What is a partnership in Vietnam? How are general partners handled in case of failing to contribute capital fully and punctually as promised?
Vietnam: What is a partnership?
Pursuant to Article 177 of the Law on Enterprises 2020, it is stipulated as follows:
“Article 177. Partnerships
1. A partnership is an enterprise in which:
a) There must be at least 02 members who jointly own the company and conduct business under a common name (hereinafter referred to as general partners). In addition to the general partners, the company may also have limited partners;
b) General partners must be individuals, and are liable for the company's obligations to the extent of all their assets;
c) Limited partners can be organizations or individuals and are only liable for the company's debts up to the amount of capital they have committed to contribute to the company.
2. A partnership has legal status from the date it is issued a Certificate of Business Registration.
3. A partnership is not permitted to issue any kind of securities.”
Thus, a partnership is a type of enterprise that must have at least 02 members who are the company's owners. Besides general partners, the company can also have limited partners.
What is a partnership? How are general partners handled if they do not contribute the full amount of capital committed on time?
Vietnam: How are general partners handled in case of failing to contribute capital fully and punctually as promised?
Pursuant to Article 178 of the Law on Enterprises 2020, it is stipulated as follows:
“Article 178. Capital Contribution and Issuance of Capital Contribution Certificate
1. General partners and limited partners must contribute fully and on time the committed capital.
2. General partners who do not contribute fully and on time the committed capital, causing damage to the company, must be liable for compensating for the damage caused to the company.
3. In cases where limited partners do not contribute fully and on time the committed capital, the unpaid capital is considered a debt owed by that partner to the company; in this case, the relevant limited partner may be expelled from the company by the decision of the Board of Members.
4. Upon the full contribution of the committed capital, the member shall be issued a capital contribution certificate. The capital contribution certificate must include the following main contents:
a) Name, business code, and principal office address of the company;
b) Charter capital of the company;
c) Name, contact address, nationality, identification of the individual for members who are individuals; name, business code or identification of the organization, principal office address for members who are organizations; type of member;
d) Value of the capital contribution and type of contributed assets of the member;
đ) Number and date of issuance of the capital contribution certificate;
e) Rights and obligations of the holder of the capital contribution certificate;
g) Name, signature of the holder of the capital contribution certificate and of the general partners of the company.
5. In case the capital contribution certificate is lost, damaged, or destroyed in other forms, the member shall be re-issued the capital contribution certificate by the company.”
In case general partners fail to contribute fully and on time the committed capital, and cause damage to the company, they must be liable for compensating the damage caused to the company.
What are the requirements for establishing a partnership in Vietnam?
Pursuant to Article 22 of Decree 01/2022/ND-CP, it is stipulated as follows:
"Article 22. Application for Registration of partnership
1. Application for business registration.
2. Company charter.
3. List of members.
4. Copies of the following documents:
a) Legal documents of individuals for members who are individuals; Legal documents of organizations for members who are organizations; Legal documents of individuals for authorized representatives and documents appointing authorized representatives.
For members that are foreign organizations, copies of legal documents of the organization must be consularly legalized;
b) Investment registration certificate for enterprises established or participated by foreign investors or foreign-invested economic organizations as prescribed by the Law on Investment and guiding documents."
When establishing a partnership, individuals need to prepare a dossier including the documents and components as stipulated above.
Latest application form for establishing a partnership in Vietnam
The latest application form for establishing a partnership is stipulated in Appendix I-5 issued together with Circular 01/2021/TT-BKHDT as follows:
Download the latest application form for establishing a partnership: Here.
Download the list of members of the partnership: Here.
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