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 and steps prescribed by the law. What are those? In this article, LSX legal firm would like to provide instructive information about: “What do you need to establish a single-member LLC in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Single-member LLC
Clause 1, Article 74, Enterprise Law 2020 defines the 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.”
Accordingly, to establish a one-member limited liability company; Organizations and individuals that want to establish must be the owners of the company and be liable for debts as well as other asset obligations by the charter capital of the company.
In addition, the enterprise must meet the following conditions to establish a single-member limited liability company:
Conditions to set up 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.
Charter capital to set up a Single-member LLC
Charter capital is one of the conditions that individuals and organizations have to pay attention to when they want to establish a single-member limited liability company. According to the Law on Enterprise 2020, the charter capital of a single-member limited liability company is the total value of assets in cash or valuable in-kind contributed by the company owner when establishing the company.
Charter capital affects the annual license tax of the enterprise as follows:
- Companies with charter capital of 10 billion VND or less have to pay the license tax at the rate of 2,000,000 VND/year.
- Companies with charter capital of more than 10 billion VND have to pay the license tax at the rate of 3,000,000 VND/year.
Depending on the business line, the company owner will contribute the appropriate amount of capital.
However, for a number of business lines that need to be established under legal capital, the enterprise must be established with charter capital at least equal to the charter capital prescribed by law.
Steps to set up a Single-member LLC
Step 1: Prepare application for business registration
The application for a Single-member LLC registration includes:
- Business registration application form;
- Company charter;
- Copies of:
- Legal papers of the legal representative of the company (as individual);
- Legal papers of the company owner (as individual);
- Investment registration certificate in case the company is established by a foreign investor or a foreign-invested economic organization according to the Investment Law and the documents guiding the implementation.
- Power of attorney for other individuals to carry out the procedure (if the company cannot do it themselves).
Step 2: Submit application
Organizations and individuals may choose one of the following ways to submit their application:
- Firstly, submit at the business registration office of the province or city where individuals or organizations want to locate their company headquarters.
- Secondly, submit online at: https://dangkykinhdoanh.gov.vn of the National Business Registration Portal.
Step 3: Receive result
Within 03 working days from the date of receipt of a valid application, the Business Registration Office will issue a Certificate of Business Registration. That means the business has been successfully established.
On the other hand, If the dossier is not valid, the individual or organization must amend and correct it as required. When the application is valid, the result of the application will be issued.
LSX legal firm’s service on company 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.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Using our service, you do not need to do the paperwork yourself. We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application; submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
Should I open company in Vietnam? Limited Liability/Sole Proprietorship?
Conditions for establishing a limited liability company in Vietnam
Registration of a multi-member limited liability company in Vietnam
Related questions
Article 74. SINGLE -MEMBER LIMITED LIABILITY COMPANIES:
3. A single-member limited liability company must not issue shares except for equitization.
4. 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 this Law.
Firstly, fraud related to invoices and vouchers.
Second, deduct VAT on goods and services that are not related to production and business activities.
Third, declare before the time of receipt of state budget payment documents.
Fourthly, fraud through the reduction of output VAT.
Contact LSX
Finally, hope this article is useful for you to answer the question about “What do you need to establish a single-member LLC in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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