What is a capital contribution certificate? Benefits of ownership

Article overview

The capital contribution certificate acts as a legal document confirming the capital contribution of shareholders or members to the company. This document clearly defines the ownership ratio, rights and obligations of capital contributors in the enterprise according to the Law on Enterprise 2020. This is the legal basis for determining charter capital, dividing profits and exercising rights. management in the company. In the following article, Long Phan will analyze in detail the capital contribution certificate and related legal regulations.

Benefits of owning a capital contribution certificate
Benefits of owning a capital contribution certificate

What is a capital contribution certificate? The role of capital contribution certificate in business

Capital contribution certificate is a document confirming the capital contribution of a member or shareholder to the company. This document shows the amount of contributed capital and the corresponding ownership ratio in the charter capital. Regulations on capital contribution certificates are specifically stipulated in the Law on Enterprise 2020.

Vietnamese law currently does not directly define capital contribution certificates. However, this is a mandatory document when individuals or organizations contribute capital to the company. Capital contribution certificate confirms the full and correct contribution of assets as committed within the prescribed time limit.

Role of capital contribution certificate:

  • Establish ownership of capital contributions in the company.
  • Serves as a basis for determining voting rates and profit distribution.
  • Protect the legal rights of capital contributors.
  • Is the basis for transferring capital contributions.
  • Determine the responsibilities of members/shareholders towards the company.

Basic information in the capital contribution certificate

The content of the capital contribution certificate is specifically regulated in Clause 6, Article 47 of the Law on Enterprises 2020, accordingly, the capital contribution certificate must have mandatory contents, including:

  • Company name, business code, and head office address.
  • Charter capital of the company.
  • Information of capital contributing members: for individuals includes full name, contact address, nationality and legal document number; For organizations, include name, business code or legal document number and head office address.
  • Capital contribution and capital contribution ratio of each member.
  • Number and date of issuance of capital contribution certificate.
  • Full name and signature of the company’s legal representative.

Full compliance with this information ensures the legality of the document. Each information has its own role in determining the rights and obligations of the parties.

Basic information required in the certificate
Basic information required in the certificate

Benefits when owning a capital contribution certificate

The capital contribution certificate establishes the rights of the capital contributor according to the provisions of the Law on Enterprise 2020. These rights are exercised through participation in company operations and management. The level of authority depends on the capital contribution ratio and type of enterprise.

When owning a Capital Contribution Certificate, an individual or organization has the following benefits:

  • Participate in company management: Have the right to participate in deciding important issues of the company, electing positions on the board of directors or board of directors.
  • Profit sharing: Receive profits according to the capital contribution ratio, divided annually or when the company makes a profit.
  • Capital transfer: Have the right to transfer capital contributions to other individuals or organizations, according to the provisions of the company’s charter and current law.
  • Protection of legal rights: Right to request protection of rights when there is a dispute, or when your rights are violated.
  • Receive assets when the company dissolves or goes bankrupt: When the company dissolves or goes bankrupt, members have the right to receive their capital contributions back after paying debts.
  • Be provided with information: Right to request information about the company’s operations, financial situation, as well as important decisions.
  • Right to require the company to comply with the law: Capital contributing members have the right to request the company to fulfill tax obligations and comply with legal regulations on labor, environment and safety.
  • Right to participate in major decisions: Participate in meetings about changing the company structure, issuing shares, or issues affecting the existence of the company.

Handling cases of non-contribution/insufficient capital contribution as committed

For LLC

1. One-member limited liability company:

According to the provisions of Clauses 3 and 4, Article 75 of the Law on Enterprises 2020, the handling of a one-member LLC when not contributing enough capital is as follows:

  • Reducing charter capital: Owners must register to reduce charter capital within 30 days.
  • Financial responsibility: The owner is responsible for financial obligations arising from failure to contribute enough capital.
  • Compensation liability: The owner must be responsible with all assets for damage caused by not contributing enough capital.

2. LLC with two or more members:

According to the provisions of Article 47 of the Law on Enterprises 2020, when capital contributing members of a LLC with two or more members do not contribute capital or do not contribute enough capital as prescribed, they will be handled as follows:

  • Loss of membership: Members who do not contribute capital will lose their membership in the company.
  • Offering of uncontributed capital: The uncontributed capital will be offered by the company according to the decision of the Board of Members (BOD).
  • Registering changes to charter capital: The company must carry out procedures to register changes to charter capital and capital contribution ratio when there is a change.

For partnerships

Pursuant to Article 185 of the Law on Enterprises 2020 and Decree 01/2021/ND-CP, when members of a partnership company do not contribute enough committed capital, there will be handling measures as follows:

  • Compensation for damages: Members who do not contribute enough capital must compensate for damages to the company.
  • Expelling members: After 2 failed requests to contribute capital, members can be expelled from the company.
  • Company debt: Uncontributed capital will be considered a member’s debt to the company.
  • Change of registration: The company must register a change in charter capital and members if there is a change.
Handling in case of not contributing enough capital
Handling in case of not contributing enough capital

Consulting services on issues related to capital contribution certificates

As an important legal document in business operations, the capital contribution certificate requires accuracy and strict compliance with regulations. Long Phan is proud to provide comprehensive consulting services on capital contribution certificates, including:

  • Consulting on the rights and obligations of capital contributing members;
  • Support customers in drafting documents and papers related to capital contribution activities;
  • Consulting on drafting and amending the company charter related to regulations on capital contribution, rights and obligations of capital contributing members, capital transfer process;
  • Representing customers to carry out relevant registration procedures at competent agencies;
  • Advise on resolution measures when disputes arise.

Capital contribution certificate is a key document in business operations, ensuring the rights of parties contributing capital and operating the company. For detailed advice on procedures for creating, registering and handling issues related to capital contribution certificates, please contact the hotline 0906735386. Our team of consulting experts will assist you in resolving all problems according to current regulations.