Change in Organizational Structure of Single-member Limited Liability Company with Institutional Ownership in 2021?

Company structure of a single-member limited liability company owned by an organization - Illustrative image.

According to Article 79 of the Enterprise Law 2020, a single-member limited liability company owned by an organization is managed and operates under one of the following models:

- Company President, Director or General Director;- Board of Members, Director or General Director.

For companies where the owner is a state-owned enterprise holding 100% of the charter capital, a Control Board must be established; in other cases, it is decided by the company. The organizational structure, working policies, standards, conditions, dismissal, removal, rights, obligations, and responsibilities of the Control Board and Controllers are implemented according to the provisions of Article 65 of the Enterprise Law 2020.

Specifically, Clause 1 of Article 65 of the Enterprise Law 2020 stipulates that the Control Board consists of 01 to 05 Controllers. The term of office for Controllers does not exceed 05 years and can be reappointed for an unlimited number of terms. In case the Control Board has only 01 Controller, that Controller simultaneously serves as the Head of the Control Board and must meet the standards of the Head of the Control Board.

It is noteworthy that the company must have at least one legal representative who holds one of the following positions: Chairman of the Board of Members, Company President, or Director or General Director. If the company's charter does not specify, the Chairman of the Board of Members or the Company President is the legal representative of the company.

If the company's charter does not provide otherwise, the organizational structure, operation, functions, rights, and obligations of the Board of Members, Company President, Director, or General Director shall be implemented according to the provisions of the Enterprise Law 2020.

For detailed information, refer to the Enterprise Law 2020, effective January 1, 2021.

Le Vy

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