According to the current enterprise law, the time limit for capital contributors and owners to fulfill the obligation to contribute capital to a limited liability company is defined as within 90 days from the date of issuance of the Certificate. get business registration. Accordingly, depending on the provisions of the company’s charter, the time limit for charter capital contribution will be determined.

However, in reality, the failure of capital contributors and company owners to contribute enough capital or/and fail to fulfill their capital contribution obligations is a common occurrence. The following article will answer all the questions of investors who have been and are planning to establish a company around the topic of capital contribution.

When is it considered past the time limit for capital contribution?

According to the provisions of Clause 2, Article 47 of the Law on Enterprises 2020, for a limited liability company with two or more members, “Members must contribute capital to the company in full and with the right type of assets as committed when registering for membership. establish an enterprise within 90 days from the date of issuance of the enterprise registration certificate, excluding the time for transporting and importing assets contributed as capital, and carrying out administrative procedures to transfer property ownership. During this period, the member has rights and obligations in proportion to the committed capital contribution ratio. A member of the company may only contribute capital to the company with an asset other than the committed one if it is approved by more than 50% of the remaining members. Similarly, the time limit for a capital contribution of the company owner to a one-member limited liability company is also specified in Clause 2, Article 75 as follows: “The company owner must contribute capital to the company in full and correctly. type of property committed when registering for business establishment within 90 days from the date of issuance of the enterprise registration certificate, excluding the time for transporting and importing assets contributed as capital, carrying out administrative procedures. principal to transfer ownership of property”.

Through the above two regulations, we can see that whether a capital contributor for a limited liability company with two or more members or an owner for a one-member limited liability company, the time of capital contribution is also within 90 days from the date of issuance of the business registration certificate. In case of capital contribution with assets, transportation, import, and administrative procedures to transfer property ownership must be carried out, this time will not be included in and 90 days as above. In other words, the time when capital contributors and company owners are considered to have violated the time limit for capital contribution obligations is from the 91st day onwards (except for the time of transportation and import of contributed assets, carrying out administrative procedures to transfer ownership of assets contributed as capital) from the date of issuance of the Certificate of Business Registration.

When do I have to register to change the charter capital or ratio of charter capital due to breach of capital contribution obligation?

A question arises, in case the time limit for performing the capital contribution obligation is over as referred to in Section 1, what should the limited liability company do? According to the provisions of Clause 4, Article 47 of the Law on Enterprises, “In case a member has not contributed capital or has not fully contributed the committed capital amount, the company must register for a change in charter capital, the percentage of capital contributed within 30 days from the last day on which the capital contribution must be fully contributed as prescribed in Clause 2 of this Article. The members who have not contributed capital or have not fully contributed the committed capital amount shall be responsible in proportion to the committed capital contribution ratio for the financial obligations of the company arising in the period before the date of registration of the company. sign changes to the charter capital and the percentage of contributed capital of the members”. And Clause 3, Article 75 of the Law on Enterprises stipulates “In case of failure to fully contribute charter capital within the time limit specified in Clause 2 of this Article, the company owner must register a change of charter capital equal to the value of contributed capital. within 30 days from the last day to fully contribute the charter capital. In this case, the owner shall be responsible in proportion to the committed capital contribution for the financial obligations of the company arising in the period prior to the last date the company registers to change its charter capital according to regulations. referred to in this paragraph.” When a capital contributor or owner violates the time limit for capital contribution as prescribed by the law on enterprises, the limited company shall be required to carry out procedures for registration of change (reduction) of charter capital, the ratio of charter capital to the same ratio. corresponding to the amount of capital contributed. In addition, the time to perform the obligation to register for a change (reduction) of charter capital, the ratio of charter capital is within 30 days from the last day to fully contribute charter capital.

Procedures for registration of change of charter capital and ratio of charter capital for limited liability companies.

Article 51 of Decree 01/2021 ND-CP stipulating the application for registration of changes in charter capital and ratio of charter capital for a limited liability company includes:

Notice of change of business registration information signed by the legal representative of the enterprise;

Resolutions and decisions of the company owner, for single-member limited liability companies;

Resolutions, decisions and meeting minutes of the Members’ Council, for limited liability companies with two or more members;

List of members of limited liability companies with two or more members; The list must include the signatures of the members whose capital contribution is changed, the signature of the member whose capital contribution is not required.

Power of attorney for the applicant for registration of change of charter capital or ratio of charter capital in case the applicant is not the legal representative.

Procedures for registration of changes in charter capital and ratio of charter capital are carried out at the Business Registration Office – Department of Planning and Investment where the Company is located. After receiving all the documents, the Business Registration Office – Department of Planning and Investment where the Company is located will handle it in accordance with the law.

In addition, in the case of a capital contributing member who completely fails to fulfill the capital contribution obligation, the Company must carry out procedures for changing the capital contributing member. And in case the number of capital contributors is only one member, the Company must carry out the procedure to change the type of business from a two-member limited liability company to a one-member limited liability company. . Corresponding to each of these changed procedures, the Enterprise must also make different documents in accordance with the law.

Administrative sanction when the enterprise violates the time to carry out the procedures for registration of change of charter capital and ratio of charter capital:

As mentioned above, the limited company is obliged to perform the obligation to register for change (reduction) of charter capital, the ratio of charter capital is within 30 days from the last day to fully contribute charter capital. In case after this time limit, the limited company has not yet carried out the above registration procedures, it must bear the sanctions in accordance with the law. Pursuant to the provisions of Article 44 of Decree 122/2021:

“Article 44. Violations against the deadline for registration of changes to the enterprise registration certificate.

A warning for violations of the time limit for registration of changes in contents of enterprise registration certificates, registration for changes in operation registration contents of branches, representative offices or business locations beyond the prescribed time limit. from 1 day to 10 days.

A fine ranging from VND 3,000,000 to VND 5,000,000 shall be imposed for violations of the time limit for registration of changes in contents of the Certificate of Business registration, registration for changes in operation registration contents of branches or representative offices. business location, business location beyond the prescribed time limit from 11 days to 30 days.

A fine ranging from VND 5,000,000 to VND 10,000,000 shall be imposed for violations of the time limit for registration of changes in contents of the Certificate of Business registration, registration for changes in operation registration contents of branches or representative offices. business location, business location beyond the prescribed time limit from 31 days to 90 days.

A fine ranging from VND 10,000,000 to VND 20,000,000 shall be imposed for violations of the time limit for registration of changes in contents of the Certificate of Business registration, registration for changes in operation registration contents of branches or representative offices. business location, business location beyond the prescribed time limit from 91 days or more.

A fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for failing to register to change the contents of the Certificate of Business registration, or to register to change the operation registration contents of the branch, representative office, or location. business point.

Thus, in case the limited company is late in registering to change the charter capital, the ratio of charter capital, corresponding to each delay period, the enterprise will be sanctioned with different corresponding fines.

On the other hand, in case the company does not carry out the procedures for registration of change of charter capital or ratio of charter capital at the business registration agency, the provisions of Article 46 of Decree 122/2021 shall apply, then “3. A fine ranging from VND 30,000,000 to VND 50,000,000 shall be imposed for one of the following acts: a) Failing to carry out procedures for capital adjustment or change of founding members or shareholders as prescribed at the business registration agency; after the expiration of the capital contribution period and the expiration of the time for capital adjustment because founding members or shareholders do not fully contribute capital but none of the founding members or shareholders fulfill their capital contribution commitments;

From the above provisions, it can be shown that, in addition to capital contributors, the owner “must be responsible in proportion to the committed capital contribution ratio for the financial obligations of the company arising during the period of time.” before the date the company registers to change its charter capital”. The limited liability company is also likely to be subject to administrative penalties as mentioned above when capital contributors and owners violate their contribution obligations. This more or less causes damage to both capital contributors, owners and the Enterprise. Therefore, capital contributors and business owners need to consider their ability to fulfill their capital contribution obligations at the time of business establishment to avoid the risks mentioned above.

The above are the legal provisions related to the capital contribution obligations of members and owners in a limited liability company. The article is for informational purposes only and is not intended to be an advice and is not an opinion, Vo Consultants is not responsible in any case. For each specific case, please contact Vo Consultants for detailed advice.

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