Unauthorized Capital Transfer in 2-Member LLCs: Handling

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Regulations on transferring contributed capital in a multi-member LLC

Under Article 52 of the Law on Enterprises 2020 (amended and supplemented by Law No. 76/2025/QH15, effective from 01/7/2025), a member of a multi-member limited liability company may transfer part or all of their contributed capital to another person as follows:

Offer first to the remaining members in proportion to their contributed capital, on the same offering terms;
Transfer to a non-member on the same terms as offered only if the remaining members do not purchase or do not purchase all within 30 days from the date of offering.

Thus, Mr. A’s transfer of his contributed capital to Ms. C without offering it to Mr. B was not in the proper order prescribed by law.

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Legal consequences of failing to offer first to the remaining member

The law does not prescribe a single, mechanically applied consequence for all cases. Depending on the specific situation, the remaining member (Mr. B) may:

Request the Court to protect his preemptive right to purchase the contributed capital;
Request the transferor to compensate for damage (if any) caused by the violation of the transfer order;
Request the Court to consider the validity of the transfer contract between Mr. A and Ms. C.

Important note: there is a view that a transfer contract violating the offering order may be declared invalid for violating a prohibition of law (Article 123 of the 2015 Civil Code), with restitution consequences under Article 131 of the 2015 Civil Code. However, this remains debated in adjudication practice — not in every case will the Court declare the contract invalid. Whether Ms. C becomes a member of the company depends on the Court’s judgment based on the evidence and specific dossier of the case.

Therefore, when a dispute arises, the parties should fully collect evidence of the offering (or lack thereof), the transfer conditions, and work with a lawyer to assess the appropriate litigation plan, rather than taking for granted that the contract is automatically invalid or automatically effective.

Notes on Applying Current Legal Regulations

This article belongs to the Corporate & M&A Knowledge series and is presented for reference purposes, helping readers understand the legal issue at an overview level before preparing dossiers or carrying out transactions.

Legal regulations may change over time, by locality, dossier type, and specific circumstances. If you need to determine the exact legal basis applicable to your dossier, please contact an ANT Legal lawyer at 0966.475.966 for verification and advice before proceeding.

Common Risks to Watch Out For

Transferring contributed capital without first offering it to the remaining members.
Taking for granted that a contract is automatically invalid or automatically effective without a court ruling.
Failing to preserve evidence of the offering, its conditions, and time limits.
Signing, filing, or carrying out transactions without fully assessing legal risks.

How Can ANT Legal Help?

ANT Legal helps review your specific situation, check dossiers, determine the applicable legal basis, advise on handling plans, and represent clients in dealings with individuals, organizations, or competent authorities when necessary.

For quick advice, please contact our lawyers at 0966.475.966.

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