When establishing a business, contributing the full charter capital as committed in the business registration certificate is a mandatory requirement under Vietnamese law.However, many businesses face difficulties in fulfilling this commitment.So if If the charter capital is not fully contributed, how much will the business be fined and what should be done to avoid violations?
Legal regulations on charter capital contributions
According to the 2020 Enterprise Law, founding members or shareholders must complete their charter capital contributions within 90 days. from the date of issuance of the Business Registration Certificate.Charter capital is the amount of capital that the members commit to contribute to establish the company, as specified in the registration documents. If after 90 days, the enterprise does not contribute the full amount of capital as committed and does not carry out the adjustment procedures, the law will impose penalties.
The penalty for not contributing the full charter capital
Based on Decree 122/2021/ND-CP, if a business does not contribute the full charter capital and does not update information with the business registration authority, the specific penalties are as follows:
– A fine ranging from 30,000,000 VND to 50,000,000 VND: Applicable to the act of not carrying out the procedure to adjust the charter capital or change founding members or shareholders when the capital contribution period (90 days) and the extension period (an additional 30 days) have expired.
– Remedial measures: The enterprise is required to carry out the procedures for adjusting the charter capital or changing the information of founding members and shareholders in accordance with regulations.
This fine not only causes financial damage but also affects the company’s reputation.Therefore, complying with the capital contribution regulations is extremely important.
Deadlines and procedures to know
After 90 days from the date of issuance of the certificate, if the members do not contribute sufficient capital, the enterprise has an additional 30 days to register the adjustment of the charter capital with the business registration authority.If not implemented, the business will fall into a violation case and be penalised as mentioned above.To avoid risks, you should:
- Check the progress of the members’ capital contributions carefully.
- Contact the business registration authority for guidance on adjusting capital if needed.
- Make a clear financial plan from the beginning to ensure commitments are met.
Advice for businesses
Not contributing the full charter capital not only leads to fines but can also cause difficulties in future business operations, such as limiting the ability to borrow capital or collaborate with partners.To avoid violations, businesses need to clearly understand the legal regulations and comply within the specified timeframe.If you are facing procedural issues or need detailed advice, please contact legal experts or relevant authorities for timely assistance.
H&P GROUP CO., LTD.
Address: 38/26 Nguyễn Văn Trỗi, Ward 15, Phú Nhuận District, Ho Chi Minh City, Vietnam
Hotline: 028.6650.4729
Email: info@hpg-tax.com
