Company members can withdraw capital from the LLC in many different ways, but feasibility depends on the company’s actual business performance.

This article was consulted by Lawyer Nguyen Quang Trung

Legal grounds:

• Enterprise Law 2020.

Enterprise law allows company members (investors) to withdraw their contributed capital (recover investment capital) from a LLC with 2 or more members.

There are many options to recover contributed capital. The method of withdrawing capital and the degree of feasibility will mainly depend on the actual business performance at the time of expected capital withdrawal. If the company does business effectively, or the company has assets, potential projects, etc., the capital contributions of members will be valuable and will be interested and sought after by the capital market.

1. Negotiate for the company to buy back its capital contribution

Members of a LLC can request the company to buy back their capital contribution. However, members can only be made if they vote against the Board of Members’ decisions on the following issues:

• Amending and supplementing content related to the rights and obligations of members and the Board of Members in the company charter;
• Reorganize the company;
• Other cases specified in the company charter.

Members must make a written request for the company to buy back their capital contribution and send it to the company within 15 days from the date of passing the resolution and deciding on the above issues.

Upon receiving the member’s request, the company and the member agree on the buyback price. If no agreement can be reached on the repurchase price, it will be determined according to the market price or according to the valuation principles stipulated in the company charter within 15 days from the date of receipt of the request. Payment for repurchasing capital contributions can only be made if, after full payment, the company still pays all debts and other property obligations.

If the company does not buy back the capital contribution, the member has the right to transfer his capital contribution to another individual or organization.

2. Transfer capital contributions to other individuals or organizations

Limited company members can freely transfer their capital contributions, but must comply with the following order:

• Must offer to sell that capital to other members of the company in proportion to their capital contribution under the same conditions;
• If other members do not buy or do not buy all within 30 days from the date of offering, the offering member has the right to transfer to another individual or organization that is not a member of the company.

3. Donate capital contributions to other individuals or organizations

Limited company members have the right to donate part or all of their capital contribution to other individuals or organizations:

• If the recipient is an heir by law, they automatically become a member of the company;
• Other receipted individuals and organizations only become members of the company when approved by the Board of Members.

4. Use capital contribution to pay off debt

The capital contribution in a LLC is also a type of asset, so LLC members can use the capital contribution to pay debts to other individuals and organizations. Individuals and organizations receiving payment in capital contributions have the right to handle the received capital contributions as follows:

• Become a member of the company if approved by the Board of Members;
• Have the right to offer and transfer that capital contribution to other individuals and organizations.

5. The company proactively reduced its charter capital

Members can withdraw capital from the LLC when the Company decides to reduce its charter capital. The company can reduce capital through the following options:

• Refund a portion of capital contribution to members according to the proportion of their capital contribution in the company’s charter capital if the company has been in continuous business operation for as least 2 years from the date of business establishment registration. But the company must ensure payment of all debts and other property obligations after returning capital to members;
• Proactively negotiate to buy back the capital contributions of company members;
• Reduced charter capital due to members not paying in full and on time the registered capital contribution.