Legal regulations on full division, partial division, consolidation, and acquire the enterprise

Law on Enterprise No. 59/2020/QH14 dated June 17, 2020.
Decree No. 01/2021/ND-CP of the Government dated January 4, 2021 on Business registration.

Legal regulations on full division, partial division, consolidation, and acquire the enterprise

2.1. Full division

Full division is the situation in which a limited liability company or joint stock company (the divided company) divides its assets, rights, obligations, members/shareholders to establish two new companies or more.
The divided company shall cease to exist after the new companies are granted the Certificate of Enterprise Registration. The new companies shall be jointly responsible for unpaid debts, unfulfilled liabilities, employment contracts and other obligations of the divided company or reach an agreement with the divided company’s creditors, clients and employees that one of the new companies will fulfill these obligations. The new companies obviously inherit all rights, obligations and lawful interests of the divided company under the full division resolution/decision.

2.2. Partial division

Partial division is the situation in which a limited liability company or joint stock company be partially divided by transfer part of the divided company’s assets, rights, obligations, members/shareholders to one or some new limited liability companies or joint stock companies without ceasing the existence of the divided company.
After applying for registration, the divided company and the new company/companies shall be jointly responsible for unpaid debts, employment contracts and other obligations of the divided company or unless otherwise agreed upon by the divided company, the new company/companies, the divided company’s creditors, clients and employees. The new company/companies obviously inherit all rights, obligations and lawful interests that are transferred under the partial division resolution/decision.

2.3. Consolidation of enterprises

Consolidation is the situation in which two or more companies (consolidating companies) be consolidated into a new company (consolidated company), after which the consolidating companies shall cease to exist.
After the consolidated company is registered, the consolidating companies shall cease to exist. The consolidated company shall inherit the lawful rights and interests, liabilities, unpaid debts, employment contracts and other obligations of the consolidating companies under the consolidation contract.

2.4. Acquisition of enterprise

Acquisition is the situation in which one or some companies (acquired companies) be acquired by another company (acquiring company) by transfer all of the acquired company’s assets, rights, obligations and lawful interests to the acquiring company, after which the acquired company shall cease to exist.
After the acquiring company is registered, the acquired companies shall cease to exist. The acquiring company shall inherit the lawful rights and interests, liabilities, unpaid debts, employment contracts and other obligations of the acquired company under the acquisition contract.

2.5. Procedure

Procedures for full division, partial division, consolidation, and acquire the enterprise are carried out through two basic steps including:

Step 1: Enterprises conduct meetings and discuss to make resolutions, decisions, and contracts on full division, partial division, consolidation, and acquire the enterprise.
Step 2: Conduct business registration procedures for newly formed companies after full division, partial division, consolidation, and acquire procedures.

2.6. How to perform

Submit directly to the Business Registration Office – Department of Planning and Investment where the business location is located;
Submit via postal service;
Submitonline via the National Business Registration Portal.

National Business Registration Portal.: https://dangkykinhdoanh.gov.vn