Voting rights at the Member’s Council of a single-member limited liability company (Single LLC) in Vietnam

It is not clear whether voting rights of members of the Member’s Council of a Single LLC is based on (1) the amount of charter capital that such member represents, or (2) principle one person-one vote. Article 75.5 of the Enterprises 2014 provides that unless otherwise provided in the charter, each member of the Members’ Council of a Single LLC has one vote. This provision suggests that in the charter of the Single LLC, the owner of a Single LLC can allocate different voting rights to members of the Members’ Council who are usually the representatives of the owner in the Single LLC. The most common criteria is based on the amount of charter capital of the Single LLC represented by each member. The ability to allocate different voting rights to different members of a Single LLC is important since the owner of a Single LLC may have different shareholders who want to directly manage the Single LLC.

On the other hand, Article 75.6 of the Enterprises Law 2014 provides that a decision of a meeting of the Members’ Council will be passed if approved by more than half of members. Article 75.5 of the Enterprise Law 2014 also provides that a quorum of a meeting of the Members’ Council of a Single LLC requires attendance of at least two thirds of the members. These provisions do not provide for any exception and suggest that voting rights at the Members’ Council of a Single LLC is determined based on the principle of one person – one vote.

This post is contributed by Le Thanh Nhat, a trainee at Venture North Law.