Detailed instructions on tasks before establishing a company

Things to do before establishing a company

Carefully prepare and declare charter capital

Maybe young people who have just started a company will not know about charter capital or have heard about it but are still confused. In fact, charter capital is also very necessary before establishing a company.

It is a type of capital that is synthesized from many sources such as members of the company and shareholders who jointly create and commit to each other for the common development of the company.

Declaration of charter capital must be carried out fully and sequentially according to the process prescribed by law. Because if there are errors, it will affect the company's economy as well as related departments.

When registering with the Department of Planning and Investment, it will be divided into two types:

• For companies that do not have legal capital requirements, the registration and declaration of charter capital will be at the company's discretion. For example, if a company has just been established and does not have much economic surplus, you can register depending on your needs. Because when there is no legal capital requirement, there will be no minimum or maximum registration required.
• For companies with legal capital requirements, they need to register and make standard declarations. Maybe a more understandable example is that for the industry in which you set up a company, the legal capital is 200,000,000 VND. That's why you need to register above or equal to the minimum level to be allowed to do business. The minimum level in this case is 200,000,000 VND.
• With the above requirements, businesses need to pay attention and comply with standards to be able to register their business.

Carefully research and choose the appropriate type of business

According to the 2014 Enterprise Law, there are 5 types of enterprises specified in the law. However, there are only 4 common types of companies that customers often choose depending on their actual needs.

Below, we point out the basic differences between these types of companies. From there, you can partly determine which type of company is suitable for the business you plan to establish to make a decision.

• Limited company with two or more members: Is a type of company in which there are from 2 to 50 members contributing capital. You will have to determine your actual number of members to be able to choose the type. A member can be an individual/organization (can rent or hire a legal representative).
• One Member Limited Liability Company: This is a type of company owned by an individual/an organization (possibly hiring or hiring a legal representative). If you only have 1 member, you should choose this type of company.
• Private enterprise: This enterprise is owned by an individual, with unlimited liability using his or her own personal assets.
• Joint Company: Is a type of business with 3 or more individuals/organizations (can hire or hire legal representatives). A joint stock company will not limit the number of shareholders.
• Partnership Company: The last type and also not chosen for establishment. Because it has its own limitations.

Limited or unlimited liability is the most basic difference in the legal responsibilities of business owners between different types of businesses. Therefore, please consider carefully when choosing the type of business to do business.

Choose a legal representative

Before establishing a company, you need to know and clearly understand the legal representative for your company. Or the legal representative of the partner company.

These are the people who will represent the business to sign documents and contracts. As well as making business contracts legal and protected before the law.

Some things to know before establishing a company about the legal representative are as follows:

• The positions that can be used as legal representatives are: Director, General Director, Chairman of the Board of Members, Chairman of the Board of Directors.
• The legal representative of the enterprise is required to permanently reside in Vietnam. In case that person is absent from Vietnam for more than 30 days, he must authorize another person in writing according to the provisions of the Enterprise Charter.
• Business representatives who are foreigners (including overseas Vietnamese) are also required to have a permanent residence card in Vietnam

Register business lines

Next you have to find out whether the business you intend to do is compatible with the industry as prescribed by law.

In the process of establishing a company, the business line is an extremely important factor in the future operation of the business.

• Professions must not be on the list of prohibited businesses
• The business must be allowed to operate where you are located
• Manufacturing industries must be allowed to produce at the place where the enterprise has its business address
• Professions should also match the Vietnamese economic system
• Business lines should be consistent with the development planning of economic regions and economic sectors of each locality
• Must register a profession that meets current business conditions. Just planning the industries that plan to operate and develop in the future.

Company address

To register a business, businesses need to choose a suitable company headquarters. It is especially necessary here to be legal, clear and under the condition that it is owned by that company.

According to the latest Law today, it is the Enterprise Law 2020. If you need to comply with the provisions of the law, it will not be difficult to register your business.

For companies that have identified a clear address and meet the requirements of 43 of the Enterprise Law, they can absolutely set that place as their headquarters.
Companies using apartment buildings from the 3rd floor or higher will not be allowed to register their business. Usually it will only be registered on floors 1 and

Company name when established

The name of the business will partly determine the brand for the company. This is one of the most important factors in the process of providing the company's products and services to the market. This will increase the company's product recognition rate from customers.

So how to choose a good and satisfactory name, not duplicated, confused with other companies, not prohibited by law...

Some things to know before establishing a company about naming the company:

• The business name must be written in Vietnamese and must have at least two elements: Type of business and Personal name of the business (can include numbers and symbols but must be pronounceable)
• Do not give the same name or names that can easily be confused with the names of other registered businesses.
• When translating a business name into a foreign language, it can still be kept unchanged or translated according to the corresponding meaning.
• It is not allowed to use the names of state agencies, socio-political organizations, socio-political-professional organizations, people's armed forces units, names of political organizations. (Unless there is consent from that agency, unit or organization).

Share some notes you need to know before establishing a company

Some notes that you should remember when establishing a company are as follows:

• Your own capital
• Business lines
• Capital contribution ratio
• Headquarters address
• Legal representative
• Tax obligations

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