What is an One-Member Limited Liability Company?

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.

2. Capital

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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