Procedures for converting a private enterprise to a partnership

Converting a private enterprise to a partnership opens up opportunities to expand business scale, strengthen financial capacity and enhance business position in the market. This transition process helps businesses mobilize more capital from new capital contributors, optimize the governance model and create leverage for sustainable development. The following article by Long Phan will analyze in detail the steps to make the conversion so that customers can understand and implement it effectively.

Conditions for converting a private enterprise into a partnership

According to Article 205 of the Law on Enterprise 2020, the conversion of a private enterprise into a partnership must meet the following specific conditions:

• The converted enterprise must meet all the conditions prescribed in Clause 1, Article 27 of the Law on Enterprise 2020;
• The owner of a private enterprise commits in writing to be personally responsible with all of his or her assets for all unpaid debts and commits to pay the debt in full when due;
• The owner of the private enterprise has a written agreement with the parties to the unliquidated contract that the converted company will receive and continue to perform those contracts;
• The owner of a private enterprise commits in writing or has a written agreement with other capital contributing members on the reception and use of existing employees of the private enterprise.

Documents prepared when converting a private enterprise to a partnership

Pursuant to Article 26 of Decree 01/2021/ND-CP, businesses need to prepare a full set of documents to register for conversion. Completing the application according to regulations will speed up the review process by the business registration agency. Conversion profile includes:

1. Application for business registration;
2. Company charter;
3. List of members;
4. Copies of personal legal documents for company members who are individuals; Legal documents of the organization for company members that are organizations; Legal documents of the individual for the authorized representative and document appointing the authorized representative;
5. For members that are foreign organizations, copies of the organization’s legal documents must be consular legalized;
6. A written commitment by the private enterprise owner to be personally responsible with all of his or her assets for all unpaid debts and to commit to paying the debt in full when due;
7. Written agreement of the private enterprise owner with the parties to the unliquidated contract on the conversion of the company to receive and continue to perform those contracts;
8. Written commitment or written agreement of the private enterprise owner with other capital contributing members on the reception and use of existing employees of the private enterprise;
9. Transfer contract or documents proving completion of transfer in case of capital transfer of private enterprises; donation contract in case of donating capital to a private enterprise; copy of document certifying the legal inheritance rights of the heir in case of inheritance according to the provisions of law;
10. Document from the Investment Registration Authority approving the capital contribution or capital contribution purchase of foreign investors or foreign-invested economic organizations in cases where capital contribution registration procedures must be carried out, buy the capital contribution according to the provisions of the Law on Investment.

Sequence of conversion

Pursuant to Article 32 of Decree 01/2021/ND-CP, the conversion process will be carried out in the following order:

Step 1: Submit application

The person submits the application to change the type of enterprise at the Business Registration Office where the enterprise is headquartered.

Step 2: Receive documents and issue Business Registration Certificate

• After receiving the business registration application, the Business Registration Office issues a Receipt of receipt of the application to the applicant.
• The Business Registration Office issues the Business Registration Certificate within 03 working days from the date of receipt of valid documents.
• In case the dossier is invalid or the name of the enterprise requested for registration is not in accordance with regulations, the Business Registration Office will notify in writing the contents that need to be revised or supplemented to the enterprise founder or enterprise within 03 working days from the date of receiving the dossier. In case of refusal to register the enterprise, the Business Registration Office will notify in writing the enterprise founder and state the reason.

In-depth and effective consulting and support services for converting business types at Long Phan

With extensive experience in the field of consulting on business transformation in Vietnam. Long Phan’s team of experts will provide the most comprehensive and optimal solution for you during the transition from a private enterprise to a partnership. And in-depth consulting services at Long Phan will include:

• Consulting on conditions and conversion procedures.
• Prepare a profile.
• Support for registration with state agencies.
• Tax and accounting consulting during the transition process.
• Support drafting charters and internal regulations.
• Consulting on corporate management after conversion.

Converting a private enterprise to a partnership is an important step to help businesses expand their scale and strengthen their management capacity. Long Phan commits to accompanying you throughout the transition process, ensuring optimizing benefits for your business. Please contact Long Phan via the hotline 0906735386, for detailed advice and support on this conversion service.