Rights and obligations of the owner of a one-member limited liability company

What is a single-member limited liability company? What rights and obligations do company owners have?

1. Company limited liability What is a member?

According to Article 74 of the Law on Enterprises 2020, the regulations on a single-member limited liability company are as follows:

“Article 74. Single-member limited liability company

1. A single-member limited liability company is an enterprise owned by an organization or individual (hereinafter referred to as is the company owner). The company owner is responsible for the debts and other property obligations of the company within the company’s charter capital.

2. A single-member limited liability company has legal status from the date of issuance of the Business Registration Certificate.

3. A single-member limited liability company is not allowed to issue shares, except for successful conversion joint stock company.

4. A single-member limited liability company is entitled to issue bonds in accordance with the provisions of this Law and other relevant laws; the issuance of individual bonds according to the provisions of Article 128 and Article 129 of this Law.”

Accordingly, a single-member limited liability company is an enterprise owned by an organization or an individual and is responsible for the liabilities. Debts and other property obligations of the company within the company’s charter capital. A one-member LLC is allowed to issue bonds but not shares.

2. What are the regulations for contributing capital to establish a one-member LLC?

Contributing capital to establish a one-member limited liability company is stipulated in Article 75 of the Law on Enterprises 2020, specifically:

“Article 75. Contributing capital to establish a company

1. charter capital of a one-member limited liability company When registering to establish a business, it is the total value of assets committed by the company owner and recorded in the company charter.

2. The company owner must contribute capital to the company in full and with the right type of assets as committed when registering to establish a business within 90 days from the date of issuance of the Business Registration Certificate, excluding the time of transporting and importing assets to contribute capital, and carrying out administrative procedures to transfer asset ownership. During this period, the company owner has rights and obligations corresponding to the committed capital contribution.

3. In case of failure to fully contribute charter capital within the time limit specified in Clause 2 of this Article, the company owner must register to change charter capital equal to the value of the contributed capital within 30 days from the last day to fully contribute charter capital. In this case, the owner must be responsible in proportion to the committed capital contribution for the company’s financial obligations arising during the period before the last date the company registered to change its charter capital according to the provisions of this Clause.

4. The company owner is responsible with all of his assets for the company’s financial obligations and damages caused by not contributing, not contributing in full, or not contributing on time to the charter capital as prescribed in this Article.”

Accordingly, the charter capital of a one-member limited liability company is the total value of assets committed by the company owner and recorded in the company charter when registering to establish a business. Within 90 days from the date of issuance of the Business Registration Certificate, the company owner must contribute capital to the company in full and with the right type of assets as committed.

3. What rights and obligations do company owners have?

The rights and obligations of the owner of a single-member limited liability company are specified in Article 76 of the Law on Enterprises 2020 and Article 77 of the Law on Enterprises 2020, specifically:

The rights of company owners include:

– The company owner is an organization with the following rights:

– Decide on the content of the company’s Charter, amend and supplement the company’s Charter;

– Decide on the company’s development strategy and annual business plan;

– Decide on the company’s organizational and management structure, appoint, dismiss, and dismiss managers and controllers of the company;

– Decide on investment and development projects;

– Decide on market development, marketing and technology solutions;

– Approving loan contracts, lending, selling assets and other contracts prescribed by the company’s Charter with a value of 50% or more of the total asset value recorded in the company’s most recent financial report or a smaller ratio or value specified in the company’s Charter;

– Approving the company’s financial statements company;

– Decision to increase the company’s charter capital; Transfer part or all of the company’s charter capital to other organizations or individuals; decision to issue bonds;

– Decision to establish a subsidiary, contribute capital to another company;

– Organize supervision and evaluation of the company’s business activities;

– Decide on the use of profits after completing tax obligations and other financial obligations of the company;

– Decision reorganize, dissolve and request bankruptcy of the company;

– Recover the entire value of the company’s assets after the company completes dissolution or bankruptcy;

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

– The owner of the company is an individual with the rights specified in points a, h, l, m, n and o of clause 1 This; Decide on investment, business and internal management of the company, unless otherwise stipulated in the Company’s Charter.

The obligations of the company owner include:

– Contribute fully and on time the company’s charter capital.

– Comply with the Company’s Charter.

– Must identify and separate assets the company’s owner’s assets with the company’s assets. Company owners who are individuals must separate their personal and family expenses from the expenses of the company President, Director or General Director.

– Comply with the provisions of law on contracts and other relevant laws in buying, selling, borrowing, lending, renting, leasing, contracts and other transactions between the company and the company owner.

– Owner The company is only entitled to withdraw capital by transferring part or all of its charter capital to another organization or individual; In case of withdrawing part or all of the charter capital contributed from the company in another form, the company owner and related individuals and organizations must be jointly responsible for the company’s debts and other property obligations.

– Company owners are not allowed to withdraw profits when the company fails to fully pay due debts and other property obligations.

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