In the context of today’s rapidly growing economy, choosing the right type of business entity plays a decisive role for investors. Among modern legal structures, the Limited Liability Company (LLC) has become the most favored choice due to its simplicity, operational flexibility, and clear management structure. The following article provides the latest and most detailed information on establishing an LLC.
1. What is a Limited Liability Company (LLC)?
Basic Definition of an LLC
A Limited Liability Company (LLC) — or Công ty Trách nhiệm hữu hạn in Vietnamese — is a legally recognized form of business in Vietnam in which the capital-contributing members are liable only within the scope of their contributed capital. This model offers a clear legal identity, with a distinct separation between the company’s assets and the personal assets of its members. LLCs are a popular choice, particularly well-suited for small and medium-sized enterprises (SMEs) due to their simple organizational structure and ease of operational control.
Types of LLCs in Vietnam
Under the current Enterprise Law, there are two types of LLCs:
- Single-member LLC: Owned entirely by one individual or organization.
- Multi-member LLC: Formed by 2 to 50 individuals or organizations contributing capital.
This classification provides flexibility in ownership structure and capital management, allowing businesses to choose the format that best matches their strategy.
Legal Characteristics and Liability
A key legal characteristic of an LLC is limited liability.
Members are only responsible for debts and obligations of the company up to the amount they have contributed — protecting their personal assets if the company encounters financial difficulties.
Additionally, the company gains independent legal entity status upon issuance of the Business Registration Certificate, enabling it to legally enter into contracts, hold property, and operate transparently in the marketplace.
Advantages of Choosing the LLC Model
- High level of control: Easier to manage compared to joint-stock companies.
- Simple formation process: Straightforward registration and procedures.
- Asset protection: Limits personal liability, offering legal security for investors.
- Ideal for startups and SMEs: Especially suitable for entrepreneurs or small groups aiming for a legally safe and manageable business model.
For these reasons, LLCs remain one of the most popular legal entities among new businesses in Vietnam.
2. What is a Single-Member Limited Liability Company (SMLLC)?
Definition and Legal Status
A Single-Member Limited Liability Company (SMLLC) is a type of enterprise wholly owned by one individual or organization. Despite having only one owner, the company still holds independent legal entity status from the moment it is granted a Business Registration Certificate.
This legal personality enables the company to:
- Be recognized and protected by law in civil, business, and commercial transactions.
- Build trust with clients and partners thanks to its formal legal standing.
Rights and Responsibilities of the Owner
The owner of an SMLLC has full authority to decide all matters related to the company’s organization and operations. However, they also have the following legal obligations:
- Must contribute the registered capital within 90 days from the issuance of the Business Registration Certificate.
- Must clearly separate personal assets from company assets.
- Must comply with legal regulations on finance, taxation, and labor.
If the capital contribution is not made in full and on time, the owner will be held liable for obligations in proportion to the unpaid capital.
Typical Organizational Structure
The internal structure depends on whether the owner is an individual or an organization:
- If the owner is an individual:
- The company structure includes a Chairman and a Director or General Director.
- The Chairman typically acts as the legal representative.
- If the owner is an organization:
- Two possible governance models:
- Chairman, Director/General Director, and Controller.
- Members’ Council, Director/General Director, and Controller.
- The chosen model must be clearly stated in the company charter.
- Two possible governance models:
Steps to Establish a Single-Member LLC
- Prepare the registration documents, including:
- Application for enterprise registration
- Company charter
- Certified copy of personal ID or business license of the owner (if an organization)
- Submit the application to the Business Registration Office at the Department of Planning and Investment where the company is based.
- Receive the Business Registration Certificate within 3–5 working days if the documents are valid.
- Announce enterprise registration details and create the official company seal.
Once all steps are completed, the company is legally allowed to operate in accordance with Vietnamese law.
3. What Is a Multiple-Member Limited Liability Company (LLC)?
Participants and Number of Members
A Multiple-Member LLC is a business model that includes from 2 to a maximum of 50 members, who may be individuals or organizations contributing capital.
This structure is a popular choice for investors who want to:
- Co-manage and grow the business with trusted partners.
- Maintain a closed ownership structure, which allows for tighter control, simplified internal governance, and greater operational stability.
The member limit helps the company stay flexible in decision-making and management.
Capital Contribution and Capital Transfer
- Each member must contribute the full amount of capital as committed when the company is established.
- Liability is limited to each member’s capital contribution—personal assets are protected.
- If a member wants to withdraw capital, they must first offer it to existing members before selling to outsiders.
- Capital transfer procedures must follow:
- Enterprise Law regulations
- The company’s charter
- Aimed at protecting ownership transparency and structural stability.
Organizational Structure
A Multiple-Member LLC typically includes:
- Members’ Council: The highest decision-making body.
- Chairman of the Members’ Council: Leads and directs the council’s activities.
- Director or General Director: Responsible for daily business operations and reports to the Members’ Council.
- Supervisory Board: Required if the company has 11 or more members, or if stipulated in the company’s charter.
📌 Decisions are made based on the members’ percentage of capital contributions.
Steps to Establish a Multiple-Member LLC
- Prepare the application dossier, including:
- Application for business registration
- Company charter
- List of members
- Copies of ID/passport or business registration certificates (for members and legal representative)
- Submit the dossier to the Business Registration Office under the Department of Planning and Investment where the company is headquartered.
- Processing time: 3–5 working days for issuance of the Enterprise Registration Certificate.
- Post-registration steps:
- Create and register the company seal
- Publicly disclose business registration on the National Business Registration Portal
After these steps, the company is officially established and legally permitted to operate.
4. Procedures and Dossier for Establishing a Limited Liability Company (LLC)
Updated Dossier for LLC Registration
To establish an LLC in Vietnam, you must prepare a complete set of documents in accordance with the Law on Enterprises 2020, including:
- 📝 Application for business registration (standard form issued by the Ministry of Planning and Investment).
- 📜 Company charter, suitable for either a one-member or multi-member LLC.
- 📋 List of members (required for multi-member LLCs).
- 📎 Certified copies of personal identification (ID card/CCCD/passport) of the legal representative and capital-contributing members.
- 🏢 Legal documentation for organizations contributing capital (if any).
✅ Ensuring accuracy and completeness from the outset will help shorten processing time and avoid file rejections.
Authority for Submitting and Processing the Dossier
Submit your registration documents to the Business Registration Office under the Department of Planning and Investment of the province or city where the company’s head office is located. You may file:
- 🔸 In person
- 🔸 By post
- 🔸 Online via the National Business Registration Portal
The business registration certificate will be issued within 3–5 working days if your dossier is valid. Otherwise, you’ll receive a notice requesting clarification or additional documentation.
Naming the Company – Important Notes
Comply with Articles 37 and 38 of the Law on Enterprises 2020:
- The name must contain the business type: “Công ty TNHH” or “Công ty trách nhiệm hữu hạn”, and a distinctive name.
- Avoid duplication or similarity with existing businesses nationwide.
- Do not use words that:
- Violate social ethics
- Contradict national traditions
- Include banned or misleading elements
🔤 You may also register:
- An abbreviated name
- A foreign language name
How to Change Company Name or Charter Capital
To change your company’s name or capital, submit a notice of change to the Department of Planning and Investment, including:
- Notification form of change in business registration
- Resolution and meeting minutes of the company owner (for one-member LLC) or Members’ Council (for multi-member LLC)
- Amended company charter
- Relevant legal documents
You must publicly disclose changes within 30 days of approval.
LLC is a flexible and legally secure business structure, ideal for investors wanting simplicity with protection. A clear understanding of regulations and procedures will empower business owners to make confident decisions. For faster results, consider working with a professional legal or accounting consultant to handle all required formalities.
If you have any questions, please contact our Hotline at (028) 3820 1213 or email us at info@wacontre.com for prompt consultation and support. With an experienced team, Service thanhlap.wacontre.com is always ready to serve customers in the most enthusiastic and efficient manner. (For Japanese customers, please contact Hotline: (050) 5534 5505).
