What are the types of enterprises ineligible to be recognized as a juridical person in Vietnam?

What is legal status? What are the types of enterprises ineligible to be recognized as a juridical person in Vietnam? - Minh Nhat (Nghe An)

What are the types of enterprises ineligible to be recognized as a juridical person in Vietnam? (Internet image)

In this regard, Lawnet would like to answer as follows:

1. What is legal status?

According to Clause 1, Article 74 of the Civil Code 2015, an organization shall be recognized as a juridical person if it meets all of the following conditions:

- It is legally established as prescribed in the Civil Code 2015 and relevant laws;

- It has an organizational structure prescribed in Article 83 of the Civil Code 2015;

- It has property independent from other natural and juridical persons and bears liability by recourse to its property;

- It participates independently in legal relations in its own name.

If the organization does not meet any of the 04 criteria as above, it is considered no legal status.

2. What are the types of enterprises ineligible to be recognized as a juridical person in Vietnam?

According to the provisions of the Law on Enterprises 2020, there are currently 05 types of enterprises in Vietnam including:

- Multiple-member limited liability company;

- Single-member limited liability company;

- Joint stock company;

- Partnerships;

- Private enterprise.

Type of enterprise

Description

Legal status

Multiple-member limited liability company

- A multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals.

A member’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise, except for the cases specified in Clause 4 Article 47 of the Law on Enterprises 2020.

The member’s stake (contributed capital) may only be transferred in accordance with Articles 51, 52 and 53 of the Law on Enterprises 2020.

Yes

Single-member limited liability company

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.

Yes

Joint stock company

A joint stock company is an enterprise in which:

- The charter capital is divided into units of equal value called shares;

- Shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders;

- A shareholder’s liability for the company’s debts and liabilities is equal to the amount of capital contributed to the company by the shareholder;

- Shareholders may transfer their shares to other persons except for the cases specified in Clause 3 Article 120 and Clause 1 Article 127 of the Law on Enterprises 2020.

Yes

Partnership

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.

Yes

Sole proprietorship

A sole proprietorship is an enterprise owned by a single individual whose liability for its entire operation is equal to his/her total assets.

Sole proprietorships are responsible for themselves with all their assets, making the assets of the enterprise no longer independent of the individual's property. In the case of bankrupt enterprises, the owner of a private enterprise must use its assets to fulfill the debt payment obligation to the enterprise.

When sole proprietorships go bankrupt, their owners will have to use their assets to fulfill their debt payment obligations to the enterprise.

Therefore, sole proprietorships are enterprises but have no legal status.

No

Nguyen Ngoc Que Anh

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