VALUATION OF CONTRIBUTED ASSETS IN THE VIETNAMESE LAW

Legal basis:

– Law on Enterprises 2020.

1. Definition of contributed assets

Contributed assets include VND, convertible foreign currencies, gold, land use right, intellectual property rights, technologies, technical secrets, other assets that can be converted into VND.

Contributed assets that are not VND, convertible foreign currencies or gold shall be valued by members/partners/shareholders or a valuation organization and expressed as VND.

2. Assets contributed upon establishment of an enterprise

There are 02 methods in order to value contributed assets upon establishment of an enterprise:

– Valuation by members/partners/founding shareholders by consensus: Members/partners/founding shareholders self-evaluate assets, negotiate with each other and make decisions on valuation of capital contributions.

– Valuation by a valuation organization: The value of contributed capital assets evaluated by professional valuation organizations must be approved by more than 50% of the members and founding shareholders. If less than 50% of the members and founding shareholders approve, the valuation must be re-evaluated or the members must conduct the valuation themselves or hire another valuation organization.

In case a contributed asset is valued at a value higher than its actual value at contribution time (overvalued), the members/partners/founding shareholders shall jointly contribute an amount equal to the difference and are jointly responsible for the damage caused by the overvaluation.

3. Assets contributed during the operation

Similar to Assets contributed upon establishment of an enterprise, there are also 02 methods value contributed:

– The owner or the Board of Members/Partners (for limited liability companies and partnerships) or the Board of Directors (for joint stock companies) and the contributor value by themself.

– Valuation by a valuation organization: The value shall be accepted by the contributor and the owner, the Board of Members/Partners/Directors. If the contributor and/or the owner, the Board of Members/Partners/Directors do not accept this valuation, the valuation must be re-evaluated or the contributor and the owner, the Board of Members/Partners/Directors must conduct the valuation themselves or hire another valuation organization.

In case a contributed asset is overvalued, the contributor, the owner and members of the Board of Members/Partners/Director shall jointly contribute an amount equal to the difference and are jointly responsible for the damage caused by the overvaluation.