Instructions for drafting business capital contribution contracts

Drafting business capital contribution contracts is the completion of legal procedures and is the basis for building a sustainable, transparent and effective cooperative relationship. When all rights and obligations are clearly specified in the contract, members will focus on developing the business. Follow Long Phan’s following article for detailed instructions on how to draft an accurate business capital contribution contract.

What is a business capital contribution contract?

A business capital contribution contract is a written agreement between parties to jointly invest in a business project. The Civil Code 2015 and the Law on Enterprises 2020 do not specifically define this term. However, based on relevant regulations, this can be understood as a legal agreement between two or more parties.

The purpose of this contract is to establish a business cooperation relationship between the participating parties. The parties commit to contribute capital, effort or assets to carry out common business activities and share profits, risks and responsibilities arising from such business activities.

Characteristics of business capital contribution contracts

Business capital contribution contracts have unique characteristics, distinguishing them from other types of contracts. And has the following main characteristics:

• Capital contribution contracts must be made in writing: because the object of the capital contribution contract is the commitments that the parties have agreed to contribute capital. A capital contribution contract is a contract that can have many parties involved, entities participating with the purpose of cooperating and contributing capital to do a business together. This contract is consensual.
• About participating subjects: This contract may have multiple signatories. Parties can be individuals or organizations, with no limit on number. This depends on the scale of the project and the needs of investors. All parties have a common purpose of collaborating and contributing capital to carry out a specific business.
• A business capital contribution contract is a bilateral contract: Because each participating party has rights and obligations towards each other. These rights and obligations are determined based on the parties’ agreement and the provisions of law.
• Business capital contribution contract with the nature of profit and loss sharing: After entering into a contract, the parties must contribute assets according to the agreement. If there is a profit, they will divide it according to the agreed ratio. In case of loss, each party must bear it according to its contribution.

Instructions for drafting business capital contribution contracts

Required content of business capital contribution contract

When making and drafting business capital contribution contracts, the parties to the agreement can freely discuss the contract content, but the contract must contain the following 9 contents:

1. Information about the subject of the contract: The information of the parties to the contract must be clearly identified.
2. Object of the contract: The quantity and quality of that object must be clearly stated.
3. Payment method: the parties must clearly state payment in cash, or bank transfer, etc. The price agreement must be clear to avoid future disputes.
4. Rights and obligations of the parties
5. Distribution of profits between parties participating in business capital contribution contracts
6. Validity of the contract: clearly state the term of the contract, the specific location of the transaction, and the method of implementing the business capital contribution contract must be very clear.
7. Regulations, clearly stating the responsibilities of each participating party
8. Dispute resolution: The parties should agree on this content to resolve disputes if the parties cannot compromise while implementing the contract.
9. Some other items are freely agreed upon by the parties.

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Form of business capital contribution contract

A capital contribution contract has many participating entities (at least 02 entities) with the purpose of cooperating and contributing capital to complete a certain task. Therefore, the contract must be made in writing to become legal evidence when a dispute occurs.

With the written form of a business capital contribution contract, the contract needs to be notarized to ensure the transparency of the contract.

Consulting services and support for drafting business capital contribution contracts

Many businesses and individuals choose to use professional consulting services to draft business capital contribution contracts. Using professional consulting services helps you save time and effort for all parties involved. At Long Phan, we can advise and support you in drafting business capital contribution contracts to propose appropriate terms to protect the interests of each party and help ensure fairness and transparency. transparency in the contract. Long Phan’s services include:

• General advice on business capital contribution in clearly explaining legal regulations on forms of business capital contribution
• Draft a detailed capital contribution contract, including all necessary provisions.
• Adjust the contract based on input from the parties. Adjusting the contract will ensure compliance with the general agreement and ensure the legality of the contract.
• Carefully check contract terms to ensure legality, clarity and avoid possible legal risks.

Drafting business capital contribution contracts helps protect the interests of investors, resolve possible disputes and create a professional and effective working environment. To ensure your contract complies with legal regulations and maximizes the rights of both parties, please contact Long Phan via hotline. 0906735386. Long Phan will provide detailed advice and support you throughout the process of drafting and implementing a business capital contribution contract.