Conditions for establishing a limited liability company in Vietnam
The current Vietnamese legislation has regulations that are very open for business establishments. A limited liability company (LLC) is a business model with many advantages in terms of organizing and managing system. Therefore, many individuals and organizations aim to build their business as a limited liability company. However, when establishing a limited liability company, people must met certain conditions prescribed by the law. What are those? Follow this article to have an insight into the conditions for establishing a limited liability company in Vietnam.
Legal grounds
- Law on Enterprise 2021
- Decree 01/2021/NĐ-CP
Conditions for establishing a limited liability company
According to the law, limited liability companies include two types: single-member and two-member or more (multi-member).
Under Clause 1, Article 74, Enterprise Law 2020; 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.
On the other hand, Clause 1, Article 46 of this Law 2020: 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 this Law.
Conditions for establishing a single-member LLC
- Business Name: The company name must include two parts in order: Type of business + Name. Specifically, for a single-member limited liability company: “limited liability company / limited company + company name”. Firms must choose the names written by the letters of the Vietnamese alphabet, letters F, J, Z, W, numbers, and symbols.
- Head office: The head office of the enterprise must locate in the Vietnamese territory. It is the contact address of the business and is identified by administrative boundaries. In addition, phone number (required); fax number, and email address (if any).
- Owner: The owner of a single-member limited liability company may be an individual or an organization. However, such individual or organization must have full capacity for civil acts and not prohibited by the State from establishing or joining an enterprise.
- Business line: enterprises are only allowed to register their business within the scope of business lines which are not prohibited by law. However, for conditional business lines, enterprises must have practice certificates and related legal papers.
- Charter capital: The capital to establish an enterprise must be suitable to the business line and scale of the enterprise. For enterprises with business lines requiring legal capital, the charter capital must not be lower than the legal capital.
Conditions for establishing a multi-member LLC
Two-member Limited Company
- Business Name: The name of an enterprise must not be identical or confusing to another enterprise registered in the same locality, province, or city (conditions prescribed in Articles 31, 32, 33, 34 of the Law on Enterprises). So, before setting up a company, you should prepare some business names and do research on https://dangkykinhdoanh.gov.vn/ to avoid overlap with other units’ names.
- Head office: The head office of the enterprise must locate in the Vietnamese territory with an identified address including house number, street name, name of commune, ward, township, district, city. It is the contact address of the business and is identified by administrative boundaries. In addition, phone number (required); fax number, and email address (if any).
- Business line: enterprises are only allowed to register their business within the scope of business lines which are not prohibited by law. However, for conditional business lines, enterprises must have practice certificates and related legal papers.
- Charter capital: Charter capital is the amount of capital contributed or committed to contribute by members or shareholders within a certain period and recorded in the company’s charter. Legal capital is the minimum capital required by the law to establish an enterprise.
Limited Company with more than two member
- Business Name: The company name must include two parts in order: Type of business + Name. Besides, they must write by the letters of the Vietnamese alphabet, letters F, J, Z, W, numbers, and symbols.
- Head office: The head office of the enterprise must locate in the Vietnamese territory with an identified address including house number, street name, name of commune, ward, township, district, city. It’s the contact address of the business; and identified by administrative boundaries. In addition, phone number (required); fax number, and email address (if any).
- Business line: Depending on the line, the enterprise must meet the conditions before and after the registration. For example, if business lines require legal capital, the firm must prove the amount of legal capital before its registration … Also, enterprises must have practice certificates and related legal papers for conditional business lines.
- Member: The minimum number of members is 02, and the maximum number of members must not exceed 50. The members of the company must not fall into the cases that prohibited from establishing and managing businesses in Vietnam according to Clause 2, Article 17 of the Enterprise Law 2020. In particular, Public Officials, Civil Servants, etc.
LSX legal firm’s service on business establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
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Related articles
Registration of a single-member limited liability company in Vietnam
Registration of a multi-member limited liability company in Vietnam
Establishing a representative office of a limited liability company in Vietnam
Related Questions
An application for enterprise registration.
The company’s charter.
Copies of the following papers:
a) Legal documents of the individual for the legal representative of the enterprise;
b) Legal papers of an individual, for the company owner being an individual; Legal papers of the organization for the company owner being an organization (except for the case where the company owner is the State); Legal papers of individuals for authorized representatives and documents on the appointment of authorized representatives.
For the company owner is a foreign organization, the copy of the legal papers of the organization must be consular legalized;
c) Investment registration certificate, in case the enterprise is established by a foreign investor or a foreign-invested economic organization according to the provisions of the Investment Law and guiding documents.
The trademark protection title valid from the date of issue to the end of 10 years from the filing date. When it expires, the owner can extend it further, without limiting the number of extensions.
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