How Is a Deceased LLC Member’s Capital Handled?

What is the establishment capital contribution of a multi-member limited liability company?

Regulations on capital contribution of a multi-member limited liability company in Clause 18, Article 4 and Article 47 of the Law on Enterprises 2020 (as amended and supplemented by Law No. 76/2025/QH15, effective from 01/7/2025) are as follows:

“Article 4. Interpretation of terms

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In this Law, the following terms are understood as follows:

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18. Capital contribution is the contribution of assets to form the charter capital of the company, including capital contribution to establish the company or additional contribution to the charter capital of an established company.

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Article 47. Capital contribution for company establishment and issuance of contributed capital certificates

1. The charter capital of a multi-member limited liability company at enterprise establishment registration is the total value of the contributed capital committed by members and recorded in the company charter.

2. Members must contribute to the company in full and in the correct type of assets committed at enterprise establishment registration within 90 days from the date of issuance of the Enterprise Registration Certificate, excluding the time for transporting and importing contributed assets and carrying out administrative procedures to transfer asset ownership. During this period, members have rights and obligations corresponding to the committed contributed capital ratio. A company member may only contribute to the company a type of asset different from the committed asset with the approval of more than 50% of the remaining members.

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

a) A member who has not contributed as committed automatically ceases to be a member of the company;

b) A member who has not fully contributed the committed capital has rights corresponding to the contributed capital;

c) The uncontributed capital of members is offered for sale under the resolution or decision of the Members’ Council.

4. Where there are members who have not contributed or have not fully contributed the committed capital, the company must register changes in charter capital and the members’ contributed capital ratios to the contributed capital within 30 days from the last date for full contribution of contributed capital under Clause 2 of this Article. Members who have not contributed or have not fully contributed the committed capital are liable corresponding to the committed contributed capital ratio for the company’s financial obligations arising before the date the company registers changes in charter capital and the members’ contributed capital ratios.

5. Except as provided in Clause 2 of this Article, a capital contributor becomes a member of the company from the time the contributed capital is paid and the information on the capital contributor in points b, c and dd, Clause 2, Article 48 of this Law is fully recorded in the member register. At the time of full contribution of the contributed capital, the company must issue a contributed capital certificate to the member corresponding to the value of contributed capital.”

Under Article 47 of the Law on Enterprises 2020, the charter capital of a multi-member limited liability company at enterprise establishment registration is the total value of the contributed capital committed by members and recorded in the company charter. And members must contribute to the company in full and in the correct type of assets committed at enterprise establishment registration within 90 days from the date of issuance of the Enterprise Registration Certificate, excluding the time for transporting and importing contributed assets and carrying out administrative procedures to transfer asset ownership.

By what means can a member withdraw capital from a multi-member limited liability company?

Under Clause 2, Article 50 of the Law on Enterprises 2020, a member of a multi-member limited liability company may not withdraw contributed capital from the company in any form, except in the cases in Articles 51, 52, 53 and 68 of this Law. Accordingly, a member wishing to withdraw capital from a multi-member limited liability company must fall into one of the following cases:

Capital withdrawal where a member requests the company to repurchase the contributed capital under Article 51 of the Law on Enterprises 2020, specifically:

– A member has the right to request the company to repurchase his/her contributed capital if the member voted against the resolution or decision of the Members’ Council on the following matters:

+ Amending or supplementing the company charter contents relating to the rights and obligations of members and the Members’ Council;

+ Reorganizing the company;

+ Other cases under the company charter.

– The repurchase request must be in writing and sent to the company within 15 days from the date of adoption of the resolution or decision in Clause 1 of this Article.

– Within 15 days from the date of receiving the member’s request in Clause 1 of this Article, the company must repurchase the member’s contributed capital at market price or at a price determined under the principles in the company charter, unless the two parties agree on the price. Payment may only be made if, after full payment for the repurchased contributed capital, the company still pays in full its debts and other asset obligations.

– Where the company cannot pay for the requested repurchased contributed capital under Clause 3 of this Article, the member has the right to freely transfer his/her contributed capital to another member or a non-member of the company.

Capital withdrawal where a member transfers contributed capital under Article 52 of the Law on Enterprises 2020, specifically:

– Except as provided in Clause 4, Article 51, Clauses 6 and 7, Article 53 of this Law, a member of a multi-member limited liability company has the right to transfer part or all of his/her contributed capital to another person as follows:

+ Offer that contributed capital for sale to the remaining members in proportion to their contributed capital in the company under the same offering conditions;

+ Transfer under the same offering conditions to the remaining members in point a of this Clause to a non-member if the remaining members of the company do not buy or do not buy all within 30 days from the offering date.

– The transferring member retains rights and obligations to the company corresponding to the relevant contributed capital until the information on the buyer in points b, c and dd, Clause 2, Article 48 of this Law is fully recorded in the member register.

– Where the transfer or change of members’ contributed capital results in only one company member remaining, the company must organize management under the single-member limited liability company form and register changes to enterprise registration contents within 15 days from the date of completing the transfer.

Capital withdrawal in special cases under Article 53 of the Law on Enterprises 2020:

– Where a company member is an individual who dies, the heir under will or law of that member becomes a company member.

– Where a member is an individual declared missing by the Court, the member’s rights and obligations are exercised through the property manager of that member under civil law.

– Where a member is restricted in or lacks civil act capacity, or has difficulties in cognition or behavior control, the member’s rights and obligations in the company are exercised through a representative.

– The contributed capital of a member is repurchased by the company or transferred under Articles 51 and 52 of this Law in the following cases:

+ The heir does not wish to become a member;

+ The donee under Clause 6 of this Article is not approved by the Members’ Council as a member;

+ A company member that is an organization is dissolved or bankrupt.

– Where the contributed capital of a company member who is a deceased individual has no heir, the heir refuses the inheritance or is deprived of the inheritance right, such contributed capital is resolved under civil law.

– Where a member donates part or all of his/her contributed capital in the company to another person, the donee becomes a company member as follows:

+ If the donee is a statutory heir under the Civil Code, he/she automatically becomes a company member;

+ If the donee is not within point a of this Clause, he/she becomes a company member only when approved by the Members’ Council.

– Where a member uses contributed capital to repay debts, the payee has the right to use that contributed capital in one of two forms:

+ Become a company member if approved by the Members’ Council;

+ Offer for sale and transfer that contributed capital under Article 52 of this Law.

– Where a company member who is an individual is in temporary detention, serving a prison sentence, or serving an administrative handling measure at a compulsory drug rehabilitation facility or compulsory education facility, the member authorizes another person to exercise some or all of his/her rights and obligations in the company.

– Where a company member who is an individual is banned by the Court from practicing a profession or doing certain work, or a company member that is a commercial legal entity is banned by the Court from trading or operating in certain fields within the company’s business lines, the member may not practice the banned profession or work at that company, or the company temporarily suspends or terminates business in the related lines under the Court’s decision.

Capital withdrawal where the company reduces charter capital and returns contributed capital to company members under Clause 3, Article 68 of the Law on Enterprises 2020 as follows:

The company may reduce charter capital in the following cases:

– Returning part of contributed capital to members in proportion to their contributed capital in the company’s charter capital if it has continuously operated for 02 years or more from the date of enterprise establishment registration and ensures full payment of debts and other asset obligations after returning to members;

– The company repurchases members’ contributed capital under Article 51 of this Law;

– The charter capital is not fully and timely paid by members under Article 47 of this Law.

How is the contributed capital of a deceased limited liability company member handled?

Under Article 53 of the Law on Enterprises 2020 on handling the contributed capital of a deceased company member as follows:

– Where a company member is an individual who dies, the heir under will or law of that member becomes a company member.

– The contributed capital of a member is repurchased by the company or transferred under Articles 51 and 52 of this Law in the following cases:

+ The heir does not wish to become a member;

+ The donee under Clause 6 of this Article is not approved by the Members’ Council as a member;

+ A company member that is an organization is dissolved or bankrupt.

– Where the contributed capital of a company member who is a deceased individual has no heir, the heir refuses the inheritance or is deprived of the inheritance right, such contributed capital is resolved under civil law.”

Accordingly, under the above provisions, where a company member is a deceased individual, the heir under will or law of that member inherits the contributed capital and becomes a company member. If the heir does not wish to become a member, the member’s contributed capital is repurchased by the company or transferred as prescribed.

Where the contributed capital of a company member who is a deceased individual has no heir, the heir refuses the inheritance or is deprived of the inheritance right, such contributed capital is resolved under civil law.