VI In the increasingly dynamic and competitive market economy, the need for scaling up, capital mobilization, and increasing the liquidity of contributed capital are key driving forces for enterprises to consider changing their legal structure. For Multi-Member Limited Liability Companies (LLCs), the current operating model may no longer meet long-term development ambitions, especially when the enterprise requires a more flexible mechanism to attract new investors or prepare for listing on the stock market. The conversion of the business type from a Multi-Member LLC to a Joint-Stock Company (JSC) is a strategic decision, marking an important turning point in the company’s development journey. This process is not merely a change of name; it involves a comprehensive adjustment of the organizational and management structure, operating mechanisms, and methods of capital mobilization and management, all strictly regulated by current enterprise law. Let Pham Consult guide you through this legal process.
- Definitions of Multi-Member Limited Liability Company and Joint-Stock Company
According to Clause 1, Article 46 of the 2020 Enterprise Law, a multi-member limited liability company is an enterprise with 02 to 50 members who can be organizations or individuals. Members are responsible for the debts and other property obligations of the enterprise within the scope of the capital contributed to the enterprise, except for the case specified in Clause 4, Article 47 of this Law.
According to Clause 1, Article 111 of the 2020 Enterprise Law, a joint-stock company is an enterprise in which:
– The charter capital is divided into many equal parts called shares (cổ phần);
– Shareholders can be organizations or individuals; the minimum number of shareholders is 03, and there is no limit to the maximum number;
– Shareholders are only responsible for the debts and other property obligations of the enterprise within the scope of the capital contributed to the enterprise;
– Shareholders have the right to freely transfer their shares to others, except for the cases specified in Clause 3, Article 120 and Clause 1, Article 127 of the 2020 Enterprise Law.
Thus, the most significant difference between a Multi-Member LLC and a Joint-Stock Company is the number of members/shareholders. Specifically, a Multi-Member LLC has 02 to 50 members, while a Joint-Stock Company has a minimum of 03 shareholders with no maximum limit.
- Forms of Conversion from Multi-Member LLC to Joint-Stock Company
According to Article 202 of the 2020 Enterprise Law, a Multi-Member LLC can be converted into a Joint-Stock Company in one of the following forms:
– Conversion into a Joint-Stock Company without mobilizing additional capital from other organizations or individuals or selling contributed capital to others.
– Conversion into a Joint-Stock Company by mobilizing additional capital from other organizations or individuals.
– Conversion into a Joint-Stock Company by selling all or part of the contributed capital to one or more other organizations or individuals.
– A combination of the above methods and other methods.
Note: The converted company automatically inherits all lawful rights and interests and is responsible for all debts, including tax debts, labor contracts, and other obligations of the company being converted.
- Dossier for conversion of business type from Multi-Member LLC to Joint-Stock Company
The dossier for registering the conversion of a Multi-Member LLC into a Joint-Stock Company is stipulated in Clause 5, Article 26 of Decree 168/2025/ND-CP of the Government on enterprise registration, and includes the following documents:
(i) Application form for enterprise registration;
(ii) Company Charter;
(iii) List of founding shareholders (not required if the converted company is a joint-stock company without founding shareholders); list of foreign investor shareholders; list of beneficial owners (if any);
(iv) Copies of the following legal papers:
– Legal papers of the individual for founding shareholders and foreign investor shareholders who are individuals, and the legal representative;
– Legal papers of the organization for shareholders who are organizations and the document appointing the authorized representative; legal papers of the individual for the authorized representative of the founding shareholder and the foreign investor shareholder that is an organization.
For foreign organization shareholders, the copy of the legal papers of the organization must be consularly legalized.
(v) Transfer contracts or documents proving the completion of the transfer in case of transferring shares or contributed capital;
Donation contracts in case of gifting shares or contributed capital;
Copy of the document confirming the lawful right of inheritance of the heir in case of inheritance as prescribed by law;
Resolution or Decision on division or separation of the company in case of division or separation;
Merger contract or consolidation contract in case of company merger or consolidation;
Repurchase contract in case the company repurchases shares;
Documents proving the capital contribution of new members or shareholders in case of receiving capital contributions from new members or shareholders;
(vi) Copy of the written approval from the Investment Registration Authority regarding the capital contribution, share purchase, or contributed capital purchase by foreign investors or foreign-invested economic organizations, for cases where the procedure for registering capital contribution, share purchase, or contributed capital purchase must be carried out in accordance with the Investment Law.
- Procedures for conversion of business type from Multi-Member LLC to Joint-Stock Company
Step 1: Submission of the dossier
The company prepares 01 set of dossiers and submits it to the provincial-level Business Registration Authority where the enterprise is headquartered.
Notes:
– The company must register the conversion with the Business Registration Authority within 10 days from the date the conversion is completed.
– The enterprise may register the conversion of the business type concurrently with the registration of changes or notification of changes in the enterprise registration content.
– If the enterprise registers the conversion of the business type concurrently with the change of the legal representative, the person authorized to carry out the enterprise registration procedures and sign the application for enterprise registration is the Chairman of the Board of Directors of the converted Joint-Stock Company.
Step 2: Dossier review
Within 03 working days from the date of receiving the conversion dossier, the Business Registration Authority shall re-issue the Enterprise Registration Certificate and update the company’s legal status on the National Business Registration Database.
