Monday, September 26 2016

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You set up a firm. Now what?

Update: June, 22/2016 - 09:00

To avoid fines for inadequate compliance with provisions of the law, PLF suggests newly-established enterprises should pay heed to the following issues:

1.  Disclosure of business registration contents: Within 30 days of the establishment or amendment of business registration contents, enterprises must post their business registration information on the National Business Registration Portal (NBRP). Failure to comply with the provisions or incorrect compliance will result in a VNĐ1-2 million fine.

2.  Company seal carving and seal sample registration: Enterprises may have new seals engraved and seal samples registered at the police departments of provinces and cities under the central government. Only after being granted a Seal Sample Registration Certificate (SSRC) may the enterprises be permitted to use the seals. Using corporate seals without the SSRC will result in a VNĐ2-3 million fine and confiscation of the seals. 

3.  Tax registration: Within 10 working days of the grant of the Business Registration Certificate (BRC) or Investment Certificate, enterprises must contact tax authorities for registration. In case of tardy submission of the tax registration dossier, enterprises will face warnings or penalties amounting to between VNĐ400,000 and VNĐ2 million, depending on the nature and extent of the violation. 

4.  Display of business name: The enterprise’s name must be displayed properly at its head office, branches and representative offices (if any). If enterprises fail to comply with the requirement, they will be fined VNĐ10-15 million and are required to display their business names in accordance with the laws. 

5.  Announcement of opening hours: Within 15 days of being granted a BRC, enterprises must announce the opening hours at their head office to business registration authorities.

6.  Sub-licences: With regard to the business sector required by law to have a business licence or certificate of eligible business (collectively referred to as “sub-licences”), enterprises must apply for permission and may only start operating once approved by competent authorities.

7.  Capital contribution commitment: Depending on the business entity, enterprises contribute capital as follows: 

·          Limited liability company (LLC): The company owner or its members must contribute capital adequately and punctually, as committed.

·          Joint stock company: The founding shareholders are obliged to fully pay for the shares that they have committed to purchase within 90 days from the day the enterprise is granted a BRC. 

In case of inadequate and unpunctual contribution of the registered capital amount, enterprises will face fines ranging from VNĐ5 million to 20 million. In addition, multi-member LLCs are required to register for charter capital reduction while other business entities are obliged to fully contribute the registered amount of capital.

8.  Issuance of certificate of capital contribution: Multi-member LLCs must grant their members the certificate of capital contribution at the time capital is contributed. If there is failure to issue, enterprises will be fined VNĐ10 to 15 million.

9.  Registry book of members and registry book of shareholders: Enterprises must issue and conserve the registry book of members (for multi-member LLCs) or the registry book of shareholders (for joint stock companies). Any enterprise failing to comply with the requirement is subject to a fine ranging from VNĐ10 million to 15 million and is required to issue registry books of members or shareholders as regulated by the law.

10.  Announcement of capital contribution progress: Multi-member LLCs must notify business registration authorities, in writing, of their capital contribution progress within 15 days commencing from when they commit to contribute capital. For joint stock companies, capital contribution progress must be disclosed to business registration authorities within 90 days from the granting of the BRC. The penalties applied in case of failure to announce capital contribution progress range from VNĐ1 million to 2 million. In addition, enterprises are required to notify the provincial business registration office of the contents.

11.  Establishment of Control Board: LLCs with 11 members or more must establish a Control Board. It is also mandatory for joint stock companies with more than 11 shareholders who are individuals or shareholders that are organisations holding more than 50% of the company’s total shares to have a Control Board. Enterprises without a Control Board will be fined VNĐ5-10 million. PLF – LAW FIRM

 

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