09 special cases of handling capital contributions from January 01, 2021

09 special cases for handling capital contributions - Illustrative image.

To be specific, Article 53 of the Law on Enterprises 2020 stipulates 9 special cases for handling capital contributions as follows:

- In the case where the member of the company is an individual who has died, the heir according to the will or by law of that member becomes the member of the company.

- In the case where the member is an individual declared missing by the Court, the rights and obligations of the member are exercised through the asset manager of that member in accordance with the provisions of civil law.

- In the case where the member is restricted or loses civil act capacity, or has difficulties in cognition, behavior control, the rights and obligations of that member in the company are exercised through the representative.

- The capital contribution of the member is repurchased by the company or transferred according to the provisions of the Law on Enterprises 2020 in the following cases:- The heir does not want to become a member;- The recipient of the gift according to the provisions of the Law on Enterprises 2020 is not accepted by the Members' Council to become a member;- The member is an organization that is dissolved or bankrupt.

- In the case where the capital contribution of the member who is an individual has died and there is no heir, the heir refuses to accept the inheritance, or is deprived of the inheritance right, that capital contribution is dealt with according to civil law provisions.

- In the case where the member donates a part or all of their capital contribution in the company to another person, the recipient becomes a member of the company under the following conditions:- The recipient is an heir according to the provisions of civil law, in which case they automatically become a member of the company;- The recipient is not covered by the point a of this clause, they only become a member of the company if accepted by the Members' Council.

- In the case where the member uses their capital contribution to pay off a debt, the payment recipient has the right to use that capital contribution in one of the following forms:- Become a member of the company if accepted by the Members' Council;- Offer for sale and transfer that capital contribution according to the provisions of the Law on Enterprises 2020.

- In the case where a member who is an individual is detained, serving a prison sentence, or undergoing compulsory rehabilitation or education, they authorize another person to perform some or all of their rights and obligations in the company.

- In the case where a member who is an individual is banned by the Court from practicing a profession or certain activities, or a member who is a legal entity is banned from doing business or certain activities in specific fields related to the company's business, that member is not allowed to practice the profession or perform the work that has been banned in that company, or the company temporarily suspends or terminates business in the related field as decided by the Court.

For further details, see Law on Enterprises 2020, effective January 01, 2021.

Le Vy

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