Can a two member limited liability company in Vietnam repurchase the stake of the member who is incapacitated?
- Can a two member limited liability company in Vietnam repurchase the stake of the member who is incapacitated?
- In which case is a member entitled to request the two member limited liability company to repurchase that member’s stake?
- What are the rights and obligations of the Board of Members of a two member limited liability company in Vietnam?
Can a two member limited liability company in Vietnam repurchase the stake of the member who is incapacitated?
In Article 53 of the 2020 Law on Enterprises in Vietnam on settlement of stakes in some special cases as follows:
Settlement of stakes in some special cases
1. In case of the death of a member that is an individual, his/her heir at law or designated by a will shall become a member of the company.
2. In case a member that is an individual is declared missing by the Court, his/her rights and obligations shall be performed through his/her asset manager as prescribed by civil laws.
3. In case a member that is an individual is incapacitated, has limited legal capacity or has difficulty controlling his/her behaviors, his/her rights and obligations shall be performed through his/her representative.
4. A member’s stake shall be transferred or repurchased by the company in accordance with Article 51 and Article 52 of this Law in the following cases:
a) The member’s heir does not wish to become a member;
b) The beneficiary mentioned in Clause 6 of this Article is not accepted as a member by the Board of Members;
c) The member that is an organization is dissolved or goes bankrupt.
5. In case a member that is an individual dies without an heir or the heir refuses the inheritance or is disinherited, the stake shall be settled in accordance with civil laws.
6. In case a member gives away part or all of his/her stake to another person, the beneficiary will become a member of the company in the following cases:
a) If the beneficiary is a lawful heir as prescribed by the Civil Code, he/she is obviously a member of the company;
b) If the beneficiary is not a lawful heir mentioned in Point a of this Clause, he/she will only become a member if it is accepted by the Board of Members.
7. In case a member uses that member’s stake to pay debt, the beneficiary may:
a) Become a member of the company if it is accepted by the Board of Members;
b) Offer and sell the stake in accordance with Article 52 of this Law.
8. In case a member that is an individual is being kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, he/she shall authorize another person to perform some or all of his/her rights and obligations to the company.
9. A member that is an individual and is banned by the court to do certain jobs must not do those jobs at the company; A member that is a juridical person and is banned by the court from certain business lines must suspend or stop business operation in those business lines.
Thus, according to the above provisions, in case a contributing member that is an individual is incapacitated, his/her rights and obligations shall be performed through his/her representative. Therefore, your company can repurchase this member's stake if the member's representative agrees to transfer the stake.
Can a two member limited liability company in Vietnam repurchase the stake of the member who is incapacitated? (Image from the Internet)
In which case is a member entitled to request the two member limited liability company to repurchase that member’s stake?
Article 51 of the 2020 Law on Enterprises in Vietnam provides for the repurchase of stakes as follows:
Repurchase of stakes
1. A member is entitled to request the company to repurchase that member’s stake if that member has voted against a resolution or decision of the Board of Members on the following issues:
a) Amendments to regulations of the company's charter on rights and obligations of members and the Board of Members;
b) Reorganization of the company;
c) Other issues prescribed by the company's charter.
2. A written request for stake repurchase shall be sent to the company within 15 days from the day on which the resolution or decision mentioned in Clause 1 of this Article is ratified.
3. Within 15 days from the day on which the request mentioned in Clause 1 of this Article is received, the company shall repurchase that member’s stake at market value or at a value determined in accordance with the company's charter, unless another value is agreed upon by both parties. The payment shall only be made if the company is still able to pay its debts and other liabilities afterwards.
4. In case the company is not able to pay for the repurchase of the stake as requested, the member is entitled to sell the stake to another member or a non-member.
Thus, a member is entitled to request the company to repurchase that member’s stake if that member has voted against a resolution or decision of the Board of Members on the above issues.
What are the rights and obligations of the Board of Members of a two member limited liability company in Vietnam?
In Clause 2, Article 55 of the 2020 Law on Enterprises in Vietnam, the rights and obligations of the Board of Members of a two member limited liability company include:
- Decide the company’s annual business plan and development strategy;
- Decide increase or decrease in charter capital, time and method for raising more capital; issuance of bonds;
- Decide investments in the company’s development projects; solutions for market development, marketing and technology transfer;
- Approve contracts for borrowing, lending, sale of assets and other contracts prescribed by the company's charter whose value are at least 50% of the total assets written in the latest financial statement (or a smaller ratio or value specified in the company's charter);
- Elect, dismiss the President of the Board of Members; designate, dismiss, sign and terminate contracts with the Director/General Director, chief accountant, controllers and other executives specified in the company's charter;
- Decide the salaries, remunerations, bonuses and other benefits of the President of the Board of Members, Director/General Director, chief accountant, controllers and other executives specified in the company's charter;
- Ratify annual financial statements, plans for use and distribution of profits or settlement of losses;
- Decide the company’s organizational structure;
- Decide establishment of subsidiary companies, branches and representative offices;
- Revise the company's charter;
- Decide reorganization of the company;
- Decide dissolution or file bankruptcy of the company;
- Other rights and obligations prescribed by Law and the company's charter.
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