Contributing capital to establish a company by shares: The simplest procedure

Contributing capital to establish a company by shares is an effective way to mobilize financial resources from many investors, helping businesses have solid capital from the beginning. This method not only reduces financial pressure for individuals but also facilitates business expansion and attracts more potential shareholders. With simple and transparent procedures, this is the optimal choice for starting a business and developing sustainably.

Can capital be contributed to establish a company by shares?

Contributing capital to establish a company by shares is an issue that many investors are concerned about, especially when they own shares in another company and want to use these assets to contribute capital to a new business. According to current law, it is absolutely possible to use shares to contribute capital, as long as the conditions prescribed by law are met.

According to Article 105 of the Civil Code 2015, assets include objects, money, valuable papers and property rights. In particular, shares are represented by shares, which can exist in the form of valuable papers, book entries or electronic data confirming ownership. At the same time, Article 115 of the Civil Code 2015 stipulates that property rights are rights that can be valued in money, including property rights to intellectual property objects, land use rights and other property rights. Therefore, it can be understood that shares are a type of asset that can be valued.

According to Article 34 of the Law on Enterprise 2020, capital contribution assets can be Vietnamese Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how and other assets that can be valued in Vietnamese Dong. Because shares are considered a valuable asset and can be valued in money, it may belong to other asset groups that the law allows to be used for capital contribution.

However, when contributing capital by shares, individuals or organizations must ensure they have legal ownership of those shares and fully comply with prescribed asset valuation procedures. Share valuation can be done by capital contributors or through a professional valuation organization to ensure transparency.

Thus, according to current legal regulations, shares can be used to contribute capital to establish a company, provided that the conditions of legal ownership and asset valuation are met. This is a flexible capital contribution method, helping investors take advantage of financial resources effectively when participating in business activities.

Procedures for contributing capital to establish a company by shares

Contributing capital to establish a company by shares is a popular method to help businesses take advantage of available financial resources. However, to ensure legality, this capital contribution needs to comply with the provisions of law, especially the Law on Enterprise 2020. Accordingly, the steps to contribute capital to establish a company by shares include:

Step 1: Valuing capital contributions:

According to Article 36 of the Law on Enterprise 2020, capital contributions must be valued in Vietnam Dong. This value can be determined in two ways:

• The company’s founding members negotiate the value of shares on the principle of consensus.
• Or a professional valuation organization conducts the valuation, with the condition that it must be approved by more than 50% of the founding members.

If the valuation is higher than the actual value, the capital contributor must be jointly responsible and make up the difference.

Step 2: Transfer ownership of capital contributions:

According to Article 35 of the Law on Enterprise 2020, when contributing capital to establish a company by shares, the individual or organization that owns the shares must transfer ownership of shares to the new company.

• If the shares are owned by an individual or organization that has registered ownership or land use rights, it is necessary to carry out procedures to transfer ownership or land use rights to the company according to regulations. The transfer of ownership or land use rights to contributed assets is not subject to registration fees.
• For assets whose ownership rights are not registered, capital contribution must be made by handing over and receiving the contributed assets with confirmation by minutes, except in cases where it is done through an account.

Minutes of delivery and receipt of capital contribution assets are mandatory documents to confirm capital contribution transactions. This minutes should include the following contents:

• Name and address of the company’s headquarters;
• Full name, contact address, legal document number of the individual, legal document number of the capital contributor’s organization;
• Type of assets and number of units of assets contributed as capital; total value of assets contributed as capital and the ratio of the total value of that asset in the company’s charter capital;
• Delivery date; Signature of the capital contributor or authorized representative of the capital contributor and legal representative of the company.

Assets used in business activities of private enterprise owners do not have to go through procedures to transfer ownership to the enterprise.

Step 3: Complete legal procedures

After completing capital contribution procedures, the company must record charter capital, update shareholder information in the Shareholder Register (for joint stock companies) and carry out procedures to change business registration content and adjust charter capital with the business registration agency according to regulations.

>>> Reference:

• Application for registration of change in charter capital of limited liability company
• Application for registration of change in charter capital of a joint stock company.

Consulting on capital contribution to establish a professional company in Long Phan

Long Phan provides professional capital contribution consulting services to establish companies, helping individuals and organizations carry out capital contribution procedures quickly and in accordance with the law. We provide comprehensive support from preparing documents, implementing legal procedures to consulting on effective capital contribution strategies.

1. Consulting on appropriate forms of capital contribution:

• Contribute capital in cash, assets, shares, intellectual property rights, land use rights, technology and other assets according to the provisions of law.
• Determine a reasonable capital contribution ratio among members/shareholders to ensure the rights and obligations of each party.
• Consulting on conditions and capital contribution procedures for foreign investors according to regulations on foreign exchange management.

2. Support procedures for transferring ownership of contributed assets:

• Instructions for transferring legal ownership of assets contributed as capital (including shares, land use rights, assets with registered ownership rights).
• Drafting minutes of handover and receipt of capital contribution assets in accordance with regulations.
• Support in completing procedures for valuing assets contributed as capital, ensuring transparency and compliance with the law.

3. Complete legal documents when contributing capital:

• Consulting and supporting the drafting of company charter, capital contribution contracts, commitments between members/shareholders.
• Support updating the list of shareholders/capital contributing members to the Shareholder Register (for joint stock companies) or Member Register (for LLCs).
• Guide businesses to report changes in charter capital to the Department of Planning and Investment.

4. Consulting on risks and treatment plans:

• Assess risks when contributing capital with special assets such as shares and intellectual property rights.
• Instructions on handling capital contribution disputes and transferring capital contributions legally.
• Consulting on terms to protect the interests of capital contributors in business cooperation contracts and capital contribution contracts.

5. Support related procedures after capital contribution:

• Consulting on issuance of Business Registration Certificate after capital contribution is completed.
• Instructions for opening a bank account and fulfilling tax obligations when contributing capital.
• Support procedures for withdrawing capital and transferring capital contributions if there is a need to change later.

Contributing capital to establish a company by shares is the optimal solution to help businesses mobilize capital effectively, reduce personal financial pressure and expand business opportunities. With professional consulting services at Long Phan, customers will receive comprehensive support from legal procedures, asset valuation to ownership transfer, ensuring the capital contribution process is quick and in accordance with regulations. Contact the hotline 0906735386 immediately for detailed advice.