Notify two-member LLC legal representative change

Summary: Notify two-member LLC legal representative change is a process required by law in Vietnam when a company changes its legal representative. This article outlines the steps, documents, and regulations that companies need to follow to ensure compliance with the legal requirements for changing the legal representative of a two-member limited liability company (LLC) in Vietnam.

Introduction

In Vietnam, limited liability companies (LLCs) are a popular form of business organization due to their flexible structure and limited liability for members. A two-member LLC is a specific type of LLC that has between two and fifty members. The legal representative plays a crucial role in the company, serving as the official contact person with government authorities and responsible for the company’s legal affairs.

When a two-member LLC undergoes changes, such as replacing its legal representative, it is required to notify the relevant authorities. The process of notifying the authorities about a change in the legal representative is a mandatory procedure that ensures the transparency and legality of the company’s operations. This article provides a detailed guide on how to properly notify a change of the legal representative for a two-member LLC in Vietnam.

Legal Basis for Changing a Legal Representative

The legal basis for notifying the change of a legal representative in a two-member LLC is grounded in the Law on Enterprises (Law No. 59/2020/QH14). This law stipulates that all changes to key personnel, such as the legal representative, must be reported to the Business Registration Office under the Ministry of Planning and Investment within 10 working days from the date of the decision to change the representative.

The change of the legal representative must be documented and submitted according to the detailed regulations outlined in the government’s Decree 47/2021/ND-CP, which further specifies the procedures for company registration and amendments.

Steps to Notify Two-Member LLC Legal Representative Change

1. Prepare the Required Documents

The company must prepare the following documents for notifying the change of the legal representative:

• A notification form of changes to the business registration content (Form 09 issued under Decree 01/2021/ND-CP)
• A resolution or decision of the Members’ Council about the change of legal representative, signed by all members
• A copy of the personal identification of the new legal representative (passport, ID card, or citizen identification card)
• A power of attorney, if another person is authorized to submit the application on behalf of the company

2. Submit the Application

The application for notifying the change must be submitted to the Business Registration Office (BRO) where the company is headquartered. The submission can be made either online via the National Business Registration Portal or in person at the provincial Department of Planning and Investment. The company should ensure that all documents are accurate and complete to avoid delays in the processing time.

3. Pay the Fees

There is a government fee associated with processing the change of a legal representative. This fee must be paid at the time of submission. The amount of the fee may vary by location and is typically around 300,000 to 500,000 VND.

4. Wait for the Confirmation

Once the application is successfully submitted, the Business Registration Office will review the documents and issue an amended business registration certificate reflecting the new legal representative. The review period is usually between 3 to 5 working days, after which the company will be issued a new registration certificate if the application is approved.

Potential Challenges and Considerations

While the process of notifying the authorities about the change of a legal representative is relatively straightforward, there are some challenges and considerations that businesses should be aware of:

• Ensuring that the Members’ Council resolution is signed by all members. In cases where there is internal conflict, this can delay the process.
• If the new legal representative is a foreign national, additional documentation may be required, such as a work permit or proof of residence in Vietnam.
• Any delays in notifying the change within the required 10-day period can result in penalties or administrative fines.

Legal Consequences of Failing to Notify

Failure to notify the authorities of a change in the legal representative within the legally prescribed period can result in several consequences:

• Fines and penalties for late notification, ranging from 1,000,000 to 10,000,000 VND depending on the severity of the delay
• Administrative sanctions imposed on the company, which could hinder its ability to operate legally
• Inability to proceed with certain business transactions, such as opening bank accounts or signing contracts, until the new legal representative is officially recognized by the authorities

Conclusion

Ensuring proper notification of a change in the legal representative is a critical step for maintaining compliance with Vietnam’s business laws. By following the prescribed procedures, preparing the necessary documents, and submitting the application in a timely manner, companies can avoid legal complications and administrative penalties. Unilaw’s team of outstanding lawyers can assist businesses in managing these changes smoothly and efficiently.

For more insights and practical guidance on corporate governance and legal compliance, visit Unilaw’s Case Law Blog.

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