There are 5 types of companies in Vietnam: joint stock companies, limited liability companies, partnerships, and sole enterprises.
1. Joint stock companies
The Joint Stock Company Definition
Joint stock companies are enterprises in which:
Charter capital is divided into equal parts called shares.
Shareholders may be organizations or individuals, in which the minimum number of shareholders is three and there is no maximum.
Shareholders are solely accountable for the firm's debts and other property responsibilities up to the amount of capital they contributed to the enterprise.
Joint Stock companies are considered legal persons (having legal entities).
The Special Feature
Joint-stock companies have the right to issue shares, bonds, and other securities of the company.
The Organisation Structure
Unless otherwise provided by the law on securities, joint-stock companies have the right to choose an organization to manage and operate according to one of the following two models:
The General Meeting of Shareholders, Board of Directors, Control Board, and the Director or General Director. Whenever a joint-stock company has less than 11-shareholders and the shareholders are organizations holding less than 50-percent (50%) of the total shares of the company, it is not required to have a Supervisory Board.
The General Meeting of Shareholders, Board of Directors, and the Director or General Director - at least 20-percent (20%) of the members of the Board of Directors must be independent members and have an Audit Committee under the Board of Directors. The organizational structure’s functions and duties of the Audit Committee are specified in the company's charter or the operation regulations of the Audit Committee issued by the Board of Directors.
2. Partnership
The Definition
A partnership is a kind of enterprise in which:
There must be at least 2 members who are general owners of the company and doing business together under a general name (hereinafter referred to as general partners).
In addition to general partners, the company may have additional capital contributors.
General partners must be individuals who are responsible with all of their assets for the company’s obligations.
Capital-contributing members are organizations and individuals who are solely accountable for the firm's debts and other property responsibilities up to the amount of capital they contributed to the enterprise.
A partnership company is a legal person (having its own legal entities).
The Special Feature
Partnerships may have no right to issue any security.
3. Limited liability companies
A limited liability company is a legal person.
A one-member limited liability company may not issue shares (except as a conversion into a joint stock company) and may issue bonds.
Organizational structure:
4. Sole proprietorships
Sole proprietorships are enterprises owned by an individual who is solely responsible with all of their assets for all business activities.
A sole proprietorship IS NOT a legal person.
Sole proprietorships may not issue securities of any kind.
Each person is only entitled to establish a private enterprise. Owners of private enterprises cannot concurrently be owners of business households or general partners of partnerships.
Private enterprises are not entitled to contribute capital to the establishment or purchase shares or contributed capital in a partnership, limited liability company, or joint-stock company.