Must a General Partner Be an Individual? May an Organization Be a Partner?

Who are the members of a partnership?

Under Clause 30, Article 4 of the Law on Enterprises 2020 (as amended and supplemented by Law No. 76/2025/QH15, effective from 01/7/2025) as follows:

“Members of apartnershipinclude general partners and limited partners.”

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Accordingly, members of a partnership include:

– General partners;

– Limited partners.

Must a general partner be an individual?

Under Clause 1, Article 177 of the Law on Enterprises 2020 on partnerships as follows:

“1. A partnership is an enterprise in which:

a) There must be at least 02 members who are joint owners of the company and conduct business together under a common name (hereinafter referred to as general partners). In addition to the general partners, the company may have additional limited partners;

b) General partners must be individuals and are liable with all of their assets for the obligations of the company;

c) Limited partners are organizations or individuals and are liable for the company’s debts only within the amount of capital committed to the company.”

Under the above provisions, a general partner must be an individual and is liable with all of their assets for the obligations of the company. Accordingly, a general partner must be an individual.

What are the restrictions on the rights of general partners?

Under Article 180 of the Law on Enterprises 2020 on restrictions on the rights of general partners as follows:

“Article 180. Restrictions on the rights of general partners

1. A general partner may not be the owner of a private enterprise; may not be a general partner of another partnership except with the consent of the remaining general partners.

2. A general partner may not, in their own name or in the name of another person, conduct business in the company’s lines of business for self-interest or to serve the interests of other organizations or individuals.

3. A general partner may not transfer part or all of their contributed capital in the company to another organization or individual without the approval of the remaining general partners.”

Accordingly, general partners are subject to certain restrictions, specifically the following:

– May not be the owner of a private enterprise; may not be a general partner of another partnership except with the consent of the remaining general partners.

– May not, in their own name or in the name of another person, conduct business in the company’s lines of business for self-interest or to serve the interests of other organizations or individuals.

– May not transfer part or all of their contributed capital in the company to another organization or individual without the approval of the remaining general partners.

May an organization be a member of a partnership?

Under Clause 30, Article 4 of the Law on Enterprises 2020, members of a partnership include general partners and limited partners. At the same time, under Clause 1, Article 177 of the Law on Enterprises 2020 on partnerships cited above, general partners must be individuals, while limited partners may be organizations or individuals.

Accordingly, an organization cannot be a general partner but may be a limited partner in a partnership.

What are the rights and obligations of limited partners in a partnership?

Article 187 of the Law on Enterprises 2020 specifically provides the rights and obligations of limited partners as follows:

– Limited partners have the following rights:

+ Participating in meetings, discussing and voting at the Members’ Council on amending and supplementing the company charter, amending and supplementing the rights and obligations of limited partners, on reorganization and dissolution of the company, and other contents of the company charter directly relating to their rights and obligations;

+ Sharing annual profits corresponding to the contributed capital ratio in the company’s charter capital;

+ Being provided with the company’s annual financial reports; having the right to request the Chairman of the Members’ Council and general partners to fully and truthfully provide information on the company’s business situation and results; examining the company’s accounting books, minutes, contracts, transactions, records and other documents;

+ Transferring their contributed capital in the company to others;

+ Conducting business in the company’s lines of business in their own name or in the name of another person;

+ Disposing of their contributed capital by bequest, donation, mortgage, pledge and other forms as prescribed by law and the company charter; upon death, the heir replaces the deceased member to become a limited partner of the company;

+ Sharing part of the remaining asset value of the company corresponding to the contributed capital ratio in the company’s charter capital upon dissolution or bankruptcy of the company;

+ Other rights as prescribed by this Law and the company charter.

– Limited partners have the following obligations:

+ Being liable for the company’s debts and other asset obligations within the amount of capital committed;

+ Not participating in managing the company and not conducting business in the name of the company;

+ Complying with the company charter and resolutions and decisions of the Members’ Council;

+ Other obligations as prescribed by this Law and the company charter.

Accordingly, upon becoming a limited partner in a partnership, one has the rights and obligations as prescribed above.

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