Increasing charter capital of joint stock company and 04 things to know

During its operation, a joint stock company may increase its charter capital. Below are four regulations related to increasing the charter capital of a joint stock company.

1. Charter capital of joint stock company

The charter capital of a joint stock company is the total par value of all types of shares sold.

The charter capital of a joint stock company when registering to establish a business is the total par value of all types of shares that have been registered to buy and recorded in the company's charter.

(Clause 1, Article 112, Law on Enterprises 2020)

2. Cases of increasing charter capital of joint stock companies

- Offering shares is when a company increases the number of shares and types of shares it is allowed to offer to increase its charter capital.

- Share offering can be done in the following forms:

+ Offering shares to existing shareholders;

+ Private offering of shares;

+ Public offering of shares.

- Public offering of shares, offering of shares of public companies and other organizations shall comply with the provisions of the law on securities.

- The company shall register changes to its charter capital within 10 days from the date of completion of the share sale.

(Article 123 of the Enterprise Law 2020)

3. Documents for increasing charter capital of joint stock company

The dossier for changing the charter capital of a joint stock company includes the following documents:

- Notice of change in business registration content signed by the legal representative of the enterprise;

- Resolutions and decisions of the General Meeting of Shareholders for joint stock companies on changing charter capital;

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

*In case the General Meeting of Shareholders approves the offering of shares to increase charter capital, it also assigns the Board of Directors to carry out the procedures for registering the increase in charter capital after the end of each share sale.

Attached to the above Notice, the application for charter capital increase must include the following documents:

- Resolution and copy of the minutes of the General Meeting of Shareholders on the offering of shares to increase charter capital, clearly stating the number of shares offered and assigning the Board of Directors to carry out the procedures for registering the increase in charter capital after the end of each share offering;

- Resolution, decision and copy of minutes of the meeting of the Board of Directors of the joint stock company on registration of increase in charter capital of the company after the end of each share sale.

(Clause 1, Clause 3, Article 51, Decree 01/2021/ND-CP)

4. Procedures for increasing charter capital of a joint stock company

Step 1: Submit application

In case a joint stock company registers to change its charter capital, the company shall submit the registration dossier for change of business registration contents as stated above to the Business Registration Office where the company has its head office.

Step 2: Process documents and return results

After receiving the business registration dossier, the Business Registration Office shall issue a Receipt, check the validity of the dossier and issue a Business Registration Certificate to the enterprise.

(Clause 1, Clause 5, Article 51, Decree 01/2021/ND-CP)