Establishing a company is not a complicated matter. However, if the following factors are not ensured, many problems and procedures will arise after the establishment of the company. The company may even be sanctioned because of unknowingly breaking the law. Then, it will cost not only time and money but also business reputation.
So, when starting a company, what is the first thing we need to care about?
- Types of enterprise:
According to the current law, there are four types of enterprises:
– Private enterprises
– Joint stock companies
– Limited liability companies
– Partnerships
Depending on the number of founding members and business purpose, enterprises can choose the appropriate type.
- Company name
The name of a business includes two elements: enterprise’s type and proper name (Ex: PhanLaw VietNam Joint Stock Company). It must not be identical to or confused with the names of registered enterprises and must not infringe upon the industrial property rights of protected individuals or organizations. An enterprise is responsible before law if its name infringes upon industrial property rights. Thus, when establishing a company, it is necessary to check if the company’s name violates the law or not so that disputes will be avoided, and the company doesn’t need to be renamed.
- Charter capital
At present, the law does not regulate the minimum charter capital, except several business lines that require legal capital. The registration of charter capital affects the level of license tax. Therefore, when establishing a company, it is vital for businesspeople to thoroughly understand the law and select the appropriate level of charter capital.
- Business line
At present, enterprises are free to do business in industries not prohibited by law. However, some business lines require enterprises to meet specific conditions when going into operation, to ensure legal capital level or to submit practice certificates and sub-licenses. Individuals and organizations wishing to establish companies should find out if they meet the prescribed conditions. In many cases, enterprises though founded must be dissolved immediately or be sanctioned by state agencies for illegal business because of not meeting the prescribed conditions.
In addition to the above factors, founding members should pay attention to the cooperation agreement before the establishment of the company. To ensure the rights and interests of members, and not to violate the law, members should go to a reputable consultancy organization.
PHAN LAW VIETNAM
Hotline: 1900.599.995 – 0794.80.88888
Email: info@phan.vn
