Can partners of a partnership be individuals or organizations in Vietnam?

Can partners of a partnership be individuals or organizations in Vietnam?

Can partnership members be individuals or organizations? What is a company member according to the law on enterprises?

Reply:

According to the Enterprise Law 2020, a “partner” of a partnership can be a general partner or limited partner.

A general partner shall be an individual whose liability for the company’s obligations is equal to all of his/her assets;

A limited partner can be an organization or an individual whose liability for the company’s debts is equal to the promised capital contribution.

According to the above regulations in Vietnam, partners must be individuals, cannot be organizations. Meanwhile, limited partners can be organizations or individuals.

Can capital contributing members of a partnership company transfer their capital contributions in Vietnam?

I am an equity member of a partnership company. I currently do not want to participate in this company anymore. I want to transfer the above capital contribution, but I am facing opposition from the partnership members of the company. So can I transfer my capital contribution to someone else outside the company?

Reply:

According to the provisions of Clause 1, Article 187 of the Enterprise Law 2020, 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.

Thus, limited partner's transfer will not require the consent of other members, so you will be able to transfer your capital contribution to someone outside the company in Vietnam.

Can partners of a partnership be individuals or organizations in Vietnam? (Image from the Internet)

In addition to not contributing enough capital, in what cases can partners also be expelled in Vietnam?

According to current regulations, in addition to not contributing enough capital, in what cases can partners also be expelled in Vietnam?

Reply:

Pursuant to Clause 3, Article 185 of the Enterprise Law 2020 stipulates as follows:

3. A general partner will be excluded from the partnership if he/she:

a) is not able to contribute capital or fails to contribute capital as promised after a second notice is made by the company;

b) violates the regulations of Article 180 of this Law;

c) fails to do business in an honest and prudent manner or has inappropriate actions causing serious damage to the interest of the partnership and other partners; or

d) fails to fulfill a general partner’s obligations.

Thus, in addition to not contributing enough capital in Vietnam, it can be expelled for: Not properly performing the obligations of a partner; not being careful or engaging in other inappropriate behavior that causes serious damage to the interests of the company and other partners...etc.

Best regards!