A one-member limited liability company is a company owned and operated by an organization or an individual. So how is a one-member limited liability company’s organizational structure? If the entrepreneurs want to let the organization have legal personality as the limited liability company owner instead of standing by themselves, how will it be managed?…

Luat Phuc Cau regularly receives these questions when advising clients. A one-member limited liability company is smaller in size and simpler organization than other types, so it is normal for entrepreneurs to have this question. However, under the law, a one-member limited liability company also has its own organizational structure.

1.Structure of a one-member limited liability company owned by the organization

This organizational structure of managing a one-member limited liability company is specified in Article 79 of the Law on Enterprises 2020:

“Article 79. The organizational structure of a single-member limited liability company owned by an organization

1.A single-member limited liability company owned by an organization shall apply one of the two models below:

a) A company with a President and the Director/General Director;

b) A company with a Board of Members and the Director/General Director.

[…]

3.The company shall have at least one legal representative who holds the title of President of the Board of Members, the company’s President, or Director/General Director. Unless otherwise prescribed by the company’s charter, the President of the company or President of the Board of Members shall be the company’s legal representative. ”

a.The company is managed under the model of having a Members’ Council:

This organizational structure is applied when the company has many problems to handle, discuss instead of giving an individual the right to decide all the problems themselves.

Members’ council: Members appointed and dismissed by the company owner; There are 03 to 07 members with a term of not more than 05 years; On the name of the company owner, the rights and obligations of the company owner are performed; on the name of the company to perform the rights and obligations of the company, except for the rights and obligations of the Director or General Director; take responsibility before law and the company owner for the performance of assigned rights and obligations following the company’s charter, this Law and other relevant laws.

b. The company is managed according to the model with the company president

This organizational structure does not require as many personnel as the above model, suitable for those units that need unified and focused management.

– Company President: The chairman of the company is appointed by the company owner. The president of the company on the name of the company owner to perform the rights and obligations of the company owner; on the name of the company to perform the rights and obligations of the company, except for the rights and obligations of the director or general director; take responsibility before law and the company owner for the performance of assigned rights and obligations under the company’s charter, this Law and other relevant laws.

Other titles:

– Director/General Director: The Members’ Council or chairman of the company/ Members’ council appoints or hires the Director or General Director for a term of not more than 05 years to run the company’s day-to-day business activities.

2. The company is managed according to the model with the company president

“Article 85. The organizational structure of a single-member limited liability company owned by an individual

1.A single-member limited liability company owned by an individual shall have a President and a Director/General Director.

2.A company’s owner shall be the President who may concurrently hold the Director/General Director position or hire another person as the Director/General Director.

3.Rights and obligations of the Director/General Director shall be specified in the company’s charter and the employment contract.”

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