What is withdrawal from a partnership? How can a member of the company withdraw capital from the partnership? Today, LSX Lawfirm will give you an article about: “The issue of withdrawing capital from a partnership in Vietnam”, as follows:
Law on enterprises 2020
Law on investment 2020
1. A partnership is an enterprise in which:
a) So, there are least 02 partners that are joint owners of the company and do business under the same name ((hereinafter referred to as “general partner”). There can be limited partners in addition to general partners;
b) A general partner shall be an individual whose liability for the company’s obligations is equal to all of his/her assets;
c) Then, a limited partner can be an organization or an individual whose liability for the company’s debts is equal to the promised capital contribution.
2. A partnership has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
3. Then, a partnership must not issue any kind of securities.
Conditions for withdrawing capital from a partnership
General partners have the right to withdraw capital from the partnership if approved by the Members’ Council.
Unless otherwise provided in the company’s charter, capital contributors in a partnership may withdraw capital from the partnership without conditions.
Method of withdrawing capital from a partnership company
General partners have the right to withdraw capital if approved by the Members’ Council.
Capital-contributing members withdraw their capital by transferring part or all of their contributed capital to another person. The consent of any other member of the company is not required.
Procedures for capital withdrawal in a partnership company
For general partners
General partners who want to withdraw capital from the company must notify in writing of the capital withdrawal request. The latest is 6 months before the date of capital withdrawal.
Then, capital can only be withdrawn at the end of the financial year and the financial statements of that fiscal year have been approved.
For capital contributors
Capital-contributing members that transfer part or all of their contributed capital to another person shall approve a transaction contract between the purchaser and the capital-contributing member.
For general partners: Withdrawal of capital will terminate that person’s status as a general partner. Within 2 years from the date of termination of the general partnership membership. That person is still jointly liable with all his assets for the debts of the company that arose before the date of termination of the membership.
For capital-contributing members: The transfer of all contributed capital will also lose the status of capital-contributing members.
For companies: The partnership company will have to carry out registration procedures to change business contents. The company will have to register for a change in charter capital. At the same time, you must also register to change members.
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