Nowadays, establishing a business for an individual or organization is quite easy, however, if you do not carefully learn about the legal issues of establishing a business, you may encounter difficulties in the process. business process and enterprise operations.

In this article, CPA HCM provides important notes when establishing a business so that the business can develop and operate sustainably in the future.

 1. COMPANY HEADQUARTERS

The company headquarters or company office does not have to be located anywhere but must be located in accordance with the provisions of enterprise law.

According to the provisions of Article 42, Enterprise Law 2020:

- The company headquarters cannot be in a dormitory or apartment building.

- To ensure business operations when renting or borrowing a house as a company headquarters, customers should sign a house rental or loan contract and request the landlord to provide 02 copies of the Land Use Rights Certificate or equivalent documents.

- The company headquarters must be contactable and have someone to receive the notification letter, to avoid the case where the tax authority or business registration agency sends unclaimed letters and will be listed as a company not doing business at the headquarters and closed. Tax code, business code lock.

- Enterprises should fix their headquarters according to the district because when changing the headquarters to a different district or district, they must carry out procedures to finalize taxes to change districts before changing business registration.

2. CHOOSE TYPE OF BUSINESS

The type of business is an important factor in establishing a company. Choosing the appropriate type of business will be good for the development and operation of the business.

- As noted by the current Enterprise Law, customers can choose the following types of businesses: One-member LLC, LLC with two or more members, Joint Stock Company, Private Enterprise, Public Company. partnership company. However, based on reality, if customers do business in common industries, they should choose 3 common types of businesses: One-member LLC, LLC with two or more members, Joint stock company. part.

- In fact, the biggest difference between a joint stock company and a limited liability company is that a joint stock company can flexibly mobilize capital and participate in the stock market. Accordingly, the minimum number of shareholders of a joint stock company is 3 people and is not limited, making it easy to transfer after no longer being a founding shareholder. The biggest advantage of a limited liability company is that the participation of members in the company is very strict, the number of participants is limited from 01 to 50 people.

- In addition, only when the company needs to participate in the stock market in the future should it choose the type of joint stock company because of the joint stock company's operations, organizational structure and regulations on internal issues. of a joint stock company is relatively complicated, but with just a small negligence, the enterprise may have violated the provisions of law related to the internal legal issues of the joint stock company.

3. NAMED THE COMPANY

Currently, naming a company also faces many difficulties due to duplication of company names, so it is necessary to carefully learn about company naming regulations..

According to the provisions of Article 37, Article 38, Article 39, Article 40, Article 41 of the Enterprise Law 2020:

- In fact, company names are increasingly limited due to the increasing number of businesses. However, to be able to name the company as desired is very simple by adding prefixes or suffixes to the company name and it can be registered.

- When naming a company, it is necessary to avoid names with famous elements such as: Samsung, Nokia, Honda,... or exclusively registered trademarks because the business may be at risk of being asked to change its name due to identical to a trademark that has been exclusively protected in Vietnam before the enterprise registered the duplicate company name.

- In addition, when choosing a company name, you should also take into account that the company's own name can be registered as a trademark or domain name to identify the future business brand in a uniform and professional manner.

4. AUTHORIZED CAPITAL 

Charter capital has an important influence on the future development of the company, so it is also necessary to pay attention to setting the charter capital correctly, appropriately and according to the provisions of law.

According to Clause 34, Article 4, Clause 2.c, Article 24 of the Enterprise Law 2020:

- According to the provisions of the Enterprise Law, the charter capital is self-declared and self-responsible for the enterprise (including industries that require legal capital, the enterprise only needs to declare the prescribed capital level without prove or confirm the actual source of capital).

- Based on operational needs such as: the level of contracts signed with partners, participation in the project, the amount of capital that must be deposited for some specific industries, and the license tax level you want to pay, the business chooses the level. Charter capital is reasonable, appropriate and takes into account the responsibility of business/company owners when committing their capital.

- The capital contribution period is 90 days from the date of issuance of the Business Registration Certificate. For individuals establishing a company, they can choose to contribute capital in the form of money or transfer money to the company's account. However, for organizations that are members/shareholders of the company, capital contribution must be made in the form of capital transfer to the company's account registered with the business registration agency .

- According to the law, the procedure for increasing the company's charter capital is relatively simple, while the procedure for reducing the company's charter capital has relatively many conditions and requires a certain amount of time, except in the case of members and shareholders. If shareholders do not contribute enough capital within 90 days, the company must operate for 2 full years to register to reduce charter capital with certain conditions. Therefore, companies should consider the capital level when declaring charter capital in the company establishment documents to ensure capital contribution as well as balance the interests of members/shareholders in the company.

5. BUSINESS

You need to choose a business line that is suitable for your business and not prohibited by law.

According to Article 7 of Decree No. 01/2021 on business registration:

- Currently, businesses are allowed to do business in professions that are not prohibited by law. However, businesses are only allowed to do business in the lines of business that they have registered and declared in the business registration dossier. Businesses should choose a wide scope when registering business lines for the company in the business registration dossier. Company establishment profile.

- It can be said that the advantage of the current Enterprise Law is that businesses do not need to present conditions for professions that require practice certificates. Therefore, depending on operational needs, businesses can choose to expand business lines to avoid additional procedures after operation because the intended lines of business were not covered when established. business.

- The application of the company's business industry code is carried out according to the level 4 industry code as prescribed in the Vietnamese economic industry system (Applied according to Decision No. 27/2018/QD-TTg dated July 6, 2018 of the Prime Minister). CPA HCM will support industry classification and application of industry codes for your company.

Above are important notes before establishing a company. Customers need to understand the above notes to make the most suitable choice for their business. If customers do not have direction or need advice on establishing a suitable business, please contact CPA HCM so that a team of experts can advise and support customers in establishing a business in the right industry and for their needs. legal regulations and help businesses operate sustainably and develop long-term.