What does the company separation file include? [Latest update]

Company separation records are an important legal process in restructuring businesses in Vietnam. According to the latest regulations of the Law on Enterprise 2020, the company separation process requires businesses to comply with a series of procedures and prepare accurate and complete documents. The following article will provide information and detailed answers about the requirements and steps to effectively separate a company.

General regulations on company separation

Company separation is an important method in restructuring businesses in Vietnam. According to the Law on Enterprise 2020, this process is carried out with specific and strict regulations. Company separation allows a business to transfer part of its assets, rights, obligations, members or shareholders to establish one or more new companies without terminating the existence of the original company.

According to the provisions of Article 199, Law on Enterprise 2020, the types of businesses eligible for separation include:

• Limited liability company;
• Joint stock company.

Important features of the company separation process:

• The separated company continues to operate;
• The separated company will only transfer part of its assets, rights and obligations;
• After separation, the company still ensures the rights of related parties.

Complete company separation file components

The most important document in separating a company is the resolution or decision to implement the company separation. The Board of members, the company owner or the General Meeting of Shareholders of the separated company shall pass a resolution and decision to separate the company in accordance with the provisions of the Law and the Company’s Charter.

Resolutions and decisions to separate the company must include the following main contents:

• Name;
• The headquarters address of the separated company;
• Name of the split company to be established;
• Labor use plan;
• How to separate the company;
• The value of assets, rights and obligations are transferred from the separated company to the separated company;
• Time limit for separating the company.

The approval rate varies according to the type of company as follows:

• Joint stock company: 65% or more of the total votes as prescribed in Article 148, Law on Enterprises 2020;
• Two-member LLC: From 75% of total capital contribution or more as prescribed in Article 59, Law on Enterprises 2020;
• One-member LLC: At least 75% of members approve as prescribed in Clause 6, Article 80, Law on Enterprises 2020.

Members, company owners or shareholders of the company are separated through the Charter, elect or appoint the Chairman of the Board of Members, Company President, Board of Directors, Director or General Director and proceed with business registration according to the provisions of the Law on Enterprise 2020.

Regarding the composition of the business registration dossier established on the basis of company separation, it is prescribed as follows:

In case of business registration for a limited liability company with two or more members or a joint stock company, based on the provisions of Article 23, Clause 2, Article 25 of Decree No. 01/2021/ND-CP, the dossier includes:

1. Application for business registration.
2. Company charter.
3. List of members for limited liability companies with two or more members; List of founding shareholders and list of shareholders who are foreign investors for joint stock companies.
4. Copies of the following documents:

• Legal documents of the individual for the legal representative of the enterprise;
• Personal legal documents for company members, founding shareholders, and shareholders who are foreign investors who are individuals; Legal documents of the organization for members, founding shareholders, shareholders who are foreign investors being organizations; Legal documents of individuals for authorized representatives of members, founding shareholders, shareholders who are foreign investors who are organizations and documents appointing authorized representatives.

For members and shareholders who are foreign organizations, copies of the organization’s legal documents must be consular legalized.

• Investment registration certificate in case the enterprise is established or participates in the establishment by foreign investors or economic organizations with foreign investment capital according to the provisions of the Law on Investment and its guiding documents.

5. Resolution and decision on company separation according to the provisions of Article 199 of the Law on Enterprises.
6. Copy of the minutes of the meeting of the Board of Members for a limited liability company with two or more members, of the General Meeting of Shareholders for a joint stock company on the separation of the company.

>>> See more: Consulting on establishing joint stock companies quickly and effectively

In case of business registration for a one-member limited liability company, based on the provisions of Article 24, Clause 2, Article 25 of Decree No. 01/2021/ND-CP, the dossier includes:

1. Application for business registration.
2. Company charter.
3. Copies of the following documents:

• Legal documents of the individual for the legal representative of the enterprise;
• Personal legal documents for company owners who are individuals; Legal documents of the organization for the company owner being an organization (except in cases where the company owner is the State); Legal documents of the individual for the authorized representative and document appointing the authorized representative.

For company owners who are foreign organizations, copies of the organization’s legal documents must be consular legalized.

• Investment registration certificate in case the enterprise is established by a foreign investor or an economic organization with foreign investment capital according to the provisions of the Law on Investment and its guiding documents.

4. Resolution and decision on separation of the company according to the provisions of Article 199 of the Law on Enterprise;
5. Copy of the minutes of the meeting of the Board of Members for a limited liability company with two or more members, of the General Meeting of Shareholders for a joint stock company on the separation of the company.

Current procedures for separating the company

According to the provisions of Clause 3, Article 199 of the Law on Enterprises 2020, procedures for separating the company are specifically carried out through the following steps:

Step 1: Pass the resolution to separate the company

The Board of members or the General Meeting of Shareholders must pass a resolution to separate the company with specific requirements on the approval rate.

Step 2: Announce the adoption of the resolution and decision to separate the company

• Send resolution to all creditors;
• Notify workers;
• Notification period: 15 days from the date of decision.

Step 3: Establish a new company

Members, company owners or shareholders of the company are separated through the Charter, elect or appoint the Chairman of the Board of Members, Company President, Board of Directors, Director or General Director and proceed with business registration.

The components of the business registration dossier arising from the separation of the company are specified depending on the type of registered business.

Place of application: Business registration office under the Department of Planning and Investment (now the Department of Finance) where the separated company’s headquarters is located.

Processing time: The business registration agency will issue the Certificate within 03 working days from receipt of valid documents.

What should businesses do after separation?

To operate the business after splitting the company effectively and in accordance with the law, customers need to ensure the following:

The first, have an effective plan for using labor after the company is split to ensure operations and profitability.

Second, carry out business registration for companies established from the separation of the original business, ensuring to avoid legal risks related to business registration.

Note: After business registration, the separated company and the separated company must be jointly responsible for the obligations, unpaid debts, labor contracts and other property obligations of the separated company, unless the separated company, the separated company, creditors, customers and employees of the separated company have otherwise agreed. The separated companies naturally inherit all legal rights, obligations and interests divided according to the resolution and decision to separate the company.

In-depth consulting services and support for company separation at Long Phan Consulting Company

At Long Phan Consulting Company, we have a team of experts with rich practical experience in consulting and supporting businesses. We will accompany and support customers throughout the process of separating and registering a business.

Long Phan Consulting Company provides professional services including:

• Comprehensive consulting on procedures for implementing business separation;
• Support customers in drafting all documents related to company separation;
• Answer all questions related to the process of separation and business registration after separation of the company;
• Carry out business registration for the separated company;
• Receive and deliver results to customers.

Frequently asked questions

Below are frequently asked questions about company separation documents:

What types of companies are allowed to separate under the Law on Enterprise 2020?

According to Article 199 of the Law on Enterprise 2020, only limited liability companies (LLCs) and joint stock companies are allowed to separate companies.

Does splitting a company terminate the existence of the original company?

No, separation of a company does not terminate the existence of the original company. The separated company continues to operate after the separation process.

What content must be included in the resolution to separate the company?

The resolution to separate the company must include main contents such as: name and head office address of the separated company, names of the separated companies, labor use plan, method of separating the company, details of asset transfer, rights and obligations, and time limit for separation.

What is the rate of passing a resolution to separate the company?

The rate of passing a resolution to separate a company varies depending on the type of company: Joint stock companies require 65% or more of the total votes, two-member LLCs require 75% or more of the total capital contribution, and single-member LLCs require at least 75% of members to approve.

What does the business registration dossier include after separating the company?

Business registration documents include: application for business registration, company charter, list of members/shareholders, copies of legal documents of members, resolution to separate the company, and meeting minutes.

Conclude

Company separation documents require a lot of expertise and legal understanding to be carried out correctly. If you are wishing to separate your company and need in-depth guidance. Please contact Long Phan Consulting Company immediately at hotline: 0906735386 to receive the most dedicated and accurate support on the company separation process in accordance with current legal regulations.