Vietnam: Is the owner of a single -member limited liability company an organization or an individual?

Vietnam: Is the owner of a single -member limited liability company an organization or an individual? (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Is the owner of a single -member limited liability company an organization or an individual?

According to Article 74 of the Law on Enterprises 2020, single -member limited liability companies are regulated as follows:

- A single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.

- A single-member limited liability company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.

- A single-member limited liability company must not issue shares except for equitization.

- Single-member limited liability companies may issue bonds in accordance with this Law and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of the Law on Enterprises 2020.

Thus, according to the above regulations, a single -member limited liability company is an enterprise that can be owned by an organization or an individual.

2.  Rights of the owner of single -member limited liability company in Vietnam

- The owner that is an organization has the rights to:

+ Draw up and revise the company's charter;

+ Decide the company’s annual business plan and development strategy;

+ Decide the company’s organizational structure; designate, dismiss the company’s executives and controllers;

+ Decide the company’s investment projects?

+ Decide solutions for market development, marketing and technology;

+ Approve contracts for borrowing, lending, sale of assets and other contracts prescribed by the company's charter whose value are at least 50% of the total assets written in the latest financial statement (or a smaller ratio or value specified in the company's charter);

+ Ratify the company’s annual financial statements;

+ Decide increase or decrease in the company’s charter capital, transfer part or all of the company’s charter capital to another organization or individual; decide issuance of bonds;

+ Decide establishment of subsidiary companies and contribution of capital to other companies;

+ Organize the supervision and assessment of the company’s performance;

+ Decide the use of profits after the company’s tax liabilities and other financial obligations have been fulfilled;

+ Decide the company’s reorganization, dissolution or file bankruptcy;

+ Recover all assets of the company after the dissolution or bankruptcy process is complete;

+ Other rights prescribed by the Law on Enterprises 2020 and the company's charter.

-  The owner that is an individual has the following rights:

+ The right to decide investment, business operation and the company’s administration, unless otherwise prescribed by the company's charter.

+ Draw up and revise the company's charter;

+ Decide increase or decrease in the company’s charter capital, transfer part or all of the company’s charter capital to another organization or individual; decide issuance of bonds;

+ Decide the use of profits after the company’s tax liabilities and other financial obligations have been fulfilled;

+ Decide the company’s reorganization, dissolution or file bankruptcy;

+ Recover all assets of the company after the dissolution or bankruptcy process is complete;

+ Other rights prescribed by the Law on Enterprises 2020 and the company's charter.

(Article 76 of the Law on Enterprises 2020)

Nguyen Ngoc Que Anh

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