Regulations on increasing charter capital by increasing capital contributions of members in limited liability companies with two or more members

A limited liability company with two or more members can increase its charter capital by increasing the capital contributions of its members. A limited liability company with two or more members can increase its charter capital in the following two cases:

- Increase member capital contribution.

- Receive additional capital contributions from new members. See more work: "Increase capital by receiving capital contributions from new members".

1. Contributed assets

Contributed capital can be Vietnamese Dong, freely convertible foreign currency. Gold, land use rights value. Intellectual property rights value, technology, technical know-how. Other assets that can be valued in Vietnamese Dong.

Intellectual property rights used to contribute capital include copyrights, rights related to copyrights, industrial property rights, rights to plant varieties. And other intellectual property rights as prescribed by the law on intellectual property. Only individuals and organizations that are legal owners of the above rights have the right to use such assets to contribute capital.

Members of a limited liability company with 2 or more members must carry out procedures to transfer ownership of assets to the limited liability company with 2 or more members according to the provisions of law.

2. Procedures for registering changes to charter capital and capital contribution ratios of members

When increasing charter capital, a limited liability company with 2 or more members must carry out procedures to register changes in charter capital and capital contribution ratio.

- Notice of change of business registration.

- Resolutions, decisions and minutes of meetings of the Board of Members.

- List of members of a limited liability company with two or more members (according to Appendix I-6 issued with Circular No. 01/2021/TT-BKHĐT).

- Transfer contract or documents proving completion of transfer in case of transfer of capital contribution; Donation contract in case of donation of capital contribution.

- Document of the Investment Registration Authority approving the capital contribution and purchase of capital contributions by foreign investors and economic organizations with foreign investment capital in cases where it is required to carry out procedures for registration of capital contribution and purchase of capital contributions according to the provisions of the Investment Law.

Application submission location: Business Registration Office where the LLC with 2 or more members has its head office.

Duration: Within 10 days from the date of completion of the charter capital increase, a limited liability company with 2 or more members must make a Notice of change in charter capital. It must clearly state the increased capital and the capital contribution ratio of the members (in case of changing the capital contribution ratio). See details at the task: "Change of charter capital".

3. Procedure for registering changes to charter capital and capital contribution ratio of members

The decision on this issue must be approved by the Board of Members of a limited liability company with 2 or more members at a meeting of the Board of Members and will only be approved if there are votes representing at least 65% of the total capital contribution of the members attending the meeting in favor. See details at the job: "Decision / Resolution of the Board of Members"

The Board of Members shall decide specifically on the increased charter capital of a limited liability company with 2 or more members. The additional contributed capital shall be divided among the members in proportion to their capital contribution in the company's charter capital.

For example: NTV X Company Limited has a charter capital of 10 billion VND, currently has 3 members A, B, C with capital contribution ratios of 40%, 35% and 25% respectively.

On April 10, 2018, Company X decided to increase the company's charter capital by increasing the capital contribution of the company's members to 20 billion (an increase of 10 billion compared to the initial establishment period). Thus, the additional capital contribution will be divided among the members in proportion to the existing capital contribution in the company, specifically:

- Mr. A will contribute more: 40% * 10 = 4 (billion)

- Mr. B will contribute more: 35% * 10 = 3.5 (billion)

- Mr. C will contribute more: 25% * 10 = 2.5 (billion)

In case one of the members wants to transfer his/her capital contribution to another person, the transfer of capital contribution shall be carried out in accordance with the provisions for transferring a member's capital contribution. See job details: "Transfer of member's capital contribution"

In case a member objects to the decision to increase the charter capital, that member may not contribute additional capital to the LLC with 2 or more members. In this case, the additional capital contributed by that member shall be divided among the other members in proportion to their capital contribution in the company's charter capital unless the members have another agreement.

Continuing the above example: In the meeting of the Board of Members of Company X, Mr. A and Mr. B agreed to increase the company's charter capital by 10 billion, Mr. C did not agree, the decision was still passed (due to > 65% of the total capital contribution of the members attending the meeting).

In this case, Mr. C can contribute additional capital or not contribute additional capital to the company. If Mr. C does not contribute additional capital to the company, this additional capital will be divided between Mr. A and Mr. B.

In case, increasing charter capital in this form changes the capital contribution ratio of members, or there are other capital contributing members (in case a member transfers his/her capital contribution rights to another person who is not a member of the LLC with 2 or more members), the Member Registration Book must be adjusted.