Currently, charter capital is no longer unfamiliar to companies. However, beyond knowing and understanding what charter capital is, many newly operating enterprises still have difficulties in determining when charter capital needs to be changed and how to implement the procedures. 

I. Procedures for changing charter capital of enterprises 

Charter capital of enterprises is the total value of capital contributions committed or already contributed by members, owners, or shareholders, and recorded in the company’s charter. Each type of enterprise has different forms and procedures for changing charter capital.

Changes in charter capital must be reported to the business registration authority. NPLaw currently provides consulting and implementation services for changing charter capital as follows:

II. Calculation of charter capital

1. Mutil-member Limited Liability Company (two members or more)

Charter capital at registration is the total value of members’ contributions committed and recorded in the company’s charter.

2. Single-Member Limited Liability Company (only one member)

Charter capital at registration is the total value of assets committed by the company owner and recorded in the company’s charter.

3. Joint Stock Company

Charter capital is the total nominal value of all shares sold. At registration, it is the total nominal value of shares subscribed and recorded in the company’s charter.

III. Cases of changing charter capital 

1. For Mutil-member Limited Liability Companies:

  • Company increases members’ contributions;
  • Company accepts additional contributions from new members;
  • Company partially returns capital to members based on their contribution ratio if it has operated continuously for at least 2 years and can pay all debts and other obligations after the return;
  • Company repurchases members’ contributions according to legal regulations;
  • Charter capital is not fully paid by members as required by law.

2. For Single-Member Limited Liability Companies:

  • Owner contributes additional capital or mobilizes contributions from others;
  • Company partially returns capital to the owner if it has operated continuously for at least 2 years and can pay all debts and other obligations;
  • Charter capital is not fully paid by the owner as required by law.

3. For Joint Stock Companies:

  • Company issues new shares according to the resolution of the General Meeting of Shareholders (GMS);
  • Company returns part of capital to shareholders based on ownership ratio if it has operated continuously for at least 2 years and can pay all debts and other obligations;
  • Company repurchases shares according to legal regulations;
  • Charter capital is not fully paid by shareholders as required by law.

IV. Required documents

  • Notification of charter capital change;
  • Decision of the owner/Board of Members/General Meeting of Shareholders on charter capital change;
  • Minutes of Members’ Council/GMS meeting regarding charter capital change;
  • Capital contribution certificate in case of accepting new members for Mutil-member Limited Liability Companies;
  • Other relevant documents.

V. Procedure time and results

  • Time for processing: Within 5 working days from the date of receiving a complete and valid dossier.
  • Result: Enterprise Registration Certificate reflecting the new charter capital.

VI. Significance of charter capital change

  • Increase in charter capital: Restructuring charter capital, expanding business scale, and increasing bank borrowing limits. The increase may come from investment mobilization or the owner’s own contributions to develop business operations.
  • Decrease in charter capital: Adjusting the company’s capital in line with the economic situation and business operations.

VII. Notes when changing charter capital

  • When paying the business license tax, the new tax bracket must be corresponding with the increased charter capital in the following year without resubmitting the license tax declaration.
  • Companies must register the change with the business registration authority.
  • No supporting documents proving capital contributions are required when submitting the change dossier. However, companies must ensure accuracy and truthfulness to avoid sanctions for misrepresentation or falsification.
  • Charter capital changes are recorded from the date the Enterprise Registration Certificate is issued by the business registration authority.