“Following up new modifications in 2014 Law on Enterprises (“LOE”) set out in the previous Legal Alert, PLF continues to keep informed the outstanding provisions which may impact on the management and organization of a limited liability company (“LLC”). “
Dear Valued Clients
Following up new modifications in 2014 Law on Enterprises (“LOE”) set out in the previous Legal Alert, PLF continues to keep informed the outstanding provisions which may impact on the management and organization of a limited liability company (“LLC”).
Regarding management and organization structure of an LLC
The provisions on management and organization structure of two or more members LLC and one member LLC owned by an individual as stipulated in 2014 LOE is generally unchanged in comparison with those in 2005 LOE, except for the same applicable for one member LLC owned by an organization. one member LLC owned by an organization is accordingly entitled to choose its organizational structure and to operate in accordance with either of the following models:
Such new provision has granted the enterprise the business autonomy in operation with an appropriate organizational model.
Conditions of conducting and adopting decisions in a MC
According to 2014 LOE, the MC of two or more members LLC shall be conducted when it is attended by a number of members holding at least 65% and 50% of charter capital for the first and the second meetings respectively, while the same is 75% and 50% in succession under 2005 LOE.
In case the MC’s resolution is passed by way of collection of written opinions, it must be approved by a number of members holding at least 65% of charter capital instead of 75% as prescribed in 2005 LOE.
2014 LOE provides with certain changes in the conditions for convening and adopting issues in a MC’s meeting by comparison with 2005 LOE. Hence, the LLC should amend and supplement its Charter in order to reflect and realize these new regulations in practice. It is further noted that such amendment and supplementation of the Charter must be approved by the MC’s meeting.
We are willing to assist you to amend and supplement your Charter and perform the related procedures to optimize the interests of your enterprise, manager and members as well as to limit the disputes related to the interests and obligations among the members of the company.
Furthermore, the enterprise which will soon be established in the form of an LLC should pay attention to the new provision on the term of capital contribution. Accordingly, the owner or the members of an LLC must contribute sufficient and correct type of capital as committed when registering for company establishment within a period of 90 days commencing from the date of issuance of Enterprise Registration Certificate instead of 36 months in maximum as regulated in 2005 LOE. However, for LLCs set up before July 1st 2015, duration of capital contribution is still carried out under the provisions of the company’s Charter.