Question

My enterprise is considering buying the entire existing limited liability company owned by a person ? Lawyers in Danang, Vietnam advise and provider services on procedures for purchase a company ?

Answer

Acquisition of an enterprise, buying a business in Da Nang ?

A one member limited liability company is an enterprise owned by one organization or individual (hereinafter referred to as company owner); the company owner is liable for all debts and other property obligations of the company to the extent of the amount of the charter capital of the company ty (Clause 1 Article 73 Law on Enterprises No. 68/2014/QH13 dated 26 November 2014).

A company owner may withdraw capital only by way of assignment of a part or all of the charter capital to other organizations and individuals; in the case of withdrawal of all or part of its contributed charter capital from the company in another form, the company owner and the organization or individual concerned must be jointly liable for debts and other property obligations of the company (Clause 5 Article 76 Law on Enterprises No. 68/2014/QH13 dated November 26, 2014).

In case the owner of the company transfers all his/her charter capital to another individual or organization, the individual who receives the transfer have to register for the change of owner of the company (Article 46 Decree No. 78/2015/NĐ-CP dated September 14, 2015).

Therefore, you may only acquire the entire enterprise by way of purchase all of the charter capital to the single member LLC and carry out procedures for registration of change of owner of the company in accordance with provisions in Clause 1 Article 46 Decree No. 78/2015/NĐ-CP dated September 14, 2015.

Further, according to provisions in Clause 3 Article 17 Law on Competition No. 27/2004/QH11 dated March 12, 2004, then:

Acquisition of an enterprise means the purchase by one enterprise of all or part of the assets of another enterprise sufficient to control or govern the activities of one or all of the trades of the acquired enterprise.

Under the Law on Competition, acquisition of an enterprise by way of purchase all or part of the assets of another enterprise is deemed economic concentration, restraining competition acts.

Any economic concentration shall be prohibited if the enterprises participating in the economic concentration have a combined market share in the relevant market of more than fifty (50) per cent, except in the cases stipulated in Article 19 of this Law or where the enterprise after the economic concentration still falls within the category of medium and small sized enterprises as stipulated by law (Article18 Law on Competition No. 27/2004/QH11 dated March 12, 2004)./.

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DMS Law firm in Vietnam
Director
(Signed)
Lawyer Do Minh Son