My company is a limited liability company with two or more members and 100% foreign capital operating in Vietnam. Currently, one of the company's capital investors is planning to merge with another company in foreign country. In case of a successful merger, does our company need to carry out procedures to adjust the Investment Registration Certificate (IRC) or Enterprise Registration Certificate (ERC)? Should we prepare the necessary procedures and documents? (Our project is not subject to the Decision on approval of investment policy).
Answer:
According to the information provided by the Client, when an investor/member contributing capital from abroad carries out a merger, there are two possible scenarios as follows:
Scenario 1: The investor/member contributing capital is the merged company. In this case, the company is not dissolved and retains its legal status, so there will be no change in the investor/member of the company in Vietnam, and therefore no procedures are required to change the investor/member.
Scenario 2: The investor/member contributing capital is the company being merged. In this case, the company is dissolved and loses its legal status, and all rights and obligations will be inherited by the merging company, which results in a change of the investor/member of the company in Vietnam. Therefore, in this scenario, the company in Vietnam must carry out the following legal procedures:
1. Procedures to be implemented
According to the information provided by the company, the company's investment project is not subject to the Decision on approval of investment policy. Therefore, in this case, the company only needs to carry out the procedure of registering the change of investor on the Investment Registration Certificate (IRC) and adjusting the information on the list of capital investors in the Enterprise Registration Certificate (ERC) after the capital investor has carried out the merger.
2. Procedures and documents for registration of change of investor
Pursuant to the provisions of Clause 2, Article 47 of Decree 31/2021/ND-CP, the documents that need to be prepared include:
- Document requesting adjustment of investment project;
- Report on the implementation status of the investment project;
- Decision of investor on adjustment of investment project for investors being organizations;
- Provide explanations and relevant documents related to the merger of foreign investors/shareholders.
3. Procedures and documents for adjusting information on the list of capital contributors
In the process of changing the investor in the IRC, the company must also update the information on the list of capital investors in the ERC. The papers and processes for adjustment for this issue are executed in accordance with Clause 7, Article 52 of Decree 01/2021/ND-CP; the particular documents are as follows:
- Notice of change in business registration content;
- List of company members;
- Resolution, decision, and copy of minutes of the Board of Members' meeting on admitting new members;
- Merger contract;
- Resolution, decision on approval of the merger contract, and a copy of the minutes of the meeting of the Board of Members for a limited liability company with two or more members on approval of the acquisition firm's merger contract;
- Resolution, decision on approval of the merger contract, and a copy of the minutes of the meeting of the Board of Members for a limited liability company with two or more members on approval of the merged company's merger contract, unless the acquiring company is a member owning more than 65% of the charter capital of the merged company.
