Chương III Luật doanh nghiệp 2005: Công ty trách nhiệm hữu hạn

Chapter III

LIMITED LIABILITY COMPANIES

Section I. LIMITED LIABILITY COMPANIES WITH TWO OR MORE MEMBERS

Article 38.- Limited liability companies with two or more members

1. A limited liability company is an enterprise of which:

a/ Members may be organizations and/or individuals; the total number of members shall not exceed fifty;

b/ Members are responsible for debts and other property liabilities of the enterprise within the amount of capital that they have committed to contribute to the enterprise;

c/ Capital shares of the members may only be transferred in accordance with Articles 43, 44 and 45 of this Law.

2. Limited liability companies shall have a legal person status from the time of receiving the business registration certificates.

3. Limited liability companies shall not be entitled to issue shares.

Article 39.- Capital contribution and grant of capital share certificates

1. Members must contribute capital fully and on time with types of assets as committed. Any change in the type of assets that members have committed to contribute must be approved by all other members and informed in writing by the company to the business registration office within seven working days as from the date of approval of such a change.

The representative-at-law of a company must inform in writing the progress of capital contribution to the business registration office within fifteen days as from the date of commitment to contribute capital, and is personally liable for any damage caused to the company or other persons due to his/her late, inaccurate, untruthful and incomplete report.

2. If a member fails to contribute capital fully and on time as committed, the amount not yet contributed shall be considered his/her debt toward the company; such a member shall be liable for any damage caused by his/her failure to fully contribute capital on time as committed.

3. If the capital contribution is not fully made within the time limit as last committed, the capital amount not yet contributed shall be dealt with in one of the following ways:

a/ One or several members agree to contribute such amount;

b/ Other persons are mobilized to contribute capital to the company;

c/ All other members contribute such amount in proportion to their capital shares in the company's charter capital.

When the capital amount is fully contributed under the provisions of this Clause, members that fail to make capital contribution as committed shall, as a matter of fact, not be considered members of the company, which must register this change in business registration contents in accordance with this Law.

4. At the time of full contribution of capital amounts, members shall be issued a capital share certificate by the company. A capital share certificate shall contain the following principal information:

a/ Company name and address of company head office;

b/ Number and date of grant of the business registration certificate;

c/ The company's charter capital;

d/ Full name, permanent address, nationality, number of the people's identity card, passport or other lawful personal certification of the member being an individual: name, head office, nationality, number of the establishment decision or business registration certificate of the member being an organization;

e/ Capital share and its value:

f/ Number and the date of grant of the certificate;

g/ Full name and signature of the representative-at-law of the company.

5. If the capital share certificate is lost, torn, burnt or otherwise destroyed, it may be re-issued by the company.

Article 40.- Member registration books

1. A member registration book must be made by the company as soon as the business registration is made. It must contain the following principal contents:

a/ Company name and address of company head office;

b/ Full name, permanent address, nationality, number of the people's identity card, passport or other lawful personal certification of the member being an individual; name, head office, nationality, number of the establishment decision or business registration certificate of the member being an organization;

c/ Value of contributed capital at the time of capital contribution and capital share of each member; time of capital contribution; type, quantity and value of every asset used to make capital contribution;

d/ Signature of the member being an individual or the representative-at-law of the member being an organization;

e/ Number and date of grant of the capital share certificate.

2. Member registration books shall be kept at head offices of companies.

Article 41.- Rights of members

1. Members of a limited liability company with two or more members shall have the following rights:

a/ To participate in the Members' Council meetings, discuss, make suggestions and vote on matters falling under the competence of the Member's Council;

b/ To vote in proportion to their capital share;

c/ To check, review, search, copy or extract the member registration book, transactions recording and monitoring books, accounting books, annual financial statements, minutes of Member's Council meetings, and other papers and documents of the company;

d/ To be distributed profits in proportion to their capital share after the company has fully paid taxes and fulfilled other financial obligations according to law;

e/ To be distributed the value of remaining assets in proportion to their capital share when the company is dissolved or goes bankrupt;

f/ To be given priority in contributing more capital into the company when the company increases its charter capital; transfer part or the whole of their capital shares in accordance with this Law;

g/ To lodge complaints about or initiate lawsuits against the director or general director who fails to fulfill his/her obligations, causing damage to members or the company according to the provisions of law;

h/ To dispose of their capital shares by transfer, bequeath, donation or otherwise according to the provisions of law and the company's charter;

i/ To have other rights as provided for by this Law and the company's charter.

2. A member or group of members holding more than 25% of the charter capital or a smaller ratio as provided for in the company's charter, except the case stated in Clause 3 of this Article, shall be entitled to convene a Members' Council meeting to decide on matters falling under competence;

3. If the company has a member holding more than 75% of the charter capital and the company's charter does not provide any ratio smaller than that stated in Clause 2 of this Article, the group of all minor members shall automatically have the right stated in Clause 2 of this Article.

Article 42.- Obligations of members

1. To naake capital contribution fully and on time as committed and be liable for debts and other property liabilities of the company within the amount of capital committed to contribute; not to withdraw capital from the company in any form, except the cases stated in Articles 43, 44, 45 and 60 of this Law.

2. To observe the company's charter;

3. To abide by decisions of the Members' Council;

4. To perform other obligations as provided for by this Law;

5. To be liable individually when acting on behalf of the company to:

a/ Violate the laws;

b/ Conduct business or other transactions not in the interest of the company but causing damage to other persons;

c/ Pay off undue debts when there is a financial danger facing the company.

Article 43.- Buy-back of capital shares

1. A member shall be entitled to request the company to buy back his/her capital share if such a member votes against decisions of the Members' Council regarding the following matters:

a/ Amendment and/or supplementation of contents of the company's charter concerning rights and obligations of members, the Members' Council;

b/ Reorganization of the company;

c/ Other matters as provided for in the company's charter.

The request for buy-back of capital share must be made in writing and submitted to the company within fifteen days as from the date of approval of decisions on matters specified at Points a, b, and c of this Clause.

2. Upon a member's request mentioned in Clause 1 of this Article, if an agreement on the price of the capital share cannot be reached, the company must buy back that amount at the market price or the price determined on the principles provided for in the company's charter within fifteen days as from the date of receiving the request. Payment shall be made only if the company is capable of paying off all due debts and other financial obligations after fully paying for such a buy-back.

3. If the company does not buy back the capital share as provided for in Clause 2 of this Article, the requesting member shall be entitled to transfer his/her capital share to other members or anyone else.

Article 44.- Transfer of capital shares

Except for the case stated in Clause 6, Article 45 of this Law, a member of the limited liability company with two or more members shall be entitled to transfer partially or wholly his/her capital share to a third party according to the following provisions:

1. Such a capital share must be offered under the same conditions to all other members of the company in proportion to their capital shares.

2. Such a capital share may be transferred to a non-member person only if all remaining members of the company refuse to buy or are unable to buy up such a capital share within thirty days as from the date of offer.

Article 45.- Handling of capital shares in other circumstances

1. If an individual-member of a limited liability company is dead or declared to be dead by the court, his/her testamentary heir or heir-at-law shall become member of the company.

2. If a member has his/her civil act capacity restricted or has lost it, his/her rights and obligations shall be performed through his/her guardian.

3. The capital share of a member shall be bought back by the company or transferred in accordance with Articles 43 and 44 of this Law in the following cases:

a/ That member's heir refuses to become member of the company;

b/ The donee stated in Clause 5 of this Article is not approved by the Members' Council to become member of the company;

c/ The member is an organization that is dissolved or goes bankrupt.

4. If an individual-member is dead and has no heir or his/her heir refuses or is deprived of the right to inherit his/her capital share, such capital share shall be handled in accordance with the civil law.

5. A member shall be entitled to donate partially or wholly his/her capital share in the company to another person.

The donee shall become a member of the company if he/she is either a relative of the donating member within three generations of kinship.

Otherwise, the donee may become member of the company if so accepted by the Members' Council.

6. In cases where a member uses his/her capital share to pay debts, the person who receives the capital share as payment may use such amount in either of the following two ways:

a/ Become member of the company if so accepted by the Member's Council;

b/ Offer and transfer that capital share in accordance with Article 44 of this Law.

Article 46.- Management organizational structure of companies

A limited liability company with two or more members has a Members' Council, chairman of the Members' Council and director or general director. A company with eleven or more members must set up a Control Board. A Control Board may be set up in a company with less than eleven members to meet its management requirements. Rights, obligations, criteria, conditions and working rules of the Control Board and its head shall be provided for in the company's charter.

Either the chairman of the Members' Councilor director or general director shall be representative-at-law of the company as provided for in the company's charter. The representative-at-law of a company must permanently reside in Vietnam. If his/her absence in Vietnam lasts more than thirty days, he/she must authorize in writing another person in accordance with the company's charter to exercise his/her rights and obligations.

Article 47.- The Members' Council

1. All members shall constitute the Members' Council which is the highest decision-making organ of a company. Organization-members shall appoint their authorized representatives in the Members' Council. Meetings of the Members' Council shall be provided for in the company's charter but must be convened at least once a year.

2. The Member's Council has the following rights and obligations:

a/ To decide on the development strategy and annual business plans of the company;

b/ To decide on the increase or decrease of the charter capital, time and methods for mobilizing capital;

c/ To decide on methods of investment and investment projects valued at over 50% of total value of assets recorded in the financial statement most recently published by the company or at a smaller ratio provided for in the company's charter;

d/ To decide on methods of market development and marketing, and technology transfer; approve contracts of borrowing, lending and selling assets valued at 50% or more of total value of assets recorded in the financial statement most recently published by the company or at a smaller ratio provided for in the company's charter;

e/ To elect, remove or dismiss the chairman of the Members' Council; decide to appoint, remove, dismiss, sign or terminate contracts with the director or general director, chief accountant and other managers as provided for in the company's charter;

f/ To decide on salaries, bonuses and other benefits of the director or general director, chief accountant and other managers as provided for in the company's charter;

g/ To adopt annual financial statements and plans for using or distributing profits as well as handling losses of the company;

h/ To decide on the management organization structure of the company;

i/ To decide on opening of subsidiary companies, branches and/or representative offices;

j/ To amend and/or supplement the company's charter;

k/ To decide on the company's reorganization;

l/ To decide on dissolution or bankruptcy of the company;

m/ Other rights and duties as provided for by this Law and the company's charter.

Article 48.- Authorized representatives

1. Appointment of an authorized representative must be made in writing and notified to the company and the business registration office within seven working days as from the date of appointment. The notification must contain the following details:

a/ Name, address of the head office, nationality, number and date of the establishment decision or business registration certificate;

b/ Capital share, number and date of grant of the capital share certificate;

c/ Full name, permanent address, nationality, number of the people's identity card, passport or other lawful personal certification of the authorized representative;

d/ Duration of authorization;

e/ Full names, signatures of the representative-at-law and authorized representative of the authorizing member.

Replacement of the authorized representative must be notified to the company and the business registration office within seven working days as from the date of decision and become valid from the date on which the notification is received by the company.

2. The authorized representative must satisfy the following criteria and conditions:

a/ Having full civil act capacity;

b/ Not being prohibited from establishing and managing an enterprise;

c/ Having professional qualifications and experience in business management or in the major business line of the company;

d/As for subsidiary companies of a company in which the State-owned capital share or shares account for more than 50% of the charter capital, wives or husbands, fathers, adoptive fathers, mothers, adoptive mothers, children, adopted children, or siblings of the managers and persons who have competence to appoint managers of that company shall not be appointed to be authorized representatives in its subsidiary companies.

3. The authorized representative shall act on behalf of the authorizing member in exercising all rights and performing all obligations of a member of the Members' Council as provided for by this Law. Any restriction by the authorizing member on his/her authorized representative in exercising rights of a member through the Members' Council shall not be legally valid towards a third party.

4. The authorized representative is obliged to attend all meetings of the Members' Council and exercise rights and perform obligations of a member of the Members' Council in a honest, careful and optimal manner for the purpose of protecting to the maximum benefits of the authorizing member and the company.

5. Voting by the authorized representative is in proportion to the amount of capital share he/she is authorized to represent.

Article 49.- Chairman of the Members' Council

1. The Members' Council shall elect one of its members to be the chairman. The chairman may concurrently hold the position of director or general director.

2. The chairman shall have the following rights and duties:

a/ To prepare, or organize the preparation of, working programs and plans of the Members' Council;

b/ To prepare, or organize the preparation of, the agenda, contents and materials for meetings of the Members' Council or the members' comments;

c/ To convene and preside meetings of the Members' Council or organize the gathering of the members' comments;

d/ To supervise, or organize the supervisions of, the implementation of decisions made by the Members' Council;

e/ To sign on behalf of the Members' Council its decisions;

f/ Other rights and obligations as provided for by this Law and the company's charter.

3. The term of the chairman of the Members' Council shall not exceed five years. The chairman of the Members' Council may be re-elected for unlimited number of terms.

4. That the chairman is the representative-at-law of the company as provided for in the company's charter must be clearly stated in all transactional papers.

5. During his/her absence, the chairman shall authorize a member of the Members' Council to exercise his/her rights and duties in accordance with principles provided for in the company's charter. If no member is authorized or the chairman is incapable of working, remaining members shall elect by principle of majority vote one of them to temporarily exercise rights and duties of the chairman of the Members' Council.

Article 50.- Convention of meetings of the Members' Council

1. A meeting of the Members' Council may be convened at any time at the request of its chairman or a member or group of members as provided for in Clause 2 and Clause 3, Article 41 of this Law. Meetings of the Members' Council must be held at the head office of the company, unless otherwise provided for in the company's charter.

The chairman of the Members' Council shall prepare, or organize the preparation of, the agenda, contents, documents of and convene the meeting. Members may make written recommendations on the meeting agenda. A recommendation must contain the following contents:

a/ Full name, permanent address, nationality, number of the people's identity card, passport or other lawful personal certification of the member, for individuals; name, address, nationality, number of the establishment decision or business registration certificate of the member, for organizations; full name and signature of the member or authorized representative;

b/ Capital share, number and date of grant of the capital share certificate;

c/ Contents recommended for inclusion in the meeting agenda;

d/ Reasons for recommendations;

The chairman of the Member's Council must accept the recommendation and incorporate it into the meeting agenda if it contains all above-mentioned contents and is sent to the head office at least one working day before the date of opening the meeting of the Members' Council; the recommendation that is submitted immediately before opening the meeting of the Members' Council may be accepted if it is approved by a majority of members attending the meeting.

2. The meeting invitation may be notified in the form of invitation card, telephone, fax, telex or other electronic means as provided for in the company's charter and must be sent directly to each member. The meeting invitation must clearly specify the time, venue and agenda of the meeting.

The agenda and materials of a meeting must be sent to all members before opening of the meeting. Materials related to amendment and supplementation of the company's charter, development orientations of the company, annual financial statements, reorganization or dissolution of the company must be sent to all members at least two working days before opening of the meeting. The time limit for sending other meeting materials shall be provided for in the company's charter.

3. A member or group of members as provided for in Clause 2 and Clause 3, Article 41 of this Law shall be entitled to convene a meeting of the Members' Council if the chairman of the Members' Council does not convene the meeting at the request of such member or group of members within fifteen days as from the date of receiving the request; in this case, if it is deemed necessary, the business registration office may be invited to oversee the organization and proceedings of the meeting; at the same time, such member himself/herself or group of members themselves or on behalf of the company may take legal action against the chairman for his/her failure to duly perform his/her management obligations, causing losses to their legitimate interests.

4. The request for convening a meeting of the Members' Council as provided for in Clause 3 of this Article must be made in writing and contain the following principal contents:

a/ Full name, permanent address, nationality, number of the people's identity card, passport or other lawful personal certification of the member, for individuals; name, address, nationality and number of the establishment decision or business registration certificate of the member, for organizations; capital share, number and date of grant of the capital share certificate;

b/ Reasons for convening a meeting of the Members' Council and matters to be settled;

c/ Proposed agenda;

d/ Full name and signature of each requesting member or their authorized representatives.

5. If the request for convening a meeting of the Members' Council does not contain full contents as provided for in Clause 4 of this Article, that fact must be notified to the requesting member or group of members by the chairman within seven working days from the date of receipt of such request.

In other cases, the chairman of the Members' Council must convene a meeting of the Members' Council with fifteen days as from the date of receipt of the request.

If the chairman of the Members' Council fails to convene a meeting, he/she shall be individually liable before law for any damage caused to the company and the concerned members of the company. In this case, the requesting member or group of members shall be entitled to convene a meeting of the Members' Council. Reasonable expenses for convening and conducting the meeting shall be reimbursed by the company.

Article 51.- Conditions and formalities of a meeting of the Members' Council

1. A meeting of the Members' Council may be conducted if all participating members own at least 75% of the charter capital; a specific percentage shall be provided for in the company's charter.

2. If the first meeting fails to open due to not satisfying the condition stated in Clause 1 of this Article, the second meeting shall be convened within fifteen days after the proposed opening date of the first meeting. The second meeting may be conducted if all participating members own at least 50% of the charter capital; a specific percentage shall be provided for in the company's charter.

3. If the second meeting fails to open due to not satisfying the condition stated in Clause 2 of this Article, the third meeting shall be convened within ten working days after the proposed opening date of the second meeting. The third meeting may be conducted regardless of the number of participating members and the percentage of the charter capital they represent.

4. Members or their authorized representatives must participate in and vote at meetings of the Members' Council. Formalities of conducting meetings of the Members' Council and forms of voting shall be provided for in the company's charter.

Article 52.- Decisions of the Members' Council

1. The Members' Council shall approve decisions falling under its competence by voting at a meeting, consulting opinions in writing or other method as provided for in the company's charter.

Unless otherwise provided for in the company's charter, decisions on the following matters must be approved by voting at a meeting:

a/ Amendment and supplementation of the company's charter;

b/ Decisions on development orientations of the company;

c/ Election, removal from office or dismissal of the chairman of the Members' Council; appointment, removal from office or demotion of director or general director;

d/Adoption of annual financial statements;

e/ Re-organization or dissolution of the company.

2. Decisions of the Members' Council shall be approved at a meeting by:

a/ A number of participating members owning at least 65% of the charter capital; a specific percentage shall be provided for in the company's charter;

b/ A number of participating members owning at least 75% of the charter capital if such decisions are related to the sale of assets valued at 50% or more of the total value of assets recorded in the latest financial statements of the company or a smaller percentage as provided for in the company's charter; to the amendment or supplementation of the company's charter, reorganization or dissolution of the company; a specific percentage shall be provided for in the company's charter.

3. Decisions of the Members' Council shall be approved in the form of consulting opinions in writing by a number of members owning at least 75% or the charter capital; a specific percentage shall be provided for in the company's charter.

Article 53.- Minutes of meetings of the Members' Council

1. All meetings of the Members' Council must be recorded in a meeting minutes book of the company.

2. The minutes of a meeting must be completed and passed before the closing of the meeting. A minutes must contain the following contents:

a/ Time, venue, purpose and agenda of the meeting;

b/ Full name, capital share, number and date of issue of the capital share certificate of every participating member or his/her authorized representative: full name, capital share, number and date of issue of the capital share certificate of every absent member or his/her authorized representative;

c/ Matters discussed and voted; summary of opinions of members on each matter;

d/ Total numbers of votes "for", "against" and "blank" for each voting matter;

e/ Decisions approved;

f/ Full names and signatures of participating members or their authorized representatives.

Article 54.- Procedures for approval of decisions of the Members' Council in the form of consulting opinions in writing

Unless otherwise provided for in the company's charter, the competence and formalities for approving decisions in the form of consulting opinions in writing shall be as follows:

1. The chairman of the Members' Council shall decide to choose the form of consulting opinions in writing when approving decisions on matters under competence of the Members' Council.

2. The chairman shall be responsible for preparing and sending reports, explanations, drafts of proposed decisions and opinion sheets to all members of the Members' Council.

An opinion sheet must contain the following contents:

a/ Name, head office, number and date of issue of the business registration certificate and the place of business registration of the company;

b/ Full name, address, nationality, number of the people's identity card, passport or other lawful personal certification, capital share of the member of the Members' Council;

c/ Matters put up for opinions and proposed opinions "for", "against" and "blank";

d/ Deadline for sending the opinion sheet back to the company;

e/ Full name and signature of the chairman and the member of the Members' Council.

Opinion sheets that are fully and accurately filled up and sent by members to the company within the time limit shall be considered valid.

3. The chairman of the Members' Council shall organize the counting of opinion sheets, making a report and sending the count results as well as approved decisions to all members within seven working days after the deadline for sending back their opinions to the company. A report on the count results must contain principal contents as provided for in Clause 2, Article 53 of this Law.

Article 55.- Director or general director

1. The director or general director of the company shall run day-to-day business operations of the company and be responsible to the Members' Council for performing his/her rights and duties.

2. The director or general director shall have the following rights and duties:

a/ To implement decisions of the Members' Council;

b/ To decide on matters related to day-to-day business operations of the company;

c/ To implement the business plan and investment plan of the company;

d/ To issue internal management regulations of the company;

e/ To appoint, remove from office and dismiss managers except ones falling under the

competence of the Members' Council;

f/ To conclude contracts on behalf of the company, except ones falling under the

competence of the chairman of the Members' Council;

g/ To propose the structure of organization of the company;

h/ To submit annual financial statements to the Members' Council;

i/ To propose plans for distributing profits or handling losses in business;

j/ To recruit laborers;

k/ Other rights and duties as provided for in the company's charter and labor contract signed between him/her and the company according to the decision of the Members' Council.

Article 56.- Obligations of members of the Members' Council, director or general director

1. The members of the Members' Council and director or general director shall have the following obligations:

a/ To perform assigned rights and duties in a honest, careful and optimal manner in order to ensure maximum lawful benefits of the company and its owner;

b/ To be loyal to the benefits of the company and its owner; not to be permitted to use information, know-how and business opportunities of the company; not to be permitted to abuse their status, position and property of the company for self-seeking purposes or the interests of other organizations or individuals;

c/ To notify promptly, fully and accurately the company of enterprises in which they or their related persons are owners or have dominant shares or capital shares. Such notification must be posted up at the head office of the company and its branches;

d/ To perform other obligations as provided for by law and the company's charter.

2. The director or general director must not raise salary or pay bonus if the company is incapable of paying off due debts.

Article 57.- Qualifications and conditions of director or general director

1. The director or general director must have the following qualifications and conditions:

a/ Having full civil act capacity and not being prohibited from managing an enterprise as provided for by this Law;

b/ Owning at least 10% of the charter capital or being a non-member person with expertise and experience in business management or major business lines of the company or other qualifications and conditions as provided for in the company's charter;

2. Wife, husband, father, adoptive father, mother, adoptive mother, child, adopted child, or sibling of the managers or persons who have competence to appoint managers of a company in which the State-contributed capital amount or State-owned share accounts for more than 50% of the charter capital can not be director or general director of a subsidiary company of such company.

Article 58.- Remuneration, salary and bonus of members of the Members' Council and director or general director

1. The company shall be entitled to pay remuneration, salary and bonus of members of the Members' Council and director or general director based on business results and efficiency of the company.

2. Remuneration and salary of members of the Members' Council, director or general director and managers shall be accounted as business expenses in accordance with the law on enterprise income tax and relevant laws and must be reflected in a separate section of the annual financial statement of the company.

Article 59.- Contracts, transactions subject to approval of the Members' Council

1. The following contracts and transactions must be approved by the Members' Council if they are concluded between the company and:

a/ Its members or their authorized representatives, director or general director and

representative-at-law of the company;

b/ Related persons of the people stated at Point a of this Clause;

c/ Managers or persons who have competence to appoint managers of its parent company;

d/ Related persons of people stated at Point c of this Clause.

The representative-at-law of the company must send draft contracts or notices on major contents of expected transactions to all members of the Members' Council and, at the same time, post them up at the head office and branches of the company. Unless otherwise provided for in the charter, the Members' Council must approve the draft contracts or transactions within fifteen days as from the date of posting; in this case, contracts or transactions shall be approved by a number of members owning at least 75% of the total voting capital. Members related to contracts or transactions shall not be entitled to vote.

2. Contracts or transactions that are concluded in violation of Clause 1 of this Article shall be invalid and handled in accordance with the provisions of law. The representative-at-law, related members and related persons of such members must pay compensation for any arising damage or return to the company any benefits gained from performance of such contracts or transactions.

Article 60.- Increase and decrease of the charter capital

1. Under decisions of the Members' Council, the company may increase or decrease its charter capital in the following forms:

a/ Increasing capital contributed by the members;

b/ Increasing the charter capital corresponding to the increased value of assets of the company;

c/ Receiving capital contributed by new members.

2. If the capital is increased in the form of increasing capital contributed by the members, the increase in the capital shall be contributed in proportion to their capital share in the charter capital of the company. Members who are against the decision on capital increase may not further contribute capital. In this case, the increase in capital shall be contributed bv other members in proportion to their capital share in the charter capital of the company, unless otherwise agreed by the members.

The capital may be increased in the form of adding new members only if it is agreed by all members, unless otherwise provided for in the company's charter.

3. Under decisions of the Members' Council, the company may decrease its charter capital in the following forms:

a/ Returning its members part of their contributed capital in proportion to their capital share if the company has been carrying out business activities for more than consecutive two years since the date of business registration and is still capable of fully paying due debts and other property liabilities afterward;

b/ Buying back the capital share in accordance with the provisions of Article 44 of this Law;

c/ Decreasing the charter capital corresponding to the decreased value of assets of the company.

4. The company must inform in writing the business registration office its decision on capital increase or decrease within seven working days as from the date of making such decision. The notification must contain the following major contents:

a/ Name, address of the head office, number and date of issue of the business registration certificate, place of business registration;

b/ Full name, permanent address, nationality, number of the people's identity card, passport or other lawful personal certification of every member being an individual; name, permanent address, nationality, number of the establishment decision or registration business certificate of every member being an organization; capital share of each member;

c/ The charter capital; amount of capital proposed to increase or decrease;

d/ Time and method of capital increase or decrease;

e/ Full name and signature of the chairman of the Members' Council and representative-at-law of the company.

In case of charter capital increase, the notification must be attached with a decision thereon of the Members' Council. In case of charter capital decrease, it must be attached with a decision thereon of the Members' Council together with the latest financial statement, which must be certified by an independent auditor for companies with more than 50% of foreign capital share.

The business registration office must register the increase or decrease in the charter capital within ten working days as from the date of receiving a notification.

Article 61.- Conditions for profit distribution

A company shall be entitled to distribute profits to its members only if it makes profits after fulfilling tax and other financial obligations in accordance with the provisions of law and is still capable of paying off due debts and other property liabilities afterward.

Article 62.- Recovery of contributed capital amount returned or profit distributed

If the return of part of contributed capital amount to decrease the company's charter capital is effected contrary to the provisions of Clause 3 and Clause 4, Article 60 of this Law or the profit distribution is made inconsistent with the provisions of Article 61 of this Law, all members must return to the company money amounts or properties they have received or must be jointly liable for all debts and other property liabilities of the company until they have fully returned money amounts or properties they have received which are equivalent to the decreased capital amount or distributed profit.

Section II. ONE-MEMBER LIMITED LIABILITY COMPANIES

Article 63.- One-member limited liability companies

1. A one-member limited liability company is an enterprise which is owned by one organization or individual (hereinafter referred to as the company owner); the company owner is liable for debts and other property liabilities of the company within the charter capital of the company.

2. Acne-member limited liability company shall have the legal person status as from the date of being granted the business registration certificate.

3. A one-member limited liability company shall not be entitled to issue shares.

Article 64.- Rights of the company owner

1. The company owner that is an organization shall have following rights:

a/ To decide on contents of the company's charter and its amendment or supplement;

b/ To decide on the development strategy and annual business plan of the company;

c/ To decide on the structure of organization and management; appoint, remove from office and dismiss managers of the company;

d/ To approve investment projects valued at 50% or more of total value of assets recorded in the latest financial statement of the company or a smaller percentage as provided for in the company's charter;

e/ To decide on methods of market development, marketing and technology;

f/ To approve lending, borrowing and other contracts as provided for in the company's charter which are valued at 50% or more of total value of assets recorded in the latest financial statement of the company or at a smaller percentage as provided for in the company's charter;

g/ To decide on sale of assets valued at 50% or more of total value of assets recorded in the latest financial statement of the company or at a smaller percentage as provided for in the company's charter;

h/ To decide on increase of the charter capital; transfer of part or whole of the charter capital of the company to another organization or individual;

i/ To decide on setting up subsidiaries and making capital contribution to other companies;

j/ To conduct supervision and evaluation of business performance of the company;

k/ To decide on use of profits after fulfilling tax and other financial obligations of the company;

l/ To decide on re-organization, dissolution and request for bankruptcy of the company;

m/ To collect the whole value of assets of the company after it finishes the dissolution or bankruptcy process;

n/ Other rights as provided for by this Law and the company's charter.

2. The company owner that is an individual shall have following rights:

a/ To decide on contents of the company's charter and its amendment or supplement;

b/ To decide on investment and business activities and internal management of the company, unless otherwise provided for in the company's charter;

c/ To transfer part or whole of the charter capital of the company to another organization or individual;

d/ To decide on use of profits after fulfilling tax and other financial obligations of the company;

e/ To decide on re-organization, dissolution and request for bankruptcy of the company;

f/ To collect the whole value of assets of the company after it finishes the dissolution or bankruptcy process;

g/ Other rights as provided for by this Law and the company's charter.

Article 65.- Obligations of the company owner

1. To make capital contribution fully and on time as committed; if not, to be liable for all debts and other property liabilities of the company;

2. To observe the company's charter;

3. To keep assets of the company and company owner separated;

The company owner who is an individual must separate between expenditure of himself or herself and that of the company owner or director or general director.

4. To observe laws on contracts and relevant laws on sale, purchase, borrowing, lending, lease, renting or other transactions between the company and the company owner.

5. To perform other obligations as provided for by this Law and the company's charter.

Article 66.- Restrictions on the rights of the company owner

1. The company owner shall be entitled to withdraw the capital only by transferring part or whole of the charter capital to another organization or individual; if the capital is withdrawn from the company by another way, the company owner shall be liable for all debts and other property liabilities of the company.

If the company owner transfers part of the charter capital to another organization or individual, the company must be transformed into a limited liability company with two or more members and such transformation must be registered within fifteen days as from the date of transfer.

2. The company owner must not withdraw profits if the company fails to fully pay off due debts and other property liabilities.

Article 67.- Management organizational structure of a one member limited liability company whose owner is an organization

1. The company owner shall appoint one or more than one authorized representative, with a term of not more than five years, to exercise the owner's rights and obligations as provided for by this Law and other relevant laws. The authorized representatives must meet all qualifications and conditions as provided for in Clause 2, Article 48 of this Law.

2. The company owner shall be entitled to change authorized representatives at any time.

3. If two or more authorized representatives are appointed, the company's organizational structure of management shall comprise Members' Council, director or general director and controller. In this case, all authorized representatives constitute the Members' Council.

4. If only one authorized representative is appointed, he/she shall be the company president. In this case, the company's organizational structure of management shall comprise company president, director or general director and controller.

5. The company's charter must specify either chairman of the Members' Council, company president, director or general director to be representative-at-law of the company. The representative-at-law must reside in Vietnam and authorize another person to act as representative-at-law of the company on principles as provided for in the company's charter if his/her absence in Vietnam lasts more than thirty days.

6. Functions, rights and duties of the Members' Council, company president, director or general director and controllers are defined in Articles 68, 69, 70 and 71 of this Law.

Article 68.- The Members' Council

1. The Members' Council shall act on behalf of the company owner in organizing the exercise of his/her rights and the performance of his/her obligations; act on behalf of the company in exercising its rights and performing its obligations; be responsible to law and the company owner in exercising assigned rights and duties in accordance with this Law and other relevant laws.

2. Rights, obligations, tasks and working regime of the Members' Council shall comply with the company's charter and relevant laws.

3. Chairman of the Members' Council shall be appointed by the company owner. The term, rights and obligations of the chairman of the Members' Council shall comply with the provisions of Article 49 and other relevant provisions of this Law.

4. Competence and procedures for convening a meeting of the Members' Council shall comply with the provisions of Article 50 of this Law.

5. A meeting of the Members' Council may be conducted if it is attended by at least two-thirds of all members. Unless otherwise provided for in the company's charter, each member shall have one vote of equal validity. Decisions of the Members' Council may be made in form of consulting opinions in writing.

6. Decisions of the Members' Council shall be approved by a majority of participating members. Decisions on amendment or supplement to the company's charter, re-organization of the company or transfer of part or whole of the company's charter capital must be approved by at least three-fourths of participating members.

Decisions of the Members' Council shall become legally effective from the date of approval, unless it is otherwise provided for in the company's charter that it must be approved by the company owner before becoming effective.

7. Meetings of the Members' Council must be recorded in the minutes book. A minute of a meeting of the Members' Council must contain contents as provided for in Article 53 of this Law.

Article 69.- President of the company

1. The president of the company shall act on behalf of the company owner in exercising his/her rights and performing his/her obligations: act on behalf of the company in exercising its rights and performing its obligations; be responsible to the company owner in exercising assigned rights and duties in accordance with this Law and other relevant laws.

2. Specific rights, obligations and duties and working regime of the president of the company toward the company owner shall comply with the company's charter and relevant laws.

3. Decisions of the president of the company on exercise of rights and performance of obligations of the company owner shall be legally effective from the date of approval by the company owner, unless otherwise provided for in the company's charter.

Article 70.- Director or general director

1. The director or general director shall be appointed or hired by the Members' Council or president of the company with a term of not more than five years. He/ she shall run day-to-day business operation of the company and be responsible to the Members' Council or president of the company in exercising his/her rights and duties.

2. The director or general director shall have following powers:

a/ To organize implementation of decisions of the Members' Council or president of the company;

b/ To decide on matters related to day-to-day business operation of the company;

c/ To organize implementation of business and investment plans of the company;

d/ To issue internal management regulations of the company;

e/ To appoint, remove and dismiss managers in the company, except those falling under the competence of the Members' Council or president of the company;

f/ To conclude contracts on behalf of the company, except those falling under the competence of the Members' Council or president of the company;

g/ To make proposals on the organizational structure of the company;

h/ To submit annual financial settlement reports to the Members' Council or president of the company;

i/ To make proposal on distribution of profits or settlement of losses;

j/ To recruit laborers;

k/ Other rights as provided for in the company's charter and contract signed with the chairman of the Members' Council or president of the company.

3. The director or general director must meet the following qualifications and conditions:

a/ Having full civil act capacity; not being prohibited from managing an enterprise in accordance with this Law;

b/ Not being related person of the members of the Members' Council or president of the company; any person who has power to appoint the authorized representative or president of the company;

c/ Having relevant expertise and experience in business management or major business line of the company; or meeting other qualifications and conditions as provided for in the company's charter.

Article 71.- Controllers

1. The company owner shall appoint from one to three controllers working for a term of not more than three years. Controllers shall be responsible to the company owner for exercising their rights and duties.

2. Controllers shall have the following duties:

a/ To check the lawfulness, honesty and diligence of the Members' Council, president of the company and director or general director in performing owner's rights and running business operations of the company;

b/ To appraise financial statements, business performance, management and other reports before they are submitted to the company owner or relevant state agencies; submit reports on examination thereof to the company owner;

c/ To make proposals to the company owner for change and addition of the organizational structure of business management and performance of the company;

d/ Other duties as provided for in the company's charter or as requested or decided by the company owner.

3. Controllers shall be entitled to review any dossiers and documents of the company at the head office, branches or representative offices of the company. Members of the Members' Council, president of the company, director or general director and other managers shall be obliged to fully and promptly provide information relating to the exercise of owner's rights, business and management performance of the company at the request of controllers.

4. Controllers must meet the following qualifications and conditions:

a/ Having civil act capacity and being not prohibited from managing an enterprise in accordance with this Law;

b/ Not being related person of the members of the Members' Council or president of the company, director or general director and any person who has power to appoint controllers;

c/ Having expertise or professional experience in accounting or audit or having expertise and experience in major business lines of the company, or meeting other qualifications and conditions as provided for in the company's charter.

Article 72.- Obligations of members of the Members' Council, president of the company, director or general director and controllers

1. Members of the Members' Council, president of the company, director or general director and controllers shall have the following obligations:

a/ To observe the laws, the company's charter and decisions of the company owner in performing their assigned rights and duties;

b/ To perform their assigned rights and duties in a honest, careful and optimal manner in order to ensure maximum lawful benefits of the company and company owner;

c/ To be loyal toward interests of the company and company owner. Not to use business information, know-how and opportunities of the company or to abuse positions, powers and assets of the company for their own benefits or benefits of other organizations and individuals;

d/ To notify promptly, fully and accurately the company of enterprises in which they or their related persons are owners or dominant shareholders or have controlling capital shares. This notification must be posted up at the head office and branches of the company;

e/ Other obligations as provided for by this Law and the company's charter.

2. The director or general director shall not be entitled to raise salary or pay bonus if the company is incapable of paying off due debts.

Article 73.- Remuneration, salary and other benefits of the company's managers and controllers

1. The company's managers and controllers shall enjoy remuneration, salaries and other benefits according to the company's business results and efficiency.

2. The company owner shall decide on the levels of remuneration, salary and other benefits of members of the Members' Council, the company president and controllers. Remuneration, salaries and other benefits of the company's managers and controllers shall be accounted as business expenses of the company in accordance with the law on enterprise income tax and other relevant laws and shall be presented in a separate section in the company's annual financial statements.

Article 74.- Management organizational structure of a one-member limited liability company whose owner is an individual

1. The organization of a one-member limited liability company whose owner is an individual shall consist of the president, director or general director. The company's owner shall be the company's president. The company's president or director or general director shall be the company's representative-at-law as provided for in the company's charter.

2. The company's president may be the company's director or general director or another person may be hired to take this position.

3. Specific rights, obligations and duties of the director shall be provided for in the company's charter and the labor contract signed by the company's director or general director and the company's president.

Article 75.- Contracts, transactions between the company and related persons

1. Contracts or transactions between a one-member limited liability company whose owner is an organization and the following parties must be considered and approved by the Members' Council, the president, the director or general director and controllers according to the majority principle; each of them shall have one vote:

a/ The company's owner and the persons related to the owner;

b/ The authorized representative, the director or general director and controllers;

c/ The persons related to the persons specified at Point b of this Clause;

d/ Managers of the company's owner and the persons with power to appoint these managers;

e/ Persons related to the persons specified at Point d of this Clause.

The representative-at-law of the company must send draft contracts or notifications on the contents of transactions to the Member's Council, the company's president, director or general director and controllers; as well as post them up at the head office and other branches of the company.

2. Contracts or transactions stated in Clause 1 of this Article shall be approved if they fully meet the following conditions:

a/ All parties to the contracts or transactions are independent legal entities, having separate rights, obligations, assets and interests.

b/ The price quoted in the contracts or the transactions is the market price at the time of conclusion of the contracts or performance of the transactions;

c/ The company's owner performs all obligations specified in Clause 4, Article 65 of this Law.

3. A contract or transaction which has been concluded in contravention of Clause 1 of this Article shall be invalid and dealt with in accordance with the provisions of law. The representative-at-law of the company and the contract's parties shall compensate for any incurred losses and return any profits from the performance of the contracts or transactions to the company.

4. All contracts or transactions between a one-member limited liability company whose owner is an individual and the company's owner or related persons shall be recorded and filed in separate documents of the company.

Article 76.- Increase and decrease of the charter capital

1. A one-member limited liability company shall not be allowed to decrease the charter capital.

2. A one-member limited liability company may increase the charter capital by additional investment made by the company owner or mobilization of capital contributions from others.

The owner shall decide on the method of increasing and the level of increase of the charter capital. If increasing the charter capital by mobilizing capital contributions from others, the company must register for conversion into a limited liability company having two or more members within fifteen days from the date the new members committed to make capital contribution to the company.

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