Introducing The Types Of Companies Popular In Vietnam Today

Currently, the economy is growing, and the need to establish businesses for individuals and organizations is increasing. And many people still wonder, when setting up a business in Vietnam, what type of company should you choose? A joint-stock company, a one-member limited liability company, or a limited liability company with two or more members? And what are the conditions for establishing a company in Vietnam? In the article below, the Van Luat Law Firm will solve your problems.

Concepts of types of companies:

One member limited liability company

-According to Article 74 of the Enterprise Law 2020, a one-member limited liability company is an enterprise:

-Owned by an organization or an individual (from now on referred to as a “company owner”); the company owner is responsible for the company’s debts and other asset obligations within the scope of the company’s charter capital.

A one-member limited liability company has legal status from the date of issuance of the Enterprise Registration Certificate.

-A one-member limited liability company is not entitled to issue shares.

-A one-member limited liability company is issued a bond.

Introducing The Types Of Companies Popular In Vietnam Today

Limited liability company with two or more members

According to Article 46 of the Enterprise Law 2020, a limited liability company with two or more members is an enterprise, of which

Members may be organizations or individuals; the minimum number of members is two and does not exceed 50 members.

Members shall be responsible for debts, and other property obligations of the enterprise within the scope of the capital contributed to the enterprise, except for the cases specified in Clause 4, Article 47 of this law;

Members’ capital contributions may only be transferred following Articles 51, 52, and 53 of this Law.

-A limited liability company with two or more members has legal status from the date of issuing the Enterprise Registration Certificate.

-Limited liability companies with two or more members are not entitled to issue shares.

-Limited liability companies of two or more members are issued bonds.

Joint Stock Company

According to Article 111 of the Enterprise Law 2020, joint-stock companies are enterprises, of which

Charter capital is divided into several equal parts, called shares,

Shareholders may be organizations or individuals; the minimum number of shareholders is 3, and there is no limit to the maximum number of shareholders.

-Shareholders are solely responsible for the debts, and other asset obligations of the enterprise within the amount of capital contributed to the enterprise.

Shareholders can freely transfer their shares to others, except for the cases specified in Clause 3, Article 120, and Clause 1, Article 127 of this Law.

-Joint-stock companies with legal status from the date of issuance of the enterprise registration certificate

-The joint-stock company has the right to issue shares, bonds, and other mineral securities.

The difference between business wreckages

Criteria	One Member Limited Liability Company	Limited liability company of two or more members	Joint Stock Company
Number of members	01 contributing member is the owner of the company	A minimum of 02 members and a maximum of 50 members contribute capital	At least 03 shareholders, no limit to the maximum number of shareholders
Property liability	Responsible within the scope of charter capital	Responsible for the amount of capital contributed to the business	Responsible for the amount of capital contributed to the business
Right to issue securities	Shares cannot be issued	Shares cannot be issued	Have the right to issue shares to raise capital
Capital transfer	In case of converting part of capital to others, procedures for converting the type of enterprise to a limited liability company of two or more members must be carried out.	Transfer of internal shares in the company or may be transferred to outsiders if members do not agree to buy back the contributed capital	Within 3 years from the time of establishment of the enterprise, it can only be transferred to the founding shareholders. If you want to transfer it to someone else, you must be approved by other founding shareholders.

III. Conditions for establishing various types of companies in Vietnam

Conditions on owners

Organizations and individuals must have total civil act capacity and are not subject to being prohibited by the State from establishing or managing enterprises under Clause 2 Article 17 of the Enterprise Law 2020.

Capital conditions

The investment capital to establish the enterprise must be suitable to the enterprise’s field, industry, and business size. For enterprises with business lines that need legal means, the initial investment capital is not lower than this legal capital level.

Conditions for business lines

-The profession in which the enterprise registers business is not prohibited by law from doing business.

If the enterprise registering to do business in the professions prescribed by law must have a practicing certificate, and the enterprise manager or operator must have a practicing certificate stored at the company’s headquarters.

Conditions on company name

-The business name given does not coincide or confuse with other registered businesses.

At the same time, the business name must include at least two components: the type of business and the company’s name.

“NCT Limited Liability Company” type is: “LIMITED LIABILITY”; the private name is: “NCT.”

Conditions for headquarters

-The head office is owned or legally used by the enterprise.

-Apartments with functions to stay in are not allowed to place the address of the company’s headquarters to perform business functions there.

As such, Van Luat Law Firm has provided you with information about the types of businesses that are common today. In addition, if there are some issues related to the procedure that you do not understand well, you can immediately call Van Luat to receive the most reliable advice.

(Source: https://thuvienphapluat.vn

This was posted on August 1, 2010.