Overview of legal entities in Vietnam

Overview of legal entities in Vietnam - HTlaw

I. Limited liability company

 Single-member limited liability companyMultiple-member limited liability company
General features- The owner/member of the company is responsible for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise.
- The company must not issue shares except for equitization.
- The company may issue bonds in accordance with Law on enterprise and relevant laws;
Number of membersAn organization or an individual as an ownerThere are from 02 to 50 members who are organizations and individuals
Organizational structure- In case of an individual as an owner:
+ The company has a President, Director or General Director.
+ The owner of the company is the President of the company and can concurrently or hire another person to act as the Director or General Director.
- In case the organization is the owner: Operating under one of the following two models:
+ The President, Director or General Director;
+ Board of members, Director or General Director.
The company has a Board of Members, President of the Board of Members, Director or General Director.

II. Partnerships

* Number of members:

There are least 02 partners (individuals) that are joint owners of the company and do business under the same name. ((hereinafter referred to as “general partner”). There can be limited partners (individuals or organizations) in addition to general partners.

* Limited liability of company members:

– The general partner shall be an individual whose liability for the company’s obligations is equal to all of his/her assets.

– The limited partner can be an organization or an individual whose liability for the company’s debts is equal to the promised capital contribution.

* Organizational structure

The Board of Members consists of all members and shall elect a partner as the President of the Board of Members, who may concurrently hold the position of Director or General Director of the partnership unless otherwise prescribed by the charter.

* Notes:

A partnership must not issue any kind of securities.

III. Joint Stock company

* Number of members:

Shareholders can be organizations and individuals.

* Limited liability of shareholders:

Normally, a joint stock company may choose one of the following models:

– General Meeting of Shareholders, Board of Directors, Board of Controllers and Director/General Director. If the joint stock company has fewer than 11 shareholders and the shareholders that are organizations hold less than 50% of the company’s total shares, a Board of Controllers is not mandatory;

– General Meeting of Shareholders, Board of Directors and Director/General Director. In this case, at least 20% of the members of the Board of Directors shall be independent members and there has to be an audit committee affiliated to the Board of Directors.

* Notes:

– A joint stock company may issue shares, bonds and other kinds of securities.

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