Question:
My company is a single-member limited liability company. My company wants to convert into a joint stock company but cannot mobilize additional individuals to contribute capital to the company. I would like to ask, can my company implement the conversion using another method?
Answer:
Clause 2, Article 202 of the Law on Enterprises 2020 stipulates that a limited liability company may convert into a joint stock company using the following methods:
a) Conversion into a joint stock company without mobilizing additional organizations or individuals to contribute capital, and without selling capital contributions to other organizations or individuals;
b) Conversion into a joint stock company by mobilizing additional organizations or individuals to contribute capital;
c) Conversion into a joint stock company by selling all or a part of the capital contribution to one or more organizations or individuals;
d) Combination of the methods prescribed in Points a, b, and c of this Clause, and other methods.”
According to the provisions at Point b, Clause 1, Article 111 of the Law on Enterprises 2020, the minimum number of shareholders of a joint stock company is 03 shareholders.
Therefore, in the case where the company cannot mobilize additional organizations or individuals to contribute capital, the single-member limited liability company may convert into a joint stock company by selling all or a part of the capital contribution to one or more organizations or individuals. The joint stock company established based on the conversion of the enterprise type must ensure the minimum required number of shareholders stipulated in Point b, Clause 1, Article 111 of the Law on Enterprises 2020 mentioned above.
Consultation:company servisce
