A license application dossier for a microfinance institution that is a one-member limited liability company

Application for a license for a microfinance institution as a single-member limited liability company.

1. Can a microfinance institution be organized in the form of a single-member limited liability company?

Clause 6, Article 6 of the Law on Credit Institutions 2010 stipulates the organizational form of a microfinance institution as follows:

“Article 6. Organizational form of a credit institution

…

6. Microfinance institutions are allowed to established and organized in the form of a limited liability company.”

Clause 7, Article 4 of the Law on Enterprises 2020 regulates the forms of limited liability companies:

“7. Limited liability companies include one-member limited liability companies and limited liability companies with two or more members.”

Based on the regulations above, you can establish a microfinance institution in the form of a single-member limited liability company according to the conditions and regulations of the law.

2. Application dossier for a license for a microfinance institution that is a one-member limited liability company?

Article 9 of Circular 03/2018/TT-NHNN stipulates the components of an application dossier for an establishment and operation license for a microfinance institution that is a one-member limited liability company as follows: following:

(1) Dossier requesting in-principle approval:

a) Application for License signed by the legal representative of the owner according to the form in Appendix No. 01a issued with this Circular;

b) Draft Charter of a micro-financial institution model;

c) Proposal for establishing a microfinance institution signed by the Head of the Preparatory Committee, which includes at least the following contents:

– The necessity of establishment and operational objectives of the microfinance institution; expected social impact of the microfinance institution in the area;

– Name of the microfinance institution, expected area of ​​operation, expected location of headquarters, charter capital when established, content of operations;

– Products and services expected to be provided to customers;

– Organizational structure;

– List of expected personnel detailing professional qualifications and work experience to meet the requirements of each position and title:

+ Chairman, member of the Board of members; Head of Committees of the Board of Members;

+ Head, member, full-time member of the Supervisory Board;

+ General Director (Director), Deputy General Directors (Deputy Directors), Chief Accountant and heads of affiliated units in the organizational structure;

– Expected financial investment for information technology systems and information technology application;

– Expected internal control and audit system to be consistent with the provisions of the Law on Credit Institutions, including at least operating principles, draft internal regulations specified in Clause 2, Article 93 of the Law on Credit Institutions, draft regulations on the organization and operation of the Board of Members, Control Board, and General Director (Director);

– Expected business plan for the first 3 (three) years, which must include at least the following contents: Market analysis, strategy and business plan; expected financial reports for each year (balance sheet, business results report, cash flow report, minimum capital adequacy targets, performance indicators and explanation of the ability to implement financial targets for each year);

d) Records of people expected to be elected and appointed as members of the Board of Members, members of the Control Board, and General Director (Director) of the microfinance institution, including:

– Curriculum vitae according to the form in Appendix No. 02 issued with this Circular;

– Judicial record card of the personnel expected to be elected or appointed, which must have complete information on criminal records (including expunged and unexpunged criminal convictions) and information on prohibitions from holding positions, establishing and managing enterprises and cooperatives;

For personnel without Vietnamese nationality: A criminal record card or document of equivalent value (including expunged and unexpunged criminal records and information on bans from holding positions, establishing and managing businesses and cooperatives) must be issued by the competent authority of the country in which the foreigner resided before coming to Vietnam. In case a foreigner is currently residing in Vietnam for 6 (six) months or more, a criminal record card issued by a competent authority in the place where the foreigner is temporarily residing.

A criminal record card or document of equivalent value must be issued by a competent authority at most 6 (six) months before the microfinance institution submits the application for approval of the list of expected personnel;

– A declaration of persons related to the personnel expected to be elected and appointed according to the form in Appendix No. 04 issued with this Circular;

– Copy of ID card or citizen identification card or passport;

– Copies of diplomas and professional certificates;

– Other documents proving satisfaction of conditions and standards as prescribed in Articles 20, 21, 22 of this Circular;

– In case the person expected to be elected or appointed as a member of the Board of Members, member of the Control Board, General Director (Director) of a microfinance institution does not have Vietnamese nationality, in addition to the above documents, there must be a written commitment to fully meet the conditions to reside and work in Vietnam;

d) Owner’s establishment license or equivalent document;

e) Owner’s charter;

g) Document of the owner committing to contribute capital to the microfinance institution on schedule, at the level of capital contribution and to take responsibility for the legality of the contributed capital source;

h) Document of the owner on the establishment of the Preparatory Board, election and appointment of the Head of the Preparatory Board, approval of the draft Charter, Project for establishing the microfinance institution, list of expected management, executive and control positions.

(2) Documents requesting issuance of License:

a) The charter of the microfinance institution has been approved by the Board of members;

b) Decision of the owner on the appointment of Chairman of the Board of Members, members of the Board of Members, members of the Control Board, General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

c) Minutes of the Supervisory Board meeting on electing the Head of the Supervisory Board.

The request for a license must satisfy the above components.

3. Can an individual be the owner of a microfinance institution in the form of a one-member limited liability company?

Points b and c, Clause 1, Article 8 Circular 03/2018/TT-NHNN stipulates the conditions for individual owners of microfinance institutions in the form of one-member limited liability companies as follows:

“1. The owner of a microfinance institution established as a one-member limited liability company must ensure the following conditions:

a) Is an organization political organizations, socio-political organizations legally established and operating in Vietnam or political organizations, socio-political organizations, associations, social funds, charity funds with microfinance programs and projects converted according to the provisions of the Prime Minister’s Decision on the operation of microfinance programs and projects of political organizations, socio-political organizations, non-governmental organizations;

b) Have the financial ability to contribute capital to establish a microfinance institution and commit not to use trust capital, mobilized capital, or loan capital from other organizations and individuals to contribute capital; Commit to supporting microfinance institutions financially to resolve difficulties in case of capital or liquidity difficulties;

c) Not a founding shareholder, owner, founding member, or strategic shareholder of another credit institution in Vietnam.”

Accordingly, if you want to become the owner of a microfinance institution that is a single-member limited liability company, you need to fully meet the above conditions.

Point a, Clause 1 of this Article clearly stipulates that the owner of a microfinance institution established in the form of a one-member limited liability company must be a political organization, socio-political organization legally established and operating in Vietnam or a political organization, socio-political organization, association, social fund, charity fund with a microfinance program or project converted according to the provisions of the Prime Minister’s Decision on the operation of programs and projects. Microfinance of political organizations, socio-political organizations, non-governmental organizations.

So an individual cannot be the owner of a microfinance institution in the form of a one-member limited liability company.