The limited liability company is one of the types of enterprises regulated by the Law on Enterprises of Vietnam. Therefore, upon establishment of a limited liability company, it must comply with the conditions for enterprise establishment as stipulated by the Law on Enterprises 2020.
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Notes upon establishment of a limited liability company in Vietnam under Law on Enterprises 2020 (Illustrative photo)
Law on Enterprises 2020 will officially take effect from January 1, 2021. The establishment of a limited liability company (LLC) after this date must comply with the following regulations:
1. Entities not eligible to establish enterprises in Vietnam
Law on Enterprises 2020, in addition to inheriting the provisions regarding entities not eligible to establish and manage enterprises in Vietnam, also adds a new entity - organizations that are juridical persons that are banned from business operation or banned from certain fields as prescribed by the Criminal Code. Therefore, there will be 07 groups of entities prohibited from establishing and managing enterprises as specifically stipulated in Clause 2 Article 17 of Law on Enterprises 2020 as follows:
2. The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
a) State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their own interests;
b) Officials and public employees defined by the Law on Officials and the Law on Public Employees;
c) Commissioned officers, non-commissioned officers, career military personnel, military workers and public employees in agencies and units of Vietnam People’s Army; commissioned officers, non-commissioned officers and police workers in police authorities and units, except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises;
d) Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1 Article 88 of this Law, except those who are designated as authorized representatives to manage state-owned stakes in other enterprises;
dd) Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons;
e) People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, has limited legal capacity or is incapacitated, is not able to control his/her own behaviors, is banned by the court from holding certain positions or doing certain works; other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law.
If requested by the business registration authority, the applicant shall submit the judicial records;
g) Juridical persons that are banned from business operation or banned from certain fields as prescribed by the Criminal Code.
2. Establishment procedures
The application for establishing a LLC includes:
- Application form for establishing a
- Company charter
- List of members
- Copies of:
+ Legal documents of members who are individuals and legal representatives;
+ Legal documents of members that are organizations, documents about designation of authorized representatives and their legal documents.
Legalized copies of legal documents of the members that are foreign organizations.
- The Certificate of Investment Registration of foreign investors as prescribed by the Law on Investment.
The enterprise’s founder or the authorized person shall apply for enterprise registration at the business registration authority as follows:
- Direct application at the business registration authority;
- Submission of the application by post;
- Online enterprise registration.
The time limit is stipulated as follows:
Within 03 working days from the receipt of the application, the business registration authority shall consider the validity of the application and decide whether to issue enterprise registration. The business registration authority shall inform the applicant of necessary supplementation in writing if the application is invalid or inform the applicant and provide explanation if the application is rejected.
Above are some notes that Lawnet advises for customers interested in establishing an LLC in 2021. We hope this information will be helpful for the customers in establishing their companies.
Thuy Tram
