Conditions to establish single-member limited company in Vietnam
Entrepreneurs struggle to choose what kind of business to launch due to the rising need for new businesses. Limited liability companies, especially single-member ones, are popular among enterprises. But not everyone has awareness of the specifics of a single-member limited liability company. When establishing a company, founders have to meet the requirements (if any) prescribed by the law. So, in this article, LSX legal firm will provide you with:
Conditions to establish single-member limited company in Vietnam
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Single-member limited liability company
Single-member limited liability company: a company with only one member (owner) as an organization or an individual. The characteristics of this type of business can be seen clearly from the name. The law also clearly stipulates that, with this type of business, the owner of the company takes limited liability for the company’s debts and property obligations to the extent of the company’s charter capital.
“Article 74, Law on Enterprise 2020: SINGLE-MEMBER LIMITED LIABILITY COMPANIES
1. 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.
2. 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.
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.”
Conditions to establish single-member limited company
Business name
The Vietnamese name of an enterprise shall contain two elements in order:
- The type of enterprise;
- The proper name.
The type of the enterprise shall be “công ty trách nhiệm hữu hạn” or “công ty TNHH” for limited liability companies.
The proper name shall consist of letters in the Vietnamese alphabet, the letters F, J, Z, W, numbers, and symbols.
The enterprise’s name shall be displayed at the headquarters, branches, representative offices, and business locations of the enterprise and printed or written on transaction documents, records, and printed materials published by the enterprise.
Business headquarter
According to the law, the head office of the enterprise must be located in the territory of Vietnam, also present as the contact address of the business, identified by administrative unit boundaries. In addition, has a phone number (required), fax number, and email address (if any).
Owner
An individual or organization can own a single-member limited liability company. However, that individual or organization must have full civil act capacity and not prohibited by the State from establishing or managing an enterprise.
Business lines
The company can only register the business lines that not prohibited by the law.
On the other hand, to operate in conditional business lines, the company has to satisfy the requirements corresponding to the lines such as obtaining related sub-licenses or equivalent certificates.
Charter capital
The capital to establish an enterprise must suit the field, industry, and business scale of the enterprise.
For enterprises with business lines that require legal capital, the initial capital must not lower than the level of legal capital.
Charter capital to establish a single-member LLC
Charter capital belongs to the most important issues that individuals and organizations need 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.
Depending on the registered business line, the company owner will contribute the appropriate amount of capital. As for some business lines that need to be established under legal capital, then the enterprise must be established with the amount of charter capital at least equal to or more than the legal capital.
Example: Pursuant to Article 5, Decree 17/2012/ND-CP, Legal capital to establish an audit firm: 5 billion VND. To be licensed with audit service providing and related certificates, business owners have to register at the rate of 5 billion VND more in the certificate of business registration.
Procedures to establish Single-member LLC
Step 1: Prepare application for business registration
An enterprise registration dossier for a single-member limited liability company include:
- An application for enterprise registration.
- Company charter.
- Copies of legal papers of the legal representative, authorized person, owner as an individual, owner as an organization (except for state-owned organization).
- The original certificate of business household registration and a valid copy of the tax registration certificate in case of conversion from a household business.
- Authorization document: In case the owner does not directly carry out the procedure.
Step 2: Submit dossiers
Submit the application at the Business Registration Office of the Department of Planning and Investment at the province level where you plan to locate the head office of your Company.
Currently, there are two forms to submit an application:
- Register directly: apply at the “one-stop” department of the Business Registration Office. However, in Hanoi, this method is no longer applied.
- Online business registration: submit your application on the National Business Registration Portal (Address: https://dangkykinhdoanh.gov.vn). After the online application is valid, you will have to go directly to the “one-stop” department to return the scanned copy (hard copy) when submitting it online. However, this method is relatively complicated, requiring you to have skills and knowledge about registering a business account.
Once you have submitted your application, you will receive a receipt for your application. The usual processing time for applications will be 3 working days.
Step 3: Receive result
According to the schedule on the appointment, you return to the “one-stop” department of the Business Registration Office to receive the results. There are two possible scenarios:
- Dossiers valid: You will receive a Certificate of Business Registration as a result and a notification to the tax authorities.
- Dossiers invalid: The Business Registration Office will have a document instructing you to amend the dossiers in accordance with the provisions of the law. After the amendments and supplements to your application according to this guide, then resubmit your application as in Step 2.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, 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.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Conditions to establish single-member limited company in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
Related articles
- Dossiers to establish a Single-member LLC in Vietnam
- Procedure to establish a Single-member LLC in Vietnam
- What do you need to establish a single-member LLC in Vietnam?
Related questions
Within 03 working days from the date of receipt of a valid application to temporarily suspend the operation of a single-member LLC, the application-receiving authority will consider and handle the request of the applicant in accordance with the law.
A single-member limited liability company owned by an individual has a company president; Director or General Manager.
The owner of a single-member limited liability company can concurrently hold the position of the Chairman of the Company, having the highest authority to manage all production and business activities of the Company.
Besides, the owner may hire a Director or at the same time act as the Director, legal representative of the Company.
The organizational model of a single-member limited liability company owned by the organization will be managed and operated by the organization under one of the following two models:
Model 1: Company President, Director or General Director;
Model 2: Board of members, Director or General Director.
The organizational structure, working regime, standards, conditions, dismissal, rights, obligations, and responsibilities of the Board of Controllers and the Controllers shall comply with the provisions of Article 65 of the Law on Enterprises 2020.
The company must have at least one legal representative who holds one of the titles of Chairman of the Board of Members, President of the Company, Director, or General Director. Unless otherwise provided by the company’s charter, the chairman of the Board of Members or the company’s president shall present as the legal representative of the company.
Conclusion: So the above is Conditions to establish single-member limited company in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
