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Guidelines of business transfer and key takeaways


5 months ago



During operation, individuals and businesses have the rights to pass on their company to another person or organization. In the article below, let's find out with INMERGERS about the essential dossier document during business transfer to execute an accurate process.

1. What does business transfer mean?

Business transfer is no longer an uncommon definition for Vietnamese companies. It is the process by which the owner, capital-contributing member, shareholder transfers company’s ownership by transmitting from one part to full part of shares or contributed capitals.

There are diverse reasons leading to business transfer. Firstly, it might originate from strategic business decisions for a company to expand, diversify operations, or restructure to focus on key resources. Furthermore, the decision possibly relates to the plan of setting up a joint venture or cooperating with another partner, thereby taking advantage of parties' common resources to develop. Finally, a transfer of business can also be the result of alternation in company ownership due to retirement plans or appointment of new individuals.

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Business transfer - The process that the ownership of the companies is passed on from current holder to another individual or organization.

Depending on the type of business, the procedure will require different documents and regulations. While the process within joint stock companies is classified as transferring shares activity, limited liability companies and partnerships operate through the form of ceding member’s contributed capital.

2. Document preparation for business transfer

Before conducting business transfer, it is important to orchestrate the required dossier document to go through with an operative process. Required documents that the transferor and transferee need are:

2.1. Dossiers for changes to enterprise registration:

Different categories of company might have different requirements on business registration changes for business transfer. Basically, the procedure will includes the documents below:

  • Certified copy of transferor’s personal identification.
  • Agreement of capital contribution transfer.
  • Minutes of liquidation of contract.
  • Declaration of shares passed on by owners.

Besides those general requirements, the detailed dossiers of specific type of company need to add following documents:

a) Single-member limited liability company:

  • Declaration of business registration changes.
  • Declaration of company owner changes.
  • Amendment of company's charter.
  • Authorization letter for a person conducting business registration changes.
  • Certificate copy of personal identification of a person conducting business registration changes.

b) Multi-member limited liability company:

  • Minutes of the Member’s council meeting.
  • Declaration of business registration changes.
  • Lists of member companies.
  • Authorization letter for a person conducting business registration changes.
  • Certificate copy of personal identification of a person conducting business registration changes.

c) Joint-stock company

  • Minutes of the General Meeting of Shareholders.
  • Declaration of General Meeting of Shareholders.
  • Amendment of company's charter.
  • Declaration of Personal Income Tax.
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Different categories of company have different requirements on business registration changes

2.2. Declaration of Personal Income Tax

According to the law, after business transfer has been done, parties involved need to submit their personal income tax. The dossier can be used by all types of company, which includes:

  • Declaration of Personal Income Tax.
  • Agreement of contributed capital transfer.
  • Minutes of liquidation of contract.
  • Documents related to contributed capital transfer - invoice, spending, accounting books.
  • Introduction letter.

3. Process of carrying out procedures for business transfer

To carry out business transfer, parties involved need to meticulously understand the process to avoid unnecessary legal issues. Essential business transfer documents for individuals and organizations are regulated specifically in Enterprise Law 2020.

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Individuals, organization taking part in business transfer need to ensure compliance with business transfer procedures.

Step 1: Make decision about business transfer

The first stage that companies need to do is holding a General Meeting of Shareholders (Joint - stock company) and a Meeting of Member’s Council (Limited liability company) to enter into an agreement of business transfer.

Step 2: Signed and acted business transfer contract

The parties (the transferor and the transferee) shall form a transfer contract and perform the obligations specified in the contract. The contract needs to be drafted logically and thoroughly to ensure the rights and obligations of the parties in transaction. Accordingly, the transferee shall make full payment for shares/or contributed capital of transferor.

Step 3: Submit documents of business registration changes, personal income tax file

Enterprises need to prepare a complete set of documents as mentioned in part 2, including: business registration changes and Personal Income Tax declaration. In particular:

  • Within 10 days from the date of change, the company must register the change of Certificate of Business Registration’s content at the business registration department.
  • Within 10 days from the date of signing transfer contract, transferor is required to submit declaration of Personal Tax Income to transferee at tax management department.

Step 4: Receive the results

After receiving completed documents, the business registration and tax management department will check the validity. In case the application is valid, the enterprise will receive business registration changes and Certificate of Business Registration with a new owner’s name within 05 - 08 days, and derive the results of Personal Income Tax declaration within 10-15 days.

4. Information needed to be aware

a) For transferor:

  • Searching and determining the transferee’s status to ensure that the person acquiring the company has full legal status and civil act capacity according to Clauses 1 and 2, Article 18 of the 2014 Enterprise Law. Accordingly, the new transferee must have the right to establish, contribute capital for the establishment and purchase shares, capital, as well as manage the enterprise.
  • Considering and negotiating terms of transfer contract to ensure company’s interests.
  • Fulfilling obligation and legal responsibility of company before business transfer.
  • Searching for legal and financial consulting agency to ensure a successful business transfer.

b) For transferee:

  • Conducting an assessment before acquiring, such as financial, assets to accurately determine debts, burdens and obligations before and at the time of transfer to control risks or liabilities.
  • Preparing financial, human and management resources to take over the company smoothly after the transfer process.
  • Seeking professional consulting agency to assist during the process of appraisal, evaluation, contract drafting... to ensure a positive outcome and minimize risks related to the transfer.


Above is the reference guideline for business transfer given by INMERGERS. To realize an advantageous business transfer process and end up with successful result, it is necessary to prepare meticulously before participating in transaction. Notably, consulting from professional financial and legal agencies will effectively support parties participating in M&A.

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