MERGER PROCEDURE FOR COMPANY INCORPORATION 

A business merger is an important strategy enabling companies to expand in size, enhance competitiveness, and optimize resources. However, to ensure the merger process proceeds smoothly, legally, and achieves its intended objectives, all involved parties must strictly comply with procedural and legal regulations. In this article, the author will clearly present the corporate merger process step by step, helping businesses understand and execute it effectively.  

1. What is a company merger? 

Article 201.1 of the  Enterprise Law 2020 states that one or more companies (hereinafter referred to as the “Merged Company”) may merge into another company (the “Merging Company”) by transferring all assets, rights, obligations, and lawful interests to the Merging Company, thereby terminating the Merged Company’s legal existence. 

Example: If Company A is the Merged Company and Company B is the Merging Company ⇒ A + B = B, meaning A will transfer all its assets, rights, obligations, and interests to B and cease to exist. 

2. Company merger procedure: 

2.1. Step 1: Preparing the merger agreement and drafted charter of the Merging Company (Article 201.2(a), Enterprise Law 2020) 

– Both the Merged Company and Merging Company prepare a merger agreement and a draft charter for the Merging Company.  

– The merger agreement must include:  

• Name and registered office of the Merged Company; 

• Name and registered office of the Merging Company; 

• Merger procedures and conditions; 

• Employee arrangements; 

• Method, procedure, timing, and conditions for converting assets, capital contributions, shares, and bonds of the Merged Company into those of the Merging Company; 

• Merger implementation timeline. 

According to Article 24.2 of the Enterprise Law 2020, the charter of the Merging Company must include: 

• The company’s name, addresses of the headquarters, branches and representative offices (if any); 

• The company’s business lines; 

• The charter capital; total quantity of shares, types of shares and face value of each type (for joint stock companies); 

• Full name, mailing address, nationality of the owner and each member (for limited liability companies) or the founding shareholders (for joint stock companies). Stakes held by each member (for limited liability companies) and values thereof. Quantity of shares, types of shares and value of each type held by founding shareholders (for joint stock companies); 

• Rights and obligations of the members (for limited liability companies) or shareholders (for joint stock companies); 

• The organizational structure; 

• Quantity, titles, rights and obligations of each of the enterprise’s legal representatives; 

• Method for ratifying the company’s decisions; rules for settlement of internal disputes; 

• Basis and method for determination of salaries and bonuses of the executives and controllers; 

• Cases in which members/shareholders may request the company to repurchase their stakes/shares (For limited liability companies/joint stock companies); 

• Rules for distribution of post-tax profits and settlement of business losses; 

• Cases of dissolution; procedures for dissolution and liquidation of the company’s assets; 

• Procedures for revising the company’s charter. 

2.2. Step 2: Approving the merger agreement and charter, notifying creditors and employees (Article 201.2(b), Enterprise Law2020) 

– Members, owners, or shareholders of both the Merged Company and the Merging Company must approve the merger agreement and Merging Company’s charter. 

– Within 15 days of approval, both companies must send the merger agreement to all creditors and notify all employees. 

– Additionally, per Article 110 of the Enterprise Law 2020, both companies must publish the merger decision on their website, in publications (if any), and make it publicly available at their headquarters and business locations within 36 hours of approval. 

2.3. Step 3: Registering to change for the Merging Company (Article 55, Decree 168/2025/NDCP)  

– The compentent authority: Provincial business registration office per Article 55.3, Decree 168/2025/ND‑CP.. 

– Required documents include: 

• Merger agreement; 

• Resolutions or decisions approving the merger (by owners for single-member LLCs, by members’ council for multi-member LLCs, or by the general shareholders’ meeting for JSCs), both for the Merged Company and the Merging Company; 

• Power of attorney from the Merging Company’s legal representative if applicable;

• ID card of the authorized person. 

2.4. Step 4: Terminating the Merged Company (Article 67, Decree 168/2025/NDCP) 

– After the Merging Company is granted new business registration, the business registration agency changes the legal status of the Merged Company to “Under dissolution, division, merger or absorption” and likewise updates the statuses of its branches and representative offices. The agency notifies the tax authority, which must confirm that the tax settlement and transfer obligations are complete. 

– Within 03 working days of receiving confirmation from the tax authority, the business registration agency finalizes the termination of the Merged Company and its branches or representative offices in the national business registration database. 

Date Written: 20/07/2025

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