Joint stock company is a form of legal entity chosen by many foreign investors when wishing to penetrate Vietnam. So what is a joint stock company? What are the characteristics of this type of company? What are the documents and procedures for setting up a joint stock company in Vietnam? All will be answered through the article below!
- 1 What is a Joint Stock Company?
- 2 Legal characteristics of Joint Stock Company in Vietnam
- 3 Advantages of establishing JSCs in Vietnam
- 4 Procedures for registration of a JSC in Vietnam
- 5 Document for registration of a joint-stock company
- 6 Procedures after establishing a JSC in Vietnam
- 7 Conclusion
What is a Joint Stock Company?
A Joint Stock Company (JSC) is a company that is owned and controlled by its shareholders, which can be a single individual or more than one person. A joint stock company has an owner, who is the shareholder. The shareholder owns the share of the company’s assets and may also have voting rights on these assets.
Legal characteristics of Joint Stock Company in Vietnam
A joint stock company is a legal entity in Vietnam with the following characteristics:
- JSC is a legal entity that is formed when two or more owners join forces to create a company.
- Members of a JSC may be individuals or organizations, with a minimum of 3 members and an unlimited number of members.
- The charter capital of the company is divided into equal parts and they are called shares. When a member buys shares, they have contributed capital to the company. According to Vietnamese law, some specific industries will have their own regulations on the minimum capital to establish a JSC.
- Shareholders can transfer their shares to others. The degree of freedom of transfer depends on the nature and characteristics of each type of share.
- Company shareholders are only responsible for the debts and other financial obligations of the company to the extent of their capital contribution.
- From the date of issuance of the Certificate of Business Registration, the Joint Stock Company has legal status.
- A joint-stock company has the right to issue securities to raise capital.
- The procedure for setting up a JSC is quite complicated.
Advantages of establishing JSCs in Vietnam
Company shareholders can withdraw investment capital in joint stock companies quickly. Within three years from the date of issuance of the Enterprise Registration Certificate, founding shareholders are free to transfer ordinary shares to other founding shareholders. However, if you want to transfer to people who are not founding shareholders, you need to get approval from the General Meeting of Shareholders.
Raising capital easily
Only a joint stock company can issue more shares on the market to increase the company’s charter capital. Shares are freely transferable, allowing the JSC to have more shareholders or increase its charter capital. At the same time, shareholders can flexibly carry out transactions of buying and selling shares of the company effectively.
Wide range of activities
Joint stock companies can operate in almost any field. This creates favorable conditions for foreign investors to penetrate the Vietnamese market.
A joint stock company does not limit the number of shareholders. Therefore, JSCs attract many individuals or organizations to buy shares issued by JSCs in Vietnam. The transfer of shares back and forth between shareholders is done simply and quickly.
Procedures for registration of a JSC in Vietnam
Registering a JSC in Vietnam is a complicated and time consuming process. In this section, we will review the procedures for registering a Joint Stock Company in Vietnam and provide step-by-step instructions so that anyone can easily register their company.
All companies, including JSCs, are required to register their companies with the State Administration for Industry and Commerce. To register for the establishment of a joint stock company in Vietnam, an enterprise must first meet the following conditions:
- Business registration lines are not prohibited;
- The name of the enterprise is consistent with the provisions of Articles 38, 39, 40 and 42 of the Law on Enterprises of Vietnam;
- Valid business registration documents;
- Fully pay the business registration fee in accordance with the law on fees and charges.
Procedures for registration of establishment of a JSC in Vietnam are as follows:
- Enterprise founders or authorized persons shall submit an enterprise registration dossier in accordance with Law on Enterprises of Vietnam to the business registration authority;
- The business registration authority considers the legitimacy of the enterprise registration dossier and issues the enterprise registration certificate within 03 working days from the date of receipt of the application. In case the application is rejected, the founder must be notified in writing. The notice must clearly explain and make necessary adjustments and supplements.
- The court conducts due diligence procedures, then records the name in the business directory and publishes the company established. From this point on, the company has legal status and only after it is registered can the company issue shares to the public.
Document for registration of a joint-stock company
According to the provisions of the Enterprises Law and guiding documents, the application for registration of the establishment of a joint stock company includes:
- Business registration application form (According to the form issued by the Ministry of Planning and Investment).
- The company’s charter.
- List of founding shareholders and shareholders being foreign investors.
- Copy of ID card or other identification papers of founding shareholders and foreign investors being individuals.
- A copy of the establishment decision, enterprise registration certificate or equivalent document of the organization and the power of attorney; Identity card or other identification document of the authorized representative of founding shareholders and foreign investors being organizations.
- A copy of the investment registration certificate of the foreign investor in accordance with the Law on Investment.
Procedures after establishing a JSC in Vietnam
After completing the procedures for establishing a JSC, the next things to do include:
- Hang the company sign in front of the company headquarters
- Fundraising on time
- Filing for tax registration for the first time
- Get digital signature token, register for electronic tax declaration method
- Open a bank account and register for electronic tax payment
- Notice of issuance of electronic invoices
- Submit application for registration of depreciation method of fixed assets
Establishing a joint stock company in Vietnam is a form of investment chosen by many foreigners. Above is a detailed guide to the application and procedures for setting up a joint stock company in Vietnam for those who are interested. Visit https://lts.com.vn for more useful legal information.