Law on Enterprises 2020: Limitations of general partners in Vietnam

Law on Enterprises 2020: Limitations of general partners in Vietnam (Internet image)

Specifically, Clause 30, Article 4 of the Law on Enterprises 2020 stipulates that  a “partner” of a partnership can be a general partner or limited partner. Article 180 of the Law on Enterprises 2020 stipulates limitations of general partners in Vietnam as follows:

- A general partner must not be the owner of a sole proprietorship; must not be a general partner of another partnership unless it is accepted by the other general partners.

- A general partner must not, in their own names or others’ names, do business in the same busines lines as those of the partnership for personal gain or to serve the interests of another organization or individual.

- A general partner must not transfer part or all of his/her stake in the company to another organization or individual unless it is accepted by the other general partners.

In addition, Article 178 of the Law on Enterprises 2020 also stipulates that a general partner who fails to contribute capital fully and punctually as promised and thus causes damage to the company shall pay compensation.

Note: Article 177 of the Law on Enterprises 2020 stipulates that a partnership is an enterprise in which:

- There are least 02 partners that are joint owners of the company and do business under the same name ((hereinafter referred to as “general partner”). There can be limited partners in addition to general partners;

- A general partner shall be an individual whose liability for the company’s obligations is equal to all of his/her assets;

- A limited partner can be an organization or an individual whose liability for the company’s debts is equal to the promised capital contribution.

More details can be found in Law on Enterprises 2020 of Vietnam, issued on June 17, 2020.

Le Vy

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE