What are the regulations on the capital contribution to establish a single member limited liability company in Vietnam? How can the owner of a single member limited liability company withdraw capital?
- What are the regulations on the capital contribution to establish a single member limited liability company in Vietnam?
- How can the owner of a single member limited liability company withdraw capital?
- In case the owner of a single member limited liability company transfers part of the charter capital to another individual, does it have to convert the type of business?
What are the regulations on the capital contribution to establish a single member limited liability company in Vietnam?
According to the provisions of Article 75 of the 2020 Law on Enterprises in Vietnam, capital contribution to establish a single member limited liability company is as follows:
Contributing capital to establish the company
1. The initially registered charter capital of a single-member limited liability company is the total assets promised by the owner and shall be written in company's charter.
2. The owner shall contribute adequate and correct assets as promised when applying for enterprise registration within 90 days from the issuance date of the Certificate of Enterprise Registration. The time needed to transport or import the contributed assets and for completing ownership transfer procedures will be added to this 90-day period. During this period, the owner shall have rights and obligations that are proportional to the promised capital.
3. In the charter capital is not fully contributed by the deadline specified in Clause 2 of this Article, the owner shall register the contributed capital as charter capital within 30 days from the deadline, in which case the owner shall be responsible for the financial obligations incurred by the company during the period before the change in charter capital is registered in proportion to the promised capital.
4. The owner’s liability for the company’s financial obligations and the damage caused by the failure to contribute or to fully and punctually contribute charter capital prescribed by this Article shall be equal to all of the owner’s assets.
Thus, the charter capital of a single member limited liability company is the total assets promised by the owner and shall be written in company's charter when applying for enterprise registration. Within 90 days from the issuance date of the Certificate of Enterprise Registration, the owner shall contribute adequate and correct assets as promised.
What are the regulations on the capital contribution to establish a single member limited liability company in Vietnam? How can the owner of a single member limited liability company withdraw capital?
How can the owner of a single member limited liability company withdraw capital?
According to the provisions of Clause 5, Article 77 of the 2020 Law on Enterprises in Vietnam, the obligations of the owner of a single member limited liability company are as follows:
Obligations of the owner
1. Contribute charter capital fully and punctually.
2. Comply with the company's charter.
3. Separate the company’s assets and the owner’s assets. The owner that is an individual shall separate expenses of himself/herself and his/her family and those of the company’s President, or General Director.
4. Comply with regulations of law on contracts and relevant laws while making purchases, sales, borrowing, lending, leasing, entering into contracts and conducting other transactions between the company and the company’s owner.
5. The company’s owner may only withdraw capital by transferring part or all of the charter capital to another organization or individual. If the capital is withdrawn otherwise, the owner and relevant organizations and individuals shall be jointly responsible for the company’s debts and other liabilities.
6. The owner must not withdraw profit when the company is unable to fully pay its debts and liabilities when they are due.
7. Other obligations prescribed by Law and the company's charter.
Thus, the company’s owner may only withdraw capital by transferring part or all of the charter capital to another organization or individual.
If the capital is withdrawn otherwise, the owner and relevant organizations and individuals shall be jointly responsible for the company’s debts and other liabilities.
In case the owner of a single member limited liability company transfers part of the charter capital to another individual, does it have to convert the type of business?
According to the provisions of Clause 1, Article 78 of the 2020 Law on Enterprises in Vietnam, in case the owner transfers or gives away part of the charter capital to one or some organizations and individuals or the company admits a new member, the company shall be converted accordingly and register the change in enterprise registration information within 10 days from the date of completion of the transfer or giveaway or admission of the new member.
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