TRANSFERING CAPITAL CONTRIBUTIONS IN A COMPANY

1.Transferring Capital Contribution in a Limited Liability Company

Transferring capital contribution in a Limited Liability Company is when a shareholder transfers all or part of their corresponding rights and obligations to an individual or organization. This process must comply with legal regulations and the company's charter.

After the transfer, the recipient of the capital contribution will become a new shareholder of the company and have the right to participate in management and share profits.

The capital contribution transfer process must comply with legal regulations and the company's charter.

2.Procedures for Transferring Capital Contribution in a Limited Liability Company

The procedures for transferring capital contribution in a joint stock company Limited Liability Company are carried out through 5 steps:

• Step 1: Prepare documents

Determine whether the recipient of the transfer is a Vietnamese individual or company or a foreign individual or company.

If the recipient is a foreign company or individual, it is necessary to consider whether the business sector can transfer capital to foreigners and what is the maximum percentage allowed for transfer.

• Step 2: Submit the capital contribution transfer dossier

- Capital contribution transfer dossier;

- Notification of changes in shareholder and shareholding ratios.

In case the capital contribution transfer affects the number of shareholders (the number of shareholders decreases to one), the company needs to submit additional documents:

- Application for changing the type of enterprise

Submit documents to the Business Registration Office under the Department of Planning and Investment where the company's headquarters are located.

• Step 3: Receive receipt papers

The Business Registration Office issues receipt papers, checks the validity and accuracy of the documents, and handles the company's dossier.

• Step 4: Receive the result of dossier handling

Based on the appointment date on the receipt paper, the company comes to the Business Registration Office to receive the result of dossier handling.

Step 5: Pay personal income tax when transferring capital contribution

The increased income from transferring capital contribution is subject to personal income tax (if the transferor is an individual) or corporate income tax (if the transferor is an organization).

The tax rate to be paid is 20% x taxable income.

Within 10 days from completing the capital contribution transfer, the transferor must submit an income tax declaration to the Tax Department (where the business's tax is managed).

3.Transferring Capital Contribution in a Joint Stock Company

Transferring capital contribution in a joint stock company is the process of transferring ownership and obligations of a shareholder to another individual or organization.

The recipient of the transfer becomes a new shareholder with the right to participate in management and profit sharing.

This process must comply with legal regulations and the company's bylaws.

4.Procedures for transferring capital contribution in a joint stock company

For procedures for transferring capital contribution in a joint stock company, shareholders only need to carry out transfer procedures within the internal procedures of the company, without changing the business registration information at the Business Registration Office.

Notification of changes in information of founding shareholders to the Business Registration Office is only required if the founding shareholder has not paid or only partially paid for the registered shares within 90 days from the date of issuance of the Business Registration Certificate.

Note: In case of transfer to foreign investors, the company still needs to notify the Business Registration Office according to Article 58 of Decree 01/2021/NĐ-CP.

The procedures for transferring capital contribution in a joint stock company include:

• Step 1: Sign transfer documents within the internal procedures of the company

- Minutes of the General Meeting of Shareholders;

- Resolution of the General Meeting of Shareholders;

- Capital transfer agreement;

- Minutes of contract liquidation;

- Shareholder certificate of the company's shareholders;

- Shareholder register.

Update information about the new shareholder who received the transfer in the shareholder register of the company.

• Step 2: Submit personal income tax declaration for the transfer of capital contribution in a joint stock company.

Submit personal income tax declaration and pay personal income tax for the transfer of shares at the Tax Agency (Tax Department or Tax Office).

During the process of transferring capital contribution in a joint stock company, all parties involved must comply with legal regulations and complete all necessary procedures to avoid violating the law and causing disputes in the future.

5.Contract for transferring capital contribution in a business

Contract for transferring capital contribution in a business

According to the Enterprise Law and Investment Law, a contract for transferring capital contribution in a business must include the following elements:

1. Information about the parties involved in the transaction, including name, address, phone number, and personal identification documents.

2. Information about the business, including name, address, tax code, and business license.

3. The quantity and value of the capital contribution being transferred.

4. The time and method of payment.

5. Commitments and terms related to the transfer of capital contribution.

6. Commitments and terms related to the rights and obligations of the parties after the transaction is completed.

7. Commitments and terms related to information security and confidentiality of the transaction.

8. Commitments and terms related to dispute resolution.

A contract for transferring capital contribution in a business must be in writing and have a high legal validity to ensure the rights of the parties involved in the transaction. In addition, before conducting this transaction, the parties need to carry out legal procedures to ensure that the transfer of capital contribution is fully and legally implemented.

Conclusion

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