Can a person be the Director of two 1-member limited liability companies?

Who is the Director of a single-member limited liability company?

According to the provisions of Clause 1, Article 82 of the Law on Enterprises 2020 on the Director and General Director of a single-member limited liability company as follows:

“Article 82. Director, General Director

1. The Board of Members or the President of the company appoints or hires a Director or General Director for a term of not more than 05 years to manage the daily business activities of the company. The Director or General Director is responsible before the law and the Board of Members or the President of the company for exercising his or her rights and obligations. Chairman of the Association Co-members, other members of the Board of Members or the President of the company may concurrently be the Director or General Director, unless otherwise provided by law or the company’s charter.”

Based on the above legal regulations, it can be understood that the Director of a one-member limited liability company is a position appointed or hired by the Board of Members or the Chairman of the company for a term of not more than 05 years to manage the company’s daily business activities. The Chairman of the Board of Members, other members of the Board of Members or the President of the company may concurrently hold this title, unless otherwise prescribed by law or the company’s Charter.

The Director or General Director is responsible before the law and the Board of Members or the President of the company for exercising their rights and obligations.

What rights and obligations does the Director of a single-member limited liability company have?

According to the provisions of Clause 2, Article 82 of the Law on Enterprises 2020, the rights and obligations of the Director and General Director of a single-member limited liability company are specifically as follows:

“Article 82. Director, General Director Director

…

2. The Director or General Director has the following rights and obligations:

a) Organize the implementation of resolutions and decisions of the Board of Members or the Chairman of the company;

b) Decide on issues related to the company’s daily business operations;

c) Organize the implementation of the company’s business plan and investment plan;

d) Promulgate the company’s internal management regulations;

dd) Appoint, dismiss, dismiss company managers, except for positions under the authority of the Board of Members or the Company’s President;

e) Sign a contract on behalf of the company, except in cases under the authority of the Chairman of the Board of Members or the President of the company;

g) Propose a plan for the company’s organizational structure;

h) Submit the annual financial report to the Board of Members or the President of the company;

i) Propose a plan for using profits or handling losses in business business;

k) Labor recruitment;

l) Other rights and obligations specified in the company charter and labor contract.”

At the same time, the Director and General Director of a single-member limited liability company have responsibilities as prescribed in Article 83 of the Law on Enterprises 2020, specifically can:

“Article 83. Responsibilities of members of the Board of Members, Company President, Director, General Director and other managers, Controllers

1. Comply with the law, the company Charter, and the company owner’s decisions in exercising assigned rights and obligations.

2. Carry out assigned rights and obligations honestly, carefully, and in the best way to ensure the maximum legitimate interests of the company and its owners.

3. Loyal to the interests of the company and its owners; Do not abuse your position or position and use information, know-how, business opportunities, or other company assets for personal gain or to serve the interests of other organizations or individuals.

4. Timely, fully and accurately notify the company owner about the enterprise in which he/she owns or has shares or controlling capital contribution and the enterprise in which his/her related person owns, jointly owns or separately owns shares or controlling capital contribution. The notice must be kept at the company’s headquarters.

5. Other responsibilities according to the provisions of this Law and the Company’s Charter.”

What are the standards to become a Director of a single-member limited liability company?

A person who wants to become a Director or General Director of a single-member limited liability company must meet the standards specified in Clause 3, Article 82 of the Law on Enterprises 2020, as follows: following:

“Article 82. Director, General Director

…

3. The Director or General Director must have the following standards and conditions:

a) Not subject to provisions in Clause 2, Article 17 of this Law;

b) Have professional qualifications and experience in business administration of the company and other conditions prescribed by the company’s Charter.”

Accordingly, the cases in Clause 2, Article 17 of the Law on Enterprises 2020 that regulate organizations and individuals that do not have the right to establish and manage businesses in Vietnam include:

“Article 17. Right to establish, contribute capital, buy shares, purchase capital contributions and manage enterprises

…

2. The following organizations and individuals do not have the right to establish and manage businesses in Vietnam:

a) State agencies and units of the people’s armed forces use state assets to establish business enterprises to make private profits for their agencies and units;

b) Cadres, civil servants and public employees according to the provisions of the Law on Cadres and Civil Servants and the Law on Public Employees;

c) Officers, non-commissioned officers, professional soldiers, workers, and defense officials in agencies and units of the Vietnam People’s Army; officers, professional non-commissioned officers, and police workers in agencies and units of the Vietnam People’s Police, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises or manage state-owned enterprises;

d) Leading and professional managers in state-owned enterprises as prescribed in Point a, Clause 1, Article 88 of this Law, except those appointed as authorized representatives to manage the State’s capital contribution in other enterprises;

d) Minors; people with limited civil act capacity; people who have lost their civil act capacity; people with difficulty in cognition and behavior control; organizations without legal status;

e) People who are being prosecuted for criminal liability, detained, are serving prison sentences, are serving administrative measures at compulsory drug treatment facilities, compulsory education establishments or are banned by the Court from holding certain positions, practicing professions or doing certain jobs; Other cases according to the provisions of the Bankruptcy Law and the Law on Prevention and Combat of Corruption.

If requested by the Business Registration Authority, the person registering to establish a business must submit a criminal record card to the Business Registration Authority;

g) Organizations are commercial legal entities banned from doing business or operating in certain fields according to the provisions of the Penal Code.”

Thus, according to the law, a person who is not prohibited from establishing and managing a business in Vietnam, has professional qualifications, experience in business administration of the company and other conditions stipulated by the company’s charter means that person meets the standards of a Director or General Director of a 1-member limited liability company. The law does not limit the number of single-member limited liability companies that one person can be the director of, so in your case, you can hire the person who is currently the director of the other single-member limited liability company to be the director of your company.