GIẢM VỐN ĐIỀU LỆ TRONG TRƯỜNG HỢP CỔ ĐÔNG GÓP CHƯA ĐỦ VỐN / REDUCTION OF CHARTER CAPITAL IN CASE OF

Legal Situation: 

Dear FDVN Lawyers,

My joint stock company was established in October 2021 with a registered charter capital of VND 20 billion. However, the shareholders have actually contributed only VND 15 billion. Can we proceed to adjust its charter capital down to VND 15 billion? Additionally, what sanctions may be imposed for this situation? I look forward to your response.

FDVN’s Opinion: Thanks for trusting and sending a question to FDVN Law Firm (“FDVN”). FDVN would like to provide the following information in response after studying the legal regulations: 

[1] Time limit for full payment of the registered charter capital by shareholders

According to Clause 1 of Article 113 of the Law on Enterprise 2020, “Shareholders shall fully pay for the subscribed shares within 90 days from issuance date of the Certificate of Enterprise Registration unless a shorter time limit is specified by the company's charter or the shares registration contract. In case of capital contribution by assets, the time needed to transport or import the contributed assets and for completing ownership transfer procedures shall be added to this time limit. The Board of Directors shall supervise the shareholders fully and punctually paying for the subscribed shares.”

Accordingly, unless the Company’s Charter or the Share Subscription Agreement provides for a shorter period, the shareholders are required to fully pay for the subscribed shares within 90 days from the date on which the Enterprise Registration Certificate is issued.

[2] Time limit for registration of charter capital adjustment in cases where shareholders fail to fully pay the subscribed capital

Point a, Clause 3 of Article 113 of the Law on Enterprise 2020 provides that after 90 days from the date of issuance of the Enterprise Registration Certificate, a shareholder has not paid or has only partially paid for the shares subscribed, the company shall, within 30 days from the expiry of such 90-day period, register an adjustment of its charter capital to correspond to the par value of the shares that have been fully paid, unless the unpaid shares have been fully sold within this period. The company must also register the change of founding shareholders accordingly.

As a result, in the event that your Company fails to fully contribute the registered capital within 90 days from the date of issuance of the Enterprise Registration Certificate, it must register an adjustment of its charter capital to reflect the actual contributed capital within 30 days from the expiry of the 90-day capital contribution period.

Besides, under Clause 5 of Article 112 of Law on Enterprise 2020, as amended by Point a, Clause 17, Article 1 of the Law Amending the Law on Enterprises 2025, which provides that one of the circumstances under which a company may reduce its charter capital is as follows: “c) Charter capital is not fully and punctually contributed by the shareholders as prescribed in Article 113 of this Law.”

Accordingly, pursuant to the above-mentioned provisions, the Company may carry out procedures for reduction of charter capital where the shareholders have failed to fully and timely pay the subscribed capital.

[3] Administrative sanctions for failure to adjust charter capital in case of incomplete capital contribution

In the event that your Company fails to register the adjustment of its charter capital upon the expiry of the prescribed capital contribution period, and the additional time limit for adjustment has also lapsed, while the founding shareholders have not fully contributed their committed capital and no founding shareholder has fulfilled the capital contribution commitment, the Company shall be subject to a monetary fine ranging from VND 30,000,000 to VND 50,000,000. In addition, a remedial measure shall be imposed, requiring the Company to carry out procedures for capital adjustment or change of founding members/shareholders in accordance with Clauses 3 and 5, Article 46 of Decree No. 122/2021/NĐ-CP.

This is FDVN's legal opinion regarding your inquiry, based on the study of relevant legal provisions. We hope this opinion is helpful to you.

Nguyễn Thị Huyền Trang – FDVN Law Firm