PROCEDURES FOR TRANSFERRING CAPITAL CONTRIBUTIONS OF A LIMITED LIABILITY COMPANY WITH 2 OR MORE MEMBERS

Legal regulations on transferring capital contributions of a limited liability company with 2 or more members. Procedures for transferring capital contributions of a limited liability company with 2 or more members. Through today’s article, let’s learn about this issue with Pham Consult!

According to Article 52 of the 2020 Enterprise Law, members of a limited liability company with 2 or more members have the right to transfer part or all of their capital contributions to others according to the following provisions:

• Must offer that capital to the remaining members in proportion to their capital contributions in the company under the same conditions;

• Transfers may only be made under the same conditions as those offered to the remaining members to non-members if the remaining members of the company do not purchase or do not purchase all of the shares within 30 days from the date of offering.

 Other cases

1. The company does not repurchase the capital contribution as prescribed in Clause 1, Article 51 of the 2020 Enterprise Law while the member has requested the company to repurchase his/her capital contribution because the member has voted against the resolution of the Board of Members on the following issues:

• Amendments and supplements to the contents of the Company Charter related to the rights and obligations of members and the Board of Members;

• Reorganization of the company;

• Other cases as prescribed in the Company Charter.

The request to repurchase the capital contribution must be in writing and sent to the company within 15 days from the date of approval of such resolution.

2. In case a member uses his/her capital contribution to pay off a debt, the payee has the right to use that capital contribution in one of the following two forms:

• Become a member of the company if approved by the Board of Members;

• Offer for sale and transfer that capital contribution in accordance with the provisions of Article 52 of the Law on Enterprises 2020.

 Note

• The transferring member still has the rights and obligations towards the company corresponding to the relevant capital contribution until the information about the buyer is fully recorded in the member registration book.

• Transfer or change the capital contribution of members resulting in only one member remaining in the company, the company must organize its operations in the form of a single-member limited liability company and at the same time register changes to the business registration content within 15 days from the date of completion of the transfer.

Step 1: Offering capital contributions

The member transferring the capital contribution shall offer his/her capital contribution to the remaining members in proportion to his/her capital contribution in the company under the same offering conditions.

In case within 30 days from the date of offering, the remaining members of the company do not buy or do not buy all of the capital contribution, the transferring member may transfer the capital contribution to another person who is not a member of the company under the same offering conditions.

Step 2: Prepare documents for transferring capital contributions of LLCs with 2 members

Documents for transferring capital contributions of members of LLCs with 2 or more members include:

• Notice of change in business registration content (Appendix II-1 Notice of change in business registration content according to Circular 01/2021/TT-BKHĐT);

• Decision of the Board of Members;

• Minutes of the meeting of the Board of Members;

• Valid copies of personal identification documents of members in case the member is an individual; valid copies of the business registration certificate or other equivalent documents in case the member is an organization;

• Transfer contract or documents proving the completion of the transfer.

Step 3: Submit the application at the Business Registration Office

Enterprises submit applications for registration of changes to the contents of the business registration certificate directly at the Business Registration Office where the enterprise has its head office or submit business registration applications online according to the process on the national business registration information portal or through the public postal service.

Step 4: Submit personal income tax declaration

For a limited liability company with two or more members declaring and paying taxes on behalf of individuals with income from capital transfer, the personal income tax declaration dossier includes:

• Personal income tax declaration (according to form 04/CNV-TNCN in Appendix II issued with Circular 80/2021/TT-BTC);

• Appendix of detailed list of individuals transferring capital according to form 04-1/CNV-TNCN in Appendix II issued with Circular 80/2021/TT-BTC (applicable to companies declaring and paying taxes on behalf of many individuals);

• Copy of the Capital Contribution Transfer Contract.

Step 5: The Business Registration Office resolves the request

After receiving the business registration dossier, the Business Registration Office issues a receipt, checks the validity of the dossier and issues a Business Registration Certificate to the enterprise.

Step 6: Return results
Based on the appointment date on the receipt, the enterprise goes to the business registration office to receive the results of the application or registers to receive the results at the address through the enterprise returning the results by post.
Within 03 working days from the date of receiving the complete application. If the application is valid, the enterprise will be granted a business registration certificate.
After the application is approved, you can register to send the business registration results through the public administrative delivery department at the Department of Planning and Investment in the provinces and cities.

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