VI Transferring capital contributions in a one-member limited liability company is a complicated process, requiring a thorough understanding of current legal regulations. The transfer of capital contributions is not only related to the rights of the company owner but can also affect the structure and operation of the company. Therefore, it is extremely important to follow the correct procedures and comply with legal regulations. Through today’s article, let’s learn about this issue with Pham Consult!
1. What is the transfer of capital contributions in a one-member limited liability company?
Transferring capital contributions in a one-member limited liability company is when the company owner transfers part or all of his capital to another individual or organization. According to Article 76 of the 2020 Enterprise Law, the owner of a single-member LLC has the right to transfer part or all of the company’s charter capital to another organization or individual. However, due to the characteristics of a single-member LLC, which only includes one owner, transferring capital contributions will lead to one of the following two cases:
– Case 1: If the company owner only transfers part of the capital contribution, the company will now have two or more owners. The single-member LLC will have to carry out procedures to convert the type of enterprise to a two-member or more LLC or a joint stock company.
– Case 2: If the company owner transfers all of the capital contribution to another individual or organization, it will change the owner of the company. At this time, the single-member LLC will have to carry out procedures to change the owner’s information on the business registration certificate.
2. Documents for transferring capital contributions in a single-member LLC
Documents for transferring capital contributions in a single-member LLC include:
(i) Notice of capital contribution transfer;
(ii) Decision of the company owner on capital contribution transfer;
(iii) Capital contribution transfer contract;
(iv) Minutes of liquidation or documents proving completion of capital contribution transfer;
(v) Notarized copies of legal documents of individuals in case the transferee is an individual or copies of legal documents of organizations in case the transferee is an organization; copies of legal documents of individuals for authorized persons and copies of documents appointing authorized representatives in case the transferee is an organization.
In addition to the above documents, a single-member LLC needs to prepare additional documents for converting the type of enterprise or documents for changing information of the enterprise owner depending on the capital contribution transferred by the company owner.
a. In case of transferring a part of the capital contribution
In case the owner of a single-member LLC transfers a part of the capital contribution to another individual or organization, thereby changing the type of enterprise, it will be necessary to prepare additional documents to convert the type of enterprise according to Article 24 and Article 26 of Decree 01/2021/ND-CP of the Government, including:
(i) Application for change of business registration content;
(ii) Notice of change of business registration content;
(iii) Charter of the converted company;
(iv) Decision of the owner on conversion of business type;
(v) List of members for a limited liability company with two or more members; list of founding shareholders and list of shareholders who are foreign investors for a joint stock company.
(iv) Copies of the following documents:
– Legal documents of individuals for the legal representative of the enterprise;
– Legal documents of individuals for individuals; Legal documents of the organization for organizations; Legal documents of individuals for authorized representatives and documents appointing authorized representatives;
For members and shareholders who are foreign organizations, copies of the legal documents of the organization must be consularized;
(v) Documents of the Investment Registration Authority approving capital contribution, share purchase, capital contribution purchase of foreign investors, economic organizations with foreign investment capital in cases where procedures for capital contribution, share purchase, capital contribution purchase must be carried out in accordance with the provisions of the Investment Law.
(vi) Documents confirming capital contribution of new members and shareholders;
b. In case of transferring all capital contributions
In case the owner of a single-member LLC transfers all capital contributions to another individual or organization, resulting in a change in the company owner, it is necessary to prepare additional documents to change the information of the business owner according to Article 53 of Decree 01/2021/ND-CP of the Government, including:
(i) Notice of change of ownership of a single-member LLC signed by the owner or legal representative of the old owner and the new owner or legal representative of the new owner;
