Before the era of increasingly developing technology and science, capital contribution assets focused not only on tangible assets but also intangible assets such as trademarks and industrial inventions.
This has been recognized in the Enterprise Law and Intellectual Property Law, but in reality it has not been specified and there are still many inadequacies that cause difficulties for subjects.
How is business capital contribution regulated by law?
In legal terms, capital contribution is a legal act whereby the capital contributor transfers ownership of his or her assets to the business person in return for benefits from capital contribution.
Unlike normal capital assets, trademarks and inventions are special assets – intangible assets, especially assets, so they need to be valued. But in reality, both spiritual and material values are not easily determined. Along with that are related legal issues such as: how to contribute, how to determine the price, delivery and receipt of trademarks and inventions, capital contribution period and protection period of trademarks and inventions.
Up to now, Vietnam’s legal document system does not have specific documents guiding the issue of capital contribution by trademarks and inventions to businesses, however, enterprise law does not prohibit capital contribution by trademarks. , inventions and in fact this capital contribution has become quite common. Contributing capital with trademarks and inventions is done after registering ownership, this is a prerequisite for trademarks and inventions to become assets for capital contribution. Next, procedures for contributing capital with trademarks and inventions are carried out through: Valuing trademarks and inventions, drawing up capital contribution contracts, transferring ownership of trademarks and inventions to the business, and issuing licenses. capital contribution certificate.
Issues to keep in mind when contributing capital to business using trademarks and inventions
In the process of contributing capital, it will be difficult for the subjects to avoid encountering difficulties and shortcomings and it is necessary to note:
Firstly, about trademark and patent valuation:
In fact, the act of valuing assets contributed as capital, especially trademarks and inventions, to find consensus for determining asset prices is not simple. Therefore, in order to ensure the limitation of possible effects on third parties in the actions between the parties, asset valuation needs to be coordinated with competent people to reach the appropriate level. specific price.
All members are the valuators of capital assets. A professional valuation organization may have the authority to set prices at the request of its members, but there are no specific regulations on how to achieve them in accordance with the principles of not causing disputes.
According to Circular No. 06/2014/TT-BTC, there are 03 groups of methods applied to price appraisal: (i) Group of valuation methods using cost approach; (ii) Group of valuation methods using market approach; (iii) Valuation method group uses income approach. In particular, the group of income approaches should be given priority when valuing trademarks and inventions for capital contribution. Other groups of methods have the disadvantage that they do not consider the future value of trademarks or inventions or are not feasible to apply in Vietnam.
The decision on the value of contributed assets will be discussed by the Board of Directors of the joint stock company, the Board of Members of the limited liability company, and all general partners of the partnership during the meeting. Valuing assets to accept members means that amendments to the Charter can only be approved when the legal ratio is met. The law also stipulates that companies can hire a professional valuation organization to value contributed assets. The provisions of the Enterprise Law on valuation authority have created favorable conditions for companies to value contributed assets.
This is a regulation that needs to be considered from both aspects: (i) The parties were not aware of the real value of the property; (ii) The parties intentionally set the price higher than the actual value. In any case, when causing damage to others, compensation must still be imposed. However, the Enterprise Law has not clearly defined the compensation liability ratio between the capital contributor and the valuer in this issue, because of which disputes may arise.
In fact, the act of valuing assets contributed as capital, especially trademarks and inventions, to find consensus for determining asset prices is not simple. Therefore, in order to ensure the limitation of possible effects on third parties in the actions between the parties, asset valuation needs to be coordinated with competent people to reach the appropriate level. specific price.
Second, conflicts in accounting for trademarks and patents:
Legal issues on recognition of intangible fixed assets currently apply according to Circular No. 45/2013/TT-BTC. Point b, Clause 2, Article 1 of this Circular considers trademarks as an intangible fixed asset of an enterprise. To be recognized as intangible fixed assets, trademarks and inventions must satisfy the conditions prescribed in Article 3 of Circular No. 45/2013/TT-BTC, accordingly, all expenses that the enterprise Expenditure must satisfy the following criteria: (i) Surely future economic benefits will be obtained from the use of that asset; (ii) Has a useful life of 1 year or more; (iii) The original cost of the asset must be determined reliably and has a value of 30,000,000 VND (thirty million VND) or more without forming tangible fixed assets to be considered intangible fixed assets. image.
However, Accounting Standard No. 04 (Issued and announced under Decision No. 149/2001/QD-BTC) does not have any content recognizing trademarks as intangible fixed assets, this is really a problem. difficult for asset accounting.
Enterprises receiving capital contributions to establish a business with intellectual property rights must account the value of capital contributed by intellectual property rights by the party contributing capital to fixed assets and deduct depreciation as reasonable expenses when calculating income tax. Entering the business since capital contribution. Thus, according to accounting principles, only intellectual property rights with costs incurred can be considered for accounting in the capital contributed to establishing a business.
Besides, we cannot ignore cases where the same trademark or invention is recognized at different values at different enterprises. So who can accurately value the trademark in this case? What specific benefits does it bring to businesses? Will businesses push up the capital contribution of the brand value to come up with ways to circumvent the law? This reality also needs competent agencies to legislate, define and clearly regulate.
Third, about trademark delivery when contributing capital:
Regulations in Article 36 of the Enterprise Law 2014 stipulate that on transferring ownership of assets with registered ownership rights or land use rights value, capital contributors must carry out procedures to transfer ownership of that asset or land use rights. Use land for the company at a competent state agency.
Trademarks and inventions are registered assets, so when you want to contribute capital with a trademark or invention, you need to carry out procedures to transfer ownership of that trademark or invention to the company. company at a competent state agency.
According to the provisions of the Intellectual Property Law on transfer of industrial property rights. Transferring intellectual property rights to inventions is carried out in two forms: Contract to transfer ownership rights to trademarks and inventions; and contracts for transfer of rights to use trademarks and inventions. Pursuant to Clause 2, Article 138; and Clause 2, Article 141 of the Intellectual Property Law, intellectual property transfer contracts for inventions must be made in writing and registered at the Vietnam Intellectual Property Department.
But industrial property rights are intangible assets, so they cannot be delivered and received like tangible assets. Therefore, such application is rigid, because at the time of making the record of delivery and receipt of famous trademarks, trade names, and business secrets, they themselves are intangible assets, without physical form. How do the parties deliver and receive?
Fourth, handling capital contributions to trademarks and inventions when the capital contribution period expires and trademarks and inventions expire:
In the 2014 Enterprise Law, Article 54 regulates the handling of capital contributions in some special cases such as the death of an individual member, loss of civil act capacity, dissolution or bankruptcy of the organization, or transfer. Contributed capital, gifts to repay debt with contributed capital… without any regulations related to the handling of the contributed capital as the value of intellectual property rights at the end of the protection term or the end of the capital contribution term.
So with the characteristics of intangible assets, the capital contribution period must be within the protection period of the trademark or invention according to Clause 6, Article 93 of the Intellectual Property Law, then “the trademark registration certificate is effective from date of issue until the end of ten years from the date of application, which can be renewed for many consecutive times, each time for ten years. When contributing capital, based on the term in the capital contribution agreement to determine the expiration date of this agreement, when contributing capital with a trademark or invention, the parties must make a contract to transfer ownership or use rights. applied and registered at the National Office of Intellectual Property. This contract is considered the basis for determining the validity period of the capital contribution agreement according to the protection term of the trademark. But in reality, the capital contribution agreement does not is still valid, the capital contributor will lose his/her membership status or have the value of his/her capital contribution reduced, and at the same time the company must carry out procedures to reduce its charter capital.
If capital contribution is equal to the value of trademark ownership rights, then when the capital contribution contract (agreement) expires, the party receiving the capital contribution is the value of trademark ownership rights and will continue to use the trademark or invention (because After completing the ownership transfer procedure when contributing capital, the party receiving the capital contribution is the owner of that trademark or invention). So at this time, does the company have to go through procedures to reduce charter capital? Currently, the 2014 Enterprise Law does not have any guidance related to this case, so if it arises, it will be difficult to resolve.
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