Hello lawyer! There are many types of company formation such as sole proprietorship, joint-stock company, LLC,… Among them, one-member LLC and multi-member LLC are currently popular forms. So, how much capital is required to establish an LLC? Please help me answer this question.
Lawyer’s reply:
What is the charter capital of a company?
One of the mandatory issues when registering a company is the charter capital. The charter capital is considered the amount of contributed capital that members of the company will put in as their financial contribution to operate the company.
However, many people misunderstand that charter capital is the initial capital contributed by members when registering the company. But, the charter capital is the total capital a company has from the time of registration until throughout its operating process. It can be understood as the value of assets the members have contributed and committed to contribute until the company’s establishment.
How much capital is needed to establish an LLC?
According to the 2014 Enterprise Law, the amount of charter capital depends on the economic capacity of the company members. And depending on the business purpose of the company, the charter capital will specify certain amounts.
For example, in the real estate business. This is a profession with specific requirements and conditions, with a contributed capital of 20 billion VND. This is stipulated under Decree No. 76/2015/ND-CP. It means that when registering a real estate company, the company must have 20 billion VND as charter capital, with no maximum limit.
Meanwhile, for a credit institution, according to Decree 10/2011/ND-CP, the bank’s deposit must be 1,000 billion VND.
Therefore, it can be concluded that the required capital to establish an LLC depends heavily on the financial capacity of the members, as well as the business product or service provided. The industry of operation will determine the necessary capital contribution level based on regulations.
However, legally, there is no prohibition on contributing charter capital when setting up an LLC. Because the amount of contributing capital affects the credibility of the company in the eyes of customers and partners. If the charter capital is too low, it may cause psychological distrust among customers or partners in business dealings. Therefore, when registering a company, it is advisable to select an appropriate capital amount that fits the budget and ensures trustworthiness.
How Apecdoc.org answers the question of how much capital is needed to establish an LLC
Due to the difficulties in determining an appropriate contribution amount that ensures financial capacity and maintains business credibility, many clients face challenges in making their decisions. Therefore, apecdoc.org has provided consultancy to help clients answer the question of how much capital is necessary to establish an LLC.
With many years of experience in consultancy and supporting company registration, assisting clients in overcoming initial difficulties in setting up companies, the organization has in-depth knowledge of the enterprise law and is attuned to current market trends. Hence, it will help you determine the perfect contribution amount that balances your budget and the required capital for an LLC.
The organization has a team of professional consultants who understand enterprise law and are aware of regulations related to business establishment and operation. They will help clients resolve all issues during the registration process, and advise to facilitate quick, legal decisions in accordance with Vietnamese enterprise law. Apecdoc.org promises to support clients throughout the entire company registration process.
Therefore, understanding how much capital is needed to establish an LLC through the above explanations will help you comprehend the importance of setting a stable contribution level for the company’s operation. It also helps in answering what the appropriate amount of contributed capital for an LLC should be. To implement a smooth registration process and determine the suitable contribution amount according to your business type, you can contact apecdoc.org for support.
