Latest cases of converting business types

Cases of converting business types are an important issue in adjusting the business operating model. Vietnamese law clearly regulates cases of conversion between different types of businesses. The conversion of business type must comply with the provisions of the Law on Enterprise 2020. In the following article, Long Phan will provide customers with common conversion cases that businesses can apply.

Current cases of converting business types

Converting business types not only aims to improve the business model but also meet market and legal requirements. Conversion cases include:

Converting a Limited Liability Company into a Joint Stock Company

According to Article 202 of the Law on Enterprise 2020, a limited liability company can be converted into a joint stock company. The conversion process can be done by the following methods:

• Do not mobilize additional organizations or individuals to contribute capital, and do not sell capital contributions to other organizations or individuals.
• Mobilize other organizations and individuals to contribute capital to the joint stock company.
• Sell ​​all or part of capital contribution to one or several other organizations or individuals.
• Combine the above methods or apply other methods as required.

Enterprises must register conversion with the business registration agency within 10 days from the date of completion of conversion.

Converting a Joint Stock Company into a Single-Member Limited Liability Company

A joint stock company can be converted into a one-member limited liability company according to Article 203 of the Law on Enterprise 2020. Conversion methods include:

• One shareholder receives all shares of the remaining shareholders.
• An organization or individual who is not a shareholder receives the transfer of all shares of the company.
• The company only has one remaining shareholder.

In this case, the company must transfer shares at market price and register the conversion with the business registration agency within 15 days.

Converting a Joint Stock Company into a Limited Liability Company with Two or More Members

A joint stock company can be converted into a limited liability company with two or more members according to Article 204 of the Law on Enterprise 2020. Conversion methods include:

• Convert without mobilizing additional shares or transferring shares to other organizations or individuals.
• Converting at the same time as mobilizing other organizations and individuals to contribute capital.
• Conversion simultaneously with the transfer of all or part of the shares to another organization or individual.
• The company only has 02 remaining shareholders.
• Combine the above methods or other methods.

The company must register the conversion with the business registration agency within 10 days.

Converting Private Enterprises into Limited Liability Companies, Joint Stock Companies, and Partnerships

Private enterprises can be converted into limited liability companies, joint stock companies or partnerships according to Article 205 of the Law on Enterprise 2020. Conversion conditions include:

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

Converting Business Type Consulting Services in Long Phan

Long Phan provides consulting services for converting business types, ensuring compliance with legal regulations and helping businesses make effective conversions. Services include:

• Consulting on regulations and cases of converting business types;
• Assist customers in drafting necessary records and documents;
• Consulting on procedures for completing obligations related to business type conversion;
• Consulting on the rights and obligations of businesses after conversion;
• Representing customers to submit documents to competent agencies;
• Consulting to resolve when disputes occur.

Converting business types is a process that requires precision and compliance with strict legal regulations. Customers need advice to carry out these procedures reasonably and quickly. Long Phan with a team of experienced consultants is ready to support customers in all issues related to business conversion. Please contact us immediately via the hotline 0906735386 for detailed advice and support.