From January 1, 2021, Basic Rights of Capital-Contributing Members in Limited Liability Companies

Fundamental rights of capital-contributing members in a partnership – Illustrative image.

To be specific: Article 187 of the Enterprise Law 2020 stipulates the rights of capital-contributing members in a partnership, including:

1. To attend meetings, discuss, and vote at the Board of Members regarding the amendment and supplementation of the company's charter, the amendment and supplementation of the rights and obligations of capital-contributing members, and the reorganization, dissolution of the company, and other contents of the company's charter directly related to their rights and obligations;
2. To receive annual profit distribution corresponding to the ratio of their contributed capital in the company's charter capital;
3. To be provided with the company's annual financial statements; to have the right to request the Chairman of the Board of Members and general partners to provide full and truthful information about the company’s business situation and results; to examine the company's accounting books, minutes, contracts, transactions, records, and other documents;
4. To transfer their capital contribution portion to another person;
5. To conduct business activities in the company's lines of business as an individual or on behalf of others;
6. To dispose of their capital contribution by inheritance, donation, mortgage, pledge, and other forms as prescribed by law and the company's charter; in case of death, the heir replaces the deceased member to become a capital-contributing member of the company;
7. To receive a portion of the remaining asset value of the company corresponding to the ratio of their contributed capital in the company's charter capital upon the company's dissolution or bankruptcy;
8. Other rights as prescribed by this Law and the company's charter.

Additionally, according to Clause 2, Article 187 of the Enterprise Law 2020, capital-contributing members have the following obligations:

- To be liable for the company's debts and other financial obligations within the scope of the pledged capital contribution;- Not to participate in the management of the company and not to conduct business activities in the name of the company;- To comply with the company's charter, resolutions, and decisions of the Board of Members;- Other obligations as prescribed by this Law and the company's charter.

For further details, see Enterprise Law 2020, effective January 1, 2021.

Le Vy

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