Notes for business foundation

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Notes for business foundation

As performing to register to establish enterprise, organizations and individuals need to notice the following issues:

Select types of enterprise

According to the provisions of Enterprise Law 2020, there are various types of enterprises such as: Private enterprise, Partnership company, One-member limited liability companies, Multi- member limited liability companies, Joint stock company.

  • Private enterprise: An individual owns and takes responsibility with his total assets for all the business’s activities.
  • Partnership company: Two individuals are the common owner of the company, commercialize together with the same name. The members of partnership company make themselves responsible with their total assets for the enterprise’s activities. The company can have additional capital contributors.
  • One-member limited liability companies: An individual and an organization is the owner and takes responsibility for the company’s debts to the extent of the capital contributed to the company.
  • Multi-member limited liability companies:  At least 2 to 50 members contribute capital to the company and are only responsible for the company’s debts to the extent of the capital contributed to the company. Company members can be individuals or organizations as prescribed by law.
  • Joint stock company: At least three members or more. According to the provisions of Law, shareholders of the company can be individuals or organizations that only make themselves responsible for the company’s debts to the extent of the amount of capital contributed to the company.

Name for company

The Vietnamese name of the company must involve two constituents as the following sequence:

  • Business types: written as “Limited liability company” or “LLC”
  • Proper name: Proper names are written with letters of the Vietnamese alphabet, letters F, J, Z, W, numbers, and symbols.

Business name in foreign language must be constituted from the Latin alphabet.

Before registering the name of the company, it is advisable to consult the name of the registered enterprises in the National Database of Business Registration: https://dangkykinhdoanh.gov.vn/. The company’s Vietnamese name, foreign name as well as abbreviation must not coincide with other company’s registered ones.

Company’s head office

Enterprise’s head office is located on the Vietnamese territory which is the contact address of the company determined by geographical boundaries of administrative units; with phone number, fax number and email address (if any)

When setting up the company headquarter, it is advisable for investors to select credible addresses with the documents proving the origin of land use to facilitate the purchase of VAT invoices of enterprise in business activities. Note that not locating the head office in apartments or collective quarters

Notes for business foundation

Select business line

Business line selection in enterprise foundation is not limited about the quantity. However, it is advisable to select the primary professions, avoid rambling to reduce difficulties in document composition and submission.

For conditioned business sectors such as commercialization, dietary supplement production, medical clinic … the legal document about this sector is not required in the process of foundation application submission. Only after the completion of establishment, the representatives begin to apply for a sub-license for each conditioned sector.

Charter capital

Proof is not required to the amount of initial charter capital in the process of enterprise foundation. Within 90 days as from the date of foundation, the registered capital must be fully contributed, or the procedure of capital reduction must be conducted in case of lacking capital. However, in fact, most businesses don’t contribute the initial registered capital enough since agencies uncommonly check or require evidence in the process of operation.

Therefore, it is advisable to select the capital in accordance with business scale that also affects annual business-license tax, specifically:

Capital < 10 billion, the annual business-license tax: 2.000.000VND (two million VND)

Capital > 10 billion, the annual business-license tax: 3.000.000VND (three million VND)

Information of the business representative

As company foundation, it is compulsory to appoint the person who will be the legal representative of the company. This person will sign the company’ s documents, take the legal responsibility about his organization’s activities. The legal representative can undertake titles such as: Director, Chairman of the Members’ Council, Chairman of the Board. One member can be the representative of several enterprises, the contributor in the company or also the employed representative who doesn’t own capital.

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