Mr. Kevin (name changed), a Singaporean citizen and co-owner of a two-member LLC operating in the e-commerce sector in Hanoi, asked DEDICA:
"Our company has an opportunity to secure funding from an investment fund, but they require us to convert into a joint stock company to issue preferred shares. I am not yet clear on how long this conversion from an LLC to a joint stock company takes, what documents are required, and what risks we should be aware of beforehand?"
DEDICA ADVISES Converting from an LLC to a joint stock company is a completely legal and common milestone in a company's fundraising roadmap. The Law on Enterprises permits four conversion methods. Once internal matters are settled, the company only needs to submit its application to the Business Registration Authority, which processes the procedure within 3 working days. The critical part to prepare thoroughly is not the administrative formality itself, but rather two parallel tracks: drafting the new joint stock company's charter to match the fund's requirements, and handling additional foreign investment procedures if new investors are joining.
Which methods of conversion does the law permit?
The current Law on Enterprises stipulates that an LLC can be converted into a joint stock company via four methods. The option that matches Mr. Kevin's situation is raising additional capital from outsiders: the investment fund injects capital, while the existing members become founding shareholders of the new joint stock company.
Upon conversion, the joint stock company naturally inherits all lawful rights and interests, and assumes liability for all debts, including tax liabilities, labor contracts, and other obligations of the old LLC. This means the investment fund will enter a legal entity that already has an operating history and is bound by pre-existing obligations: both parties must fully understand this before signing.
The actual process and key preparation points
The conversion process consists of two phases. The first phase takes place entirely within the company: the Members' Council approves the conversion decision, agrees on the new shareholder structure, drafts the joint stock company's charter, and determines the list of founding shareholders along with their shareholding ratios. This phase usually takes the most time, particularly when negotiating investment terms with the fund (term sheet, conditions precedent, veto rights, etc.). The second phase involves state registration: submitting the dossier to the provincial Business Registration Office, which processes the application within 3 working days from the receipt of a valid dossier.
According to Decree 168/2025/ND-CP, the registration dossier to convert an LLC into a joint stock company includes: an application form for enterprise registration; the charter of the new joint stock company; the list of founding shareholders and foreign investors; copies of legal documents of each shareholder; and documents proving the capital contribution by new members/shareholders. If the investment fund is a foreign entity, an approval document from the Investment Registration Authority regarding capital contribution and share purchase by foreign investors must be supplemented.
This is a detail that many FDI companies or startups with foreign co-founders tend to overlook: when a foreign investment fund contributes capital to a joint stock company, this transaction usually must be registered with the Investment Registration Authority first, before submitting the conversion dossier to the Business Registration Office. This sequence cannot be reversed, and each step carries its own processing timeline. Therefore, the actual total duration from start to obtaining the new Business Registration Certificate usually ranges from 4 to 8 weeks, depending on the complexity of the investment structure.
Conclusion
In summary, converting from an LLC to a joint stock company is entirely feasible, and the law outlines a clear framework for it. For Mr. Kevin's situation, the steps should be executed in the following order: (1) negotiate and finalize the investment terms with the fund; (2) draft the joint stock company's charter to satisfy both parties' requirements; (3) if the fund is a foreign entity, complete the investment registration procedures first; (4) submit the conversion dossier to the Business Registration Office within 10 days from the completion of internal procedures. The phase that demands the most time and meticulous care is drafting the charter and shareholders' agreement; errors here could trigger future disputes.
DEDICA Law Firm is ready to support you with LLC to joint stock company conversion. Contact DEDICA for in-depth legal consultation.
The above content is for reference purposes and reflects the legal regulations at the time of publication. Each conversion transaction has its own unique structure and circumstances; please consult DEDICA lawyers for accurate advice regarding your specific case.
