Is it permissible for a single-member limited liability company to be partially divided into a multi-member limited liability company in Vietnam?

Is it permissible for a single-member limited liability company to be partially divided into a multi-member limited liability company in Vietnam?

Is it permissible for a single-member limited liability company to be partially divided into a multi-member limited liability company in Vietnam? Thank you!

Answer:

Pursuant to Clause 1 Article 199 of the Law on Enterprise in 2020 stipulating partial division as follows:

A limited liability company or joint stock company may be partially divided by transfer part of the divided company’s assets, rights, obligations, members/shareholders to one or some new limited liability companies or joint stock companies without ceasing the existence of the divided company.

A “limited liability company” can be a single-member limited liability company or multiple-member limited liability company.

As regulations above, a limited liability company or joint stock company may be partially divided by transfer part of the divided company’s assets, rights, obligations, members/shareholders to one or some new limited liability companies or joint stock companies without ceasing the existence of the divided company.

In addition, there is no regulations on distinguishing between the divided company and the new limited liability company. Therefore it is permissible for a single-member limited liability company to be partially divided into a multi-member limited liability company in Vietnam.

Is it permissible for organizations to establish a single-member limited liability company in Vietnam?

I have a question. Is it permissible for organizations to establish a single-member limited liability company in Vietnam?

Answer:

Pursuant to Clause 1 Article 74 of the Law on Enterprise in 2020 stipulating as follows:

A single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.

As regulations above, organizations are permissible to establish single-member limited liability companies in Vietnam.

Is it necessary for only state-owned single-member limited liability companies in Vietnam to establish a Board of Controllers?

Is it necessary for only state-owned single-member limited liability companies in Vietnam to establish a Board of Controllers?

Answer:

Pursuant to Clause 2 Article 79 of the Law on Enterprise in 2020 stipulating organizational structure of a single-member limited liability company owned by an organization in Vietnam 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.

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As regulations above, the company’s owner is a state-owned enterprise prescribed in Clause 1 shall establish a Board of Controllers. The establishment of a Board of Controllers in other cases shall be decided by the company. Meanwhile, if the owers of single-member limited liability companies in Vietnam are individuals, it is not necessary to establish a Board of Controllers.

Best regards!