Business households change business type

September 13, 2023

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In the dynamic landscape of business, flexibility and adaptability are key factors for survival and growth. One way that businesses can evolve to meet changing demands and opportunities is by changing their business type. Whether transitioning from a sole proprietorship to a partnership or altering their structure in other ways, these changes can have significant implications. In this discussion, we will explore the procedures and considerations involved when business households decide to change their business type. And understanding this process is vital for entrepreneurs looking to navigate the evolving business environment effectively.

Question:

To the Authority of Planning and Investment of Ho Chi Minh City,

I am currently operating as a business household and would like to upgrade to a two-member limited liability company (LLC). So could you please provide guidance on the necessary procedures for preparing the application dossier?

Answer:

Pursuant to Article 27 of Decree No. 01/2021/NĐ-CP pertaining to business registration:

“1. The application for registration of an enterprise which is converted from a household business shall be submitted to the Business Registration Office of province where the enterprise will be headquartered.

2. The application for registration of an enterprise which is converted from a household business includes the original certificate of household business registration, the copy of the tax registration certificate and the documents specified in Articles 21, 22, 23 and 24 hereof corresponding to each enterprise type but excludes the investment registration certificate specified in Point b Clause 4 Article 22, Point c Clause 4 Article 23 and Point c Clause 3 Article 24 hereof. If foreign investors/foreign-invested business entities contribute capital to or purchase of shares/stakes of the enterprise converted from a household business in case procedures for registration of capital contribution or purchase of shares/stakes must be followed in accordance with the Law on Investment, the application for enterprise registration must include the written approval given by the investment registration authority for capital contribution or purchase of shares/stakes by such foreign investors/foreign-invested business entities.

3. Within 02 working days from the date of issue of the enterprise registration certificate, the Business Registration Office shall send the copy of the enterprise registration certificate and original certificate of household business registration to the business registration authority of district where the household business is located for completing procedures for shutdown of the household business.”

As a result, businesses have the option of utilizing online registration services to compile the application dossier. You can accomplish this by using the City’s Home Business Registration Service Program, which you can access through the website www.dpi.hochiminhcity.gov.vn. For inquiries or assistance, a dedicated hotline is available at 0283.8244.399.

Conclusion

In conclusion, the ability to change business types is a valuable tool for business households seeking to align their operations with their evolving needs and objectives. While the process may involve several legal and administrative steps, it offers businesses the opportunity to explore new avenues, expand their reach, and remain competitive. Adhering to the necessary procedures and seeking professional guidance when needed ensures a smooth transition and positions the business for success in the ever-changing world of commerce.

HMLF is always available to offer assistance in understanding the procedures with authorities.