How to transfer stakes in a multi member limited liability company in Vietnam?
What are the regulations on the transfer of stakes of enterprises in Vietnam?
Pursuant to Clause 27, Article 4 of the 2020 Law on Enterprises in Vietnam as follows:
Definitions
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27. “stake” means the total value of assets that a member/partner has contributed or promises to contribute to a limited liability company/partnership. “holding” means the ratio of a member/partner’s stake to the charter capital of the limited liability company/partnership.
Thus, “stake” means the total value of assets that a member/partner has contributed or promises to contribute to a limited liability company/partnership.
The transfer of stake means a member owning stakes in a two-member limited liability company transferring part or all of his/her stake to a member in the company or to an individual or organization that is not a member of the company.
How to transfer stakes in a multi member limited liability company in Vietnam?
How to transfer stakes in a multi member limited liability company in Vietnam?
Pursuant to Clause 1, Article 52 of the 2020 Law on Enterprises in Vietnam stipulating as follows:
Transfer of stakes
1. Except for the cases specified in Clause 4 Article 51, Clause 6 and Clause 7 Article 53 of this Law, a member of a multiple-member limited liability company is entitled to transfer part or all of their stake to another person as follows:
a) Offer the stake to other members in proportion to their holdings under the same conditions;
b) Transfer the stake under the same conditions as those applied to other members mentioned in Point a of this Clause to a non-member if the other members do not purchase or fully purchase the stake within 30 days from the first day of offering.
With regard to the transfer of stake in a multi member limited liability company, a member of a multiple-member limited liability company is entitled to transfer part or all of their stake to another person as follows:
- Offer the stake to other members in proportion to their holdings under the same conditions;
- Transfer the stake under the same conditions as those applied to other members mentioned in Point a of this Clause to a non-member if the other members do not purchase or fully purchase the stake within 30 days from the first day of offering.
However, the following cases are not allowed to transfer stake as prescribed in Clause 4, Article 51 of the 2020 Law on Enterprises in Vietnam, Clause 6, Article 53 of the 2020 Law on Enterprises in Vietnam and Clause 7, Article 53 of the 2020 Law on Enterprises in Vietnam:
- In case the company is not able to pay for the repurchase of the stake within 15 days from the date of receipt of the member's request as prescribed, the company shall repurchase that member’s stake at market value or at a value determined in accordance with the company's charter.
- In case a member gives away part or all of his/her stake to another person, the beneficiary will become a member as prescribed.
- In case a member uses that member’s stake to pay debt, the beneficiary may become a member of the company if it is accepted by the Board of Members; or offer and sell the stake in accordance with the law.
What should be done in the case that after transferring stakes, a multi member limited liability company has only one member left?
Pursuant to Clause 3, Article 52 of the 2020 Law on Enterprises in Vietnam stipulating as follows:
Transfer of stakes
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2. The transferor still has the rights and obligations to the company in proportion to the stake until information about the buyer mentioned in Point b, c and dd Clause 2 Article 48 of this Law is fully recorded in the member register.
3. In case only one member remains after transfer or change of the members’ stakes, the company shall be converted into a single-member limited liability company and apply for change of enterprise registration information within 15 days from the day on which the transfer is complete.
Thus, in case only one member remains after transfer or change of the members’ stakes, the company shall be converted into a single-member limited liability company.
At the same time, apply for change of enterprise registration information within 15 days from the day on which the transfer is complete.
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