Reference situation:

Some Vietnamese investors are going to establish a company specializing in study abroad counseling. They would like to consult lawyers about the appropriate form of the company and the necessary procedures relating to the establishment of the company.

Legal grounds:

1. Law on Enterprise 2014
2. Decree No. 78/2015/NĐ-CP

Our legal advice:

Law on Enterprise 2014 provides with 04 forms of company:

1. Limited liability company with 02 members or higher 

“Article 47. Limited liability companies with two or more members
1. A limited liability company with two or more members is an enterprise in which:
(a) A member may be an organization or an individual; the number of members shall not exceed fifty (50);
(b) A member shall be liable for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise, except for the case stipulated in article 48.4 of this Law;
(c) The share of capital contribution of each member may only be assigned in accordance with articles 52, 53 and 54 of this Law.“

2. Limited liability company with only 01 member

“Article 73. Limited liability company with 01 member

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

3. Joint-stock company

“Article 110. Joint-stock company

1.  A joint-stock company is an enterprise in which:
(a) The charter capital is divided into equal portions called shares;
(b) Shareholders may be organizations or individuals; the minimum number of shareholders is three and there is no restriction on the maximum number;
(c) Shareholders are liable for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise;
(d) Shareholders may freely assign their shares to other persons, except in the cases stipulated in article 119.3 and article 126.1 of this Law.“

4. Partnership company

“Article 172. Partnership company

1. A partnership company is an enterprise in which:

(a) There must be at least two members being co-owners of the company jointly conducting business under one common name (hereinafter referred to as unlimited liability partners). In addition to unlimited liability partners, the company may also have limited liability partners;
(b) Unlimited liability partners must be individuals who shall be liable for the obligations of the company to the extent of all of their assets;
(c) Limited liability partners shall only be liable for the debts of the company to the extent of the amount of capital they have contributed to the company.”

Under the regulations, as shown above, we advise that these investors should select the company form as Joint-Stock Company and Limited Liability Company with more than 02 members with different pros and cons. For example, the limited liability company with 02 or more members has the management structure and organization more complex than that of a joint-stock company.

Please click here to refer to the procedures for the establishment of a new company

Please click here to refer to the procedures for the issuance of a License for study abroad counseling.