Question:
Dear Lawyer, Our company is currently engaged in commercial business activities. Should we add "Commercial" to the business lines in our company’s business registration documents?
If this addition is required, should it be done now or after completing the change of the company’s registered address?
Our company is planning to change its registered address to Hanoi. What are the specific steps to proceed with this change?
Additionally, the company is considering two options for the new registered address:
1. Using a virtual office for business registration.
2. Using a residential address.
(Note: The company does not have many employees working fixed hours at the office like larger companies; the address is primarily for registration purposes.)
Response:
SB Law would like to response as follow:
1. Regarding the addition of "Commercial" as a business line in the company’s business registration documents, it is necessary to check the list of registered business lines on the National Business Registration Portal.
If the company’s documents already include relevant business lines, such as "Wholesale of agricultural and forestry raw materials and live animals" (or similar lines), the company is deemed eligible to conduct commercial activities without the need for additional registration.
However, if the specific business line has not been registered, it is advisable to proceed with the registration to ensure compliance with legal regulations and avoid potential legal risks during business operations.
2. If the addition is required, should the company proceed immediately or wait until the change of the registered business address is complete?
If the company already has commercial business lines registered, there is no need to add any additional lines.
3. The company is currently planning to change its registered business address to Hanoi. What are the steps to implement this change?
The company should follow these steps:
* Before the relocation:
- Register the change of the company’s headquarters address (based on Article 47 of Decree No. 01/2021/ND-CP):
The company submits the application for changing the business registration information to the Business Registration Office under the Hanoi Department of Planning and Investment. The application includes:
● A notice of change of business registration information signed by the company’s legal representative (01 original copy). Form: Appendix II-1.docx.
● Resolution or decision of the company owner.
Note: The Business Registration Office under the Hanoi Department of Planning and Investment will notify the company’s current tax authority about the registration of the new headquarters address in Hanoi.
- Update the tax registration information (based on Article 10.2.a of Circular No. 105/2020/TT-BTC):
The company must register tax changes with the new tax authority due to the relocation of its headquarters, which leads to a change in the managing tax authority.
The application should be submitted to the tax authority at the current location and includes: A declaration for amending and supplementing tax registration information (Form No. 08-MST issued under Circular No. 105/2020/TT-BTC).
The current tax authority will issue a notice regarding the company’s relocation.
- Register the change of the company’s headquarters address (based on Article 47 of Decree No. 01/2021/ND-CP):
After receiving the notice of relocation from the tax authority, the Business Registration Office under the Hanoi Department of Planning and Investment will issue a receipt, verify the validity of the application, and grant a new Business Registration Certificate.
* After the relocation:
- Create a company nameplate (based on Article 37.4 of the Law on Enterprises 2020): The company must hang its nameplate at the new headquarters address.
- Create a company seal (based on Article 43.2 of the Law on Enterprises 2020): If the company’s seal needs to be updated due to changes in information, the company should have a new seal made.
4. Options for changing address
4.1. Using a virtual office for business registration:
The company can use a virtual office as the address for business registration.
4.2. Using a personal home address:
Firstly, according to Clause 2, Article 4 of Circular 40/2021/TT-BTC, individuals renting out houses with revenue of up to 100 million VND per year are not required to pay Value-Added Tax (VAT) and Personal Income Tax (PIT).
On the other hand, if the rental income in a year exceeds 100 million VND (equivalent to over 8.33 million VND per month), the individual will be required to pay VAT and personal income tax (PIT) in accordance with the regulations. Therefore, if the lease agreement between the individual landlord and the company has a total value exceeding 100 million VND per year, the individual will be obligated to pay these taxes.
Secondly, according to Point a, Clause 1, Article 8 of Circular 40/2021/TT-BTC:
"Article 8. Methods of tax calculation for cases where organizations or individuals declare and pay taxes on behalf of individual:
1. Organizations or individuals declare and pay taxes on behalf of individuals in the following cases:
a) Organizations renting property from individuals where the rental contract specifies that the lessee is responsible for tax payment."
Therefore, if the lease agreement between the individual landlord and the company specifies that the company is responsible for paying the taxes on behalf of the individual, the company will be obligated to fulfill the declaration and payment of the taxes arising from the individual’s rental income. Additionally, SB Law emphasizes that in the case where (i) the lease agreement between the individual landlord and the company does not include a clause about the declaration and payment of personal income tax on behalf of the individual, and (ii) the individual does not declare or pay taxes, the rental expense incurred by the company may not be recognized as a valid expense.
Thirdly, the personal home address must ensure that there are personnel present regularly to avoid being deemed inactive at the address if inspected or audited.
Fourthly, the personal home address must ensure safety in terms of fire prevention and fighting; otherwise, it may not be usable as the company’s head office address.
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