Instructions for converting a joint stock company into a one-member limited liability company

Instructions for converting a joint stock company into a one-member limited liability company helps businesses carry out the process of restructuring their operating model towards streamlining, concentrating management and capital control into a single individual or organization. Conversion in accordance with regulations not only ensures legality but also helps businesses easily make decisions, manage internally and optimize operational efficiency.

Forms of converting a joint stock company into a one-member limited liability company

A joint stock company can be converted into a one-member limited liability company when it can no longer meet the minimum number of shareholders or when the company has a need. Pursuant to Article 203 of the Law on Enterprise 2020, a joint stock company can be converted into a one-member limited liability company by the following methods:

• One shareholder receives the transfer of all corresponding shares of all remaining shareholders. In this case, an existing shareholder will buy back all the shares of other shareholders, becoming the sole owner of the company after conversion;
• An organization or individual who is not a shareholder receives the transfer of all shares of all shareholders of the company. This method allows a completely new third party to take over all the shares of an existing joint stock company;
• The company only has 01 shareholders left due to other reasons such as shareholders withdrawing capital, no longer having legal status or other cases leading to only one shareholder remaining.

Note: When converting by any of the above methods, transfer transactions must be carried out at market prices, with valuation methods such as discounted cash flow method, asset method or other methods in accordance with current legal regulations.

Thus, the law stipulates 03 forms of conversion from joint stock company to one-member limited liability company.

>>>See more: What are the conditions for converting into a public company?

Procedures for converting a joint stock company into a one-member limited liability company

The process of converting a joint stock company into a one-member limited liability company requires strict compliance with the provisions of corporate law. The implementation steps need to be carried out in the correct order and ensure complete documents according to regulations, specifically as follows:

File

Pursuant to Clause 4, Article 26 of Decree 01/2021/ND-CP of the Government issued on January 4, 2021 regulating the composition of documents for conversion from a joint stock company to a one-member limited liability company including the following documents:

1. Application for business registration as a one-member limited liability company issued together with Circular No. 01/2021/TT-BKHDT of the Ministry of Planning and Investment dated March 16, 2021.
2. Charter of the new one-member LLC after conversion, with content consistent with regulations on one-member LLC.
3. Resolution and Minutes of the General Meeting of Shareholders on converting the type of enterprise, clearly stating the method of conversion, the status of the company after conversion (charter capital, owner, legal representative, industry, head office address, phone number…).
4. Share transfer contract and documents proving completion of transfer, or Investment capital contribution agreement, or Document confirming legal inheritance rights (depending on the specific conversion method).
5. Copies of legal documents of the owner and legal representative, specifically:

• For owners who are Vietnamese individuals: Citizen ID/Passport;
• For owners who are Vietnamese organizations: Business registration certificate, Authorization document and personal identification documents of the authorized representative;
• For owners who are foreign individuals: Foreign passport or equivalent documents;
• For owners who are foreign organizations: Investment registration certificate, Authorization document and personal identification documents of the authorized representative.

6. Document from the Investment Registration Authority approving capital contribution, share purchase, purchase of capital contribution from foreign investors, economic organizations with foreign investment capital (if any).
7. Authorization document and personal identification documents of the authorized person (if the person performing the procedure is the authorized person).

Important note: According to Article 24 of Decree 01/2021/ND-CP of the Government issued on January 4, 2021, for foreign organizations, copies of legal documents must be consular legalized according to regulations. In addition, businesses can combine changes to other business registration information (such as company name, business lines…) along with business type conversion documents.

Thus, when carrying out the procedure for converting a joint stock company into a one-member limited liability company, you need to fully prepare the above documents and papers according to regulations.

>>>CLICK DOWNLOAD NOW: APPLICATION FOR BUSINESS REGISTRATION FOR ONE MEMBER LIMITED COMPANY 2025

Conversion process

The process of converting a joint stock company into a one-member limited liability company includes the following main steps:

Step 1: Organize the General Meeting of Shareholders:

The joint stock company holds a General Meeting of Shareholders to pass a resolution on converting the business type.

Step 2: Perform share transfer:

• Carry out procedures for transferring shares according to the approved method;
• The transfer must be carried out at market price with appropriate valuation methods;
• Complete documents proving the transfer (contract, liquidation minutes, payment documents…).

Step 3: Prepare and submit application:

• Prepare all documents as prescribed in Clause 4, Article 26 of Decree 01/2021/ND-CP of the Government issued on January 4, 2021;
• Submit documents to the Business Registration Office where the company’s headquarters is located;
• Application form: can be submitted in person or online depending on the regulations of each locality.

Step 4: Receive and process documents:

• Within 03 working days from the date of receipt of complete and valid documents, the Business Registration Office will review and process the documents;
• If the dossier does not meet the requirements, the Business Registration Office will notify the request for amendments and supplements.

Step 5: Get results:

• The company received a new Business Registration Certificate in the form of a one-member limited liability company;
• The Business Registration Office updates the new legal status of businesses on the National Business Registration Database.

After completing the conversion procedure, the new one-member limited liability company will inherit all legal rights, obligations and interests of the previous joint stock company. This includes continuing to fulfill employment contracts, paying tax debts and fulfilling other obligations to creditors and business partners.

Above is the entire process that you need to follow when performing the procedure for converting a joint stock company into a one-member limited liability company. Complying with the above procedures will help the transition process take place quickly and conveniently.

>>>See more: Guidelines for Converting a Limited Liability Company into a Joint Stock Company.

Handling violations of converting a joint stock company into a one-member limited liability company

Failure to comply with regulations on business type conversion may lead to sanctions according to the provisions of law. According to Point b, Clause 1 and Clause 2, Article 58 of Decree 122/2021/ND-CP regulating penalties for administrative violations in the field of planning and investment as follows:

Fine from 20,000,000 VND to 30,000,000 VND for the act of not carrying out dissolution procedures when the company no longer has the minimum number of members as prescribed for a period of 06 consecutive months without carrying out procedures for converting the type of business.

In addition, businesses are also forced to carry out business dissolution procedures for violations of the above regulations.

Therefore, businesses can be fined up to 30,000,000 VND if they do not strictly comply with regulations on business type conversion to ensure continuous and legal business operations.

Guidance service for quickly converting a joint stock company into a one-member limited liability company at Long Phan Consulting Company

Implementing the conversion process from a joint stock company to a one-member limited liability company requires a deep understanding of corporate law and practical experience. Long Phan Consulting Company provides professional business conversion guidance services with outstanding advantages in time and quality with the following service items:

• Consulting on choosing a conversion method suitable to the actual situation of the business;
• Support in drafting complete and accurate conversion documents according to legal regulations;
• Authorized representative of the enterprise to carry out administrative procedures at state agencies;
• Consulting on solving problems that arise during the transition process;
• Consulting on share valuation methods and taxes arising when making transfers.

With in-depth experience in the field of business consulting, Long Phan Consulting Company is committed to supporting customers in successfully implementing the process of converting business type from a joint stock company to a one-member limited liability company quickly, effectively and legally.

Some frequently asked questions about converting a joint stock company into a one-member limited liability company

We would like to provide some common questions about converting a joint stock company into a one-member limited liability company that you may be interested in:

How long does it usually take to complete the entire conversion process?

Completion time may vary depending on each specific case and the processing efficiency of state agencies, but usually ranges from a few weeks to a month after submitting the complete application.

What are the costs involved in the conversion process?

Costs include application fees, notary fees, consulting service fees (if any), and other costs related to the valuation and transfer of shares.

How will the legal seal of a joint stock company be handled after conversion?

The company will have to carry out procedures to cancel the old seal of the joint stock company and register a new seal for the one-member limited liability company.

Is the company name and brand required to change after conversion?

Optionally, the company can retain its registered name and trademark. However, it is necessary to update business type information in transactions and legal documents.

Do all shareholders need to agree with the decision to change the type of company?

The resolution on converting the type of enterprise must usually be approved by the General Meeting of Shareholders according to the provisions of the Law on Enterprise and the company’s Charter.

If the joint stock company has debts, how will the conversion process take place?

The one-member LLC after conversion will inherit all financial obligations, including unpaid debts, of the joint stock company.

Can a one-member LLC later be converted back into a joint stock company?

Yes, a one-member LLC can be converted back into a joint stock company according to current law.

Does the conversion document need to be notarized or authenticated?

Some documents in the file may require notarization or authentication according to the provisions of law.

Who is responsible for submitting conversion documents to state agencies?

The company’s legal representative or legally authorized person will be responsible for submitting the application.

Above are some answers to questions you have about converting a joint stock company into a one-member limited liability company. We hope that the above answers have partly answered your questions surrounding this issue.

Conclude

Instructions for converting a joint stock company into a one-member limited liability company provide detailed procedures and full grounds for businesses to make the conversion. For in-depth consulting support and answers to questions, please contact Long Phan Consulting Company via the hotline 1900636389 to receive detailed guidance and timely support from a team of experts.