Improving legal provisions of the member’s stake in a limited liability company under vietnamese law on enterprises 2020

Tóm tắt

Law on Enterprises 2020 has offered many favorable opportunities for investors, created flexibility in business for increased enterprise freedom, and contributed to eliminating the limitations of Law on Enterprise 2014. For the first time in Vietnamese Law on Enterprises, a multi-member limited liability company is allowed to issue shares to convert into a joint-stock company. In addition to the openness in multi-member limited liability companies’ capital mobilization, the 2020 also provides clearer and stricter regulations on corporate governance enhancing the level of protection for investors through regulations on capital transfer conditions and stakes handling. However, there are still some restrictions in the provisions of governing the stakes ins multi-member limited liability companies. This article identifies and analyzes limitations in regulations related to the member’s stake in a multi-member limited liability company via three cases: i) Redemption of the member’s stake in a multi-member limited liability company; ii) Handling the member’s stake in the event of conversion to a joint-stock company; iii) Transfer of the member’s stake in some particular cases. On that basis, the article proposes solutions to improve the effectiveness of the Vietnamese Law on Enterprises.