Rights and obligations of members of the Board of Directors of a two-member limited liability company
What are the rights and obligations of a member of the Board of Directors of a limited liability company with two or more members? What are the rights and obligations of members of the Company? LSX would like to answer the above questions as follows:
Legal grounds
Enterprise Law 2020
Consulting content
Current activities of limited liability companies with two or more members are affirming the advantages of this type of business. A limited liability company with two or more members is a type of company with a relatively small or medium-sized organization and high security of assets for its members.
What is a limited liability company with two or more members?
According to the law, a limited liability company with two or more members is an enterprise with between 2 and 50 members who are organizations and individuals. However, members are responsible for debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise.
Charter capital of limited liability companies with two or more members
According to Article 46 of the Enterprise Law 2020, the charter capital of a limited liability company with two or more members upon enterprise registration is the total value of the contributed capital the members commit to contribute to the company.
Rights and obligations of members of a limited liability company with two or more members
Rights of members of the Board of Directors
– Firstly, attend meetings of the Board of Directors, discuss, propose, and vote on matters falling within the competence of the Board of Directors;
– Secondly, having the number of votes corresponding to the capital contribution; except as required by law;
– Thirdly, share profits in proportion to the contributed capital after the company has fully paid taxes; and fulfill other financial obligations as prescribed by law;
– To receive the remaining value of the company’s assets; corresponding to the capital contribution when the company is dissolved or bankrupt;
– Priority to contribute more capital to the company when the company increases its charter capital;
– To dispose of their capital contribution by transferring a part; or all, donated and other forms as prescribed by law and the company’s charter
– By themselves or on behalf of the company, sue for civil liability against the Chair of the Board of Directors, the Director or General Director, or the legal representative;
– Finally, other rights as prescribed by the Enterprise Law 2020 and the company’s charter.
In case the company has one member owning more than 90% of the charter capital; and the company’s charter does not stipulate another smaller percentage, the remaining group of members naturally have the rights prescribed in Clause 2, Article 49 of the Enterprise Law 2020.
Obligations of members of the Board of Directors
– Contributing in full and on time the committed capital, is responsible for the company’s debts and other property obligations within the amount of capital contributed to the company; except as required by law;
– Besides, not to withdraw contributed capital from the company in any form; except in the case of statutory law.
– Comply with the company’s charter.
– Particularly, comply with resolutions and decisions of the Board of Directors.
– Take personal responsibility when acting on behalf of the company to perform the following acts:
+ Violating the law;
Conduct business or other transactions; not to serve the interests of the company and cause damage to others;
+ Payment of undue debts before possible financial risk to the company.
Finally, there are obligations under the provisions of the Enterprise Law 2020.
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Frequently asked questions
According to Clause 1, Article 48 of the Enterprise Law 2020. A limited liability company with 2 or more members must establish a member register immediately after being granted a business registration certificate. The member registration number may be in writing. electronic data collection paper recording information on ownership of contributed capital of company members
A limited liability company with two or more members has a Board of Directors, a chairman of the Board of Directors, a director, or a general director.
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