Capital-contribution disputes — shareholders or members failing to pay subscribed capital, paying late, or arguing over asset valuations — are among the most common internal disputes in Vietnamese enterprises. This article maps the legal grounds, the litigation route in court, and commercial mediation so parties can choose the right path.
Substantive grounds: the contribution duty and consequences of breach
Under the Enterprise Law (consolidated text 67/VBHN-VPQH, effective 01/7/2025), members and shareholders must pay in full and on time their subscribed capital within 90 days of the enterprise registration certificate’s issuance (Art. 47 for multi-member LLCs, Art. 75 for single-member LLCs, Art. 113 for joint-stock companies). If capital is not fully paid:
- The member/shareholder loses membership status corresponding to the unpaid portion;
- The company must register a charter-capital reduction within 30 days of the final contribution deadline.
Breach of the contribution duty is the substantive basis for the remaining members/shareholders — or the company itself — to sue for performance and damages.
Contribution disputes fall under court jurisdiction
Under Articles 30.3 and 30.4 of the Civil Procedure Code (consolidated text 99/VBHN-VPQH — consolidating Code 92/2015/QH13 and Law 85/2025/QH15, effective 01/7/2025), disputes between the company and its members, between the company and its managers, and among members relating to the company’s establishment, operation, or dissolution are business/commercial disputes within court jurisdiction.
Court levels: note the change from 01/7/2025
A point many still get wrong under the old rules. After Law 85/2025/QH15 (effective 01/7/2025):
- Regional People’s Courts hear all business/commercial disputes at first instance (Art. 35, Civil Procedure Code) — including foreign-element cases (Art. 469). The old rule sending foreign-element cases to provincial courts at first instance no longer applies.
- Provincial People’s Courts hear appeals against first-instance judgments (Art. 37).
Writing “provincial court at first instance” for a foreign-element contribution dispute has been wrong since 01/7/2025 — a misfiled petition will be returned, wasting time.
Litigation procedure
Petitions and proceedings follow Articles 186–194 of the Civil Procedure Code: identify the correct defendant (the breaching member/shareholder), gather evidence (charter, capital-contribution certificates, meeting minutes, transfer records, asset valuations), and file with the competent Regional People’s Court. On limitation periods: the law sets different limitation periods for different types of claims (demands for contribution performance, damages claims, etc.); parties should check the applicable rule for their specific claim rather than guessing — when in doubt, consult counsel before filing to avoid a time-barred claim.
Commercial mediation — the less costly route (Decree 22/2017/ND-CP)
For disputes among shareholders/members who must keep working together, commercial mediation under Decree 22/2017/ND-CP (still in force) is often wiser than litigation:
- The dispute is handled by a commercial mediator chosen by agreement;
- A successful out-of-court settlement may be submitted to the court for recognition under Articles 416–419 of the Civil Procedure Code: the request must be filed within 06 months of the settlement record;
- The recognition decision takes immediate effect and is enforceable.
Mediation’s strengths: confidentiality, speed, preserved business relationships; its weakness: dependence on the parties’ good faith.
Suing managers tied to contribution disputes (Article 166)
In many contribution disputes, managers (Board members, Directors) cover up breaches or breach duties themselves. Shareholders or groups holding 01% or more of ordinary shares may sue in the company’s name for managers’ civil liability under Article 166 of the Enterprise Law.
Risks and recommendations
The biggest risk in contribution disputes is evidence: many companies fail to keep contribution records, minutes on handling breaches, leaving litigation uphill. Recommendations: (1) as soon as a breach surfaces, record it in minutes and notify in writing; (2) register the capital reduction within the 30-day deadline to avoid compounding administrative penalties; (3) consider commercial mediation before suing, especially where parties wish to continue cooperating; (4) file at the right court level (Regional People’s Court at first instance) and verify the limitation period for each claim type.
FAQs
What is the deadline for paying subscribed capital? 90 days from issuance of the enterprise registration certificate (Art. 47/75/113, Enterprise Law).
What happens if capital is not fully paid? Loss of membership/shareholder status for the unpaid portion; the company must register a capital reduction within 30 days.
Where do I sue in a foreign-element contribution dispute? The Regional People’s Court hears all such cases at first instance, including foreign-element ones (Art. 35 and 469, Civil Procedure Code after Law 85/2025) — no more provincial-court first instance as before 01/7/2025.
Is an out-of-court mediated settlement enforceable? Yes, once recognized by the court under Art. 416–419 of the Civil Procedure Code (request within 06 months); the recognition decision is immediately enforceable.
Can minority shareholders sue a manager covering up a contribution breach? Yes — shareholders/groups with 01%+ of ordinary shares may sue in the company’s name (Art. 166, Enterprise Law).
Sources
- Enterprise Law — consolidated text 67/VBHN-VPQH, effective 01/7/2025: Art. 47, 75, 113 (90-day contribution duty), Art. 166 (suing managers).
- Civil Procedure Code — consolidated text 99/VBHN-VPQH (Code 92/2015/QH13 + Law 85/2025/QH15), effective 01/7/2025: Art. 30 (30.3, 30.4), 35, 37, 186–194, 416–419, 469.
- Decree 22/2017/ND-CP on commercial mediation (in force).
Contact FLAT Law Firm
If you are facing a capital-contribution dispute among shareholders or members, or need advice on choosing between commercial mediation and litigation, please contact our lawyers at contact us.
This article provides general legal information and does not replace legal advice for any specific case. Content has been QA-reviewed by the AI Legal Council; it was not reviewed by a human lawyer.
