Limited liability company is one of the most popularly chosen business types among all types of businesses because it offers many advantages in management and operation, creating high trust among members, and limiting the entry of strangers into the company. Here, let’s find out with Pham Consult the steps to carry out the procedure of setting up a limited liability company.
WHAT IS A LIMITED LIABILITY COMPANY?
A limited liability company (Co., Ltd) is a company with legal status and in the form of a partnership company. It means capital contributors are only responsible for the debts and other property obligations of the enterprise in the amount of capital contributed to the enterprise.
There are two types of limited liability companies: Single-member limited liability companies and Multi-member limited liability companies, which are defined as follows:
- A single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital. (Article 74 Enterprise Law 2020)
- A multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals. A member’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise, except for the cases specified in Clause 4 Article 47 of this Law. The member’s stake (contributed capital) may only be transferred in accordance with Articles 51, 52 and 53 of this Law. (Article 46 of the Enterprise Law 2020)
Thus, basically, the nature of these two types of companies is the same, only the difference in the number of members leads to the name being called Single-member limited liability companies and Multi-member limited liability companies.
WHAT INFORMATION IS NEEDED TO PREPARE WHEN ESTABLISHING A LIMITED LIABILITY COMPANY?
To establish a business, clients need to identify and prepare in advance the following information:
- Select type of company: If the number of capital contributors is 01, a single-member limited liability company is established. If the number of capital contributors is from 02 to 50, a multiple-member limited liability company shall be established.
- Enterprise name: must not infringe industrial property rights and must include two elements in the following order:
- Type of business: written as “limited liability company” or “ limited company ”
- Company name: with the letters of the Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols.
- Business lines: are those that are not prohibited by law. The lines of business with business conditions must meet the requirements of the industry’s operation.
- Address of the head office: located on the territory of Vietnam, is the contact address of the enterprise and is determined according to the administrative division; have a phone number, fax number and email (if any).
- Charter capital: is the minimum amount of capital that needs to be met when establishing a company, which will depend on the industry in which you do business.
- Legal representative: Having full civil act capacity and not in the cases prohibited from establishing and managing an enterprise. The enterprise must ensure that there is always at least one legal representative residing in Vietnam.
DOCUMENTATION FOR ESTABLISHMENT OF COMPANY LIMITED LIABILITY
The application file for registration of the establishment of a limited liability company should contain the following documents:
- An application for enterprise registration: Appendix I-2 for single-member limited liability companies, Appendix I-3 for multiple-member limited liability companies (the above two appendices are issued together with the Circular). Circular No. 01/2021/TT-BKHDT)
- The company’s charter.
- Copies of the following papers:
- Legal papers of the individual for the legal representative of the enterprise;
- Investment registration certificate, for enterprises established by foreign investors or foreign-invested economic organizations according to the provisions of the Investment Law and guiding documents;
- List of legal representative/authorized representative (Appendix I-10 issued together with Circular No. 01/2021/TT-BKHDT);
- For a single-member limited liability company, additional documents are required: Legal documents of individuals for the company owner are individuals or legal documents of organizations for the company owners who are organizations (unless the company owner is the State) such as business registration certificate, establishment decision; Legal documents of the individual for the authorized representative and the document appointing the authorized representative.
8. For a multiple-member limited liability company, it is necessary to have: List of capital contributors (Appendix I-6 issued together with Circular No. 01/2021/TT-BKHDT); Legal papers of the organization for members being an organization; Legal papers of individuals for authorized representatives of members being organizations and documents of appointing authorized representatives.
Note: Copies of legal papers of foreign organizations must be legalized.
PROCEDURES FOR APPLICATION FOR BUSINESS ESTABLISHMENT
- Directly at the Department of Planning and Investment of the province/city where the headquarter is located
- Online at the national portal on business registration
Settlement period: Within 03 working days from the date of receipt of the application, the business registration agency is responsible for reviewing the validity of the application for business registration and granting business registration.
Business registration fee: For business registration documents via electronic information network: Enterprise registration fee is exempted.
Fee for publishing business registration contents: 100,000 VND/document. After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Business Registration Portal and pay fees as prescribed by law.
The Law on Enterprises 2020 takes effect from June 17, 2020.
Decree 01/2021/ND-CP on enterprise registration dated January 04, 2021.
Circular 01/2021/TT-BKHDT guiding enterprise registration dated March 16, 2021.
Above is information on the procedure for registration of the establishment of a limited liability company. Understanding the expectations of each organization/individual when establishing a business, Pham Consult with many years of experience in the profession commits to accompanying, providing professional consulting services on registration, implementation of legal documents. Establish a company as soon as possible to assist the client in making the best first choices and to open the door for future sustainable growth.
PHAM CONSULT is a unit specializing in providing tax consulting services, financial consulting, accounting services, preparing and paying salaries. Customers can contact us via hotline: (84-28) 3930 2487 or Facebook communication channel: http://bit.ly/phamconsult if you need support.