Can capital contributing members of a partnership company conduct business in the name of the company?

The rights of capital contributing members in a partnership are stipulated in Clause 2, Article 187 of the 2020 Enterprise Law as follows:

Rights and obligations of capital contributing members

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2. Capital contributing members have the following obligations:

a) Responsible for debts and other property obligations of the company within the amount of capital committed to contribute;

b) Not allowed to participate in company management, not allowed to conduct business on behalf of the company;

c) Comply with the Charter company, resolutions and decisions of the Board of members;

d) Other obligations according to the provisions of this Law and the company’s Charter.

Thus, according to regulations, capital contributing members in a partnership company are not allowed to conduct business in the name of the company.

If capital contributing members do not contribute the committed capital in full and on time, how will this be resolved?

In case a capital contributing member fails to contribute the committed capital amount in full and on time as prescribed in Clause 3, Article 178 of the 2020 Enterprise Law as follows:

Implement capital contribution and issue capital contribution certificate

1. General partners and capital contributing members must contribute the committed capital in full and on time.

2. A general partner who fails to contribute the committed capital in full and on time, causing damage to the company, must be responsible for compensating the company for the damage.

3. In case a capital contributing member fails to contribute the committed capital amount in full and on time, the not yet fully contributed capital is considered that member’s debt to the company; In this case, the relevant capital contributing member may be expelled from the company according to the decision of the Board of Members.

4. At the time of contributing the full amount of committed capital, members will be issued a certificate of capital contribution. The capital contribution certificate must include the following main contents:

a) Name, business code, and head office address of the company;

b) charter capital of the company;

c) Name, contact address, nationality, legal document number of the individual for individual members; name, business code or legal document number of the organization, head office address for organizational members; type of member;

d) Value of capital contribution and type of capital contribution assets of the member;

đ) Number and date of issuance of capital contribution certificate;

e) Rights and obligations of the owner of the capital contribution certificate;

g) Full name, signature of the owner of the capital contribution certificate and of the general partners of the company.

5. In case the capital contribution certificate is lost, damaged or destroyed in another form, the member will be re-issued the capital contribution certificate by the company.

Thus, according to regulations, in case a capital contributing member does not contribute the committed capital in full and on time, the not yet fully contributed capital is considered that member’s debt to the company.

In this case, the relevant capital contributing member may be expelled from the company according to the decision of the Board of Members.

In case a partnership goes bankrupt, what benefits do capital contributing members receive?

The rights of capital contributing members in case of bankruptcy of a partnership company are specified in Clause 1, Article 187 of the Law on Enterprises 2020 as follows:

Rights and obligations of capital contributing members

1. Capital-contributing members have the following rights:

a) Participate in meetings, discuss and vote at the Board of Members on amending and supplementing the company’s Charter, amending and supplementing the rights and obligations of capital-contributing members, reorganizing and dissolving the company and other contents of the company’s Charter directly related to their rights and obligations;

b) Receive a corresponding annual profit share. Corresponding to the proportion of capital contribution in the company’s charter capital;

c) Be provided with the company’s annual financial report; has the right to request the Chairman of the Board of Members and general partners to provide complete and honest information about the company’s business situation and results; review accounting books, minutes, contracts, transactions, records and other documents of the company;

d) Transfer your capital contribution in the company to another person;

dd) Conducting business on behalf of an individual or on behalf of another person in the company’s line of business;

e) Disposing of one’s capital contribution by inheritance, donation, mortgage, mortgage and other forms according to the provisions of law and the company’s Charter; In case of death, the heir who replaces the deceased member becomes a capital contributing member of the company;

g) Receive a portion of the company’s remaining asset value corresponding to the proportion of capital contribution in the company’s charter capital when the company dissolves or goes bankrupt;

h) Other rights according to the provisions of this Law and the company’s Charter.

Thus, according to regulations, in case a partnership company goes bankrupt, capital contributing members are given a portion of the company’s remaining asset value corresponding to the proportion of their capital contribution in the company’s charter capital.