What is a Single-Member Limited Liability Company? – Article 74 of the Enterprise Law 2020 stipulates the concept of a one-member limited liability company as follows:
“A single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.”
Features of a one-member limited liability company
As a special type of enterprise, a one-member limited liability company has the following main characteristics:
1. Company member
One member limited liability company with only one owner. A business owner here not only means an individual but can also be an organization.
The charter capital is specified in Article 75 of the Enterprise Law 2020, according to which:
– Charter capital upon enterprise establishment registration is the total value of assets committed to contributing by the company owner and stated in the company’s charter;
– Owners are responsible for contributing in full, in the right type, and on time as committed;
– The maximum capital contribution period is 90 days from the date of issuance of the Enterprise Registration Certificate;
– In case of insufficient contribution, the owner must carry out the procedures for changing the charter capital of the one-member limited liability company;
– Charter capital is entirely personal responsibility, without the participation of other members or organizations;
3. Owner’s property liability
Unlike a sole proprietorship, the owner will not have unlimited liability for all his assets.
The owner of a one-member limited liability company will be fully responsible for the debts and property obligations within the charter capital.
Note: One-member limited liability companies are not allowed to issue shares, except in the case of conversion into a joint-stock company. Instead, businesses will have to raise capital in other forms such as borrowing capital from individuals and organizations; issue bonds, or simply add capital yourself.
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