How to draft a constitution of single individual member limited liability company in Vietnam

        How to draft a constitution of sole individual member limited liability company                                  

1. What is a constitution of single individual member limited liability company in Vietnam?

  The constitution of a single individual member limited liability company in Vietnam is a formal document, drawn up by those applying to register the single individual member limited liability company in Vietnam, that sets out the rules for running the company in Vietnam.  A single individual member limited liability company is a limited liability company has one owner who is an individual.  If a constitution has been adopted, it must be filed with the Business Registration Office in Vietnamin in order for the company to be registered and incorporated with that constitution.

2. Is a single individual member limited liability company in Vietnam required to have its own constitution?

 No, there is no requirement for a company to have a constitution. It is up to those forming the company to decide whether or not they will draw up a constitution for it.

 If there is no constitution then the company is governed by the Law on Enterprise 2005. This will determine the rights, powers, duties and obligations conferred on the company, its board of directors and its shareholders. If there is a constitution the rules contained in the Law will still apply, except to the extent that they are negatived or modified by the constitution where the Law permits this; in general, however, the constitution cannot contravene or be inconsistent with the Law.

3. What should the constitution of single individual member limited liability company contain?

 A single individual member limited liability company has a wide discretion as to what it may include in its constitution. The Law on enterprise 2005 says that a constitution may contain matters contemplated by the Law on enterprise 2005, includes:
  a) Company name, head-office, branches, representative offices (if any);
  b) List of business activities;
  c) Charter capital and method of raising or reducing the charter capital;
  d) Name, address, nationality and other basic identification of company owner;
  e) Rights and obligations of owner;
  f) Structure of organizational management;
  g) Legal representative of the limited liability company;
  h) Formality for adoption of decisions of the company; principles applied to the settlement of internal disputes;

  i) Ground and method for calculating salary, allowance and bonus of chairman, director or general director
  j) Principles for distribution of profit or settlement of losses;
  k) Procedures for dissolution and liquidation of the company;
  l) Procedure for amending and supplementing the company charter; 
  m) Full name and signature of owner, of legal representative;
  n) Other agreements made by owner in compliance with laws.

 However, in the interests of the company and those involved in it, it is strongly recommended that the constitution deal with the rights, powers and obligations of all people involved in the company, and that it set out clear guidelines as to what conduct and behaviour is acceptable and what is unacceptable.

 One of the advantages of having a constitution is that there are a number of features that are permissible in a constitution that are not found in the Law on enterprise 2005.

 4. What is the effect of the constitution of single individual member limited liability company?

 As long as the company constitution does not contravene the Law on Enterprise 2005, the effect of the document is that it will be binding between the company and owner according to its terms.

 5. Can a single individual member limited liability company adopt a constitution after the company”s been formed?

 Yes, it can do this by company owner.

 6. How can a constitution of single individual member limited liability company be changed?

 Once company owner has adopted a constitution, there are ways in which company owner may either amend, modify or revoke it. However, Company must notify the Business Registration Agency  within 10 working days of making any change to the constitution.

 7. Cautionary notes

 A provision in a constitution will have no effect if it contravenes or is inconsistent with the Law on enterprise 2005. It may therefore be advisable to obtain legal advice to ensure that the proposed constitution is compatible with the Law.