Converting a limited liability company into two or more members

Converting a limited liability company into two or more members requires compliance with strict legal procedures as prescribed by law. The transformation not only helps businesses expand their scale and strengthen their financial capacity, but also creates favorable conditions for capital mobilization and more sustainable development. The article below will advise and guide in detail the necessary procedures for businesses to convert a limited liability company into two or more members.

Table of Contents

Distinguish between a one-member limited liability company and a limited liability company with two or more members

One-member limited liability companies and limited liability companies with two or more members are common types of businesses in Vietnam. Besides some similarities between these two types of businesses, companies need to pay attention to the differences when wanting to carry out conversion procedures.

Criteria	LLC	LLC with two or more members
Number of members	Only 1 member contributes capital and is the owner of the company (Article 74 of the Law on Enterprise 2020).	There are from 02 to 50 members who are organizations and individuals. (Article 46 of the Law on Enterprise 2020).
Procedures for increasing and decreasing charter capital	According to Article 87 of the Law on Enterprise 2020, the company increases its charter capital through the company owner contributing additional capital or mobilizing additional capital contributions from others.	According to Article 68 of the Law on Enterprise 2020, the company can increase its charter capital through increasing the capital contribution of members or receiving additional capital contribution from new members.
Transfer of contributed capital	The company owner has the full right to transfer and dispose of all or part of the company’s charter capital.	Company members who want to transfer their capital contribution to others must offer to sell that capital share to the remaining members. The remaining members have priority rights to buy within 30 days from the date of offering (Article 52 of the Law on Enterprise 2020).
Organizational structure	A Board of members is not required. A one-member LLC owned by an organization is organized and managed and operates according to one of two models: Company President, Director or General Director; or Board of members, Director or General Director.	There is a Board of members, Chairman of the Board of members, Director or General Director (Article 54 of the Law on Enterprise 2020).
Responsibility for contributed capital	The company owner is responsible for the company’s debts and other property obligations within the company’s charter capital (Article 74 of the Law on Enterprise 2020).	Company members are jointly responsible for the debts and other property obligations of the enterprise within the amount of capital committed to contribute to the enterprise (Article 46 of the Law on Enterprise 2020).

Procedures for converting a limited liability company into two or more members

The conversion procedure includes two main stages: application preparation and application submission and processing, specifically:

Documents need to be prepared

Based on the content in Clause 2, Article 26 and Article 23 of Decree 01/2021/ND-CP, the application file for converting a one-member limited liability company into a limited liability company with 2 or more members includes the following documents:

Application for registration of establishment of a 2-member limited liability company (according to the form at Appendix I-3 issued together with Circular 01/2021/TT-BKHDT);
Charter of a 2-member limited liability company;
List of members of LLC with two or more members;
Business registration certificate or business registration certificate (original);
ID card/ID card/passport of legal representative and capital contributor (copy);
Power of attorney for the applicant (if necessary);
ID card/ID card/passport of the person authorized to submit the application.

In addition, when converting from a one-member LLC to a LLC with 2 or more members, businesses need to prepare additional documents:

Documents proving completion of transfer, donation, or inheritance of capital contribution (contract, document confirming inheritance rights).
Resolution of the owner and documents confirming capital contribution of new members if capital contribution is mobilized.
Written approval from the Investment Registration Authority in case of capital contribution or capital contribution purchase by foreign investors according to the Law on Investment.

Implementation process

The process of converting a one-member limited liability company into 2 or more members includes the following specific steps:

Step 1: Sign a capital transfer contract:

The owner of the one-member limited liability company and the new member sign a capital transfer contract and a liquidation record of the transfer contract.
Make a decision to receive additional capital contributions from new members.

Step 2: Prepare conversion documents.

Step 3: Submit application to the Department of Planning and Investment in the following 2 ways:

Method 1: Submit application directly to the Department of Planning and Investment of the province/city where the business is headquartered.
Method 2: Submit your application online at the National Business Registration Portal through your business registration account or public digital signature.

Step 4: Within 5 – 7 working days from the date of submission, the Business Registration Office checks the validity of the application and returns the results:

Valid documents: Business Registration Office issues Business Registration Certificate.
Invalid dossier: The Business Registration Office issues a written notice clearly stating the reasons for the enterprise to amend and supplement the dossier and resubmit it.

Step 5: Publicize business information

According to the provisions of Article 32 of the Law on Enterprise 2020, businesses must publicly announce on the National Information Portal about business registration within 30 days from the date of issuance of the Business License.

Procedures for converting a limited liability company into two members

Things to do after conversion

After completing the procedure for converting from a one-member LLC to a LLC with two or more members, the enterprise needs to perform a number of tasks to ensure smooth business operations.

Re-engrave the legal seal;
Redoing company signs;
Update business information on digital signature;
Register to change information with the social insurance agency;
Change business license information for branches, representative offices, and business locations.

Consulting services for converting a limited liability company into two or more members at Long Phan Consulting Company

With many years of experience in the field of business consulting, Long Phan Consulting Company provides the service of converting a one-member limited liability company into a limited liability company with two or more members with a professional process.

Our consulting services include:

Consulting on conversion options suitable to business needs:
Drafting necessary legal documents;
Prepare business registration documents according to legal regulations;
Authorized business representative to carry out procedures at state agencies;
Guide businesses on what to do after conversion;
Consulting on capital distribution, rights and obligations of new members;
Consulting on resolution in case of disputes.

Long Phan Consulting Company is committed to providing customers with reputable, fast and effective service quality.

Some frequently asked questions

Below are some questions about the procedure for converting a limited liability company into two or more members that customers can refer to:

What criteria distinguish a one-member LLC from a LLC with two or more members?

The number of members, procedures for increasing or decreasing charter capital, transfer of capital contributions, management organization structure and responsibility for capital contributions are the main criteria to distinguish these two types of companies.

How can a one-member limited liability company increase its charter capital?

A one-member LLC can increase its charter capital through the owner contributing more capital or mobilizing additional capital from others.

What should a member of a LLC with two or more members who wants to transfer contributed capital do?

Members who want to transfer their capital contribution must first offer that capital to the remaining members. The remaining members have priority to buy within 30 days.

How is the organizational structure of a one-member limited liability company regulated?

A one-member LLC can organize its management according to the model of company President, Director (or General Director) or Council of members, Director (or General Director) if the owner is an organization.

What documents need to be prepared to convert a one-member LLC into a LLC with two or more members?

It is necessary to prepare a request to register to establish a two-member limited liability company, company charter, list of members, original business registration certificate, copy of ID card/ID card/passport of the legal representative and capital contributing members, owner’s decision on raising additional capital, power of attorney (if any) and a copy of CCCD/ID card/passport of the authorized person.

When submitting a conversion application, what should businesses keep in mind about contact information?

Businesses need to provide complete information about phone numbers. Missing this information may cause the application to be considered invalid.

Conclude

Converting a limited liability company into two or more members is a process that requires strict compliance with legal regulations. Customers need to prepare complete documents, follow the correct process and complete post-conversion procedures to ensure the legality of business activities. Please contact Long Phan Consulting Company immediately via the hotline 1900636389 to receive full support for quick and effective business conversion procedures.

Dương Thị Kim Ngân

Jurist Ngan Duong Thi Kim - Partner of Long Phan, Ms. Ngan possesses profound knowledge in business consulting, labor, and contracts. With dedication and creativity, Ms. Ngân has achieved significant success in advising and supporting businesses in critical areas such as legal matters, finance, management, and contracts. She is committed to providing optimal solutions and helping clients succeed in the business environment.