May a multiple-member limited liability company in Vietnam issue bonds and share certificates against regulations of laws?

Main Content

• May a multiple-member limited liability company in Vietnam issue bonds and share certificates against regulations of laws?
• When must a multiple-member limited liability company in Vietnam make a member register?
• Is the Board of Members the supreme governing body of a multiple-member limited liability company in Vietnam?

May a multiple-member limited liability company in Vietnam issue bonds and share certificates against regulations of laws?

Under Article 46 of the Enterprise Law 2020, there are the following provisions:

Multi-member limited liability companies

1. A multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals. A member’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise, except for the cases specified in Clause 4 Article 47 of this Law. The member’s stake (contributed capital) may only be transferred under Articles 51, 52 and 53 of this Law.

2. A multiple-member limited liability company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.

3. Multiple-member limited liability companies must not issue shares except for equitization.

4. Multiple-member limited liability companies may issue bonds in accordance with this Law and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of this Law.

Thus, a multiple-member limited liability company in Vietnam may not issue share certificates (except for converting into a joint stock company).

A multiple-member limited liability company in Vietnam may issue bonds under this Law and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of Enterprise Law 2020.

When must a multiple-member limited liability company in Vietnam make a member register?

Under Clause 1, Article 48 of the Enterprise Law 2020, there are the following provisions:

Member register

1. The company shall make a member register upon issuance of the Certificate of Enterprise Registration. The member register can be physical or electronic and shall contain information about the members’ holdings.

2. A member register shall contain the following information:

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

b) Full name, signature, mailing address, nationality and legal document numbers of members that are individuals; names, EID numbers or legal document numbers and headquarters addresses of members that are organizations;

c) Stakes, holdings, contribution time, types of contributed assets, quantity and value of each type of contributed assets of each member;

d) Signatures of members that are individuals and of legal representatives of members that are organizations;

dd) The number and date of issuance of the certificate of capital contribution of each member.

3. The company shall update changes to members in the member register as requested by relevant members in accordance with the company's charter.

4. The member register shall be retained at the company’s headquarters.

Thus, a multiple-member limited liability company in Vietnam shall make a member register upon issuance of the Certificate of Enterprise Registration.

The member register can be physical or electronic and shall contain information about the members’ holdings.

Is the Board of Members the supreme governing body of a multiple-member limited liability company in Vietnam?

Under Clause 1, Article 55 of the Enterprise Law 2020, there are the following provisions:

The Board of Members

1. The Board of Members is the supreme governing body of the company, consists of all members that are individuals and authorized representatives of members that are organizations. The company's charter shall specify the frequency of meetings of the Board of Members but at least one meeting shall be held per year.

2. The Board of Members has the following rights and obligations:

a) Decide the company’s annual business plan and development strategy;

b) Decide increase or decrease in charter capital, time and method for raising more capital; issuance of bonds;

c) Decide investments in the company’s development projects; solutions for market development, marketing and technology transfer;

d) 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);

dd) 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;

...

Thus, the Board of Members is the supreme governing body of a multiple-member limited liability company in Vietnam.