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18/06/2021 20:40

          Charter capital and legal capital are two capital types that make many people confused when enterprise establishment registration. How is the difference between the two capital types? This article will provide information that helps to differentiate between the two capital types.

Charter capital and legal capital have some different points as follows:
           firstly, about the notion
        + Charter capital means the total value of assets that have been contributed or promised by the members/partners/owners when the limited liability company or partnership is established; or the total of nominal values of the sold or subscribed shares when a joint stock company is established.
                 + Legal capital is minimum capital has to establish an enterprise, this capital-level shall be the competent authorities to stipulate and depend on each other commercial business, then this capital has stipulated differently.
           Second, about the capital – level

          With the legal capital, when enterprise register to establish any commercial fields have to satisfy minimum capital required by law for that business. While with the charter capital, the law doesn’t stipulate minimum or maximum capital. However, the minimum charter capital –level have to equal legal capital – level with conditional business lines.
          Third, the capital contribution period
          With legal capital, the enterprise has to satisfy sufficient capital to operate. As for charter capital is capital contribution members have to contribute capital within 90 days from the issuance date of the certificate of enterprise registration.
           Fourth, the basis of application
          Legal capital applies for each specific line of business and brings fixed. While charter capital applies to some company types: Limited liability companies; Joint stock companies; partnerships…and charter capital maybe change during the business process.
          Lastly, the basis of stipulation
           Legal capital is stipulated in decrees, circulars… beside, charter capital was stipulated the company’s charter.
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