Are limited partners entitled to request a meeting of the Board of Partners of a partnership in Vietnam?

1. Are limited partners entitled to request a meeting of the Board of Partners of a partnership in Vietnam?

Pursuant to Article 182 of the Enterprise Law 2020, the Board of Partners is as follows:

1. The Board of Partners consists of all partners and shall elect a partner as the President of the Board of Partners, who may concurrently hold the position of Director/General Director of the partnership unless otherwise prescribed by the charter.

2. A general partner is entitled to request a meeting of the Board of Partners to discuss and decide its business. The requesting partner shall prepare the meeting documents and agenda.

3. The Board of Partners is entitled to decide all business activities of the partnership. Unless otherwise prescribed by the charter, the following issues are subject to approval by at least three fourths (3/4) of the general partners:

a) Orientation for development of the partnership;

b) Revisions to the charter;

c) Admission of new partners;

d) Permission for withdrawal or exclusion of a partner;

dd) Investment in projects;

e) Taking of loans and other methods for raising capital; granting a loan that is worth at least 50% of the partnership’s charter capital, unless a higher rate is prescribed by the charter;

g) Purchase or sale of assets that whose value is equal to or greater than the partnership’s charter capital, unless a higher value is prescribed by the charter;

h) Ratification of the annual financial statement, total distributable profit and distributed profit of each partner;

i) Dissolution or bankruptcy of the company.

4. Other issues that are not mentioned in Clause 3 of this will be ratified if approved by at least two thirds (2/3) of the general partners; a specific ratio shall be specified in the charter.

5. The rights to vote of limited partners shall comply with this Law and the charter.

Thus, according to the above provisions, only general partners of a partnership have the right to request a meeting of the Board of Partners of a partnership. Therefore, limited partners will not have the right to request a meeting of the Board of Partners of a partnership in Vietnam.

2. What are rights and obligations of limited partners in Vietnam?

Article 187 of the Enterprise Law 2020 stipulates rights and obligations of limited partners as follows:

1. Limited partners have the rights to:

a) Participate in meetings, discuss and vote at the meetings of the Board of Partners on revisions to the charter, changes in rights and obligations of limited partners, reorganization and dissolution of the company and other contents of the charter directly affecting their rights and obligations;

b) Receive distributed profits in proportion to their holdings;

c) Be provided with the partnership’s annual financial statements; request the President of the Board of Partners and general partners to fully and accurately provide information about the partnership’s business performance; examine accounting books, records, transactions and other documents of the company;

d) Transfer their stakes to other persons;

dd) Do business within the partnership’s business lines in their own names in other persons’ names;

e) Leave as inheritance, give away, pledge or otherwise dispose of their stakes in accordance with regulations of law and the charter. In case a limited partner dies, his/her heir shall be a new limited partner;

g) Receive part of the partnership’s remaining assets in proportion to their holdings in case the partnership is dissolved or goes bankrupt;

h) Other rights prescribed by Law and the company's charter.

2. Limited partners have the obligations to:

a) Take on a liability for the partnership’s debts and other liabilities which is equal to their promised capital contribution;

b) Do not participate in administration of the partnership; do not do business in the partnership’s name;

c) Comply with the partnership’s charter, resolutions and decisions of the Board of Partners;

d) Other obligations prescribed by Law and the partnership’s charter.

According to this Article, limited partners of a partnership have the rights and obligations as prescribed above in Vietnam.

Best Regards!