Will a company be fined if it does not register changes to its charter capital? | iGuide

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What is the penalty for a joint stock company that does not register when changing its charter capital?

Failure to register changes to charter capital can result in serious penalties for a joint stock company. This article will explain in detail the relevant legal regulations and the legal consequences that a business may face.

1. Pursuant to Article 44 of Decree 122/2021/ND-CP, it is stipulated that:

"Article 44. Violations of the time limit for registering changes to the contents of the Business Registration Certificate

1. Warning for violations of the deadline for registering changes to the contents of the Business Registration Certificate, registering changes to the contents of the branch, representative office, or business location registration beyond the prescribed deadline from 01 to 10 days.

2. A fine of VND 3,000,000 to VND 5,000,000 shall be imposed for violations of the deadline for registering changes to the contents of the Business Registration Certificate, registering changes to the contents of the registration of branch operations, representative offices, and business locations beyond the prescribed deadline from 11 to 30 days.

3. A fine of VND 5,000,000 to VND 10,000,000 shall be imposed for violations of the deadline for registering changes to the contents of the Business Registration Certificate, registering changes to the contents of the registration of branch operations, representative offices, and business locations beyond the prescribed deadline from 31 to 90 days.

4. A fine of VND 10,000,000 to VND 20,000,000 shall be imposed for violations of the deadline for registering changes to the contents of the Business Registration Certificate, registering changes to the contents of the registration of branch operations, representative offices, and business locations beyond the prescribed deadline of 91 days or more.

5. A fine of VND 20,000,000 to VND 30,000,000 shall be imposed for failure to register changes to the contents of the Business Registration Certificate, or to register changes to the contents of the registration of operations of branches, representative offices, and business locations.

6. Remedial measures:

a) Compulsory registration of changes to the contents of the Business Registration Certificate, registration of changes to the contents of registration of branch, representative office, and business location activities for violations specified in Clause 1, Clause 2, Clause 3 and Clause 4 of this Article in case of failure to register changes as prescribed;

b) Forced registration of changes to the contents of the Business Registration Certificate, registration of changes to the contents of registration of branch, representative office, and business location activities for violations specified in Clause 5 of this Article."

2. In addition, pursuant to Clause 2, Article 4 of Decree 122/2021/ND-CP, it is stipulated that:

"2. The fine level prescribed in this Decree is the fine level applied to organizations (except for the fine level prescribed in Point c, Clause 2, Article 28; Point a and Point b, Clause 2, Article 38; Article 62 and Article 63 of this Decree are the fine levels applied to individuals). For the same administrative violation, the fine level for individuals is equal to 1/2 (one-half) of the fine level for organizations."

Thus, failure to register when changing charter capital will result in a fine of 20,000,000 VND to 30,000,000 VND for organizations, and 1/2 (one-half) of the fine for individuals, i.e. from 10,000,000 VND to 15,000,000 VND. In addition, it is mandatory to register changes to the content of the Business Registration Certificate.