Splitting a Multi-Member LLC: Must Employees Be Notified?

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Is a multi-member limited liability company required to notify employees when splitting the company?

The procedures for splitting a multi-member limited liability company are prescribed in Clause 3, Article 199 of the Law on Enterprises 2020:

Division of enterprises
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3. Procedures for division of limited liability companies and joint-stock companies are prescribed as follows:
a) The Members’ Council, the company owner, or the General Meeting of Shareholders of the divided company shall approve a resolution or decision on the division in accordance with this Law and the company charter. The resolution or decision on division must contain the following principal contents: name and head office address of the divided company; name of the new company to be established; plan for using employees; method of division; value of assets, rights, and obligations transferred from the divided company to the new company; and time limit for implementing the division. The resolution or decision on division must be sent to all creditors and notified to employees within 15 days from the date of issuance of the decision or approval of the resolution;
b) Members, the company owner, or shareholders of the new company shall approve the charter, elect or appoint the Chairperson of the Members’ Council, the company President, the Board of Directors, the Director or General Director, and carry out enterprise registration in accordance with this Law.

Thus, under the regulations, when a multi-member limited liability company is divided, the resolution or decision on division must be sent to all creditors and notified to employees within 15 days from the date of issuance of the decision or approval of the resolution.

How can a multi-member limited liability company be divided?

The forms of division of a multi-member limited liability company are prescribed in Clause 1, Article 199 of the Law on Enterprises 2020 as follows:

Division of enterprises
1. A limited liability company or a joint-stock company may be divided by transferring part of its assets, rights, obligations, members, and shareholders to establish one or more new limited liability companies or joint-stock companies (hereinafter referred to as the new company) without terminating the existence of the divided company.
2. The divided company must register changes to its charter capital and the number of members or shareholders corresponding to the reduced contributed capital, shares, and number of members or shareholders (if any); and at the same time carry out enterprise registration for the new companies.

Thus, under the regulations, a multi-member limited liability company may be divided by transferring part of the assets, rights, obligations, and members of the existing company to establish one or more new limited liability companies without terminating the existence of the divided company.

What does the enterprise registration dossier for the division of a limited liability company include?

The enterprise registration dossier is prescribed in Clause 2, Article 25 of Decree 168/2025/ND-CP as follows:

Enterprise registration dossiers for companies established on the basis of division, split, or consolidation of companies
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2. In the case of division of a limited liability company or a joint-stock company under Article 199 of the Law on Enterprises, in addition to the documents prescribed in Articles 23 and 24 of this Decree, the enterprise registration dossier for the new company must include the following documents:
a) The resolution or decision on the division of the company in accordance with Article 199 of the Law on Enterprises;
b) A copy of the minutes of the Members’ Council meeting for a multi-member limited liability company, or of the General Meeting of Shareholders for a joint-stock company, regarding the division of the company.

Thus, under the regulations, the enterprise registration dossier for the division of a limited liability company includes the following documents:

(1) Documents prescribed in Article 23 of Decree 168/2025/ND-CP:

– The enterprise registration application.
– The company charter.
– The list of members.
– Copies of the following documents:

+ Legal documents of the individual for the enterprise’s legal representative;

+ Legal documents of the individual for company members who are foreign investors being individuals;

Legal documents of the organization for members who are foreign investors being organizations;

Legal documents of the individual for the authorized representative of members who are foreign investors being organizations, and the document appointing the authorized representative.

For members that are foreign organizations, copies of the organization’s legal documents must be consularly legalized;

+ The investment registration certificate for enterprises established by or with the participation of foreign investors or economic organizations with foreign-invested capital.

(2) The resolution or decision on the division of the company.

(3) A copy of the minutes of the Members’ Council meeting regarding the division of the company.

Notes on Applying Current Legal Regulations

This article belongs to the Corporate & M&A Knowledge series and is presented for reference purposes, helping readers understand the legal issue at an overview level before preparing dossiers or carrying out transactions.

Legal regulations may change over time, by locality, dossier type, and specific circumstances. If you need to determine the exact legal basis applicable to your dossier, please contact an ANT Legal lawyer at 0966.475.966 for verification and advice before proceeding.

Common Risks to Watch Out For

Applying legal instruments that have been amended, supplemented, or replaced.
Preparing incomplete dossiers, documents, or evidence.
Misunderstanding the conditions, procedures, time limits, or competent authority.
Signing, filing, or carrying out transactions without fully assessing legal risks.

How Can ANT Legal Help?

ANT Legal helps review your specific situation, check dossiers, determine the applicable legal basis, advise on handling plans, and represent clients in dealings with individuals, organizations, or competent authorities when necessary.

For quick advice, please contact our lawyers at 0966.475.966.

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