According to estimates, every month, in Vietnam there will be tens of thousands of people who need to carry out procedures for establishing a new company. At the present time, the State has allowed with just one click, businesses can see countless extremely attractive advertising offers, with extremely low costs to establish a new company. . We invite readers to join Viet My to learn about the legal regulations related to Procedures for establishing a new company.

1. Concept of establishing a new company

From an economic perspective we can consider:

Establishing a company is the process in which a business has fully prepared the business issues and conditions to be ready to establish an economic organization. Business entities need them to prepare related conditions such as name, head office address, machinery, equipment, reception…

From a legal perspective we can consider:

Establishing a company is considered a legal procedure carried out by business owners at state management agencies and competent state agencies for approval. The process of preparing documents and procedures will be simple or complex depending on the type of company the company chooses.

2. Classification of each type of company

Based on the provisions of the current Enterprise Law 2020 in Vietnam, we have 5 types of companies and businesses when registering to establish a business. You will have to choose a company model so that the newly established company procedures are suitable for your business as well as meet the legal requirements for each type:

– Joint stock company

– One-member limited liability company

– Limited liability company with two or more members

– Partnerships

– Private enterprise

2.1. Private enterprise

A private enterprise is a type of business owned by individuals and they are responsible with all their assets for all activities of the business. The sole owner of this sole proprietorship is an individual, the sole proprietorship has no legal status.

According to the Enterprise Law, it is stipulated that the owner of a private enterprise is the legal representative of the enterprise. Private business owners have full decision-making authority over all business activities of their enterprise; has full authority to decide on the use of profits after paying taxes and performing other financial obligations in accordance with current law. The owner of a private business can directly or hire another person to manage and operate the business. In the case of hiring another person to act as a business director, the private business owner will still be responsible for all business activities of the business.

2.2. One-member limited liability company

This is a type of business in which an individual or an organization is the owner and contributes capital to establish. The charter capital of a one-member limited liability company at the time of business registration is prescribed by law as the total value of assets committed to contributions by their owners and recorded in the company charter.

The owner will have to contribute the full amount and correct type of assets as stated in the commitment when registering to establish a business within 90 days, calculated from the date of issuance of the Business Registration Certificate. In case the company does not fully contribute charter capital within the prescribed time limit according to Clause 2, Article 75 of the Enterprise Law 2020, the company owner will have to register to adjust the charter capital equal to the value of the capital amount. Actual contributions within a period of 30 days, calculated from the last day the charter capital must be fully contributed.

In this case, the owner must fully bear all responsibility corresponding to the capital contribution as committed for the company’s financial obligations arising during a period of time before the company registered the change. Authorized capital. A single-member limited liability company will be entitled to reduce its capital if it has operated continuously for more than 02 years from the date of business registration and has guaranteed payment of all debts and obligations. other assets after being fully returned to the owner.

The company will have the right to increase its charter capital by allowing the company owner to invest more or mobilize additional capital contributions from others. In case the increase in charter capital is equal to mobilizing additional capital contributed by others, the company will also have to convert the business type to a limited liability company with two or more members or to a corporation. share.

2.3. Limited liability company with 2 or more members

A limited liability company with two or more members is a business in which members can be an organization or individual; with the number of members not exceeding 50 people.

A limited liability company with two or more members has legal status from the date of issuance of the Business Registration Certificate. This limited liability company will not have the right to issue shares to raise capital.

Members are responsible for the debts and other property obligations of this enterprise within the amount of capital contributed to the enterprise. The charter capital of a limited liability company with two or more members when required to register a business is the total value of the capital contributions that the members have committed to contribute to the company. Members must contribute capital to the company in full and with the correct type of assets as committed when registering to establish a business within 90 days from the date the competent State issues the Certificate. Get business registration.

During this period, members have rights and obligations corresponding to the proportion of capital contribution as committed to contribute. In case any member has not contributed or has not contributed the full amount of capital committed above, the company will have to register to adjust the charter capital, as well as the ratio of each member’s capital contribution equal to the capital amount. contribute within 30 days from the last day the company must contribute the full capital contribution.

2.4. Joint stock company

– A joint stock company is regulated as an enterprise, in which:
+ The charter capital of this company is divided into many equal parts called shares;
+ Shareholder can be an organization or individual; with a minimum number of shareholders of three and no maximum number limit;
+ Shareholders are only responsible for the debts and other property obligations of the enterprise within the amount of capital they have contributed to the enterprise;
+ Shareholders have the right to freely transfer their own shares to others, except for the cases specified in Clause 3, Article 81 and Clause 5, Article 84 of the Enterprise Law 2020.
– A joint stock company has legal status from the date of receipt of the Business Registration Certificate.
– Joint stock companies have the right to issue securities of these types to mobilize capital.
A joint stock company is a type of company in which it is stipulated that the charter capital is divided into equal parts, also known as shares, that are established and exist independently.

2.5. Partnerships

– A partnership company is defined in the Enterprise Law 2020 as an enterprise in which:
+ There must be at least two members who are co-owners of the company, they do business together under a common name (hereinafter referred to as general partners); In addition to general partners, there may also be additional capital contributing members;
+ A general partner must be an individual and must be responsible with all of his or her own assets for the company’s obligations;
+ Capital contributing members will only be responsible for all debts of the company within the amount of capital they have contributed to the company.
– A partnership company has legal status from the date the company is granted a Business Registration Certificate.
– Partnership companies are not allowed to issue any type of securities.

3. Procedures for establishing a new company

According to regulations, procedures for establishing a new company will be carried out as follows:

Step 1: Prepare the name and address of the company

* The company address cannot be located in restricted areas, apartment buildings or dormitories

– The company needs to have a specific business address to be allowed to register its business. The company’s address must also ensure general regulations, avoid placing the company address in apartment buildings or group houses.

– Businesses can use a private house with a certificate of ownership or rent an office to set up as the company address. The company address will also have to be located within the territory of Vietnam, with a clear and accurate house number, alley, district, city… The law stipulates that it is not allowed to use a fake address as a company address.

* The company name must be unique and not cause confusion or overlap with previously registered companies

– The company needs to have its own name and the name the company gives must be unique, not identical or similar to a previously registered business.

– Businesses will also have to prepare a company name that is complete with structure, including company type + personal name. The type will be one of the 5 types mentioned in the above mentioned business type, and the personal name will be given by the allowed business.

– To avoid having the name duplicated with another company, businesses can use abbreviations or English names, but with the condition that they must ensure that the company name will not cause confusion or have any additional status. prefixes, suffixes or uncultured symbols in names. Along with that, businesses are also not allowed to use the names of functional agencies or state management agencies to name their companies.

Step 2: Enterprises must choose an appropriate business registration industry and apply a detailed industry code

– In order for a company to be able to carry out operations, it must register a suitable business line related to the activities that the company operates. You must look up the industry code to be able to register your business.

– If you choose a profession that does not meet the required conditions, you can start operating immediately after establishing the company without having to prepare additional related conditions or apply for a business license. .

– If you choose a profession with conditional requirements, you must ensure the necessary requirements, then apply for a business license before officially starting your business.

Step 3: Prepare the minimum capital and charter capital to be registered when opening the company

– Capital is also considered an important issue when a business opens a company. In fact, it can be seen that, because this field is very diverse, the capital to establish a company will depend on the financial and economic capabilities or conditions of the business and the capital requirements of each industry. registered business. However, businesses should prepare adequate minimum capital because when they first open the company they will also need a lot of spending.

– Enterprises must declare charter capital when opening a company. Normally, businesses can declare their own charter capital depending on their wishes and financial capacity. Accordingly, the law has no regulations on the charter capital of an enterprise when establishing a company.

+ However, if an enterprise registers to do business in an industry that requires capital, for example an industry that requires legal capital or deposit capital, it is also necessary to register a minimum charter capital equal to the required capital. legal capital, only then can business registration be carried out.

+ Enterprises should not declare too low a charter capital when establishing a new company, because it will affect part of the company’s reputation in the eyes of customers and partners.

Step 4: Choose the type of company and legal representative suitable for the business

* Legal representatives must meet general regulations

– The company may have one or more legal representatives depending on the type of business. The legal representative must be a person with full capacity and experience, capable of deciding on important tasks of the enterprise throughout its operation.

* The type of company must match the conditions of number of members, as well as capital or meet the wishes of the business.

– Enterprises must rely on the number of members contributing capital, the amount of capital contributed, the enterprise’s own wishes… to choose a suitable type of enterprise for the company and be able to help their company develop. develop strongly and avoid future risks.

Step 5: Draft the registration documents to establish a new company

Detailed documents will include the following documents:

– Members or shareholders of the company participate in capital contribution activities.

– Basic charter of the company.

– For individuals: Prepare personal identification documents in advance such as a copy of an ID card, a copy of a passport or a copy of a citizen identification card.

– For organizations: In addition to documents that can prove the legal representative’s personal status, a business registration certificate, establishment decision…

– Application for the Department of Planning and Investment to issue a business registration license.

Step 6: Submit documents to the Business Registration Office to apply for a license at the Department of Planning and Investment

– Enterprises must bring complete documents to submit to the Business Registration Office under the Department of Planning and Investment to be granted a company business registration license.

– The time for granting this business registration license is usually 3 – 5 days.

Step 7: Proceed to publish company information on the State’s national electronic information portal

– The company needs to prepare all procedures for publishing the business registered content in the most complete way. The maximum time for businesses to perform this operation is 30 days from the date of obtaining the business registration license.

– If within the prescribed time, the company fails to publish business information on the national electronic information portal, the State will be administratively fined from 1,000,000 VND to 2,000,000 VND depending on the level. the company’s violation.

4. Frequently asked questions about establishing a new company

4.1. How much capital does a business need to have to become a company?

The current Enterprise Law 2020 has no regulations on the company’s capital limit. Companies can arbitrarily register high or low charter capital. However, for certain business lines according to State regulations, legal capital is still required.

4.2. What type of business should a business choose?

Basically, in Vietnam, the choice of company type will mostly be based on the number of members opening the company: For example, if you are the only one opening a company, you can establish a liability company. Limited to one member or may be a private enterprise; For example, if there are only 2 people to establish a business, you can choose a Partnership Company or a Limited Liability Company with 2 or more members; A joint stock company has a characteristic that it must have a number of shareholders greater than or equal to 3 people. If a joint stock company has more than 100 shareholders, it is called a public company.

4.3. How are the procedures for establishing a new company carried out?

The person who establishes the business or is authorized to register the business at the Business Registration Office according to the following method:

– You can register your business directly at the Business Registration Office;

– Register your business through the postal service;

– A connection to the network is required to register a business via the electronic information network.

4. 4. Can a business owner authorize company establishment procedures?

According to Decree 01/2021/ND-CP, the law allows authorization to carry out procedures to establish a company, including:

– Authorization can be given to individuals but must have a written authorization;

– Enterprises can authorize organizations: Provided that there must be a copy of the service provision contract;

– Authorize a postal service provider that is not a public service. Attached is a condition that must include a copy of the service contract;

– Enterprises can authorize a unit to provide public postal services: There must be a copy of the service provision contract and a letter of introduction from that organization to the authorized individual to directly carry out the procedure.

4. 5. What do you need when starting a business?

Things to do after establishing a new company will include:

– Enterprise reports

– Businesses need to engrave their seal

– Businesses need to buy electronic digital signatures

– Initial tax declaration and registration to use the enterprise’s own electronic invoices

– Register as an employer at the Department of Labor (if any employer)

– Every month or every quarter, you need to declare tax (Note that even if it does not arise, you still have to declare tax).

Above is an article about the issue “Procedures for establishing a new company“, hopefully the above article of VIETNAMESE LAW AND ACCOUNTING will help readers understand more about the type of procedure for establishing a new company. This. We are pleased to answer this question for our readers.