd Floor, 125 Hoang Ngan, Hoang Ngan Plaza, Trung Hoa, Cau Giay, Hanoi, Vietnam

info@vietanlaw.com

Ho Chi Minh city office

Room 04.68 vs 04.70, 4th Floor, River Gate Residence, 151 – 155 Ben Van Don Street, District 4, HCM, Viet Nam

hcm@vietanlaw.com

SPEAK TO OUR LAWYER

English speaking: (+84) 9 61 57 18 18 - Lawyer Dong Van Thuc ( Alex) (Zalo, Viber, Whatsapp, Wechat)

Vietnamese speaking: (+84) 9 61 37 18 18 - Dr. Lawyer Do Thi Thu Ha (Zalo, Viber, Whatsapp, Wechat)