When the company goes bankrupt, do capital contributing members of limited liability companies have to be responsible for debts in Vietnam?

When the company goes bankrupt, do capital contributing members of limited liability companies have to be responsible for debts in Vietnam?

Article 46 of the Enterprise Law 2020 stipulates multi-member limited liability companies, as follows:

1. A multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals. A member’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise, except for the cases specified in Clause 4 Article 47 of this Law. The member’s stake (contributed capital) may only be transferred in accordance with Articles 51, 52 and 53 of this Law.

2. A multiple-member limited liability company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.

3. Multiple-member limited liability companies must not issue shares except for equitization.

4. Multiple-member limited liability companies may issue bonds in accordance with this Law and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of this Law.

According to Clause 4, Article 47 of the Enterprise Law 2020, it is stipulated:

4. In the cases mentioned in Clause 3 of this Article, the company shall register the change in charter capital and the members’ holdings within 30 days from the deadline for contributing capital specified in Clause 2 of this Article. The members who fail to contribute or fully contribute capital shall be responsible for the financial obligations incurred by the company during the period before the company registers the change in charter capital and the members’ holdings in proportion to their promised contributions.

According to this Article, when the company goes bankrupt, the capital contributing members of your company will have to bear with you the debts of other parties.

Unless members have not yet contributed capital or have not contributed the full amount of capital as committed, they will be responsible for the financial obligations incurred by the company during the period before the company registers the change in charter capital and the members’ holdings in proportion to their promised contributions in Vietnam.

When the company goes bankrupt, do capital contributing members of limited liability companies have to be responsible for debts in Vietnam? (Image from the Internet)

If a company has stopped operating but has not yet filed bankruptcy procedures, how much is fine for company in Vietnam?

According to Article 67 of Decree 82/2020/ND-CP regulating violations of regulations on filing obligations, as follows:

Fine from 1,000,000 VND to 3,000,000 VND for acts of owners of sole proprietorships, chairman of the board of directors of joint stock companies, chairman of the board of members of multiple-member limited liability company, owner of a single-member limited liability company, general partner of a partnership or legal representative of an enterprise or cooperative shall not file a request to open bankruptcy proceedings. when businesses and cooperatives lose their ability to pay.

In addition, Clause 4, Article 4 of Decree 82/2020/ND-CP stipulates as follows:

4. The fines specified in Chapters II, III, IV, V, VI and VII of this Decree are applied to administrative violations by individuals, except for the provisions in Clause 5 of this Article. In case an organization commits an administrative violation like an individual, the fine is 2 times the fine for an individual.

When the company has stopped operating and you have not filed for bankruptcy in Vietnam, you will be fined from 1,000,000 VND to 3,000,000 VND.

What is method of conversion of a joint stock company into a multiple-member limited liability company in Vietnam?

Pursuant to Clause 1, Article 204 of the Enterprise Law 2020 stipulates conversion of a joint stock company into a multiple-member limited liability company, as follows:

1. A joint stock company can be converted into a multiple-member limited liability:

a) without raising additional capital or selling stakes;

b) by raising additional capital from other organizations and individuals;

c) by transfer all or part of the shares to other organizations and individuals;

d) when only 02 shareholders remain in the company; or

dd) combining the methods specified in Points a, b and c of this Clause and other methods.

Thus, a joint stock company can convert into a multiple-member limited liability company according to the method prescribed above by law in Vietnam.

Best regards!