Does a single-member limited liability company have to establish a Board of Controllers in Vietnam?

Does a single-member limited liability company have to establish a Board of Controllers in Vietnam?

Our company has only been established for 1 week, currently the company structure is relatively stable. Now, I want to ask, is it necessary to establish a Board of Controllers for a single-member limited liability company? The company is owned by an organization and is not related to a state-owned enterprise.

Answer: Pursuant to Clause 1 and Clause 2, Article 79 of the Enterprise Law 2020 stipulates as follows:

1. A single-member limited liability company owned by an organization shall apply one of the two models below:

a) A company with a President and the Director/General Director;

b) A company with a Board of Members and the Director/General Director.

2. In case the company’s owner is a state-owned enterprise prescribed in Clause 1 Article 88 of this Law, a Board of Controllers shall be established. The establishment of a Board of Controllers in other cases shall be decided by the company. The organizational structure, working regulations, standards, requirements, dismissal, rights, duties and responsibilities of the Board of Controllers and Controllers are specified in Article 65 of this Article.

Thus, returning to your case, it can be seen that there is no need to establish a Board of Controllers because your company does not have a state-owned enterprise owner according to the above regulations in Vietnam.

Do meetings of the Board of Members have to take place at the company's headquarters in Vietnam?

Regarding current regulations in limited liability company, is it mandatory for meetings of the Board of Members to take place at the company's headquarters?

Answer: Pursuant to Clause 1, Article 57 of the Enterprise Law 2020 stipulates convening meetings of the Board of Members as follows:

1. Meetings of the Board of Members shall be convened by the President of the Board of Members or at the request of the member or group of members prescribed in Clause 2 and Clause 3 Article 49 of this Law. In case the President of the Board of Members does not convene a meeting as requested by the aforementioned member of group of members within 15 days from the day on which the request is received, the member of group of members may convene the meeting themselves. Reasonable costs of convening and conducting meetings of the Board of Members shall be reimbursed by the company.

Thus, based on the above regulations in Vietnam, the limited liability company can freely decide the location for the meeting of the Board of Members without having to be the headquarters.

Does a single-member limited liability company have to establish a Board of Controllers in Vietnam? (Image from the Internet)

Whether the owner of a single-member limited liability company is an organization or an individual, do they have the same rights in Vietnam?

I would like to ask, is there any difference in rights of owners of limited liability companies who are organizations and individuals? Ask for help.

Answer: Article 76 of the Enterprise Law 2020 has regulations on the rights of the owner of a single-member limited liability company as follows:

1. The owner that is an organization has the rights to:

a) Draw up and revise the company's charter;

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

c) Decide the company’s organizational structure; designate, dismiss the company’s executives and controllers;

d) Decide the company’s investment projects?

dd) Decide solutions for market development, marketing and technology;

e) 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);

g) Ratify the company’s annual financial statements;

h) Decide increase or decrease in the company’s charter capital, transfer part or all of the company’s charter capital to another organization or individual; decide issuance of bonds;

i) Decide establishment of subsidiary companies and contribution of capital to other companies;

k) Organize the supervision and assessment of the company’s performance;

l) Decide the use of profits after the company’s tax liabilities and other financial obligations have been fulfilled;

m) Decide the company’s reorganization, dissolution or file bankruptcy;

n) Recover all assets of the company after the dissolution or bankruptcy process is complete;

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

2. The owner that is an individual has the rights specified in Points a, h, l, m, n and o Clause 1 of this Article; the right to decide investment, business operation and the company’s administration, unless otherwise prescribed by the company's charter.

Thus, unless the company charter has other provisions, the company owner who is an individual will have fewer rights than the owner who is an organization according to the above regulations in Vietnam.

Best regards!