Is it possible for a member of a 2-member limited liability company to donate a capital contribution to his brother-in-law?

Are members of a limited liability company with 2 or more members entitled to donate their capital contribution?

Pursuant to Clause 1, Article 49 of the Law on Enterprises 2020 (amended by Clause 1, Article 7 of the Law amending the Law on Public Investment, the Law on Investment in the form of public-private partnerships, the Investment Law, the Housing Law, the Bidding Law, the Electricity Law, the Enterprise Law, the Special Consumption Tax Law and the Civil Judgment Enforcement Law 2022) regarding the rights of members of LLCs with 2 or more members:

“Article 49. Rights of company members

1. Company members have the following rights:

a) Attend meetings of the Board of Members, discuss, make recommendations, and vote on issues within the authority of the Board of Members;

b) Have a number of votes corresponding to the capital contribution, except for the case specified in Clause 2, Article 47 of this Law;

c) Receive profits in proportion to the capital contribution after the company has fully paid taxes and fulfilled other financial obligations according to the provisions of law;

d) Receive a share of the remaining value of the company’s assets in proportion to the capital contribution when the company dissolves or goes bankrupt;

d) Have priority in contributing more capital to the company when the company increases its charter capital;

e) Dispose of your capital contribution by partial or complete transfer, donation and other forms according to the provisions of law and the company’s Charter;

g) On your own or on behalf of the company, initiate a civil liability lawsuit against the Chairman of the Board of Members, Director or General Director, legal representative and other managers according to the provisions of Article 72 of this Law;

h) Other rights as prescribed by this Law and the company’s Charter.”

Based on the above regulations, you have the right to dispose of your capital contribution by donating according to the provisions of law and the Charter of a limited liability company with 2 or more members.

When does a person who receives a capital contribution from a member of a limited liability company with 2 or more members become a member of the company?

Pursuant to Clause 6, Article 53 of the Law on Enterprises 2020, the person who is gifted the capital contribution of a member of a limited liability company with 2 or more members will become a member of the company in the following cases:

“Article 53. Handling of capital contribution in some special cases special

…

6. In case a member donates part or all of his/her capital contribution in the company to another person, the recipient becomes a member of the company according to the following regulations:

a) The recipient is an heir under the law according to the provisions of the Civil Code, then this person is automatically a member of the company. company;

b) A donor who is not subject to the provisions of Point a of this Clause will only become a member of the company when approved by the Board of Members.”

In your school, you are a member of a limited liability company with 2 or more members and donate the capital contribution to your brother-in-law (not subject to legal inheritance according to the provisions of the Civil Code), so your brother-in-law only becomes a member of the Company when approved by the Board of Members.

What are the procedures for changing members of a limited liability company with 2 or more members due to donation of capital contributions?

Step 1: Prepare application documents to change members due to donation of capital contribution within 10 days from the date of change in membership. Documents specified in Clause 1 and Point b, Clause 5, Article 52 of Decree 01/2021/ND-CP, specifically as follows:

– Notice of change in business registration content signed by the legal representative of the enterprise;

– List of members of a limited liability company with two or more members. The list of members must include the signatures of new members and members whose capital contributions have changed; it is not required to have the signatures of members whose capital contributions have not changed;

– Resolutions, decisions and copies of minutes of meetings of the Board of Members on receiving new members;

– Donation contract for capital contribution;

– A copy of the individual’s legal documents in case the new member is an individual, a copy of the individual’s legal documents for the authorized representative.

– Document from the Investment Registration Authority approving capital contribution, stock purchase, capital contribution purchase by foreign investors, economic organizations with foreign investment capital in cases where capital contribution registration procedures, stock purchase, capital contribution purchase must be carried out according to the provisions of the Investment Law.

Step 2: Submit application to Business Registration Office – Department of Planning and Investment.

Within 03 working days from the date of receipt of the application, the Business Registration Authority is responsible for reviewing the validity of the application and issuing a new Business Registration Certificate; In case the dossier is not valid, the Business Registration Authority must notify the enterprise in writing of the content that needs to be amended or supplemented. In case of refusal to issue a new Business Registration Certificate, the enterprise must be notified in writing and clearly state the reason.

Step 3: Return results.