Trang chủNewsQuestion and AnswerWhat is charter capital?

Date: 14/10/2020

Question: Please indicate how to define the charter capital for the type of joint stock company. What are the basic characteristics of the charter capital?
Regarding the concept of charter capital for joint-stock companies, the Law on Enterprises 2014 clearly stipulated. Accordingly:
- Charter capital of a joint-stock company is to total face value of sold shares. Sold shares are the amount of authorized shares that have been paid-off by shareholders to the company.
- Authorized shares are the total amount of shares of various types that the General Meeting of Shareholders decides to offer to raise capital.
- Unsold shares are authorized shares that have not been paid-off.The charter capital of the joint stock company has some basic characteristics as follows:
a) Charter capital of a joint-stock company on the business registration date is the capital contributed by the members, shareholders within a certain periodEnterprise Law 2014 specifies the duration for charter capital contribution. Accordingly, shareholders shall fully pay for the registered shares within 90 days from the issuance date of the Enterprise Registration Certificate. The shareholder that fails to pay or fails to pay completely for the registered shares shall have responsibility for financial obligations of the company which are incurred during the period for charter capital contribution.
b) Charter capital can be formed from a variety of assets
Enterprise Law 2014 specifies the types of assets used to contribute capital to the company. Accordingly, contributed assets may be Vietnam Dong (VND), convertible foreign currencies, gold, value rights to use land, value of intellectual property rights, technologies, technical secrets, and other assets that can be assessed in VND.
Intellectual property rights contributed as capital include copyrights and relevant rights, industrial property rights, plant variety rights, and other intellectual property rights prescribed by regulations of law on intellectual property. Only the organizations and individuals who are legitimate owners of the aforementioned rights may contribute such assets as capital.

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