Company consolidation can be understood simply as all assets, rights, obligations, and profits of the consolidated company, and terminate the existence of the consolidated company
– Law on Enterprises 2020
– Decree 01/2021/ND-CP
Business combination procedures
The procedures for company consolidation under the Enterprise Law 2020 are as follows.
The integrator creates the integration contract
The integration agreement should essentially include the name and headquarters address of the incorporated company. Name and registered office of the incorporated company. Integration procedures and conditions. Manpower use plan; conversion of assets, investments of the consolidating company, contribution of shares and bonds to the consolidating company, term, procedures, and conditions for converting to shares or bonds. Integration term. The draft law of the incorporated company.
Approval of the Integration Agreement
Members, shareholders, or consolidation members of the consolidating company determining the consolidation agreement, terms of establishment of the consolidated company, are the Chairman of the Shareholders’ Council, the company’s President, the Board of Directors, the Director or General Manager of the company incorporated and incorporated under this Act. Company registration of the company association. The integration agreement must be sent to the creditor and notified to the employee within 15 days of approval.
Steps for some special integration cases
In case the consolidated company has a market share of between 30% and 50% in the market, the legal representative of the consolidating company must notify the competition authority before proceeding. Consolidation is prohibited if the consolidating company has a share of more than 50% of the market.
If the market share of the relevant market is above 50% but subject to the Competition Law 2018:
a) One or more parties to the integration are companies that are or are in danger of bankruptcy.
b) This merger will lead to increased exports or contribution to socio-economic and scientific and technological development.
Consolidated enterprise registration documents
Dossier for Business Registration, Incorporation, and Conduct as follows:
Business Registration Documents of the Incorporated Company
After completing the order and procedures for company consolidation as prescribed, the new company (consolidated company) must submit a company registration file by relevant provisions of the Companies Act 2020 and attach a company registration form. The following documents:
- General contract.
- Resolution and minutes of approval of the consolidation contract of the consolidating company.
Company registration procedure of the registered company
The new company will file a company registration application with the commercial registry where the company is headquartered.
According to specific instructions in Article 61, Clause 1 of Decree 01/2021/NDCP on business registration, it stipulates: Within 3 working days from the date of issuance of business registration to the consolidated company, the offices where The Trade has located separated, consolidation or merger company must terminate the operation The business registration of these companies is the national database on registration of the consolidating company. Commercial register where the incorporated company has its registered office. The commercial register of the commercial office where the registered office of the consolidating company is located reports to the National Business Registration Database to update the legal form of the incorporated company.
Information about the existence of registered companies
Once the business registration process is complete, the company will expire. The consolidated company has legitimate rights and interests and is responsible for the unpaid debts, employment contracts, and other financial obligations of the consolidating company.