Is the member of a two member limited liability company eligible to contribute capital in cash instead of land use rights?

Main Content

• Is the member of a two member limited liability company eligible to contribute capital in cash instead of land use rights?
• When contributing capital to establish a two-member limited liability company, will the members be issued with a capital contribution certificate?
• Is the two-member limited liability company failing to issue a certificate of capital contribution fined?

Is the member of a two member limited liability company eligible to contribute capital in cash instead of land use rights?

Pursuant to Clause 2, Article 47 of the 2020 Law on Enterprises of Vietnam as follows:

Capital contribution to establish the company and issuance of the certificate of capital contribution in Vietnam

...

2. The members shall contribute sufficient and correct assets as promised when applying for enterprise registration within 90 days from the issuance date of the Certificate of Enterprise Registration, excluding the time needed to transport or import the contributed assets and for completing ownership transfer procedures. During this period, the members shall have rights and obligations that are proportional to their promised contribution. The members may only contribute assets that are different from the promised ones if the change is approved by more than 50% of the remaining members.

According to the above regulations, the members of a two-member limited liability company may only contribute assets that are different from the promised ones when applying for enterprise registration if the change is approved by more than 50% of the remaining members.

That is, in the case of a two-member limited liability company with all 7 members, the fact that one member wants to contribute capital in money instead of promised land use rights when proposing to establish the company, the change is approved by at least 4 of the remaining 6 members.

Is the member of a two-member limited liability company eligible to contribute capital in cash instead of land use rights?

When contributing capital to establish a two-member limited liability company, will the members be issued with a capital contribution certificate?

Pursuant to Clause 6, Article 47 of the 2020 Law on Enterprises of Vietnam and Clause 7, Article 47 of the 2020 Law on Enterprises of Vietnam as follows:

Capital contribution to establish the company and issuance of the certificate of capital contribution in Vietnam

…

6. The capital contribution certificate shall contain the following information:

a) The company’s name, EID number, headquarter address;

b) The company’s charter capital;

c) Full name, signature, mailing address, nationality and legal document number if the member is an individual; EID number or legal document number, headquarters address if the member is an organization;

d) The capital contributed and the member’s holding;

dd) The number and date of issuance of the certificate of capital contribution;

e) Full names and signatures of the company’s legal representatives.

7. In case the capital contribution certificate is lost or damaged, the member will be reissued with another certificate following the procedures specified in the company's charter.

According to the above regulations, in case the capital contribution certificate of a two-member limited liability company is lost or damaged, the member will be reissued with another certificate. Therefore, when contributing capital to establish a two-member limited liability company, the members of the company will be issued with a capital contribution certificate.

The capital contribution certificate shall contain the following information:

- The company’s name, enterprise identification number, headquarter address;

- The company’s charter capital;

- Full name, signature, mailing address, nationality and legal document number if the member is an individual; enterprise identification number or legal document number, headquarters address if the member is an organization;

- The capital contributed and the member’s holding;

- The number and date of issuance of the certificate of capital contribution;

- Full names and signatures of the company’s legal representatives.

Is the two-member limited liability company failing to issue a certificate of capital contribution fined?

Pursuant to Article 52 of Decree 122/2021/ND-CP of Vietnam as follows:

Violations against other regulations on organization and management of enterprises

1. A fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for any of the following violations:

a) Appointing a person who does not have the right to enterprise management to hold a managerial position;

b) Appointing an unqualified person as the Director (General Director).

2. A fine ranging from VND 30,000,000 to VND 50,000,000 shall be imposed for any of the following violations:

a) Failure to issue the certificate of capital contribution to a company’s member;

b) Failure to make a member register or register of share-issuing shareholders;

c) Failure to put up the enterprise’s name at its head office, failure to put up the name of branch, representative office or business location at its location;

d) Failure to retain documents at the head office or another location specified in the company’s charter.

3. Remedial measures:

The violator is compelled to:

a) dismiss the unqualified enterprise manager if the violation specified in Point a Clause 1 of this Article is committed;

b) dismiss the unqualified Director (General Director) if the violation specified in Point b Clause 1 of this Article is committed;

c) issue a certificate of capital contribution to the company’s member if the violation specified in Point a Clause 2 of this Article is committed;

d) make a member/shareholder register as prescribed if the violation specified in Point b Clause 2 of this Article is committed;

dd) put up the enterprise’s name at its head office or put up the name of the branch, representative office or business location if the violation specified in Point c Clause 2 of this Article is committed.

Thus, the company will be administratively fined from VND 30,000,000 to VND 50,000,000 when failing to issue the certificate of capital contribution to its member. In addition, remedial measures of the issuance of a certificate of capital contribution to the company’s members are imposed.