A limited liability company is a business model that many people choose to build for their business. With the advantages of the financial, economic as well as management model of the company for new business types developed in recent years. In the near future, the limited liability company model will further develop with its advantages in the current business type. Therefore, there are many questions related to this issue such as What is a limited liability company? What is a single-member limited liability company? What is a 2 member limited liability company? Today, LSX Lawfirm will give you an article about “Limited liability company in accordance with the law of Vietnam“, as follows:
Legal grounds
Enterprise Law 2020
What is a limited liability company?
Limited Liability Company is often abbreviated as Limited Company. This is one of the popular types of businesses in our country.
Accordingly, to Clause 7, Article 4 of the Enterprise Law 2020, Limited liability companies include two types. These are: a one-member limited liability company and two or more member limited liability company.
Capital contributors can be individuals or organizations. Capital contributors who own part or all of the charter capital of the Company call capital contributors then.
Features of a limited liability company
A limited company has optimal characteristics and also has limiting characteristics.
Limited liability company with legal status
A limited liability company has legal status. Therefore, the company has independent assets, its own seal, and its own headquarters and can participate in legal relations on its own behalf without being dependent on the status of the owner.
Only limited liability
Capital contributors are only liable for debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise.
This is a great advantage of a limited company as well as a joint-stock company. The fact that the members contributing capital to the company are only responsible to the extent of the contributed capital; separates personal assets to ensure certain safety for business participants.
About raising capital
The limited company can raise capital through borrowing capital and credit from individuals and organizations. The limited company also has the right to issue bonds.
Neither one-member limited liability company nor two or more member limited liability companies allowed to issue shares. A limited company not allowed to issue many types of Securities in the form of certificates; journal entries or electronic data issued like a joint-stock company.
About capital contributors
As mentioned above, a capital contributor is a person (individual or organization) who owns part or all of the charter capital of the Company.
For a one-member limited liability company, only one capital-contributing member is the sole owner of the company. If they want to add capital contributors, a one-member limited liability company must convert into a limited liability company with two or more members or a joint-stock company.
For a limited liability company with two or more members, there will be at least two members and at most fifty capital contributors. If it wants to add more than fifty members, a limited liability company with two or more members must convert it into a joint-stock company.
What is a single-member limited liability company?
As a type of limited company, a one-member limited liability company also has the same concept and common characteristics as above. However, this type has some special features such as:
Accordingly, to the Enterprise Law 2020, a single-member limited liability company an enterprise owned by an organization or individual. The company owner is responsible for the company’s debts and other property obligations to the extent of the company’s charter capital. Having legal status from the date of issuance of the Business Registration Certificate.
One member limited liability company has a tight structure. If the company owner is an organization, he/she can choose the organizational structure of the company according to one of two models: Chairman of the company; Director or General Director and Controllers; or Members’ Council, Director or General Director and Controllers then.
So If the owner is an individual; The company’s organizational structure includes a company president, director, or general director.
However, because it is a one-owner company, it organizes in any form; The owner also has absolute rights over the activities of the company.
What is a 2 member limited liability company?
Just like a one-member limited liability company, a two-member limited liability company or more also has common characteristics of the type of company such as limited liability, not being able to issue shares… Distinctive points such as:
A limited liability company with two or more members has two or more members and a maximum of fifty members. Members are only liable for debt obligations and other property obligations to the extent of the amount of capital contributed to the company then.
A two-member limited liability company has an organizational structure consisting of a Council of members, a chairman of the members’ council, a director, or a general director of the company. If the number of members is 11 or more, a company control committee must established then.
Consulting service of LSX Lawfirm
Above is LSX Lawfirm’s advice on the content of the problem “Limited liability company in accordance with the law of Vietnam“. And all the above knowledge to use in work and life. If you have any questions and need more advice and help, please contact the hotline for the reception. Lawyer X is a place that provides reputable and fast business services at reasonable prices. Customers will be extremely satisfied when using our services.
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Related questions
About naming the company, we will base on the provisions of the law and some notes to name a beautiful and correct name. The structure of the name of a limited company is as follows: Company + limited liability (or limited liability) + private name The proper name must be the characters in the Vietnamese alphabet, the letters F, J, Z, W, numbers, and symbols. To name a beautiful name, we need to note: The proper name should be easy to pronounce, clear, and not confusing with the name of another company or organization. Own name should carry a great meaning, easy to brand.
Charter capital is the amount of capital committed to fully contribute within 90 days from the date of issuance of the business registration certificate or a smaller period specified in the charter then. Some industries require a minimum capital contribution (legal capital), while most economic sectors of Vietnam do not require minimum or maximum capital.
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