Procedures for changing members due to transfer of contributed capital of a limited company in Vietnam

In the course of business operations, the change of members of a two-member limited liability company; must be carried out according to the procedures prescribed by law. The change of members due to the transfer of contributed capital of a limited liability company with two or more members is a concern for many people. So, what is the procedure for changing members due to the transfer of contributed capital of a limited company? Let’s find out with Lawyer X.

Legal grounds:

Enterprise Law 2020
Decree 01/2021/ND-CP

What is a limited liability company with two or more members?

According to Clause 1, Article 46 of the Enterprise Law 2020; Regulations on the concept of a limited liability company with two or more members are as follows:

Limited liability company with two or more members; is an enterprise with from 2 to 50 members who are organizations and individuals. The member is responsible for the debts; and other property obligations of the enterprise; within the amount of capital already contributed to the enterprise, except for the case specified in Clause 4, Article 47 of this Law. A member’s capital contribution may only be transferred according to the provisions of Articles 51, 52, and 53 of this Law.

Procedures for changing members due to transfer of contributed capital of a limited company

Transfer of capital in a two-member limited liability company; being a member or owner that transfers part or all of his/her rights and obligations in proportion to his/her capital contribution; to members or other individuals or organizations who are not members of the company. Transfer can take the form of: sale, donation, inheritance
Procedures for changing members due to transfer of contributed capital of a two-member limited liability company are as follows:

Step 1: Send a notice of change in business registration to the Business Registration Office where the company has registered

Notice content

• Above all, name, enterprise identification number, tax identification number or business registration certificate number (if the enterprise does not have an enterprise identification number or tax identification number);
• Secondly, name and head office address, for organizations, or full name, nationality, number of the people’s identity card or passport or other lawful personal identification as specified in Article 10 of this Decree, for individuals; capital contribution of the transferor and the transferee;
• Moreover, capital contribution of members after the transfer;
• Time of transfer;
• Full name, signature of the legal representative of the company.

Step 2: Check the validity of the profile

Upon receiving the Notice, the Business Registration Office hands over the Receipt and checks the validity of the application

Step 3: Issue a new business registration certificate

After the validity check is complete. If the profile is correct, sufficient and valid; then the business registration authority will issue an enterprise registration certificate to the enterprise.

Consequences of the transfer of contributed capital in a limited liability company with two or more members

• The company’s charter capital does not change, the company changes/adds members
• In case the transfer results in only one member remaining, within 15 days of completing the transfer, the company must change the type of enterprise and register to change the business registration contents.
  
• Besides, in case there is a new member accepted in a limited liability company with two or more members, it is necessary to carry out the procedures for registration to change members.
  
• In case an individual transfers his/her capital contribution, he/she should pay attention to paying personal income tax in accordance with tax laws.

Cases of transferring capital contribution in a limited liability company with two or more members

Transfer of contributed capital in a limited liability company with two or more members will include the following cases:

• Firstly, company members resell their contributed capital to members of the company in proportion to their contributed capital in the company or to non-members of the company.
• Then, the member requests the company to buy back his/her contributed capital.
• After that, company members use contributed capital to repay debts.
• A member donates part or all of his/her capital contribution in the company to another person

So the issue of transferring capital contributions of members in a limited company; must be carried out according to a sequence prescribed by law

Related article

Rights of employees when working in Vietnam

Guidance on procedures for increasing charter capital of a partnership in Vietnamese

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