QUESTION :
Lawyer please advise me. I want to contribute capital to a joint stock company, I would like to ask if there is any problem with such a capital contribution contract and will it guarantee my interests when there is an incident related to the company or business such as default bankrupt?
ANSWER:
With your question, DHP LAW would like to answer the following questions:
Regarding your capital contribution contract, in addition to some points that are not legal and unclear which may lead to disputes later, there are also some important provisions missing to ensure your interests, specifically: can be as follows:
Firstly, if you contribute capital to a Company (specifically a Joint Stock Company…), the party receiving the capital contribution must be a Company, not an individual (specifically Ms.: Nguyen….). In case you let the recipient of capital contribution be an individual, this will be a cooperative capital contribution contract between two individuals. Thus, in case the competent authority (General Meeting of Shareholders or Board of Directors) decides on this capital contribution but does not agree with your capital contribution, this contract has no legal value. and binding on the company. Therefore, you must amend the subject of the capital contribution party in the Contract.
Second, the contract does not stipulate your right to inspect your financial records. In case the party receiving the capital contribution has violated the law, resulting in no profit on the books and documents, your interests will not be guaranteed and you will not be able to share profits. You should add this provision to ensure that your investment is effective.
Third, the contract does not specify the terms when the company is dissolved or bankrupt, what are your rights? The dissolution of the company is decided by the General Meeting of Shareholders of the company and the General Meeting of Shareholders is the meeting of the shareholders. In a joint-stock company, shareholders are free to transfer shares. Therefore, the decision of the General Meeting of Shareholders may change at any time. Therefore, when the company is dissolved or bankrupt directly affects your interests, specifically, you should stipulate additional terms:
– In case the company is dissolved, before carrying out the dissolution procedures at a competent State agency, it must notify your party and must return or compensate a certain amount of money given by your party. .
– In case the company goes bankrupt, the capital contribution is considered a loan of the company to the individual and the company will have to perform obligations to you such as payment obligations to creditors in accordance with the Bankruptcy Law. .
Fourth, regarding the purpose of capital contribution, you should stipulate more content of capital contribution to carry out business activities of the company if you want the amount invested in the company to serve business activities.
Fifth, the contract does not stipulate the case that the shareholders in the company later transfer shares to another person or the company manager changes leading to the termination of this capital contribution contract, then the rights directly affected through no fault of yours. Therefore, you should add the compensation liability of the company in this case in the Contract.
Sixth, the contract does not provide for cases where the parties are entitled to unilaterally terminate the contract when one of the two parties violates their obligations or fails to properly perform their commitments in the contract; or stipulate the case that your party can unilaterally terminate the contract but must notify the Company in advance with a reasonable time when it finds that the Company is not profitable but only found in the contract that you can withdraw capital or transfer at the end of the capital contribution term. Therefore, you should add this provision in the Contract to protect your rights.
Above are some consulting opinions of DHP LAW, if you have any questions, please contact us.
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