Issue 011025 – Procedures for division, separation, consolidation, and merger of companies

Dear Valued Client,

In the course of business, a company may need to undergo restructuring to achieve growth objectives, streamline its operations, or expand its scale of business. Under Vietnamese enterprise law, there are four forms of corporate reorganization: division, separation, consolidation, and merger. To help our Valued Clients better understand the nature and differences of each form, as well as the applicable procedures, we are pleased to introduce the following article on this topic.

1. Company division

Clause 1, Article 198 of the Law on Enterprises 2020 (as amended in 2025) (“Law on Enterprises”) defines company division as the division of assets, rights and obligations, and members/shareholders of an existing company (the “divided company”) to establish two or more new companies. In other words, company division can be expressed as A = B + C, where A is the divided company, and B and C are the new companies. Upon completion of division, the divided company ceases to exist. The newly established companies shall be jointly liable for the obligations, debts, employment contracts, and assets of the divided company, unless otherwise agreed for one company to assume such liabilities. They shall also succeed to all lawful rights, obligations, and interests in accordance with the resolution or decision on the division of the company.

1.1. Steps for company division[1]

1.2. Procedures for company division:

Since the division of a company results in the simultaneous establishment of new companies and the termination of the divided company’s operations, the procedure involves two steps, as provided below:

a. For establishment of new companies:[2]

• For LLCs: dossier similar to that of enterprise registration of an LLC (Article 21, Law on Enterprises), with a copy or original of the division resolution/decision, submitted to the competent business registration authority.
• For JSCs: dossier similar to that of enterprise registration of a JSC (Article 22, Law on Enterprises), with a copy or original of the division resolution/decision, submitted likewise.

b. For termination of the divided company:[3]

Pursuant to Clause 3 Article 67 of Decree No. 168/2025/NĐ-CP, the divided company must also terminate the operations of all its branches, representative offices, and business locations. Accordingly, along with the procedures for establishing the new companies, it is necessary to carry out the procedures for terminating the divided company and its dependent units.Once the new companies are registered, the provincial business registration authority updates the legal status of the divided company to “In dissolution procedures/divided/consolidated/merged” and updates the status of dependent units to “In termination procedures.”

Within three working days from the date on which the tax authority confirms that the divided company and its dependent units have fulfilled all tax obligations, the provincial business registration authority shall remove the divided company from the National Enterprise Registration Database and officially terminate the operations of all its branches, representative offices, and business locations.

2. Company separation

Under Clause 1 Article 199 of the Law on Enterprises, “company separation” means transferring part of the assets, rights, obligations, members, or shareholders of an existing company (the “separated company”) to set up one or more new companies (the “new companies”), without ending the legal existence of the separated company. In simple terms, company separation can be understood as A = A + B, where A is the separated company and B is the newly established company.

After the business registration is completed, both the separated company and the new companies are jointly responsible for the separated company’s outstanding obligations, unpaid debts, employment contracts, and other liabilities, unless otherwise agreed. The new companies automatically take over the lawful rights, obligations, and interests allocated to them under the resolution or decision on the separation.

2.1. Steps for company separation

2.2. Procedures for company separation

a. For establishment of the newly separated company:[4]

• For LLCs: dossiers similar to those for registration of an LLC under Article 21 of the Law on Enterprises, together with a copy or original of the separation resolution/decision, submitted to the competent business registration authority.
• For JSCs: dossiers similar to those for registration of a JSC under Article 22 of the Law on Enterprises, together with a copy or original of the separation resolution/decision, submitted likewise.

b. For amendment of enterprise registration of the separated company:[5]

• Application form for amendment of enterprise registration;
• Copy or original of the resolution/decision of the highest decision-making body on changes in charter capital (if any);[6]
• Updated list of members (if membership changes occur);
• Copy or original of the resolution/decision on company separation;
• Other supporting documents depending on the specific changes, in accordance with Chapter V of Decree 168/2025/ND-CP.

3. Company consoliation

Under Article 200 of the Law on Enterprises, consolidation is the combination of two or more companies (the “consolidated companies”) into a new company, while the consolidated companies cease to exist. In short, this can be expressed as A + B = C, where A and B are the consolidated companies, and C is the newly consolidated company.

The consolidated company automatically inherits all rights, obligations, and lawful interests of the consolidated companies, including existing rights and interests, outstanding debts, labor contracts, and other liabilities. Such succession is established under the consolidation contract and takes effect by operation of law.

3.1. Steps for company consolidation

3.2. Procedures for company consolidation

a. For establishment of the consolidated company:[7]

• For partnerships: dossier as prescribed in Article 20 of the Law on Enterprises.
• For limited liability companies: dossier as prescribed in Article 21 of the Law on Enterprises.
• For joint-stock companies: dossier as prescribed in Article 22 of the Law on Enterprises (excluding the list of founding shareholders if the consolidated company has no founding shareholders).
• Consolidation contract.
• Copy or original of the resolutions/decisions of the consolidated companies approving the consolidation contract.

b. For termination of the consolidated companies:[8]

The procedure is the same as in the case of termination of a divided company, as described in Section 2.2(b) above.

4. Company merger

Clause 1, Article 201 of the Law on Enterprises defines a company merger as the process by which one or more companies (the “merged companies”) merge into another company (the “merging company”) by transferring all assets, rights, obligations, and lawful interests to the merging company, while the merged companies cease to exist. In short, a merger can be expressed as A + B = B, where A is the merged company and B is the merging company.

The merging company enjoys all lawful rights and benefits, and is responsible for the obligations, outstanding debts, employment contracts, and other liabilities of the merged company. The merging company automatically inherits all rights, obligations, and lawful interests of the merged company in accordance with the merger agreement.

4.1. Steps for company merger

4.2. Procedures for company merger

a. For amendment of enterprise registration of the merging company:[9]

• Application form for amendment of enterprise registration;
• Merger contract (original or valid copy);
• Resolution/Decision and meeting minutes of members, owners, or shareholders approving the merger;
• Amended charter (if any);
• Updated list of members/founding shareholders/foreign shareholders (if there are changes).

b. For termination of the merged companies:[10]

The procedure follows Article 67 of Decree 168/2025/ND-CP, similar to the termination of a divided company as set out in Section 2.2(b) above.

The above sets out the regulations and procedures for the four forms of corporate reorganization under Vietnamese law: division, separation, merger, and consolidation. As always, we hope this article proves useful and we look forward to working with you in the near future.

Sincerely,
ENT Law LLC

[1] Article 198, Law on Enterprises

[2] Article 25.1 of Decree 168/2025/ND-CP

[3] Article 67, Decree 68/2025/ND-CP

[4] Article 25.2, Decree 168/2025/ND-CP

[5] Article 55.1, Decree 168/2025/ND-CP.

[6] If the separated company uses part of its charter capital to set up the new company, its charter capital will be reduced by the corresponding value of the transferred assets, unless it simultaneously increases its capital to offset the reduction. As a result, the company must update its business registration details after the separation.

[7] Article 25.3, Decree 168/2025/ND-CP.

[8] Article 67, Decree 168/2015/ND-CP.

[9] Article 55.2, Decree 168/2025/ND-CP.

[10] Article 67, Decree 168/2025/ND-CP.