Model charter of single member limited liability company in form of chairman

Single member limited liability company in form of chairman in accordance with Vietnamese Law on enterprise 2005 is a single member limited liability company found by an organization, in which company owner appoints an authorized representative being company chairman. The organizational and management structure of the Company will comprise of chairman, director (general director) and inspector.  

Model charter of single member limited liability company in form of chairman

Model charter of single member limited liability company in form of chairman hereafter is for your reference

MODEL CHARTER
SINGLE INDIVIDUAL MEMBER LIMITED LIABILITY COMPANY IN FORM OF CHAIRMAN

___________________________

CHARTER
…………………………… SINGLE MEMBER LIMITED LIABILITY COMPANY

Pursuant to the Law on Enterprises passed by National Assembly of Socialist Republic of Vietnam, Legislature XI on 29 November 2005.

(Model charter of single member limited liability company in form of chairman)

CHAPTER I: GENERAL PROVISIONS

ARTICLE 1: COMPANY FORM
…………………………… SINGLE MEMBER LIMITED LIABILITY COMPANY (Hereinafter referred to as the “Company”) is a company established by …..(Full name of organization) who is the Company Owner (Hereinafter referred to as the “Company Owner”)
Company is incorporated and operated legally in Vietnam, carried out its business activities in accordance with laws.
Company will be given a legal status from the issuing date of the certificate of business registration, has its own seal and its own bank accounts in VND and foreign currencies.
The Company Owner shall be liable for all debts and other property obligations of the Company within the amount of the charter capital of the Company.

Company operation term is  …… years, from the issuing date of the certificate of business registration.

Please refer to Articles 150, 151, 152, 153, 154, 155 and 157 of the Enterprises Law

ARTICLE 2: COMPANY NAME, HEAD OFFICE, BRANCHES
1. Company names:
Name (in Vietnamese): CÔNG TY TNHH ….....................................
Name (in foreign language): ………..........................................
Abbreviated name: …………..........................................................................
Please refer to Articles 31, 32, 33 and 34 of the Enterprises Law
2. Company head office:
- Head office is located at Lot No. : ……………., Street: ………, IPZ/ EPZ: ……………, Ward: ……..............................................., District: …………………………, City/ Province: …………………..
Tel: …………………………… Fax: …………………………………
Email: ………………………………… Website:……………………………..
Please refer to Article 35 of the Enterprises Law
3. Company may open their branches and representative offices in Vietnam or foreign countries when it requires and compliance with provisions of laws.
4. Company may establish a joint venture with other organizations and individuals in domestic and foreign countries upon the Company Owner written consent and approval of competent authorities.

ARTICLE 3: BUSINESS SCOPE
…………………………………………………………………………….………….
Please refer to Article 7 of the Enterprises Law and List of Business Activities for Business Registration.

ARTICLE 4: COMPANY OWNER
Organization name: ………………….……….. Nationality: …………..
Business registration (or incorporation license) number: ...............................................
Issued date: ....../......./.......... Issued by : ....................................................
Head office address: ................................................................
Tel: ......................................... Fax: ..............................................
Email: .............................................. Website: .........................................

ARTICLE 5: CHARTER CAPITAL, INCREASE AND DECREASE OF CHARTER CAPITAL
1. Charter capital is  ……………………… (In word:…only)  contributed by Company Owner within …. days, from issuing date of business registration certificate.
In which:
- VND:……………………………………………………………….
- Assets: ………… (specify quantity and value of each asset)
- Foreign currency: ……………………………………………………………….
- Other assets:………………………………………………………………………….
Company Owner assures and takes responsible before law for the prices of all contributions in assets above (if any).
Please refer to Articles 18 and 30 of the Enterprises Law
2. Increase, decease of charter capital:
a. Company shall not reduce its charter capital.
b. Company increases its charter capital by the Company Owner making additional investment or raising additional capital contributed by other people.
The Company Owner shall decide on the form of increase and the amount of increase of the charter capital. Where the charter capital is increased by raising additional capital contributed by other people, the Company must register to convert into a limited liability Company of two or more members within fifteen (15) days from the date the new member undertakes to contribute capital to the Company.

ARTICLE 6: RIGHTS OF COMPANY OWNER
a) To make decisions on the contents of the charter of the company, amendments of and additions to the charter of the company;
b) To make decisions on strategies for development and annual business plans of the company;
c) To make decisions on the organizational and management structure of the company, to appoint, remove or dismiss managerial positions of the company;
d) To make decisions on investment projects valued at fifty (50) or more per cent of the total value of the assets recorded in the most recent financial statement of the company, or a smaller percentage as stipulated in the charter of the company;
e) To make decisions on solutions for market development, marketing and technology;
f) To approve loan agreements and other contracts as stipulated in the charter of the company valued at fifty (50) or more per cent of the total value of the assets recorded in the most recent financial statement of the company, or a smaller percentage as stipulated in the charter of the company;
g) To make decisions on sale of assets valued at fifty (50) or more per cent of the total value of the assets recorded in the most recent financial statement of the company, or a smaller percentage as stipulated in the charter of the company;
h) To make decisions on increases in charter capital of the company; on assignment of all or part of the charter capital of the company to other organizations or individuals;
i) To make decisions on establishment of subsidiary companies or on capital contribution to other companies;
j) To organize supervision and assessment of the business operations of the company;
k) To make decisions on use of profits after fulfilment of tax obligations and other financial obligations of the company;
l) To make decisions on re-organization or dissolution and petition for bankruptcy of the company;
m) To recover all of the value of assets of the company after the company completes dissolution or bankruptcy [procedures];
n) Other rights in accordance with this Law and the charter of the company.

ARTICLE 7: RESTRICTION ON RIGHTS OF COMPANY OWNER      
1. Company Owner may only withdraw capital by way of assignment of a part or all of the charter capital to other organizations and individuals; in the case of withdrawal of all or part of its contributed capital from the Company in another form, [the Company Owner] must be jointly liable for debts and other property obligations of the Company.
In the case of assignment of part of the charter capital to other organizations or individuals, the Company must register for conversion into a limited liability Company with two or more members within a period of fifteen (15) days from the date of assignment.
2. The Company Owner may not withdraw profits of the Company in cases where the Company has not paid in full all debts and other property obligations which become due.

ARTICLE 8: OBLIGATIONS OF COMPANY OWNER
a) Making capital contribution fully and promptly as committed; if not, the company owner will be liable to all debts and other financial obligations of the company;
b) Complying with the company charter;
c) Keeping assets of the company and company owner separated;
d) Complying with laws governing contracts on sale, borrowing, lending, leasing, renting or other transactions between company and the company owner.
e) To perform other obligations in accordance with this Law and the charter of the Company.

ARTICLE 9: RIGHTS AND OBLIGATIONS OF COMPANY
A. Rights of company:
a) Conduct business; choose, by its own initiative, business activities, localities, and form of investment; expand business in terms of size and business activities; are encouraged, facilitated and given incentives, by the state, in producing or providing public goods or services.
b) Choose form and way of mobilizing, distributing and utilize capital;
c) Take initiative in the search for markets, customers, and in signing contracts;
d) Import and export;
e) Hire and use labors in accordance with the business requirement;
f) Apply, by its own initiative, modern scientific and technology in order to enhance business performance and competitiveness;
g) Decide on organizational structure and business affairs in an autonomous manner;
h) Possess, use and dispose assets of the enterprises;
i) Deny any request of supplying resources that are not lawfully stipulated by laws.
j) Complain and petition in pursuant to laws on complain and petition;
k) Engage in legal proceedings directly or via authorized person;
l) Other rights as provided by the laws.

B. Obligations of company:
a) Conduct business activities that are recorded in the Certificate of Business Registration; ensure fulfillment of business conditions as required by laws;
b) Do accounting, make and submit financial reports faithfully, accurately and promptly in pursuant to laws on accounting.
c) Register tax code; pay tax and perform other financial obligations in pursuant to the laws;
d)  Ensure lawful rights and interests of employees in pursuant to laws on labor; ensure that social insurance, health insurance and other insurance are given to employees in pursuant to laws on insurance.
e) Ensure and be liable to quality of goods and services in accordance with standard as registered or declared;
f) Fulfill statistical requirements in compliance with laws on statistics; submit periodically information in relation to enterprises and financial status of enterprises to the competent authority by using standardized forms; correct and adjust any submitted information that are found incorrect and insufficient afterward;
g) Abide by laws on national defense, security, public order and safety, protection of natural resources, environment, historical and cultural places, and famous landscapes;
h) Other obligations as stipulated by laws.

(Model charter of single member limited liability company in form of chairman)

CHAPTER II: 
ORGANIZATION AND MANAGEMENT STRUCTURE OF THE COMPANY

ARTICLE 10:  ORGANIZATION AND MANAGEMENT STRUCTURE – LEGAL REPRESENTATIVE

1. The company owner shall appoint one person as authorized representative for a term not exceeding five years in order to exercise its rights and obligations in accordance with this Law and relevant laws. Authorized representative of company owner is company chairman. An authorized representative must satisfy the following criteria and conditions:
a) Having full capacity for civil acts;
b) Not being prohibited from establishment and management of enterprises;
c) Having professional qualifications and experience in business management or in the main lines of business of the company;
d) In the case of a subsidiary company where the State owned share of capital contribution or State owned shares accounts for more than fifty (50) per cent of the charter capital, the spouse, father, adoptive father, mother, adoptive mother, children, adopted children and siblings of the managers and of a person authorized to appoint the managers of the parent company may not be appointed as the authorized representative of the subsidiary company.
2. The company owner has the right to replace an authorized representative at any time.
3. The organizational and management structure of the Company will comprise of chairman, director (general director) and inspector. 
4. The legal representative is director or general director (or the company chairman). The legal representative of the company must reside in Vietnam. If his/her absence in Vietnam is more than thirty days, he/she must authorize in writing another person to exercise rights and obligations in accordance with this charter.

ARTICLE 11: COMPANY CHAIRMAN
1. Chairman of the company will act on behalf of the company owner in exercising his/her rights and obligations; act on behalf of the company in exercising its rights and obligations; be responsible to the company owner in exercising assigned rights and obligations in accordance with Law on enterprise 2005 and related regulations.
2. Rights, duties, obligations and working rule of the chairman of the company will be complying with the company charter and related laws.
3. Decisions of the chairman of the company will be effective from the date of being ratified by the company owner otherwise stipulated in the company charter.

ARTICLE 12: COMPANY DIRECTOR (GENERAL DIRECTOR)

A.. Powers and duties of Director (General Director):
The company chairman can either hold the position of or hire a director (general director) with term of a five years or less to run the day-to-day business operation of the company. Director (general director) is responsible to the law and chairman of the company in exercising assigned rights and obligations.

 Powers of Director (General Director):
a) Implementing decisions of the chairman of the company;
b) Deciding on matters in relation to day-to-day business operation of the company;
c) Implementing business and investment plans of the company;
d) Stipulating rules on internal management of the company;
e) Appointing, exempting and dismissing managers except those are appointed and dismissed by the chairman of the members’ council or chairman of the company;
f) Concluding contracts on behalf of the company except that must be concluded by the chairman of the members’ council or chairman of the company;
g) Suggesting organizational management of the company;
h) Submitting annual financial report to the members’ council or chairman of the company;
i) Suggesting method of distributing profits or handling losses;
j) Hiring employees;
k) Other rights as stipulated in the company charter and contract signed with the chairman of the company.
B. Director (general director) is required to meet following qualifications:
a) Having capacity for civil act; not prohibited from managing an company in pursuant to the law on enterprise;
b) Not being related person of the chairman of the company and any person who has power to appoint authorized representative or chairman of the company;
c)  Having expertise and experiences in relation to business management or major business activities of the company; the company charter can stipulate other qualifications.

ARTICLE 13: INSPECTOR
1 The company owner will appoint from one to three inspectors with term of a three year or less. Inspectors are responsible to the law and company owner in exercising assigned rights and obligations.
2 Inspectors will have following duties:
a) Inspecting lawfulness, fiduciary and diligence of the chairman of the company and director (general director) in performing their respective rights, duties and obligations;
b) Examining the reports on financial statement, business performance, management and others before submitting them to the company owner and relevant state agencies; submitting the company owner examination report thereof.
c) Recommending proposals for change and adjustment of the organizational management of the company;
d) Other obligations as stipulated in the company charter or decisions made by the company owner.
3 Inspectors are entitled to review any document of the company at the head office, branches or representative offices. Chairman of the company, director (general director) and other managers are required to provide fully and promptly information in relation to business and management performance as requested by the inspectors.
4 Inspectors are required to meet following qualifications:
a) Having capacity for civil act and not prohibited from managing an enterprise in pursuant to this law;
b) Not being related person of the chairman of the company, director or general director and any person who has power to appoint inspectors;
c) Having expertise and experiences in relation to accounting or auditing; having expertise and experiences in relation to major business activities of the company; the company charter can stipulate other qualifications.

ARTICLE 14: DUTIES OF CHAIRMAN OF THE COMPANY, DIRECTOR OR GENERAL DIRECTOR AND INSPECTORS
1 Chairman of the company, director  (general director) and inspectors will have following duties:
a) Complying with the laws, company charter, decisions of the company owner in performing their assigned rights and obligations;
b) Performing assigned rights and obligations in a fiduciary, diligent and optimal manner in order to maximize benefits of the company and company owner;
c) Pledging loyalty toward interests of the company and company owner. Not permitted to make use of information, know-how and business opportunity of the company or to abuse positions, powers and assets of the company for the benefit of themselves and other person.
d) Notifying promptly, fully and accurately the company enterprises in which they or their related persons are sole owner or major shareholders. Notification is required to display at the head-office and branches of the company.
d) Other duties as stipulated in this law and company charter.
2. Director or general director is not entitled to raise salary or pay bonus if the company is incapable of paying off due debts.

ARTICLE 15: ASISTANT CABINET
1. Director (general director) is assisted by one or two deputy director (deputy general director) appointed by Chairman. Deputy director (deputy general director) may manage one or some operation sections of company assigned by director (general director) and are responsible to Director (General Director), company Chairman and laws in exercising assigned duties. The other key positions shall be appointed by Company Chairman under proposal of Director (General Director) includes managers, deputy managers of departments and sections.
2. Chief Accountant will assist Director (General Director) to manage the organization, implementation of accounting activities, statistics of company. Powers and responsibilities of chief accountant comply with provisions of laws.

ARTICLE 16: CONTRACT, TRANSACTIONS BETWEEN COMPANY AND RELATED PERSONS
1. Contracts and transactions between a limited liability company with one member with the following subjects must be considered and voted on by the chairman of the company, the director or general director and the inspectors on the principle of majority with one vote for each person:
a. The company owner and a related person of the company owner;
b. The authorized representative, the director or general director and the inspectors;
c. A related person of the persons stipulated in sub-clause (b) of this clause;
d. A manager of the company owner, the person authorized to appoint such managers;
e. A related person of the persons stipulated in sub-clause (d) of this clause.
The legal representative of the company must send to the the chairman of the company, the director or general director and the inspectors; and, at the same time, display at the head office and branches of the company, the draft of any such contract or contents of any such transaction.

2. The contracts and transactions stipulated in clause 1 of this article may be approved only upon satisfaction of the following conditions:
a. The parties entering into the contract or performing the transaction are independent legal entities with separate rights, obligations, assets and interests;
b. The price used in the contract or transaction is the market price at the time when the contract is entered into or the transaction is performed;
c. The company owner complies with the obligations stipulated in clause 4 of article 65 of  Law on enterprise 2005.
3. A contract or transaction shall be void and be dealt with in accordance with law where it is not entered into in accordance with the provisions of clause 1 of this article. The legal representative of the company and the parties to the contract must compensate for any damage arising and return to the company any benefits gained from the performance of such contract or transaction.
4. A contract or transaction between a limited liability company with one member with the company owner or a related person of the company owner must be recorded and retained as separate files of the company.

ARTICLE 17: LABOR MANAGEMENT
1. Laborers are employed in the company by labor contracts, enjoying the rights and obligations according to the provisions of labor codes of Vietnam, labor regulations, salary and remuneration regulation of company.
2. Director (General Director) is the person decides the recruitment base on the proper educational and professional background for works and in accordance with regulations issued by company chairman.

(Model charter of single member limited liability company in form of chairman)

CHAPTER III : FINANCE -ACCOUNTING

ARTICLE 18: FISCAL YEAR AND FINANCIAL STATEMENTS
1. The fiscal year of the Company shall commence on 1st of January and end on 31st of December of the calendar year annual. The first fiscal year shall commence on date of business registration to 31st of December of the same year.
2. The accounting books of the Company shall be opened and maintained according to the current regulations of laws.
3. Collection and payment of company shall be carried out in accordance with provisions of laws.
4. Within 90 days from the closing date of the fiscal year, the annual financial statements of the Company must be submitted to the Tax Authority, the competent Business Registration Authority and Statistical Authority.

ARTICLE 19: REMUNERATION, SALARY AND OTHER BENEFITS OF MANAGERS OF THE COMPANY AND INSPECTORS
1. Managers of the Company and inspectors shall be entitled to remuneration or salary and other benefits in accordance with the business results and efficiency of the Company.
2. The Company Owner shall decide on the rate of remuneration, salary and other benefits of members of the Chairman of the Company, director (General director) and inspectors. Remuneration, salary and other benefits of managers of the Company and inspectors  shall be included in business expenses in accordance with provisions of the law on corporate income tax and other relevant legislation, and be recorded as a separate item in annual financial statements of the Company.

ARTICLE 20: PROFIT DISTRIBUTION OF COMPANY AND LOSS HANDLE IN BUSINESS
Annually, after fulfillment of tax obligations and other financial obligations in accordance with la, company shall make appropriations for following funds of the company from profit after tax:
Reserve funds…%
Business development funds …%
Remuneration, welfare fund…%
Other funds in accordance with laws…%
Other funds decided by company chairman upon business performance and compliance with provisions of laws
The company owner may not withdraw profits of the company in cases where the company has not paid in full all debts and other property obligations which are due.
Where company is loss in business, company may use profit and reserved funds to cover such loss, if loss in business prolong, company shall be dissolved in accordance with provisions of laws.

(Model charter of single member limited liability company in form of chairman)

CHAPTER IV : PROCEEDINGS, DISPUTES, DISOLUTION,
LIQUIDITY, BANKRUPCY

ARTICLE 21: DISPUTE RESOLUTIONS AND PROCEEDINGS

1. Internal disputes, company may resolve in manner of internal agreement, if not it may be transferred to the competent authority.
2. External disputes, company has equal rights with other legal entities under laws when disputes arise. Authorized representative of company will represent on behalf of company to laws.

ARTICLE 22: COMPANY DESOLUTION
Company shall be dissolved in following cases::
1. At the expiry of the term stipulated in the Charter of the Company and no extension is made; or application for extension but not approved by competent authorities.
2.  At the decision of the Company Owner;
3. The Certificate of business registration of the Company is revoked.

ARTICLE 23: PROCEDURE FOR DISSOLUTION AND ASSET LIQUIDITY
1. A resolution on dissolution of company shall be passed by company owner  must have the following main details:
a. Name and address of the head office of the enterprise;
b. Reasons for dissolution;
c. Time-limit and procedures for discharging contracts and paying debts of the enterprise; time limit for paying debts and discharging contracts shall not exceed six months from the date on which the resolution on dissolution is passed;
d. Plan for dealing with obligations arising from labor contracts;
e. Full name and signature of the legal representative of the enterprise.

2. Within seven working days after being passed, the resolution on dissolution must be sent to the business registration body, all creditors, persons having related rights, obligations or interests, and employees in the enterprise and must be displayed publicly at the head office and branches of the enterprise and the resolution on dissolution must be published on at least one written or electronic newspaper in three consecutive issues. The resolution on dissolution must be sent to creditors together with a notice of the settlement of the debt. The notice shall include the name and address of the creditor; the amount of the debt, the time-limit, location and method of payment of such debt; the method and time-limit for dealing with complaints of creditors.
3. Debts of the enterprise shall be paid in the following order:
a. Unpaid wages, retrenchment allowances, and social insurance in accordance with law and other benefits of employees pursuant to signed collective labor agreement and labor contracts.
b. Tax liabilities and other debts.
After payment of all debts and costs of the dissolution proceeding of the enterprise, the remainder shall belong to the company owner.
4. Within a time-limit of seven working days after all debts of the enterprise are fully paid, the legal representative of the enterprise must submit documents relating to the dissolution of the enterprise to the business registration body.
5. Where the business registration certificate of company is revoked, the company must be dissolved within six months from the date of revocation of the business registration certificate.

ARTICLE 24: BANKCRUPCY
Company bankruptcy shall be implemented according to the procedures of law on bankruptcy.

(Model charter of single member limited Liability Company in form of chairman)

CHAPTER V: IMPLEMENTATION

ARTICLE 25: AMENDEMENT AND ADDITION OF THE CHARRTER
This charter shall be amended or added upon the decision of company owner.

ARTICLE 26: FINAL PROVISION
This Charter is passed by Company Owner on …….  20…., comprises 05 chapters, 26 articles and is made in ….. originals having equal legal validity: 01 original for registering at the business registration authority (or Authority that grants the Investment Certificate), ….. originals for the Chairman of the Company, and 01 original for filing at the head office of the Company.

……., dated,  ……

Company Legal Representative                                    Company Owner

              (Sign, full name, title)                                           (sign, full name)

 
(Notes: This Draft is just for reference only. Company may amend, add the articles, but does not contravenes with the law on enterprises 2005)