In the course of business, due to business development needs to increase capital or for other reasons, the enterprise must reduce capital. Increasing or decreasing capital is an important decision of the business that affects the financial health of the company.  

However, when carrying out related procedures, enterprises inevitably face difficulties with legal regulations that are not easily accessible. Using the service to support the company name change procedure is something to consider.

PROCEDURES FOR INCREASE  COMPANY CAPITAL 

PROCEDURES  FOR INCREASE CAPITAL FOR LIMITED COMPANY 

The company may increase capital in the following cases:

• Increase capital contribution of existing members.

The additional capital corresponds to the existing capital ratio of the members or the owner of the one-member limited liability company. A member may transfer his/her right to contribute capital to another person. Members objecting to the decision to increase charter capital may not contribute more capital.

• Receiving capital contributions from new members.

If a one-member limited liability company receives new members, it must be converted into a limited liability company with two or more members or a joint-stock company. The procedure requires members (old and new) to provide their ID cards or passports (if they are individuals) with a certified true copy.

If the company is a limited liability company with 2 or more members, when accepting a new member, the new member must provide a certified true copy of the ID card or passport (if it is an individual).

PROCEDURES  FOR INCREASE CAPITAL FOR JOINT STOCK COMPANY

Joint stock companies raise capital by offering shares. An offer of shares may be made in one of the following forms:

a) Offer to existing shareholders

Offering shares to existing shareholders is a case where the company increases the number of shares it is entitled to offer and sells all of those shares to all shareholders in proportion to their existing shares in the company.

b) Public offering

Public offering of shares, offering for sale of shares of listed and public joint stock companies shall comply with the provisions of the law on securities. This case we do not discuss in depth in this article.

c) Private offering of shares.

The private placement of shares by a joint-stock company that is not a public joint-stock company is regulated as follows:

• • Within 05 working days from the date of issuance of the decision on private placement of shares, the company must notify the private placement of shares to the Business Registration Authority. The notice of private placement of shares must be enclosed with the following documents:
  • Resolution of the General Meeting of Shareholders on the private placement of shares;
  • The plan for the private placement of shares approved by the General Meeting of Shareholders (if any);

PROCEDURES FOR REDUCTION OF COMPANY CAPITAL 

Capital reduction for limited company 

A limited liability company reduces its capital in the following cases:

a) Return a part of the contributed capital to members according to their proportion of contributed capital in the charter capital of the company if it has operated continuously for more than 2 years from the date of enterprise registration and guaranteed payment. enough debts and other property obligations after they have been repaid to the member;

b) The company buys back the contributed capital of the members according to the provisions of Article 52 of the Law on Enterprises.

c) Charter capital is not paid in full and on time by members as prescribed in Article 48 of the Enterprise Law. Accordingly, a member must contribute capital to the company in full and with the right type of assets as committed when registering for business establishment within 90 days from the date of being granted the enterprise registration certificate. In case a member has not contributed or has not fully contributed the committed capital, the company must register for adjustment, the charter capital, the proportion of contributed capital of the members equal to the contributed capital within 60 days, counting from the date of registration. from the last day to contribute capital in full.

* For a one-member limited liability company, the charter capital is not fully and timely paid by the owner as prescribed in Article 74 of the Enterprise Law, the company must register for adjustment, charter capital, ratio the members’ contributed capital is equal to the contributed capital within 30 days from the last day on which the capital contribution must be fully contributed.

Capital reduction for joint stock companies 

 A joint-stock company may reduce its charter capital in the following cases:

a) According to the decision of the General Meeting of Shareholders, the company will return a part of the contributed capital to the shareholders in proportion to their share ownership in the company if the company has operated continuously for more than 02 years, from the date of enterprise registration and ensure full payment of debts and other property obligations after they have been returned to shareholders;

b) The company repurchases the issued shares as prescribed in Articles 129 and 130 of the Law on Enterprises

c) The charter capital is not paid in full and on time by shareholders as prescribed in Article 112 of the Law on Enterprises (90 days from the date of issuance of the Certificate of Business Registration). The company must register to adjust the charter capital equal to the par value of the shares that have been paid in full and change the founding shareholders within 30 days from the end of the time limit for paying the full number of shares. registered to buy in accordance with regulations.

Above is the procedure to increase or decrease the company’s charter capital. If you need support to carry out the above procedures, you can contact us. When choosing PNL to support changes in the increase or decrease of the company’s capital, you only need to provide the company’s tax code and information about the new member/shareholder (if any new members/shareholders are accepted). ) we will carry out all related formalities. After 3 days, we will deliver the new business registration certificate.