Structure of business capital contribution contract

The business capital contribution contract is the basis for determining issues related to capital contribution between investors and related parties. Normally this contract will include contents such as the amount of capital contribution, capital contribution period, and profit division ratio between the parties. Therefore, the drafting of capital contribution contracts needs to be clear and minimize risks that may arise. To understand more about this issue, let’s learn with Long Phan about the structure of this type of capital contribution contract through the article below.

 Instructions for drafting business capital contribution contracts

Overview of business capital contribution contracts

What is a business capital contribution contract?

According to the provisions of Clause 18, Article 4 of the Law on Enterprises 2020, capital contribution is the contribution of assets to form the company’s charter capital, including capital contribution to establish a company or additional charter capital contribution of an already approved company. establish.

Accordingly, a business capital contribution contract can be understood as a document establishing the contribution of assets for the purpose of investing in an enterprise. This contract clearly stipulates the amount of capital contribution, capital contribution period, interest rate and method of profit sharing between the parties. This is an important document that helps relevant parties clearly define their rights and obligations. At the same time, this is also the basis for resolving disputes, if any, during the cooperation process.

The role of capital contribution contracts in investment activities

Business capital contribution contracts play a key role in investment and capital mobilization activities of enterprises. This document creates the basis for forming a relationship between investors and businesses. This is a tool to help make the capital contribution and profit distribution process transparent.

For investors, contracts are a tool to protect their rights when investing in businesses. In addition to determining the benefits investors are entitled to, the document also mentions solutions in case the business encounters risks.

On the Enterprise side, business capital contribution contracts are an effective means of mobilizing capital. Through contracts, businesses can attract capital from outside investors. Business capital contribution contracts also help businesses better manage capital contributions and relationships with investors. Signing a capital contribution contract demonstrates the Enterprise’s commitment to using capital effectively and transparently.

Basic terms in capital contribution contract

Information about the subject of the contract

The subject of the contract is an important part of the business capital contribution contract. This information includes details about all parties contributing capital (individuals/organizations that are investors, businesses receiving capital contributions, related third parties). This information needs to be recorded clearly and accurately according to legal documents.

For individual investors, the contract needs to clearly state information such as:

• First and last name
• Date of birth
• Legal document number of ID card/CCCD/passport
• Permanent address, contact address
• Email, phone number, other contact methods

In case the Investor is an organization, the contract needs to specify the following contents:

• Organization Name
• Head office address
• Business code/tax code
• Legal representative
• Authorized representative to sign the contract (if any)

On the enterprise receiving capital contribution, the contract needs to clearly state the following information:

• Company’s name
• Office address
• Business code/Tax code
• Legal representative
• Person authorized to sign the contract (if any)

In addition, a business capital contribution contract may include information about a third party such as a consultant or broker. Recording complete and accurate information of participating parties helps clearly determine legal responsibilities and avoid future disputes.

Subject of business capital contribution contract

Object of the contract

The object of the business capital contribution contract is the capital contribution from the investor to the Enterprise. The contract must clearly state the amount of capital contribution, form of capital contribution and purpose of capital use. This information needs to be expressed specifically and clearly in the contract document.

Regarding the amount of contributed capital, the contract needs to clearly state information about the contributed assets, a detailed description of the type of asset, value and valuation method. The form of capital contribution can be cash, bank transfer or property. The contract also needs to specifically stipulate the time limit and progress of capital contribution if done in batches.

The contract content also needs to clearly state the purpose of using the contributed capital. Determining the specific contract object helps investors clearly understand how their capital is used. At the same time, this also creates a basis to evaluate the efficiency of capital use of the Enterprise in the future.

Content of capital contribution contract

The content of the contract must include provisions on profit distribution methods, rights and obligations of the participating parties. At the same time, binding terms on dispute resolution measures must also be accurately determined. This helps ensure transparency and fairness in the cooperation process. A basic business capital contribution contract needs to have content provisions such as:

• Rights and obligations of the parties
• Method of dividing profits and losses
• Transfer of rights and obligations
• Validity of contract
• Commitments to information security
• In case of force majeure or objective obstacles
• Ways to resolve disputes

Process of drafting and signing business capital contribution contracts

The process of concluding a business capital contribution contract begins with agreeing on the main terms between the Investor and the Enterprise. Typically this process will include the following steps:

• First of all, the parties need to agree on the essential contents of the transaction.
• One party will draft a contract based on the initial agreements reached.
• The next step of the process is to review and edit the draft contract. The parties need to carefully check the contract content to ensure the accuracy and completeness of the terms. If there are disagreements, the parties will continue to negotiate to reach a final agreement.
• After completing the content, the parties will sign a business capital contribution contract. The contract needs to be signed by an authorized person of each party. The business capital contribution contract takes effect from the time of signing, unless the parties agree otherwise.

Sample business capital contribution contract

>> DOWNLOAD THE LATEST BUSINESS CAPITAL CONTRIBUTION CONTRACT FORM: HERE

 Standard business capital contribution contract template

Consulting on drafting standard business capital contribution contracts

Drafting a capital contribution contract not only requires legal knowledge but also involves financial and management factors. In order to support customers in investment activities, Long Phan provides professional and comprehensive contract drafting consulting services. Based on customer requirements, Long Phan will conduct the following tasks:

• Evaluate and analyze your investment plans and business capital contributions.
• Consulting and determining the type of contract that needs to be drafted
• Receive, collect information, advise on necessary terms in the contract based on customers’ specific requirements.
• Guide customers to prepare necessary documents for the contract drafting process
• Construction, structural design, drafting of detailed contract content
• Support negotiation and signing of contracts
• Provide support services after the contract is signed, ensuring the terms of the contract are implemented as committed.

To ensure benefits and avoid disputes in investment activities, customers need to clearly understand the structure and content of capital contribution contracts. Long Phan’s consulting services will support the process of drafting professional, legal contracts and optimizing profits. Please contact Long Phan via Hotline 0906735386 to receive detailed advice on contract forms suitable to your customers’ needs.