In the intricate landscape of company structure, the role of a legal representative holds significant importance. Particularly in the scenario of a two-member limited liability company, questions may arise concerning the transition of this pivotal role in the unfortunate event of a legal representative’s demise. This discussion will explore the processes and considerations involved when such a situation arises, shedding light on the potential shift in legal representation.
Question:
Our limited liability company has only two members. The other member who is currently the legal representative has passed away. The remaining member automatically becomes the legal representative, right? What procedures do we need to follow?
Answer:
According to Clause 5 of Article 12 of Law on Enterprises 2020: “5. In case the only legal representative of an enterprise she is not present in Vietnam for more than 30 days without authorizing another person to act as the enterprise’s legal representative, or is dead, missing, facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, has limited legal capacity or is incapacitated, has difficulty controlling his/her own behaviors, is banned by the court from holding certain positions or doing certain works, the enterprise’s owner, Board of Members/Partners or Board of Directors shall appoint another legal representative, except for the cases specified in Clause 6 of this Article.“
In the case where the legal representative of the company is also a member of the company, we recommend that the company follow the procedures for changing members of the limited liability company with two members, as specified in Clause 3 of Article 52 of Decree 01/2021/NĐ-CP on enterprise registration. We suggest that the company study and implement these regulations accordingly.
Conclusion
In the realm of company dynamics, the designation of a legal representative carries substantial implications. When confronted with the loss of a legal representative in a two-member limited liability company, a careful and legally compliant transition is essential. Understanding the procedures and responsibilities involved ensures the smooth continuation of the company’s operations, safeguarding its interests and adhering to the regulatory framework.
HMLF is always available to offer assistance in understanding the procedures with authorities.
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Website: hmlf.vn Email: miller@hmlf.vn
