Step 1: Verify company information
Organizations and individuals acquiring the company before buying need to verify company information, specifically:
- Information about the company’s business activities ;
- Employee status, employee insurance;
- Tax information: Check the usage of invoices, input and output invoices; income of the company during operation, financial statements and other accounting documents…;
- Tax obligations of the company: Check the compliance with tax obligations, tax declaration, tax debt (if any), tax finalization situation of the company.
Note: To avoid risks when acquiring the company, the acquiring organization or individual must request the company to carry out tax finalization procedures with the tax authority.
Step 2: Transfer contributed capital
The essence of the company acquisition procedure is the transfer of contributed capital and the transfer of management of the company. Please note the following:
Tax obligations of organizations and individuals when transferring capital
Natural persons must fulfill the obligation to declare personal income tax whether taxable income arises or not, the following tax calculation method is applied:
- Personal income tax payable = Taxable income x 20% tax rate
- Taxable income = Transfer price – Purchase price of contributed capital
Note: The deadline for filing personal income tax returns is at least 10 days from the date of signing the transfer contract.
For organizations that are legal entities, income from capital transfer will be included in corporate tax and the company must declare in the quarterly provisional declaration and annual settlement.
Step 3: Take steps to amend company establishment registration, declare personal income tax
Preparation of documents in the company acquisition procedure
- Prepare notarized copies of identity cards, citizen identity cards, passports of the transferee.
- Notarized copy of business registration for the transferred legal entity; personal identification documents for the representative managing the contributed capital of this legal entity.
- Information about the amount of contributed capital transferred: what percentage of the total share capital of the company; transfer value.
Drafting dossiers for adjustment of business registration
Tax returns include:
- Personal income tax returns;
- Agreement on transfer of contributed capital;
- Minutes of liquidation of the transfer contract;
- Power of attorney for tax preparer: Where the owner authorizes the company to make records. Documents related to the transfer of contributed capital: receipts, expenditures, account books …
Records of change of company registration
- Owner’s decision for a one-member limited liability company; decisions of the Members’ Council for limited liability companies with two or more members;
- Minutes of meetings of the Members’ Council for limited liability companies with 2 or more general partners;
- Agreement on transfer of contributed capital in the procedure for the acquisition of the company;
- Minutes of liquidation of the transfer contract;
- Notification of change of business registration;
- Power of attorney for the agent to manage the contributed capital: In case the new owner is a legal entity;
- Other relevant legal documents.
Submission of documents and business information disclosure fees
- The application for registration of change must be submitted at the Planning and Investment Department where the head office of the company is located within 10 days from the date of signing the transfer contract.
- The company pays the company registration information disclosure fee in accordance with the provisions of law
- The tax return will be submitted to the Tax Department at the head office of the company; within 10 days from the date of signing the capital transfer contract. The transferor pays personal income tax (if any).
Step 4: Complete the company acquisition procedure
Results within 05-08 working days for procedures for changing business registration, 10-15 working days for tax declaration procedures.
