To: Departments of Planning and Investment of centrally-governed cities and provinces

The Ministry of Planning and Investment has recently received the written requests from Departments of Planning and Investment of centrally-governed cities and provinces for instructions for adjustment of the company’s charter capital in the event that members, owners and shareholders of a company (hereinafter collectively referred to as members) has not yet or fully made their capital contribution to the company’s charter capital as committed. In order to deal with this issue, the Ministry of Planning and Investment gives its opinions hereunder:

Clause 29 Article 4 of the 2014 Law on Enterprises prescribes: “Charter capital means the total value of assets that are contributed or promised to be contributed by members/partners when establishing a limited liability company or partnership; or the total face value of shares that are sold or registered when establishing a joint-stock company”.

Article 48, Article 74, Article 112 and Article 212 of the 2014 Law on Enterprises prescribes that every member of a company must contribute assets in full and of the right type as agreed upon within 90 days from the day on which the Certificate of Business Registration is issued. As regards limited liability companies which applied for registration of their establishment before July 1, 2015, their members and owners shall be bound to make their capital contribution within the permitted duration specified in the company’s statutes.

1. Where the company’s members have not yet or fully made their capital contribution to the company’s charter capital within the aforesaid duration as committed, the duration for registration of the adjusted charter capital equal to the actual value of contributed capital shall be 60 days with respect to multiple-member limited liability companies, 30 days with respect to single-member limited liability companies and joint-stock companies, from the deadline for the full contribution to the charter capital. Members who has not yet or fully made capital contributions to the company’s charter capital as committed shall bear responsibility in proportion to the portion of capital to be contributed as committed for fulfilling financial obligations that may arise prior to registration of adjustment to the charter capital with respect to limited liability companies and for fully paying for shares which they offer to buy within the predetermined duration with respect to joint-stock companies.

2. Where members have not yet or fully made their capital contribution as committed upon expiration of the duration for registration of the adjusted charter capital, the company shall apply for registration of a decreasing adjustment to the charter capital which equals the actually contributed capital value. In this case, any violation against regulations on the permitted duration for registration of adjustment to information about the enterprise registration shall be subject to penalties referred to in Article 25 of the Government's Decree No. 50/2016/ND-CP dated June 1, 2016 on administrative penalties for violations in the planning and investment sector. Application package for registration of adjustment to the charter capital shall be prescribed in Article 44 of the Government's Decree No. 78/2015/ND-CP dated September 14, 2015 on enterprise registration.

3. Where contributed capital portions and shares for which payments have not yet been made are totally sold to other members, shareholders, organizations or individuals within the duration for registration of adjustment to the charter capital as per Clause 4 Article 48, Clause 3 Article 74, Point d Clause 3 Article 112 of the 2014 Law on Enterprises, the company in question shall be obliged to register adjustment to its charter capital.

- Where sale of contributed capital portions for which payments have not yet been made results in any change in the proportion of capital contribution of members of multiple-member limited liability companies, application package for registration of change in the contributed capital proportion shall be subject to Clause 1 Article 44 of the Decree No. 78/2015/ND-CP. The decision on offer for sale of shares of contributed capital granted by the Board of Members and documents evidencing completion of sale of shares of contributed capital should be attached to the aforesaid application package.

- Where sale of shares for which payments have not yet been made leads to any change in information about founding shareholders of joint-stock company, documents required for notification of change of founding shareholders' information shall be subject to provisions laid down in Clause 3 Article 51 of the Decree No. 78/2015/ND-CP, and shall comprise the written agreement on transfer of shares or documents evidencing completion of transfer of shares which are replaced by the decision on offer for sale of shares for which payments have not yet been made, granted by the Managing Board, and documents evidencing completion of sale of shares.

- Where sale of shares for which payments have not yet been made leads to any change of shareholders who are foreign investors in unlisted joint-stock companies, documents required for notification of change of shareholders who are foreign investors shall be subject to provisions laid down in Clause 1 Article 52 of the Decree No. 78/2015/ND-CP, and Clause 2 Article 5 of the Circular No. 20/2015/TT-BKHDT dated December 1, 2015 of the Ministry of Planning and Investment providing guidance on registration of enterprises, and shall comprise the written agreement on transfer of shares or documents evidencing completion of transfer of shares which are replaced by the decision on offer for sale of shares for which payments have not yet been made, granted by the Managing Board, and documents evidencing completion of sale of shares.

- Where sale of shares for which payments have not yet been made leads to any change of information about shareholders who are foreign investors in unlisted joint-stock companies, documents required for notification of change of information about shareholders who are foreign investors shall be subject to provisions laid down in Clause 2 Article 54 of the Decree No. 78/2015/ND-CP. The decision on offer for sale of shares granted by the Managing Board and documents evidencing completion of sale of shares should be attached to the aforesaid documents.

- Where sale of shares for which payments have not yet been made results in any change in members of multiple-member limited liability companies, application package for registration of change in members shall be subject to Clause 1 Article 45 of the Decree No. 78/2015/ND-CP. The decision on offer for sale of shares of contributed capital granted by the Board of Members should be attached to the aforesaid application package.

- Where sale of shares or shares of contributed capital for which payments have not yet been made leads to business transformation, application package for enterprise registration shall be subject to provisions laid down in Article 25 of the Decree No. 78/2015/ND-CP, and shall comprise the written transfer agreement or documents evidencing completion of transfer of shares of contributed capital which are replaced by the decision on offer for sale of shares of contributed capital and shares for which payments have not yet been made, and documents evidencing completion of sale of shares of contributed capital and shares.

4. The 2014 Law on Enterprises does not prescribe that companies shall be allowed to register a decreasing adjustment to the charter capital within the duration for capital contribution by members and shareholders to the charter capital as committed.

5. Where companies registered an increase in their charter capital before July 1, 2015 but, in fact, members have failed to make or have not made capital contribution as much as they have registered, these companies shall apply for registration of a decreasing adjustment to the charter capital which is equal to the actually contributed capital amount. The application package for registration of change in the charter capital shall be subject to Article 44 of the Decree No. 78/2015/ND-CP. Members who has not yet or fully made capital contributions shall bear responsibility in proportion to the portion of capital to be contributed as committed for fulfilling financial obligations that may arise prior to registration of adjustment to the charter capital.

Departments of Planning and Investment are requested to direct their Business Registration Divisions to study and implement this document.