Increasing charter capital of joint stock companies and things to know

Increasing the charter capital of joint stock companies is an important solution for businesses to expand their scale and increase competitiveness. Increasing charter capital not only helps the company mobilize more financial resources but also creates opportunities to cooperate with large organizations. The article below will analyze in detail the process, methods, and procedures that need to be followed when increasing charter capital for a joint stock company.

The benefits of increasing charter capital of joint stock companies

Increasing the charter capital of a joint stock company brings many practical benefits. Specifically includes the following benefits:

• First, the company will have more financial resources to expand its scale of operations and invest in new projects. This helps enhance competitiveness and market access.
• Second, when the charter capital is high, the company can cooperate with larger organizations and businesses, thereby expanding its partner network and increasing development opportunities. At the same time, thereby increasing reliability and long-term cooperation.
• Finally, increasing charter capital helps the company borrow capital more easily from banks and credit institutions. Enterprises with large charter capital are often given priority in granting loans with high limits and low interest rates, creating conditions for future development strategies.

Methods of increasing charter capital of joint stock companies

Pursuant to Article 123 of the Law on Enterprise 2020, joint stock companies can increase charter capital through the following methods:

• Offering shares to existing shareholders;
• Offering private shares;
• Offering shares to the public.

The choice of method to increase charter capital depends on the specific needs and goals of each company.

Procedures for increasing charter capital of joint stock companies

Procedures for increasing charter capital of joint stock companies are specified in Article 51 of Decree 01/2021/ND-CP.

Step 1: Prepare documents

Customers need to prepare complete documents according to regulations, including:

• Notice of change in business registration content.
• Resolutions and decisions of the General Meeting of Shareholders on increasing charter capital.
• Minutes of the General Meeting of Shareholders.
• Document from the Investment Registration Authority approving the purchase of shares by foreign investors or economic organizations with foreign investment capital in cases where share purchase registration procedures must be carried out.

In case the General Meeting of Shareholders approves the offering of shares to increase charter capital, and at the same time assigns the Board of Directors to carry out procedures for registering an increase in charter capital, accompanied by the above Notice, the application for registration of increase Charter capital must contain the following documents:

• Resolution and copy of the minutes of the General Meeting of Shareholders on the offering of shares to increase charter capital and assign the Board of Directors to carry out procedures for registering an increase in charter capital;
• Resolutions, decisions and copies of meeting minutes of the Board of Directors of joint stock companies on registration to increase the company’s charter capital after the end of each share sale.

Step 2: Submit application

Documents to increase charter capital are submitted directly or by post to the Business Registration Office where the company’s headquarters is located.

Step 3: Processing documents

The Business Registration Office receives the application, checks its validity, makes additional requests (if necessary) and issues the Business Registration Certificate within 03 working days.

Professional consulting services for increasing charter capital of joint stock companies

Long Phan’s services for increasing charter capital of joint stock companies include:

• Consulting on choosing appropriate capital raising methods.
• Drafting application documents to increase charter capital.
• Instructions on the order and procedures for registering changes in charter capital.
• Customer representative submits documents and works with the business registration agency.
• Support customers in completing procedures after registering to change charter capital.
• Consulting and answering other issues related to joint stock companies.

Increasing charter capital is an important step for businesses to improve their financial strength and expand business activities. Implementing the correct process not only helps the company achieve its development goals but also minimizes risks. Customers who need support with procedures for increasing charter capital can contact us via the hotline: 0906735386 for detailed advice.