Transfer of capital contributions in a limited liability company with two or more members

How is a limited liability company with two or more members regulated? How to transfer capital contributions in a limited liability company with two or more members?

1. Regulations on Limited Liability Companies with two or more members?

According to Article 46 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 46. Limited liability companies with two or more members

1. Limited liability companies with two or more members are enterprises with from 02 to 50 members as organizations Members are responsible for debts and other property obligations of the enterprise within the amount of capital contributed to the enterprise, except in the case specified in Clause 4, Article 47 of this Law. Members’ capital contributions can only be transferred according to the provisions of Articles 51, 52 and 53 of this Law.

2. A limited liability company with two or more members has legal status from the date of issuance of the Certificate business registration certificate.

3. A limited liability company with two or more members is not allowed to issue shares, except for conversion into a joint stock company.

4. A limited liability company with two or more members may issue bonds in accordance with the provisions of this Law and other relevant laws; the issuance of individual bonds must comply with the provisions of Article 128 and Article 129 of this Law.”

Thus, a limited liability company with two or more members is an enterprise with at least two members and a maximum of 50 members who are organizations and individuals. Members will be responsible for the debts and other property obligations of the business within the amount of capital contributed to the business.

2. What are the regulations for contributing capital to establish a company and issuing a certificate of capital contribution to a limited liability company with two or more members?

Contributing capital to establish a company and issuing a certificate of capital contribution are regulated in Article 47 of the Law on Enterprises 2020, specifically:

– The charter capital of a limited liability company with two or more members when registering to establish a business is the total value of the capital contributions committed by the members and recorded in the company’s charter.

– Members 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, members have rights and obligations corresponding to the committed capital contribution ratio. Company members can only contribute capital to the company with assets other than the committed assets if approved by more than 50% of the remaining members.

– After the time limit specified in Clause 2 of this Article, if there are still members who have not contributed capital or not fully contributed capital as committed, it will be handled as follows:

+ Members who have not contributed capital as committed are automatically no longer members of the company;

+ Members who have not fully contributed their committed capital have rights corresponding to their capital contribution;

+ The members’ uncontributed capital is offered for sale according to the resolutions and decisions of the Board of Members.

– In case there are members who have not contributed capital or have not contributed the full amount of capital as committed, the company must register to change the charter capital, the capital contribution ratio of the members is equal to the amount of capital contributed within 30 days from the last day on which the capital contribution must be fully contributed as prescribed in Clause 2 of this Article. Members who have not yet contributed capital or have not contributed the full amount of committed capital must be responsible in proportion to the committed capital contribution ratio for the company’s financial obligations arising during the period before the date the company registers to change its charter capital and the member’s capital contribution ratio.

– Except for the case specified in Clause 2 of this Article, the capital contributor becomes a member of the company from the time the capital contribution is paid and the information about the capital contributor specified in Points b, c and dd, Clause 2, Article 48 of this Law is fully recorded in the member registration book. At the time of full capital contribution, the company must issue a capital contribution certificate to the member corresponding to the value of the contributed capital.

– The capital contribution certificate must include the following main contents:

+ Name, business code, head office address of the company;

+ charter capital of the company;

+ Full 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 members that are organizations;

+ Capital contribution, capital contribution ratio of members;

+ Number and date of issuance of capital contribution certificate;

+ Full name, signature of the legal representative of the company company.

– 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 according to the order and procedures specified in the company’s Charter.

Thus, the charter capital when registering to establish a business is the total value of the capital contribution of the members who commit to contribute and recorded in the company’s Charter. Members must contribute capital to the company in full and with the right type of assets as committed within 90 days from the date of issuance of the Business Registration Certificate. In case there are members who have not contributed capital or have not contributed the full amount of capital as committed, the company must register to change the charter capital, with the capital contribution ratio of the members equal to the amount of capital contributed within 30 days from the last day on which the capital contribution must be fully contributed. In case the capital contribution certificate is lost or damaged, the member will be re-issued a capital contribution certificate by the company.

3. How to transfer capital contributions in a limited liability company with two or more members?

The transfer of capital contributions in a limited liability company with two or more members is regulated in Article 52 of the Law on Enterprises 2020, specifically:

“Article 52. Transfer of capital contributions

1. Except for the cases specified in clause 1. 4 Article 51, Clause 6 and Clause 7, Article 53 of this Law, members of a limited liability company with two or more members have the right to transfer part or all of their capital contribution to others according to the following provisions:

a) Offer to sell that capital contribution to the remaining members in proportion to their capital contribution in the company with the same offering conditions;

b) Transfer with the same offering conditions for the remaining members specified in Point a of this Clause to non-members if the remaining members of the company do not buy or do not buy all within 30 days from the date of offering.

2. The transferring member still has rights and obligations towards the company corresponding to the relevant capital contribution until information about the buyer specified in Points b, c and dd, Clause 2, Article 48 of this Law is fully recorded in the member registration book.

3. In case of transfer or change in capital contributions of members resulting in only one member of the company remaining, the company must organize management in the form of a one-member limited liability company and register to change the business registration content within 15 days from the date of completion of the transfer.

Accordingly, if you want to transfer part of your capital contribution to your younger brother, your younger brother is not currently a member of the company, so this transfer must be offered to members of the company first. If within 30 days from the date of offering, the remaining members of the company do not buy or do not buy all, then it will be transferred to your younger brother with the same conditions of offering to the remaining members of the company according to Clause 1, Article 52 of the Law on Enterprises 2020.