Differences Between Limited Liability Company and Joint Stock Company

How to distinguish a Limited Liability Company and Joint Stock Company?

Vietnam Law allows the establishment company in Vietnam in various forms. It is an important step in investment process.

10 questions to ask before setting up company in Vietnam?

Investors could choose different forms depending on the needs and capacity on the ability to raise capital and sharing the risk in business as well as the management and operating costs. Each form will have its own organizational structure, operating mechanism, rights and obligations specified under Law on Enterprise 2014.

Currently, Limited Liability Company (“LTD”) and Joint Stock Company (“JSC”) are two popular enterprise forms operating in Vietnam.

What is the difference between these two forms of companies?

I. Organizational Structure

Number of members/shareholders:

LTD

-Single member LTD: Having only one member (member can be an organization or an individual);

-Multi members LTD: Having at least 2 members and not exceed 50 members (member can be an organization or an individual).

JSC

Joint Stock Company has at least 3 shareholders and not limit the maximum number.

Management structure

LTD

-Single member LTD

Single member LTD owner by an organization shall be organized under two models: Company president, Director/General director and Supervisor; (OR) Members Council, Director/General director and Supervisor.

Single member LTD owner by an individual shall be organized as follows:  Company president, Director/General director.

-Multi members LTD

Multi members shall be organized by: LTD Council members, Chairman of the Members Council and Director/General director;

Multi members LTD having 11 members or more shall establish the Board of Supervisors.

JSC

JSC can be organized under two models: General Meeting of Shareholders, Board of Directors, Board of Supervisors and Director/General director; (OR) General Meeting of Shareholders, Board of Directors (Board of Internal Supervisors under Board of Directors) and Director/General director.

II. Capital Contribution

Raising capital

LTD

-Single member LTD: Owner increases charter capital

-Multi members LTD: Members increase their charter capital, or increasing the number of capital contributors

JSC

Different from LTD, JSC can raise its capital by various methods as follows: Selling shares to existing shareholders; Selling shares individually to non-shareholders; Issuing shares on the stock market.

Transfer of contributed capital

LTD

-Single member LTD: Owner transfers a part of contributed capital to other persons and this could lead to changes of the type of business or other procedures if all capital is transferred (for instance in a M&A deal).

-Multi members LTD: Offer the stakes to other members in proportion to their stakes in the company under the same conditions;  The stakes could only be transferred to other persons if the members do not buy or do not buy completely within 30 days from the offering date.

JSC

The shareholders of JSC are free for transfer their contributed capital after 03 years from the establishment.

Having said that, LTD is a type of enterprise that the capital contribution is not the only link between the members of the company but they are also linked together by relationship. They may be acquaintances and trust each other to jointly contribute capital to establish an enterprise. Therefore, the management of the LTD is as complicated as JSC. With the larger the number of shareholders, the level of capital mobilization, voting power to decide on issues of the company based on the ratio of capital contribution of each shareholder, the management and operation of the JSC is more complex.

The ability to raise capital of a JSC is higher than a LTD. Because, JSC can issue shares to the public in the form of securities. When the stocks are listed on stock exchange, the information of company’s business operations must be public and more transparent.

The procedure to set up a company in form of an LTD or a JSC has not much differences.

ANT Lawyers is a law firm in Vietnam with English speaking lawyers, located in the business centers of Hanoi, Danang and Ho Chi Minh City to provide convenient access to our clients. With highly professional staff and great experience in foreign investment, we would like to support you to set up joint stock company in Vietnam.

Source ANTLawyers: https://antlawyers.vn/library/distinguish-a-limited-liability-company-and-a-joint-stock-company-in-vietnam.html 

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How Vietnam Has Simplified Procedures to Register Business in Vietnam?

By the end of 2019, there have been more than 30,000 FDI projects choosing Vietnam for investment, with a total registered capital of about 362 billion USD. Recently, business propensity of Vietnam is highly concentrated on the private sector, attracting foreign investors to the Vietnam market.

As Vietnam has built diplomatic relationship with nearly 190 countries around the world and signed about 15 Free Trade Agreements with important trading partners, Vietnam’s participation in various free trade agreements has created a strong impetus for foreign investors from developed countries to set their first steps in the Vietnam.

To be able to register a business in Vietnam, investors need to carry out procedures to apply for the Investment Registration Certificate. After being granted the Investment Registration Certificate, the investor shall  then apply for Enterprise Registration Certificate.

To carry out the process of applying for the Enterprise Registration Certificate, firstly, the investors need to choose a name for the business, which must not be identical or confusing to the name of another business already registered in the National Database of Business Registration on a national scale, except for businesses that have been dissolved or have had effective court decisions declaring businesses bankrupt.

After that, the investors or the authorized person need to prepare a complete set of application dossiers in accordance with the law and submit it at the Business Registration Office where the head office is planned to be located. The Business Registration Office will check the validity of the application dossier, based on the appointment date on the Receipt, the investors or the authorized person can go to the Business Registration Office to receive the results of the application or Register to receive results by post. The time limit for considering and handling the dossier is 03 working days from the date of receiving the valid dossier.

The investor will be granted an Enterprise Registration Certificate when fully meeting the following conditions:

-The registered business lines are not in the prohibited business sectors;

-The business’s name is set in accordance with the provisions of law;

-Having a head office as prescribed by law;

-Having a valid business registration dossier as prescribed by law;

-Fully paying the enterprise registration fee as prescribed by law

Over the years, investors have built confidence in the Vietnam’s business and investment environment. The socio-political and macroeconomic stability are prominent features for the growth of Vietnam’s business potential. The Vietnam government has determined to  simplify the process for investment application. Hence, Vietnam is and will continue to be an attractive investment location, a promising destination for foreign investors for applying for investment registration certificate and register a business in Vietnam compared with other neighboring countries in the region.

ANT Lawyers – a law firm in Vietnam will always follow up with authorities for legal update on matters relevant to investment registration or business setting-up in Vietnam.

Source ANTLawyers: https://antlawyers.vn/library/procedures-to-register-business-in-vietnam.html   

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Regulations of Radio and Television Services in Vietnam

What Changes in Decree 71/2022/ND-CP  on Regulations of Radio and Television Services in Vietnam?

Along with the strong development of the Internet is an increase in people’s demand for using television services on the Internet instead of the traditional methods. Television services on the Internet providing domestic and foreign programs, movies, etc. have brought a significant source of revenue for domestic and foreign enterprises providing radio and television services. However, to ensure legal fairness for domestic enterprises as well as foreign enterprises doing business in providing this service to users, on October 1st, 2022, the Government issued Decree 71/2022/ND-CP amending and supplementing some articles of Decree No. 06/2016/ND-CP dated January 18th, 2016 on management, provision and use of radio and television services. The promulgated Decree has added new regulations on the management of domestic and foreign enterprises providing radio and television services, or in other words, changes in broadcast law in Vietnam. Specific details should be advised by media and entertainment lawyers in Vietnam however this write-up expects to provide some update on the development of regulations in this area.

As for management policies, the Decree stipulates the management of the provision and use of radio and television services in Vietnam, including radio and television services on the Internet, or across borders to users in the territory of Vietnam. Accordingly, foreign enterprises providing across borders radio and television services in Vietnam must be managed and comply with the provisions of Vietnam law.

For internet radio and television services (OTT TV), enterprises can choose from two service delivery models: (i) OTT TV provides both online channels and on-demand content (VOD) and (ii) OTT TV only provides VOD (OTT TV VOD). For OTT TV VOD service, enterprises are not required to provide program channels like traditional services and only needed to make a declaration according to the form of the Ministry of Information and Communications, instead of having to make a scheme as previously required to apply for a license to provide paid radio and television services. This regulation creates favorable conditions for domestic enterprises with the same technical conditions as foreign enterprises to participate in providing radio and television services on demand on the internet. Foreign enterprises wishing to participate in the market must also carry out the procedures for applying for a license like domestic enterprises.

The next highlight of Decree No. 71/2022/ND-CP is the addition of regulations on editing, classifying and translating radio and television content on demand (VOD). Enterprises are allowed to actively edit and classify VOD content as movies, sports and entertainment programs when meeting the conditions and criteria as prescribed by competent agencies which previously, according to the provisions of Decree No. 06/2016/ND-CP, all VOD content must be edited by a press agency with a radio and television license before being provided on the service. Accordingly, this content is divided into 03 groups to perform as follows:

(i) For news and current affairs programs; programs on politics, national defense, security, economy, and society must be produced and edited by a press agency that has licensed to operate radio and television before being provided on the service;

(ii) For films: Before providing services, enterprises must ensure conditions for the classification of films according to the Government’s regulations and take responsibility to the law for the content and results of film classification according to the classification criteria prescribed by the Vietnam Ministry of Culture, Sports and Tourism; In case enterprises have not yet met conditions for classification of films, it is requesting the Ministry of Culture, Sports and Tourism or an agency authorized by the Ministry of Culture, Sports and Tourism to classify films that have not been granted a Film Classification License or a Broadcast Decision;

(iii) For sports and entertainment programs: Enterprises must edit and classify before providing them on the service and display warnings while providing services, ensuring that they do not commit violations against regulations of Vietnam law. Enterprises shall work on the principles of editing, classifying, and warning content in accordance with regulations of the Ministry of Information and Communications and relevant laws to carry out editing and classification activities.

Regarding regulations on translation management, enterprises are allowed to take the initiative in translation activities. The translation of foreign programs and channels, enterprises must respect and preserve the purity of the Vietnam language, and ensure that they do not violate the prohibitions according to the provisions of Vietnam law.

In addition to supplementing regulations on management policies, Decree 71/2022/ND-CP has added regulations to reduce administrative procedures, and orient online application components to reduce costs for enterprises providing radio and television services. Accordingly, enterprises that wish to apply for a license i.e. a license to provide paid radio and television services, amend or supplement the content of the license, or re-issue the license, only need to prepare set of 01 (a) dossier (previously two sets, 01 sets of originals, 01 sets of copies) and can submit online on the online public service portal of the Ministry of Information and Communications for cases which electronic authentication certification is available. In addition, the processing time for the above procedures and documents are also significantly shortened, creating favorable conditions for enterprises when carrying out administrative procedures quickly, ensuring that the business operations are not affected.

Decree No. 71/2022/ND-CP officially took effect on January 1st, 2023.

ANT Lawyers, as a reliable law firm in Vietnam, we focus on providing possible solutions that best meet the needs of legal and business clients. We help customers achieve their goals while protecting their interests, minimizing risks, and complying with the law.

Tell us how we can be of service and one of our team members will contact you. Email: ant@antlawyers.vn, Tel: +84 28 730 86 529.

Source ANTLawyers: https://antlawyers.vn/library/regulations-of-radio-and-television-services-in-vietnam.html

Source: ANT Lawyers.vn

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Trademark Registration Services in Vietnam

In Vietnam, many businesses today have not paid sufficient attention to trademark protection. Only when their trademarks would be infringed by other companies or competitors, they really concern to protect their trademarks and business through trademark registration, trademark opposition or take further actions. Such situation will negatively impact the business financially.

Trademark Registration services in Vietnam

Trademark rights will be protected within the national territory, therefore when a trademark has been registered in Vietnam, it will be protected in Vietnam. If one company wishes their trademarks to be protected in other countries, it could:

-Directly register in each country or

-Register via the Madrid International registration by filing a single application which indicates the registrations at respective countries.

If registered under the Madrid International, firstly, trademarks must have been submitted trademark applications or have registered in Vietnam, depending on whether the country for protection is under the Madrid Protocol or the Madrid Agreement.

Law on Intellectual Property and its related documents could also be referred to for further information.

ANT Lawyers’ services in the field of trademark registration advice covers:

-Look-up, assess and consult possibilities to register trademark in Vietnam and abroad;

-Represent clients in applying for certificates of trademark registration, record modification, extend degree of trademark protection in Vietnam and abroad;

-Evaluate the effectiveness of the certificate of trademark registration in Vietnam and the possibility of trademark rights violation;

-Implement of the protected trademark rights: investigate, monitor, negotiate, seek arbitration or initiate a lawsuit or request other competent agencies for handling of infringement in Vietnam and abroad;

-Negotiate, draft, evaluate and register the of changing trademark ownership in Vietnam and abroad;

-Advise on building strategies, brand development;

Trademark protections plays important roles in start-up business or matured business models because the financial benefits it brings or even it could make a business to close down in worst scenario. Hence, at ANT Lawyers, an IP registered agent in Vietnam, we continuously strive to assist clients to protect its intangible assets of trademark through registration of trademark in Vietnam at early stage.

If you are looking for an experienced Trademark lawyers in Vietnam to help you with your Trademark application, you should visit ANTLawyers. Our attorneys have experience with the IP process and will work closely with you as you apply for your IP. 

Source ANTLawyers: https://antlawyers.vn/legal-service/intellectual-property-and-trademark-registration-in-vietnam.html

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What Important Step-by-Step Guide to Establish Company in Vietnam?

When foreign investors invest in Vietnam, they could establish company in Vietnam. Foreign investors have the right to choose the appropriate forms of enterprise such as a limited liability company, joint stock company, etc. with specific steps are as follows:

How to establish company in Vietnam?

Step 1: Register the investment project

Investors submit an investment project registration file to the Business Registration office of the province or city or the management board of an industrial zone, an export processing zone or a high-tech zone for the approval of an investment project during the period within 15 days (without time for clarification).

Step 2: Apply for Certificate of investment registration

After approval of the investment project, investors submit a valid record to the Department of Planning and Investment within 10 days to apply for a business registration certificate.

Step 3: Apply for the certificate of business registration

After obtaining the business registration certificate, the investor shall submit the application for enterprise registration certificate to the enterprise registration office within 3 days.

Step 4: Publish the content of the business registration

After being granted the certificate of enterprise registration, the investor shall disclose information about the enterprise on the national enterprise registration portal within 30 days, including the following information:

i, Business lines;

ii, List of founding shareholders and shareholders being foreign investors for joint-stock companies.

Step 5: Registered business stamp

The enterprise has the right to decide on the form, quantity and contents of the stamp of the enterprise. The content of the stamp must show the following information:

-Company’s name;

-Business code.

After receiving the legal entity stamp and before using the business stamp, the enterprise must send a notice on the stamp of the enterprise to the business registration office for publication in the National Information Portal on the business registration.

Step 6: Notice of use of stamp:

After having stamp made, investors submit notices on use of stamp forms to the Investment registration agency. After receiving the record, the Investment registration agency issues a receipt for the enterprise, publishes the notice of the enterprise on the National Business Information Portal and issues a notice of the posting, stamp samples of enterprises, branches and representative offices for enterprises.

Step 7: Open bank account:

Investors need to open two types of bank accounts, namely the investment capital account to receive the investment amount and the transaction account for conducting daily transaction in Vietnam.

Step 8: The post licensing procedures:

For the conditional business lines:

Investors investing in conditional businesses lines as regulated in Appendix 4 of the Investment Law 2014 must apply certificate of business qualification, practicing certificates, professional liability insurance, legal capital requirements, etc. before conducting business in Vietnam.

With highly professional staff and great experience in foreign investment, ANT Lawyers would like to support you in establishing company in Vietnam.

ANT Lawyers - a Law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or service request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

Source ANTLawyers: https://antlawyers.vn/library/what-important-step-by-step-guide-to-establish-company-in-vietnam.html

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How to Obtain Business Registration Certificate in Vietnam

How to Obtain Business Registration Certificate in Vietnam?

Every organization and individual wishing to set up a foreign owned company in Vietnam shall need to meet some specifics conditions as promulgated under the Law on Investment and Law on Enterprise. In specific areas being considered as conditional investment, the investor shall also need to consult with the law governing the area of investment. Once the investment registration certificate is completed, the investor has the obligation to apply for enterprise registration.

Business Registration Certificate in Vietnam

The procedure to register for a certificate of enterprise registration of a joint stock company or limited liability with two or more members are herein mentioned:

Dossiers:

i) Application form for enterprise registration

ii) The company’s charter.

iii) A list of founding shareholders and shareholders being foreign investors/ a list of capital contribution members.

iv) Valid copies of:

Copies of the ID card or other ID papers of founding shareholders and foreign investors/members being individuals; list of authorized representatives of foreign shareholders being organizations.

Decision on establishment, certificate of business registration, or an equivalent document of the organization and the letter of authorization; the ID card or other ID papers of the authorized representatives of founding shareholders and foreign investors being organizations.

If shareholders are foreign organizations, the copy of the certificate of business registration or an equivalent document must be notarized, legalized and authenticated.

The Certificate of Investment registration of the foreign investors as prescribed by the Law on Investment.

State Authority: Business registration office of the province where the enterprise’s headquarters is situated.

Period: within 03 working days from the full receipt of the dossiers

Result: Business registration office shall issue the certificate of enterprise registration or if the application is not satisfactory, business registration office shall inform the applicant of necessary revisions and supplementation to company.

In general, Vietnam government encourages foreign direct investment. If the investor faces challenges at state authority, whom do not issue notification or request of supplementation to the application for enterprise registration, the investor cold lodge a complaint as prescribed by regulations of law on complaints and denunciation to the state authority to protect its right in doing business and investment in Vietnam. A law firm in Vietnam with expertise in both business registration and dispute resolution could assist the investor in the process.

The enterprise is entitled to do business from the issuance date of the certificate of enterprise registration. For conditional business lines, enterprises are entitled to engage in conditional business lines if they satisfy all conditions and are capable to maintain fulfillment of such conditions throughout their operation.

With highly professional staff and great experience in investment in Vietnam, ANT Lawyers would like to support you to register business registration certificate in Vietnam  

Source ANTLawyers: https://antlawyers.vn/update/how-to-obtain-business-registration-certificate-in-vietnam.html

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