PROCEDURES FOR REDUCING CHARTER CAPITAL

1. Legal Basis

Law on Enterprises No. 59/2020/QH14 dated June 17, 2020;

Law No. 76/2025/QH15 dated 17 June 2025 amending and supplementing a number of articles of the Law on Enterprises;

Decree No. 168/2025/ND-CP dated June 30, 2025 on enterprise registration;

Circular No. 68/2025/TT-BTC dated July 1, 2025 promulgating forms used in enterprise registration and household business registration.

2. Charter Capital

Pursuant to Clause 34, Article 4 of the 2020 Law on Enterprises, charter capital means the total value of assets contributed or committed to be contributed by members or owners upon establishment of a limited liability company or partnership; or the total par value of shares sold or subscribed for upon establishment of a joint stock company.

3. Methods of Reducing Charter Capital        

Pursuant to Articles 68, 87, and 112 of the Law on Enterprises 2020, a reduction of charter capital may be carried out in the following circumstances:

(i) For Multiple-Member Limited Liability Companies:

- Returning a portion of the contributed capital to members in proportion to their capital contribution ratios in the company's charter capital, provided that the company has conducted business continuously for at least two (02) years from the date of enterprise registration and is able to fully satisfy all debts and other property obligations after such repayment;

- Repurchasing a member’s capital contribution in accordance with applicable regulations;

- The charter capital has not been fully and timely contributed by the members as required by law.

(ii) For Single-Member Limited Liability Companies:

- Returning a portion of the contributed capital to the company owner, provided that the company has conducted business continuously for at least two (02) years from the date of enterprise registration and is able to fully satisfy all debts and other property obligations after such repayment;

- The charter capital has not been fully and timely contributed by the company owner as required by law.

(iii) For Joint Stock Companies:

- Pursuant to a resolution of the General Meeting of Shareholders, the company may return a portion of the contributed capital to shareholders in proportion to their shareholding ratio, provided that the company has operated for at least two (02) years from the date of enterprise registration (excluding any period of business suspension) and is able to fully satisfy all debts and other property obligations after such repayment;

- Repurchasing issued shares in accordance with applicable regulations;

- The charter capital has not been fully and timely paid for by shareholders as required by law;

- Refunding capital contributions to shareholders holding redeemable preference shares upon request and subject to the conditions specified in the share certificates, in accordance with the Law on Enterprises and the company's Charter.

4. Dossier for Registration of Charter Capital Reduction

Pursuant to Article 44 of Decree No. 168/2025/ND-CP, the dossier for registration of a reduction in charter capital includes the following documents:

- Application for registration of changes to enterprise registration information (Form No. 12 issued together with Circular No. 68/2025/TT-BTC);

- A certified copy or original of the resolution or decision of the company owner for a single-member limited liability company; of the Board of Members for a limited liability company with two or more members, or a partnership; of the General Meeting of Shareholders for a joint-stock company regarding the change of charter capital;

- A certified copy or original of the Minutes of the Members’ Council Meeting regarding the change in charter capital (applicable to Multiple-Member Limited Liability Companies);

- A copy of the written approval issued by the Investment Registration Authority regarding capital contribution, share acquisition, or acquisition of capital contributions by a foreign investor or a foreign-invested economic organization, where such approval is required under the Law on Investment.

In cases where a Multiple-Member Limited Liability Company or a Partnership registers changes to capital contribution amounts or capital contribution ratios without any change in its members, the dossier shall include the following documents:

- Application for registration of changes to enterprise registration information (Form No. 12 issued together with Circular No. 68/2025/TT-BTC);

- List of members of the Multiple-Member Limited Liability Company or List of Partners of the Partnership Company, excluding information relating to capital-contributing members. Such lists must bear the signatures of members whose capital contributions have changed; signatures of members whose capital contributions remain unchanged are not required (Forms No. 6 and No. 9 issued together with Circular No. 68/2025/TT-BTC);

- Capital contribution transfer agreement or documents evidencing completion of the transfer in the case of a transfer of capital contributions; or a donation agreement in the case of a gifted capital contribution;

- A copy of the written approval issued by the Investment Registration Authority regarding capital contribution, share acquisition, or acquisition of capital contributions by a foreign investor or a foreign-invested economic organization, where such approval is required under the Law on Investment.

*Note: The enterprise must undertake that it will be able to fully satisfy all debts and other property obligations after the reduction of charter capital. In the case of a Multiple-Member Limited Liability Company reducing its charter capital pursuant to Points (a) and (b), Clause 3, Article 68 of the Law on Enterprises, the application dossier must be accompanied by the financial statements nearest to the date of the decision on the reduction of charter capital.

5. Procedures for Registration of Charter Capital Reduction

Pursuant to Article 44 of Decree No. 168/2025/ND-CP, the procedures for registering a reduction of charter capital are as follows:

Step 1: Prepare the dossier for registration of the charter capital reduction.;

Step 2: The company submits the dossier for registration of changes to enterprise registration contents to the provincial-level business registration authority where the company’s head office is located;

Step 3: Upon receipt of the enterprise registration dossier, the provincial-level business registration authority shall issue a receipt and an appointment letter indicating the date for returning the result to the dossier submitter;

Step 4: Within 03 working days from the date of receipt of the enterprise registration dossier, the provincial-level business registration authority shall examine the validity of the dossier and issue the Enterprise Registration Certificate to the enterprise in accordance with regulations;

In case the dossier is invalid, the provincial-level business registration authority shall notify the enterprise in writing of the contents that need to be amended or supplemented.

6. Authority for Registration of Charter Capital Reduction

Pursuant to Article 20 of Decree No. 168/2025/ND-CP, the competent business registration authorities at the provincial level include:

(i) The business registration authority under the Department of Finance of the province or centrally governed city shall carry out enterprise registration for enterprises, branches, representative offices, and business locations having addresses within the province or centrally governed city under its management, except for the case specified in item (ii). The business registration authority may establish receiving and result-returning points at different locations within the province;

(ii) The Management Board of High-Tech Parks shall carry out enterprise registration for enterprises, branches, representative offices, and business locations whose addresses are located within high-tech parks.

Reducing charter capital is an important legal procedure that requires enterprises to satisfy all statutory conditions and comply with the prescribed registration procedures before the competent authorities. Proper compliance not only ensures the legality of the company's internal governance activities but also minimizes potential legal risks that may arise during business operations. Therefore, before proceeding with a reduction of charter capital, enterprises should carefully review the relevant legal grounds, financial status, and related obligations to ensure that the adjustment is carried out smoothly, effectively, and in alignment with their business objectives.