A limited liability company with two or more members is an enterprise with between 02 and 50 members who are organizations and individuals. When a member dies, how is their contributed capital handled?
Legal grounds:
- Enterprise Law No. 59/2020/QH14.
Members of a limited company are entitled to share profits in proportion to their contributed capital. A member may also transfer part or all of the contributed capital. Therefore, the contributed capital is considered a member’s property. In case a member of a limited company dies, an inheritance related to the contributed capital will arise.
Specifically, according to the provisions of Article 53 of the Law on Enterprises as follows:
In case a company member being an individual dies, the heir according to the will or at law of such member is a member of the company.
Thus, if a member of a limited company dies, then: Although the limited liability company is a counter-capital nature, the remaining members will not have the right to actively choose members in this case, but the heirs automatically become a member of the company. The heirs will have to carry out the inheritance declaration procedures according to the Civil Code to serve as the basis for the company to determine who the new members are.
What if the heir does not want to become a member of the company?
In fact, there are many cases where the heir does not want to become a member of the company. In case the deceased member’s heir does not want to become a member of the company, they have the right to:
- Request the company to buy back the inherited capital contribution
- Or transfer the inherited capital contribution to another person
Procedures for requesting the company to buy back contributed capital and procedures for transferring contributed capital shall comply with the provisions of Articles 51 and 52 of the Law on Enterprises.
