Hanoi-Vietnam: Guidelines for settlement of stakes in some special cases for a multiple-member limited liability company

Hanoi- Vietnam: Guidelines for settlement of stakes in some special cases for a multiple-member limited liability company (Image from the Internet)

1. Guidelines for settlement of stakes in some special cases for a multiple-member limited liability company

According to Article 53 Law on Enterprises 2020, guidelines for the settlement of stakes in some special cases for a multiple-member limited liability company are as follows:

- In case a company member who is an individual dies, the heir according to the will or the law of that member will become a member of the company.

- In case a company member who is an individual is declared missing by the Court, the rights and obligations of the member are exercised through the asset manager of that member according to civil law.

- In case a member is restricted or loses civil act capacity, or has difficulty in cognition, or behavioral control, the rights and obligations of that member in the company will be exercised through a representative.

- The member's stake is repurchased or transferred by the company according to the provisions of Article 51 and Article 52 of Law on Enterprises 2020 in the following cases:

+ The heir does not want to become a member;

+ The transferee according to Clause 6, Article 53 Law on Enterprises 2020 is not approved to be a member by the Board of Members;

+ The member company is a dissolving or bankrupt organization.

- In case a member's stake is an individual who dies without heirs, the heirs refuse the inheritance, or the heirs are disqualified, the stake shall be resolved according to civil law.

- In case a member donates part or all of their stake in the company to another person, the recipient will become a member of the company according to the following provisions:

+ If the recipient is an heir according to the law as stipulated by the Civil Code 2015, that person will naturally become a member of the company;

+ If the recipient is not stipulated at point a, Clause 4, Article 53 Law on Enterprises 2020, they will become a company member only if approved by the Board of Members.

- In case a member uses their stake to pay a debt, the recipient has the right to use the stake in one of the following forms:

+ Becoming a member of the company if approved by the Board of Members;

+ Offering and transferring the stake according to the provisions of Article 52 Law on Enterprises 2020.

- In case a member that is an individual is being kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, he/she shall authorize another person to perform some or all of his/her rights and obligations to the company.

- A member who is an individual and is banned by the court to do certain jobs must not do those jobs at the company; A member who is a juridical person and is banned by the court from certain business lines must suspend or stop business operations in those business lines.

2. Provisions on repurchasing stakes of a multi-member limited liability company

According to Article 51 of Law on Enterprises 2020 on repurchasing stakes of a multi-member limited liability company:

- Members have the right to request the company to repurchase their stake if they have cast a disapproving vote on the resolutions or decisions of the Board of Members on the following issues:

+ Amending and supplementing the company's charter contents related to the rights and obligations of members and the Board of Members;

+ Reorganizing the company;

+ Other cases as stipulated by the company's charter.

- The request for repurchasing the stake must be in writing and sent to the company within 15 days from the date the resolution or decision mentioned in Clause 1, Article 51 Law on Enterprises 2020 is passed.

- Within 15 days from the date of receiving the member's request mentioned in Clause 1, Article 51 Law on Enterprises 2020, the company must repurchase the member's stake at market value or a price determined according to the principles stipulated in the company's charter, unless otherwise agreed upon. Payment is only made if, after making full payment for the repurchased stake, the company can still settle all debts and other asset obligations.

- In case the company cannot pay for the requested repurchase of the stake as stipulated in Clause 3, Article 51 Law on Enterprises 2020, the member is free to transfer their stake to another member or a non-member.

To Quoc Trinh

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