Procedures for changing the owner of a one-member limited liability company

Changing the owner of a one-member limited liability company is an important legal procedure to ensure that the rights and obligations of the new owner are recognized by law. Implementing the correct procedures helps the transfer process be transparent, avoids future disputes and creates conditions for business operations to continue to be stable. The following article will provide detailed instructions on the steps to perform this procedure, please refer to it!

Cases of changing the owner of a one-member limited liability company

Pursuant to Article 53 of Decree 01/2021/ND-CP on business registration, changing the owner of a one-member limited liability company is divided into 5 specific cases. Cases of changing the owner of a one-member limited liability company include:

1. Change of owner due to transfer of charter capital:

This is the most common form. Accordingly, when the former owner decides to sell the entire charter capital to another individual or organization, the transfer of ownership must comply with current legal regulations and register changes with competent state agencies;

2. Change of owner due to inheritance:

Accordingly, when the owner of a one-member LLC who is an individual passes away, the change of owner will be carried out through inheritance procedures according to the provisions of law.

The legal heir will take over all the rights and obligations of the former owner of the one-member LLC. Determining the legal heir must be based on legal grounds such as a will, a written agreement to divide the inheritance, or a court decision on the division of the inheritance;

3. Change of owner due to donation of contributed capital:

In this case, the owner of the one-member limited liability company decides to donate the entire capital contribution to another individual or organization. The transfer of ownership will be done through a donation contract.

This is a form of transfer without compensation and must comply with the regulations on donating property under the Civil Code.

4. Changes due to division, separation, merger or consolidation of businesses:

Changing the owner of a one-member limited liability company in this case may arise from business restructuring transactions such as division, separation, merger or consolidation.

Each form of restructuring has its own legal process and requirements specifically stipulated in the Law on Enterprise and its guiding documents.

5. Change of owner according to decision of competent authority:

This case applies when changing the owner of a one-member limited liability company is carried out according to a decision of a competent state agency such as a court, judgment enforcement agency, or other state management agency. This decision is the mandatory legal basis for carrying out the procedure for registering a change of owner.

Above is a summary of some cases of changing the owner of a one-member limited liability company according to current regulations.

>>>See more: Rights of the owner of a LLC.

Procedures for changing the owner of a one-member limited liability company

Current Law on Enterprise stipulates the procedures for registering a change of owner of a one-member limited liability company as follows:

File

The registration dossier to change the owner of a one-member limited liability company is specifically stipulated in Article 53 of Decree 01/2021/ND-CP of the Government issued on January 4, 2021. Depending on each case of change of owner, the application will have different requirements for necessary documents as follows:

1. In case of change of owner due to transfer of charter capital, documents include:

• Notice of change of owner of a one-member limited liability company according to the form Appendix II-4 of Circular 01/2021/TT-BKHDT. This document must be signed by the owner or legal representative of the old owner and the new owner or legal representative of the new owner;
• Contributed capital transfer contract accompanied by contract liquidation minutes or documents proving completion of the transfer;
• Copy of the amended and supplemented Charter of the company;
• A copy of the individual’s legal documents in case the transferee is an individual or a copy of the organization’s legal documents, a copy of the individual’s legal documents for the authorized person and a copy of the document appointing an authorized representative in case the transferee is an organization;
• Document of the Investment Registration Authority approving capital contribution, share purchase, purchase of capital contribution of foreign investors, economic organizations with foreign investment capital in cases where procedures for registration of capital contribution, share purchase, purchase of capital contribution must be carried out according to the provisions of the Law on Investment.
• Authorization document and personal legal documents for the person authorized to perform the procedure (if any).

2. In case of change of owner due to inheritance, documents include:

• Notice of change of owner of a one-member limited liability company signed by the new owner or the legal representative of the new owner;
• Copy of the amended and supplemented Charter of the company;
• A copy of the individual’s legal documents in case the heir is an individual or a copy of the organization’s legal documents, a copy of the individual’s legal documents for the authorized person and a copy of the document appointing an authorized representative in case the heir is an organization;
• Copy of document certifying the heir’s legal inheritance rights;
• Authorization document and personal legal documents for the person authorized to perform the procedure (if any);

3. In case of changing the owner of a single-member limited liability company due to donation of the entire capital contribution, the business registration dossier includes the documents in section 1 (in case of transfer of charter capital), in which the transfer contract or documents proving the completion of the transfer are replaced by the contract of donation of the capital contribution.
4. In case of change due to division, separation, merger or consolidation of enterprises, the dossier includes the documents in section 1 (in case of charter capital transfer), in which, depending on each specific case, the capital contribution transfer contract or documents proving the completion of the capital contribution transfer are replaced by:

• Resolutions and decisions to divide the company;
• Resolutions and decisions to separate the company;
• Consolidation contract and resolutions and decisions on approving the consolidation contract;
• Merger contract, resolution, decision on approving the merger contract of the merging company and document approving the merger contract as prescribed in Point c, Clause 2, Article 61 of Decree 01/2021/ND-CP of the merged company.

Resolutions and decisions on division, separation, consolidation and merger of the company must show the content of transferring all capital contributions in the one-member limited liability company to the new company.

5. In case of change of ownership according to the decision of a competent authority, the business registration dossier includes the documents in section 1 (in case of transfer of charter capital), in which the transfer contract or documents completing the transfer are replaced by the decision of a competent authority on the change of company owner.

Note: For the old/new owner being a foreign organization, copies of the organization’s legal documents must in all cases be consular legalized.

Procedure

Procedures for registering a change of owner of a one-member limited liability company must comply with the provisions of the Law on Enterprise 2020 and Article 53 of Decree 01/2021/ND-CP of the Government issued on January 4, 2021. Specifically includes the following steps:

Step 1: Submit application:

According to the provisions of Clause 1, Article 26 of the Law on Enterprises 2020, applicants can choose one of the following submission methods:

• Submit paper documents directly to the Business Registration Office under the Department of Planning and Investment where the company’s headquarters is located (After the merger, the Department of Finance);
• Send documents via postal service to the Business Registration Office under the Department of Planning and Investment where the company’s headquarters is located;
• Submit your application online via the National Business Registration Portal. (http://dangkyquamang.dkkd.gov.vn).

Upon receiving the application, the business registration agency will check the completeness of the application, then issue a receipt and schedule to return the results to the applicant (paper or electronic copy depending on the form of application). The applicant needs to keep this receipt to return when receiving the results.

Step 2: The business registration agency will review and process the application within 3 working days from the date of receipt.

Step 3: Receive application processing results:

• If the application is valid, the business registration agency issues a Business Registration Certificate to the limited liability company.
• If the dossier is not valid, the business registration agency will notify you of a request to amend or supplement the dossier. Enterprises need to amend and supplement documents as required by the registration authority (usually within 60 working days from the date of submission). Time to return results is 03 working days from the date the business registration agency receives the amended and supplemented dossier.

Step 4: After being granted a new Business Registration Certificate, the company must publish the changed content on the National Business Registration Portal.

Important note: Procedures for changing owners and procedures for publishing business registration contents can be carried out at the same time in the same application submission to save time and costs for businesses.

Above is the entire process of registering to change the owner of a one-member limited liability company that you need to pay attention to so that the process goes quickly and smoothly.

>>>See more: Latest procedures for changing the name of a joint stock company.

Time limit for changing the owner of a one-member limited liability company

According to the provisions of Clause 3, Article 30 of the Law on Enterprises 2020, the time limit for resolving procedures for registering a change of owner of a one-member limited liability company is 03 working days from the date of receipt of valid documents. This deadline is applied uniformly nationwide.

In reality, the processing time may be longer in cases where the dossier does not meet the requirements and needs to be amended or supplemented. Therefore, to ensure the procedure is resolved quickly, customers should prepare complete documents according to instructions and submit on time.

>>>See more: Instructions for converting a joint stock company into a one-member limited liability company.

Consulting service for changing the owner of a one-member limited liability company at Long Phan Consulting Company

Long Phan Consulting Company provides professional consulting services on changing the owner of a one-member limited liability company with a team of experienced consultants. Consulting services for changing ownership of a one-member limited liability company at Long Phan Consulting Company include:

• In-depth consulting on issues related to changing the owner of a one-member limited liability company;
• Draft and complete the application for registration of change of owner in accordance with the law;
• Authorized representative of the enterprise carries out change registration procedures with the business registration agency;
• Monitor the process of processing documents and handing over results to customers;
• Consulting on issues that arise after changing ownership.

With extensive experience in the field of business consulting, Long Phan Consulting Company is committed to providing customers with high quality services, ensuring that procedures for changing the owner of a one-member limited liability company are carried out quickly, accurately and effectively.

Some frequently asked questions about changing the owner of a one-member LLC

We would like to provide you with some common questions related to the procedure for changing the owner of a one-member limited liability company.  Please refer!

Is it necessary to change the company seal after a change in ownership?

Although not always immediately required upon a change in ownership, it is often advisable to update the company seal to reflect the legal representative or new owner, especially if the seal carries the information or signature of the previous owner. Procedures for creating a new seal include notifying competent authorities and registering a new seal model.

How does the change in ownership affect the company’s existing contracts and banking relationships?

Typically, a company’s existing contracts remain in effect despite the change in ownership because the company itself is an independent legal entity. However, key contracts should be carefully reviewed to ensure there are no provisions that trigger reassessment or termination upon a change of control. Similarly, banks may require up-to-date information and details about the signer after transfer of ownership.

What are the legal responsibilities of the old owner and the new owner after the transfer of ownership?

The former owner typically relinquishes all rights and obligations related to the company upon completion of the transfer, as stipulated in the transfer contract. The new owner assumes all rights, responsibilities and obligations related to the company’s operations and the company’s financial situation from the effective date of transfer. However, the transfer contract may provide for certain continuing obligations of the former owner, such as warranties or indemnities.

What measures can be taken to resolve disagreements that may arise during the transfer of ownership?

Disagreements can be resolved through negotiation and mediation between the parties involved. If these methods are unsuccessful, legal remedies such as arbitration or litigation may be instituted to resolve the dispute in accordance with Vietnamese law and the terms of any transfer agreement.

What is the difference between the legal representative and the owner of a one-member limited liability company, and how does a change in ownership affect the legal representative?

The owner is the individual or organization that holds the company’s capital. A legal representative is an individual authorized to act on behalf of the company in legal and business matters. Although owners often appoint themselves or others as legal representatives, a change in ownership does not automatically change the legal representative. The new owner has the right to appoint a new legal representative if they wish.

Can the company name be changed simultaneously with the transfer of ownership?

Yes, the company name can be changed simultaneously with the transfer of ownership. This requires including the name change request in the business registration change application and complying with company name regulations.

Above are some questions surrounding the procedure for changing the owner of a one-member limited liability company. We hope that the above answers have partly answered your questions about this issue and helped you be more confident when performing this procedure. Thank you!

Conclude

Procedures for changing the owner of a one-member limited liability company require strict compliance with legal regulations and preparation of complete documents as required. Please contact Long Phan Consulting Company via the hotline 1900 636389 for detailed advice and support in implementing procedures for changing the owner of a one-member limited liability company in a professional and effective manner.