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Charter of a multi member LLC in Vietnam:

THE SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom- Happiness

CHARTER

LIMITED LIABILITY COMPANY 

We include members named as follows:

...

Mutually agree and sign off the decision to establish Vietnam ... Limited Liability Company (hereinafter called “company”) operates in accordance with the Law on Enterprise No. 68/2014/QH13 dated November 26, 2014 ( hereinafter referred to as the Law on Enterprise) and this Charter with the following chapters, articles, clauses:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of responsibilities

1. Members shall be liable for all debts and other property obligations of the Company within the amount of the capital contributed to the Company.

2. Members who has not yet contributed capital at all or has not yet contributed capital committed in full will be responsible corresponding to the capital contribution committed for financial obligation of the company arising during the period prior to the date the company registers to change the charter capital and the capital contribution (share holding) of members.

Article 2. Name of the Enterprise

1. Name of the company in Vietnamese: ...

2. Name of the company in English: ...

3. Abbreviated name: ...

Article 3. Head office’s address of the company.

1. Head office address of the company: ...

2. Contact information:

Phone: ...                              Fax: ...

Email: ...            Website: ...

Article 4. Business lines to register business 

...

Article 5. Operation term 

1. The Company’s operation term is ... years since the date of its Business Licence in accordance with law.

2. The Company may be liquidated prior to the expiry of the operation term or extended for additional term by a decision of the board of members or regulations of the law.

Article 6. The company’s stamp

1. Form of the stamp: the stamp shall have a circle form, the face of the stamp is made from rubber material, on the face of the stamp shall have circles of the same heart, numbers and words shall be floatingly carved.

2. Content of the stamp: write the name of the company, write the number of the business registration certificate, write the name of the place where the company’s head office is located. 

3. Colour of ink of the stamp is red colour.

4. Size of the stamp: the stamp’s diameter is about 36 mm.

5. Number of stamp: the company shall have one (01) circle stamp (called the company stamp).

6. The management, use and keeping  of the company stamp is performed in accordance with rules set by the board of members.

7. The company stamp shall be used in cases in accordance with law and regulations or where transaction parties agree about use of stamp. 

8. Making stamp on all documents, papers, transaction documents and contracts of the company must be agreed by the company’s General Director.

Chapter II

CHARTER CAPITAL AND RULES 

ABOUT TRANSFER OF CAPITAL

Article 7. Charter capital. 

Charter capital of the Company is: ...

In words: ...

Include share of capital contribution as follows detailed:

...

Time of capital contribution: within 90 days from the date of Business Registration Certificate.

The charter capital can be increased or decreased due to operation demand and decision of the board of members.

Article 8. Implementation of capital contribution and issuance of certificate of share of capital contribution. 

1. The company’s charter capital at the time of business registration is the total value of the shares of capital which members committed to contribute to the company.

2. Members must contribute their shares of capital as committed. Members can only be permitted to contribute their shares of capital to the company by assets other than the type of assets committed if approved by the majority of remainders (members). In this period, member has rights and obligations corresponding  to the percentage share of capital committed.

3. After expiry of the period mentioned in Clause 2 of this Artilce if there is member who has not yet contributed his/her share of capital at all or has not yet contributed in full his/her share of capital committed (subscribed capital), then the issue will be resolved as follows:

a) The member who has not yet contributed capital committed will naturally cease to be the company’s member;

b) The member who has not yet contributed capital committed in full will have rights and obligations corresponding to the share of contributed capital (paid up capital);

c) The shares of capital which have not yet been contributed by members (unpaid capital) will be offered for sale in accordance with the decision of the board of members.

4. In case there is member who has not yet contributed his/her share of capital committed (subscribed capital), the company must register to amend its charter capital, the percentage of share holding of members equals to the contributed capital (paid up capital) within 60 days, from the last date on which the share of capital must be fully contributed in accordance with clause 2 of this Article. Members who have not yet contributed capital at all or in full must be liable corresponding to the share of capital committed (subscribed capital) with respect to the company’s financial obligation arsing in period prior to the date the company  registers to change its charter capital and percentage of share holding of its members.

5. At the point of time when the capital is contributed in full, the company must issue certificate of share of capital contributed (paid up capital) for member corresponding with the value of the share of contributed capital. The certificate of share of capital contributed has the main following content:

a) Name, business registration number, the company head office’s address.

b) The company’s charter capital.

c) Full name, permanent residence address, nationality, passport number of member.

d) Share of capital, value of contributed capital of member.

đ) Number and date if issuance of the certificate of capital contributed. 

e) Full name, signature of the legal representative of the company.

6. In case the certificate of share of capital contributed is lost, destroyed, damaged, or abolished in other form, the member shall be re-issued the certificate of share of capital contributed in accordance wuth the order, prescribed procedure of the company. 

Article 9. Transfer of ownership of contributed assets

1. Company’s members must transfer ownership of contributed assets to the company as mentioned below:

a) For assets which are subject to registration of ownership or value of land use rights, the member who contributed capital must perform procedure to transfer the ownership of such assets to the company at the competent state authority. The transfer of ownership of assets contributed will not be subject to registry fee. 

b)  For assets which are not subject to registration of ownership, the capital contribution must be performed by hand-over and receiving of assets with written confirmation.

The written confirmation must write clearly the name and head office address of the company; full name, permanent residence address, passport number or other personal identification document, number of decision to incorporation or registration of the entity who subscribes capital contribution; type of assets and unit quantity of assets contributed; total value of assets contributed and the percentage of such total asset value in the company’s charter capital; date of hand-over and receiving; the signature of the capital contributor or his/her authorized representative and the legal representative of the company.

c) Share holding or share of capital contributed in assets which are not in VND, free exchange foreign currency, gold will only be deemed as settlement when the lawful ownership of the assets contributed has been transferred to the company.

2. The payment of all purchase, sale, transfer of share holding of foreign investors must be performed via the capital account of such investors opened at bank in Vietnam, except cases where payment is made by assets.

Article 10. Registry of members.

1. The company must prepare registry of members immediately after granted the business licence. The registry of members must have the main following content:

a) Name, business registration number, the company head office’s address.

b) Full name, permanent residence address, nationality, passport number or other personal indentification document for individual member.

c) Share of capital contribution, value of the share of contributed capital, time of capital contribution, type of assets contributed, quantity, value of each assets contributed of each member.

d) Signature of individual member or legal representative of member which is an organization. 

dd) Number and date of issuance of the certificate of share of capital contributed for each member.

2. The registry of member shall be kept at the company’s head office.

Article 11. Buy-back of the share of capital.

1. Member has the rights to request the company to buy back his/her share of capital, if that member had voted against the resolution of the board of members regarding the followings: 

a) Amendment, supplement of content of the company’s Charter regarding rights and obligations of members, the board of members;

c) Reorganization of the company;

c) Other cases as mentioned in the company’s Charter.

The request to buy back the share of capital must be in written form and sent to the company within 15 days, from the date of issuance of the resolution mentioned in this clause.

2. When receiving the request men tioned at clause 1 of this Article from member, if a price cannot be agreed, then the company will have to buy back the share of capital from that member at the market price or at the price determined according to principles mentioned at the company’s Charter within 15 days, from the the date of receiving the request. The payment can only be performed if after such payment, the company will still capable of paying other debts and asset obligations. 

3. In case the company does not buy back the share of capital mentioned at clause 2 of this Article, the member will have rights to freely transfer his/her share of capital to other members or to other persons who are not members. 

Article 12. Transfer of the share of capital.

1. Except for cases mentioned at clause 3 Artilce 52, clauses 5 and 6 Article 54 of the Law on Enterprise, the company members have rights to transfer part or all of their shares of capital to other person in accordance with rules set out below: 

a) Must offer for sale  of those shares of capital to the remaining members corresponding to their shares of capital in the company with the same condition.

b) Only be permitted to transfer with the same condition for offer for sale to the remaining members mentioned at point a of this clause  for non-member if the remaining members do not buy at all or do not buy in full within 30 days, from the date of offer.

2. The member who transers share of capital will still have rights and obligations with the company corresponding to his/her related share of capital until the information about the buyer mentioned at points b,c and d clause 1 Article 19 of the Law on enterprise is recorded completely in the Registry of members.

3. In case the transfer or change of share of capital of members leads to the existence of only one member of the company, then the company must organize in the form of a limited liability company with one member and simultaneously register to change the content of business registration within 10 days, from the date of completion of the transfer.

Article 13. Dealing with share of capital in some special cases.

1. In case individual member died, his/her  legal or testate heir would become the member of the company. In case individual member is proclaimed disappearance by a Court, the person who manages assets of such member in accordance with the civil laws shall become member of the company.

2. In case there is member who is subject to limited civil act capability or lost of civil act capability, then such member’s rights and obligations in the company shall be performed through the guardian. 

3. The share of capital of member will be bought back or transferred by the company according to Articles 52 and 53 of the Law on Enterprise in the following cases:

a) The heir does not want to become a member;

b) The person who is given (as gift) mentioned at clause 5 of this Artilce is not accepted by the board of members to become a member;

c) Member which is an organization had liquidated or dissolved.

4. In case the share of capital of individual member who died without any hier, the heir refused to inherit or had been disinherited then such share of capital will be resolved in accordance with the civil laws.

5. Members have rights to give (as gift) part or full of their shares of capital in the company to other person. In case the person who is given is wife, husband, parent, children, a relatives up to the third line in the inheriting hierarchy shall naturally become member of the company. If the person who is given is other person, then he/she will only become the company’s member when the board of members approved.

6. In case member uses his/her share of capital to repay debts, the receiving person has rights to use such share of capital in one of the two following forms:

a) to become member of the company if approved by the board of members;

b) to offer for sale and transfer such share of capital in accordance with Article 53 of the Law on Enterprise.

Artile 14. Change of the charter capital.

1. The company can increase the charter capital in the following cases:

a) increasing the capital contribution of members;

b) accepting of new members.

2. In case of increasing the capital contribution of members, the additional capital contribution will be shared between members in proportion to their shares of capital in the company charter capital. Members can transfer their rights of contribution to other person in accordance with Article 53 of the Law on enterprise. Members who object to the decision to increase the charter capital can contribute no addiotional capital. In such case, the share of additional capital of that member will be divided between other members in proportion to their shares of capital in the company charter capital if members do not have other agreement.

3. The company can decrease its charter capital in the following forms:

a) to return part of share of capital to members in proportion to their shares in the company charter capital if the company is operating in more than two consecutive years, from the date of business registration and ensure the payment in full of debts and other asset obligations after returning to member;

b) The company buys back the share of capital of members mentioned at Article 52 of this Law;

c) The charter capital was not paid in full and on time according to Article 48 of the Law on Enterprise.

Chapter III

ORGANIZATIONAL AND MANAGERIAL STRUCTURE, OPERATING PRINCIPLES OF THE COMPANY 

Article 15. Organizational and managerial structure

The organizational and managerial structure of the company includes: 

- The board of members;

- The chairman of the board of members;

- The general director.

Article 16. The legal representative

1. Full name: ...                                  Sex: ...

Title: ...

Date of birth: .../.../...              Ethnic group: ...               Nationality: ...

Personal identification document: ...

Passport No.: ..., date of issuance: ..., date of expiry: ..., place of issuance: ...

Permanet residence address: ...

Current address: ...

2. Rights and obligations of the legal representative:

To represent the company in performing rights and obligations arising from the company’s transactions, to represent the company as claimant or defendant, the personal with related rights and obligation before Arbitrator, Court and other rigths and obligations according to laws. 

Must reside in Vietnam and must authorize , in written form, other person to perform rights and obligations of the legal representative when exits from Vietnam. In this case, the legal representative will still be responsible in respect of performing the authorized rights and obligations.

In case at the expiry of authorization, but the legal representative of the company has not yet come back to Vietnam and there is no other authorization, then: The authorized person will still perform rights and obligations of the legal representative of the company within the scope of the authorization until legal representative return to work at the company or until the board of members decides other person to become the legal representative of the company.

In case the legal representative of the company absents in Vietnam for more than 30 days without authorization to other person to perform rights and obligations of the company’s legal representative or had died, disappeared, put in temporary detention, convicted, be restristed or lost of civil act capability, then the board of members shall appoint other person to become the company’s legal representative. 

3. Responsibilities of the company’s legal representative:

To honestly, carefully perform rights and obligations entrusted in the best sense in order to ensure lawful benefits of the company; to be loyal to the company’s benefits; do not use information, know-how, business opportunities of the company, do not abuse the position, title and use the company’s assets for personal interest or to serve for benefits of other organization, individual; inform timely, completely as regard to such representative or his/her related person who owns or has share holding, majority share holding in other enterprise.

The legal representative of the company will personally be liable for damages to the company caused by violation of obligations mentioned in this Article.

Article 17. The board of members.

1. The board of members consists of all members of the company, is the highest level of hierarchy of decision making in the company. The board of members will meet at least once a year.

2. The board of members shal have rights and obligations as follows:

a) To decide on the strategy to develop and annual business plan of the company;

b) To decide on the increase or decrease of the charter capital, decide on the point of time and method of raising additional capital (finance). 

c) To decide on investment, development projetc of the company;

d) To decide on solution to expand market, promote and transfer of technology; approve loan agreement, lending, sale of assets worth equal to or more than 50% of total asset valued reported in the financial statements of the company in the most recent announcement. 

dd) To vote, dismiss, remove the Chairman of the board of members; to decide on appointment, dismissal, sign and terminate contract with the General Director, Chief Accountant and other directors/managers;

e) To decide on the level of salary, bonus and other employement benefits (remuneration package) of the Chairman of the board of members, General Director, Chief Accountant and other directors/managers;

g) To approve annual financial statements, plan to use and distribute after-tax profits (earnings) or dealing with losses of the company;

h) To decide on the organizational, managerial structure of the company;

i) To decide on the establishment of subsidiaries, branches, representative offices;

k) To amend, supplement the company’s Charter;

l) To decide on the re-organization of the company;

m) To decide on the dissolution or request to liquidate the company;

n) Other rights and obligations mentioned in this Law and the company’s Charter.

3. In case individual member is put in temporary dentention, convicted or is taken away the rights of practice by Court in accordance with the Criminal Code (the Penal Code), such member shall authorize other person to attend the company’s board of members. 

Article 18.  Chairman of the board of members

1. The board of member shall appoint one member to become the Chairman.

2. The Chairman of the board of members has the following rights and obligations:

a) To prepare agenda, operation plan of the board of members;

b) To prepare agenda, content, documents for the board of members’ meetings or to  refer to members;

c) To convene and chair the board of members’ meetings or to organize reference from members;

d) Monitor or organize monitoring of the implementation of resolutions of the board of  members;

dd) To represent the board of members to sign resolutions of the board of  members;

e) Others rights and obligations according to the Law of Enterprise and the Charter of the company.

3. The term of Chairman of the board of members will not exceed 05 years. The Chairman  of the board of members can be voted again with unlimited number of term of office.

4. In case of absence or incapability to perform rights and obligations, the Chairman of the board of members shall authorize in written form a member to perform rights and obligations of the Chairman in accordance with principles mentioned in the company’s Charter. In case there is no member who is authorized then one member of the board of members convening meetings of remaining members to vote a person temporarily performing rights and obligations of the Chairman according to the majority (more than half) principle. 

5. The Chairman of the board of members has the following responsibilities:

a) To honestly, carefully perform rights and obligations in the best sense in order to ensure the most lawful benefits of the company;

b) To be loyal to the company’s benefits, do not use information, know-how, business opportunities of the company, do not abuse the position, title and use the company’s assets for personal interest or to serve for benefits of other organization, individual; 

c) To inform timely, completely, accurately about the enterprise which they or their related persons own or have share holding, majority share holding in;

d) Other rights and obligations according to laws and the company’s Charter.

Article 19. General Director.

1. General Director is the person who manages day – to – day operations of the company, is responsible before the board of members in respect of performing his/her rights and obligations. 

2. General Director has the following rights and obligations:

a) To organize the implementation of resolutions of the board of members;

b) To make decisions on all matters relating to the day - to - day operations of the company;

c) To organize the implementation of business plan and investment project of the company;

d) To issue rules on internal management of the company, except where the company’s Charter has other regulations.

dd) To appoint, remove or discharge directors/managers in the company, except for positions falling within the authority of the company’s board of members;

đ) Bổ nhiệm, miễn nhiệm, bãi nhiệm các chức danh quản lý trong công ty, trừ các chức danh thuộc thẩm quyền của Hội đồng thành viên;

e) To sign contract on behalf of the company, except for cases falling within the authority of the Chairman;

g) To make recommendations with respect to the organizational structure of the company;

h) To submit the final annual financial statements to the company’s board of members;

i) To recommend the plan for use of profits or dealing with losses in business;

k) To recruit employees;

l) Other rights and obligations mentioned in the company’s Charter, labour contract which the Director signs with the company according to the resolution of the board of members.

3. Criteria and conditions for the General Director.

a. Having full civil act capacity and not subject to objects who cannot manage enterprise mentioned at Clause 2 Article 18 Law on Enterprise.

b. Having specialist knowledge, experience in the business management, governance of the company.

4. General Director has the following responsibilities:

a) To honestly, carefully perform rights and obligation entrusted in the best sense in order to ensure the most lawful benefits of the company;

b) To be loyal to the company’s benefits, do not use information, know-how, business opportunities of the company, do not abuse the position, title and use the company’s assets for personal interest or to serve for benefits of other organization, individual; 

c) To inform timely, completely, accurately about the enterprise which they or their related persons own or have share holding, majority share holding in;

d) Other rights and obligations according to laws and the company’s Charter.

Article 20. Audit committee. 

Audit committee is established when the company has 11 members or more. Rights, obligation, criteria and working regime of the Audit Committee, Head of the Audit Committee can be referred to artilces 71, 163, 164, 165, 166, 167, 168 and 169 of the Law on Enterprise to regulate in this Charter.

Điều 21. Remuneration, salary and bonus of the Chairman of the board of members, General Director and other directors/managers.

1. The company will pay remuneration, salary  and bonus for the Chairman, General Director and other directors/managers according to business results and productivity. 

2. Remuneration, salary  and bonus for the Chairman, General Director and other directors/managers will be included in the operational expenses in accordance with laws on corporate income tax, related laws and must be separately presented in the annual financial statements of the company.

3. The General Director shall not be increased salary, paid bonus when the company is not capable of making payment for debts that fall due.

Article 22. Convene board of members’ meeting

1. The board of members will be convened as per request of the Chairman or request of members or group of members mentioned at clause 8 and clause 9 Article 50 of the Law on Enterprise. The meeting of the board of members must be organized at the company’s head office or at a place decided by the board of members.

The Chairman shall prepare the agenda, document’s content and convene the meeting of board of members. Member has the rights to propose the content of meeting in written form. Proposal must have the following main contents:

a) Full name, permanent residence address, nationality, ID card No., Passport No. or other personal identification paper of individual members;

b) Share of capital contributed, number and date of issuance of the certificate of share of capital contributed;

c) Content of the proposal to be included in agenda of the meeting;

d) Reason for the proposal.

The Chairman must approve proposal and supplement the meeting agenda if the proposal with the full content prescribed was sent to the head office of the company no later than 01 working day prior to the date of meeting of the board; in case the proposal was presented right before the meeting, such proposal will be approved if the majority of members attending the meeting agreed.

2. The Meeting Invitation of the board can be sent using paper, fax or electronic means regulated by the company’s Charter and will be directly sent to each member. The content of the invitation must clearly define the time, venue and meeting’s agenda.

Meeting agenda and documents must be sent to members prior to exercising the meeting. Documents using in the meeting relating to decision about amendment, supplement of the company’s Charter, approval of the direction to develop the company, approval of annual financial statements, re-organization or dissolution of the company must be sent to members no later than 07 working days prior to the meeting date. The term to send other documents will be regulated by the company’s Charter.

...

Article 29.  Principles to resolve disputes

1. Disputes arise between founder members must firstly be resolved through negotiation and mediation;

2. In case disputing parties still failed to reach agreement with each other, the issue will be submitted to Court to resolve according to laws. 

Chapter IV

FINANCIAL ACCOUNTING, DISTRIBUTION OF AFTER TAX PROFIT AND DEALING WITH LOSS IN BUSINESS OPERATION

Article 30. Fiscal year

1. Fiscal year of the company starts from January 01 western calendar and terminates on December 31 every year. 

2. The first fiscal year of the company shall start from the date of its business registration certificate to December 31 of the same year.

...

Article 34. Dealing with losses incurred in business operation.

1. Losses incurred in business operation shall be shared between members in proportion to their shares of capital. In case the company incurred loss in previous year, then profit for the current year must be prioritized to offset loss incurred in previous year.

2. About accounting affairs:

2. 1. Offset to undistributed profits of previous years (if any).

2. 2. Offset to undistributed after-tax profits of the subsequent years (if any).

3. About the taxation affairs: Shall be implemented in accordance with provisions of the Law on corporate income tax and legislative documents providing guidances on current tax regulations.

Chapter V

ESTABLISHMENT, RE-ORGANIZATION, DISSOLUTION AND ASSET LIQUIDATION

Article 35. Establishment

1. The company shall be established after this Charter is approved by the company’s members collectivelly  and is issued business registration certificate  by the business registration office. 

2. All expenses relate to the establishment of the company shall be recorded in the company’s expenses and shall be counted reducing expenses of the first fiscal year.

...

Artcile 37. Re-organization of the company

The division, splitting, unifying, merging, change of the company according the decision of the board of members, on the base of implementing articles 192, 193, 194, 195, 196,198 and 199 of the Law on Enterprise.

Chapter VI

TERMS OF IMPLEMENTATION

Article 38. Effect of the Charter. 

This Charter takes effect from the date of business registration certificate issued by the business registration office. 

Article 39. Ways to amend, supplement articles of the Charter

1. Issues relating to the company’s operations which were not mentioned in this Charter will be dealt with by the Law on Enterprise and other related laws. 

2. In case this Charter has articles which oppose against laws or lead to implementation against laws, such articles shall not be conducted and will be amended immediately in the nearest board of members’ meeting.

3. In order to amendment, supplement this Charter’s content, the board of members will meet to approve the decision on the change. Way of meeting to approve the amendment will conform to regulations at Article 23 of this Charter. 

Article 40. The final terms.

This Charter has been considered each chapter, each article by the company members  and to be jointly signed to verify agreement.

This Charter consists of 06 chapters 40 articles, is prepared into 04 copies with equal validity, of which: 01 copy shall be registered at the business registration office, 01 copy shall be kept at the company’s head office, the remaining 02 copies shall be delivered 01 copy to each member . 

All reproducing, copying must be verified by the General Director./. 

Consulting services:

Phone: 0914 165 703 or email: dmslawfirm@gmail.com

Charter of a multi member LLC in Vietnam

Prepared by: Thi-Ha Nguyen, Lawyer’s assistant

DMS Law firm in Vietnam Director (Signed) Lawyer Do Minh Son