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Compare joint stock company and limited liability company with two members or more. What are the differences? Find out with OTIS LAWYERS within the scope of the following article, in order to help them make suitable choices when wanting to establish a business.
Compare joint stock company and limited liability company
| LIMITED LIABILITY COMPANY WITH TWO MEMBERS OR MORE | JOINT STOCK COMPANY | ||
SIMILARITIES | - Both are businesses operating according to the Enterprise Law of 2020; - Both have legal status; - Both have multiple owners; - Members are limitedly liable for the company's debts and financial obligations; - Contributions that are insufficient or not made on time are considered as debts to the company." | ||
| DIFFERENCES | Legal basis | Article 47 - Article 72 of the 2014 Enterprise Law. | Article 110 - Article 171 of the 2014 Enterprise Law. |
| Number of members | Minimum of 02 members and a maximum of 50 members | Minimum of 03 members and no maximum limit. | |
| Capital structure | The charter capital is not divided into equal parts. | The charter capital is divided into equal parts, recorded as shares. | |
| Capital contribution | Full and correct asset contributions as committed within 90 days from the date of being granted the Business Registration Certificate. Allowed to contribute other assets only if approved by the majority of the remaining members. | Full capital contribution as registered within 90 days from the date the company is granted the Business Registration Certificate. Founding shareholders must jointly register to purchase at least 20% of the total common shares entitled to offer at the time of business registration | |
| Capital mobilization | Not allowed to issue shares. | Allowed to issue shares | |
| Capital transfer | Conditions applied for transfers (preferential transfer to the company members). | Easy and free transfer (except during the first 03 years, founding shareholders can only transfer shares to other founding shareholders and to non-founding shareholders with approval from the Shareholder General Meeting). | |
| Organizational structure | There is a structure: Members' Council, Chairman of the Members' Council, Director or General Director, Supervisory Board (companies with less than 11 members are not required to establish a Control Board). | There are two structures: a) The General Meeting of Shareholders, Board of Directors, Board of Supervisors, Director or General Director (company with less than 11 shareholders and shareholders being organizations holding less than 50% of the total shares, shall not required to have a Control Board); b) General Meeting of Shareholders, Board of Directors, Director or General Director (at least 20% of the members of the Board of Directors are independent members and have an Internal Audit Committee under the Board of Directors). | |
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OTIS AND PARTNERS LAW FIRM
Office address: K28 - Group K, Lane 68 Trung Kinh, Yen Hoa Ward, Cau Giay District, Hanoi
Email: info@otislawyers.vn
Hotline: 0987748111
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