Notes on using machinery and equipment as capital contribution to enterprises

Capital contribution means the investor’s contribution of assets to form the charter capital of a company, including contributions made for the establishment of a company or additional contributions to the charter capital of an already established company. Under the Law on Enterprises 2020, assets used for capital contribution may include Vietnamese Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong. 

In addition to the common method of capital contribution in cash, many investors currently use other types of assets as capital contributions. Among these, capital contribution in the form of machinery and equipment has become a method that is increasingly applied in practice. In light of this reality, this article sets out several notes for investors who intend to contribute capital to enterprises using machinery and equipment. 

1. Notes on the suitability of machinery and equipment used as capital contribution assets: 

– Suitability for the intended use: Not all machinery and equipment may be used as capital contribution assets to an enterprise. Accordingly, investors and enterprises must ensure that the machinery and equipment contributed as capital are suitable for their intended use and are capable of contributing to the enterprise’s production and business activities, in line with the registered business lines and sectors of the enterprise. 

– Ensuring safety: Machinery and equipment used as capital contribution assets must have technical specifications and operating methods compatible with the planning requirements at the installation location, ensuring safety for operators and other workers at such location. In addition, investors and enterprises must ensure that the operation of the machinery and equipment does not pose risks or cause adverse impacts on the environment or surrounding structures. 

2. Notes on the valuation of machinery and equipment used as capital contribution assets: 

– Machinery and equipment used for capital contribution must be valued by the members, founding shareholders, or a valuation organization, and such value must be expressed in Vietnamese Dong. In particular:

• Valuation principles:

In case of capital contribution with machinery and equipment upon establishment of the enterprise: The machinery and equipment must be valued by the members or founding shareholders based on consensus, or by a valuation organization. Where a valuation organization conducts the valuation, the value of the contributed assets must be approved by more than 50% of the members or founding shareholders. If the value of the contributed assets is higher than their actual value at the time of capital contribution, the members or founding shareholders shall jointly contribute an additional amount equal to the difference between the assessed value and the actual value of the assets at the time of completion of valuation, and shall jointly bear liability for any damage caused by the intentional overvaluation of the contributed assets. 

In case of additional capital contribution with machinery and equipment during the operation of the enterprise: The value of the machinery and equipment shall be agreed upon by the capital contributor and the owner, the Members’ Council (for limited liability companies and partnerships), or the Board of Directors (for joint stock companies), or determined by a valuation organization. Where a valuation organization conducts the valuation, the value of the contributed assets must be approved by the capital contributor and the owner, the Members’ Council, or the Board of Directors, as applicable. If the value of the contributed assets is higher than their actual value at the time of capital contribution, the capital contributor, the owner, members of the Members’ Council (for limited liability companies and partnerships), and members of the Board of Directors (for joint stock companies) shall jointly contribute an additional amount equal to the difference between the assessed value and the actual value of the assets at the time of completion of valuation, and shall jointly bear liability for any damage caused by the intentional overvaluation of the contributed assets. 

• Determination of the value of machinery and equipment contributed as capital: 

Machinery and equipment used as capital contribution assets shall become tangible fixed assets of the enterprise upon contribution. Pursuant to Clause 5 Article 2 of Circular No. 45/2013/TT-BTC, the historical cost of tangible fixed assets received as capital contribution is the total cost required to acquire the assets and bring them to a state ready for use. Accordingly, such historical cost may include the purchase price stated in the sale and purchase contract, import duties (if any), transportation costs, loading and unloading costs, installation costs, trial operation costs, and other directly related expenses. Therefore, in addition to the value of the goods under the sale and purchase contract, investors and enterprises may include other supporting costs incurred to bring the machinery and equipment into a ready-for-use condition as part of the total value of capital contribution in the form of machinery and equipment. 

– In cases of intentional misvaluation of contributed assets, organizations may be subject to a fine ranging from VND 30,000,000 to VND 50,000,000, while individuals may be subject to a fine ranging from VND 15,000,000 to VND 25,000,000. 

3. Notes on the transfer of ownership 

Investors contributing capital in the form of machinery and equipment must transfer ownership of such assets to the company, in accordance with the following regulations:  

3.1. Capital contribution with machinery and equipment subject to ownership registration: 

– The investor must carry out procedures for transferring ownership of the machinery and equipment to the company in accordance with the law.

– The transfer of ownership or land use rights of assets contributed as capital is exempt from registration fee. 

3.2. Capital contribution with machinery and equipment not subject to ownership registration: 

– Capital contribution must be effected through the handover and receipt of the contributed assets, evidenced by a handover minutes. 

– The handover minutes of capital contribution assets must include the following principal contents: 

• Name and head office address of the company; 

• Full name, contact address, and legal document number of the individual, or legal document number of the organization, contributing the capital; 

• Type and quantity of contributed assets; total value of the contributed assets and the ratio of such value to the charter capital of the company; 

• Date of handover; signatures of the capital contributor or its authorized representative and the legal representative of the company. 

Capital contribution in the form of machinery and equipment is a method increasingly chosen by investors in investment practice. Accordingly, investors and enterprises should ensure full compliance with applicable legal regulations in order to ensure legality and minimize potential legal risks. 

Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.

Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Business and Investment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.

Nguồn: https://ift.tt/ZwepO6A
Map: https://goo.gl/maps/JbCF1FiWPuD2Jsnx6
Thông tin: https://www.google.com.vn/search?q=Apolat+Legal&kponly=&kgmid=/g/11jkvqgmw_