From January 1, 2021, basic rights of limited partners in Vietnam

From January 1, 2021, basic rights of limited partners in Vietnam – Illustrative image.

Under Article 187 of the Enterprise Law 2020, limited partners in Vietnam have the rights to:

- Participate in meetings, discuss and vote at the meetings of the Board of Partners on revisions to the charter, changes in rights and obligations of limited partners, reorganization and dissolution of the company and other contents of the charter directly affecting their rights and obligations;

- Receive distributed profits in proportion to their holdings;

- Be provided with the partnership’s annual financial statements; request the President of the Board of Partners and general partners to fully and accurately provide information about the partnership’s business performance; examine accounting books, records, transactions and other documents of the company;

- Transfer their stakes to other persons;

- Do business within the partnership’s business lines in their own names in other persons’ names;

- Leave as inheritance, give away, pledge or otherwise dispose of their stakes in accordance with regulations of law and the charter. In case a limited partner dies, his/her heir shall be a new limited partner;

- Receive part of the partnership’s remaining assets in proportion to their holdings in case the partnership is dissolved or goes bankrupt;

- Other rights prescribed by Law and the company's charter.

Additionally, according to Clause 2, Article 187 of the Enterprise Law 2020, limited partners in Vietnam have the following obligations:

- Take on a liability for the partnership’s debts and other liabilities which is equal to their promised capital contribution;

- Do not participate in administration of the partnership; do not do business in the partnership’s name;

- Comply with the partnership’s charter, resolutions and decisions of the Board of Partners;

- Other obligations prescribed by Law and the partnership’s charter.

Further details may be found in Enterprise Law 2020 effective January 1, 2021.

Le Vy

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