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Regulations On Separation Of Businesses In Vietnam

Enterprise 04/12/2023

In the dynamic world of commerce, businesses often find themselves at crossroa separation of businesses, separation of businesses in Vietnam, regulations on separation of businesses, regulations on separation of businesses in Vietna ds where strategic decisions must be made. One such critical juncture is the separation of a business. Whether it is spinning off a division, selling a subsidiary, or splitting a conglomerate into distinct entities, the process of business separation is a complex endeavor that requires careful planning, strategic foresight, and meticulous execution. If you have any questions, please feel free to contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline 0903.419.479.

In the dynamic world of commerce, businesses often find themselves at crossroa separation of businesses, separation of businesses in Vietnam, regulations on separation of businesses, regulations on separation of businesses in Vietna ds where strategic decisions must be made. One such critical juncture is the separation of a business. Whether it is spinning off a division, selling a subsidiary, or splitting a conglomerate into distinct entities, the process of business separation is a complex endeavor that requires careful planning, strategic foresight, and meticulous execution. If you have any questions, please feel free to contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline 0903.419.479.

1. Concepts and objects that can perform the business separation procedure

1.1. Subjects of business

According to the latest Enterprise Law 2014 stipulated in Articles 192 and 193, only joint stock companies and limited liability companies have the right to carry out the procedures for enterprise separation. Other types are not regulated on the separation of enterprises.

1.2. Enterprise division 

Enterprise division is a joint stock company, a limited company divided into a number of new companies. After new companies are established, the operation of the old company will be terminated.

Regulations On Separation Of Businesses In Vietnam - 01Regulations On Separation Of Businesses In Vietnam

1.3. Separation of enterprises

Separation of enterprises is a joint-stock company, a limited company that separates part of its assets and contributed capital to establish one or several new companies. The old company (the separated company) still operates after the new company is established.

2. Methods of splitting up a business

Enterprises may follow the following methods to carry out the procedures for enterprise separation:

2.1. How to divide a business?

  • Divide part of shares, capital contribution of shareholders and members together with assets corresponding to the value of shares, share of contributed capital is divided to new companies according to the percentage of ownership in the divided company. and the corresponding value of assets transferred to the new company.

  • All shares and capital contributions of one or more shareholders and members together with assets corresponding to the value of shares and capital contributions they contribute to shall be transferred to new companies.

  • Combine both cases above.

2.2. Method of separation of business

  • Separation of a part of shares and capital contributions of shareholders and members together with assets corresponding to the value of shares and contributed capital is transferred to new companies according to the percentage of ownership in the separated company. and the corresponding value of assets transferred to the new company.

  • All shares and capital contributions of one or more shareholders and members together with assets corresponding to the value of shares and capital contributions they contribute to shall be transferred to new companies.

  • Combine both cases above.

Regulations On Separation Of Businesses In Vietnam - 02Regulations On Separation Of Businesses In Vietnam

3. Business separation profile

  • Application for registration of establishment of a new business

  • Charter of the new company

  • List of founding members and shareholders of the new company (for limited liability companies with two or more members and joint stock companies)

  • Minutes of the meeting of the General Meeting of Shareholders for joint-stock companies, the Members Council for limited liability companies with two or more members on the division/separation of the company.

  • Resolution on business division/separation

  • A valid copy of the Certificate of Business Registration or other equivalent documents of the divided/separated company

  • Valid copies of the following documents:

    • Valid ID card (or Passport) for individual members;

    • Certificate of business registration/Certificate of business registration for members being organizations, together with personal identification papers, authorization decision of the authorized representative of the organization.

4. The order of carrying out procedures for business separation

  • The Members Council, the company owner or the General Meeting of Shareholders of the divided/separated company must hold a meeting and pass a resolution on the division/separation of the company.

  • Within 15 days from the date of adoption of the resolution on division/separation, the company must send the resolution to the creditors and notify the employees.

  • A member, company owner or shareholder of a newly established company ratifies the company charter, appoints or elects the titles of Chairman of the Members Council, President of the company, Chairman of the Board of Directors. administrator, director or general director for the new company.

  • Then prepare a full business separation dossier as instructed above.

  • Submit the prepared documents to the Business Registration Office where the divided/separated company is located.

  • After 3 working days, the enterprise will receive a new business registration certificate.

  • At the same time, the Business Registration Office will update the termination status of the old company on the National Portal if the business is divided.

  • The company has just engraved its seal and announced its seal sample.

The art of business separation requires a delicate balance between strategic vision and operational precision. It is a transformative process that, when executed thoughtfully, can unlock new opportunities for growth, innovation, and market leadership. By following a comprehensive strategy that encompasses legal, financial, operational, and communication considerations, businesses can navigate the complexities of separation and set the stage for a successful future. For more detail, please contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline (+84) 903.419.479.

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