The comparative characteristics between Joint Stock Companies (JSC) and Limited Liability Companies (LLC) are based on the provisions of the 2014 Enterprise Law.
See more: Enterprise Law 2014
Similarities
- Members can be individuals or organizations;
- There is a separation between the company's assets and the assets of its members;
- They both have legal personality;
- They are both types of equity-based companies;
- Members are liable to the extent of their capital contribution;
- Company members have the right to transfer capital in accordance with the law.
The differences
| Criteria | Viet Nam Kosmos | Limited liability company |
| Quantity | There is no limit on the number of shareholders; however, there must be a minimum of three shareholders. | The number of members ranges from 1 to 50, depending on whether it's a single-member limited liability company or a limited liability company with two or more members. |
| Operating characteristics | – Joint-stock companies are a more complex type of company compared to limited liability companies, and their operations have a broader social impact. – It is easy to raise large amounts of capital through the issuance of shares and bonds, thus sharing the risks in the company's business operations. | Limited liability companies (LLCs) are subject to fewer legal restrictions than joint-stock companies, have less capital because LLCs only have the right to issue bonds, and therefore are subject to higher risks. |
| Capital | – Authorized to issue shares to raise capital; – The charter capital of a joint-stock company is divided into many equal parts called shares; – Capital contribution: Founding shareholders must jointly subscribe to a minimum of 20% of the total number of common shares offered and must pay in full for the subscribed shares within 90 days from the date the joint-stock company is granted its business registration certificate. – In case a shareholder fails to pay or pays insufficient capital contribution within the above timeframe => The matter will be handled according to the provisions of Clause 3, Article 112 of the 2014 Enterprise Law. | – Issuing shares is not permitted; – The charter capital of a Limited Liability Company is calculated as a percentage of the contributed capital; – Capital contribution: Members must contribute their capital contribution to the company in full and with the correct type of assets as committed when registering the business within 90 days from the date of issuance of the Business Registration Certificate. A certificate of capital contribution will be issued upon full and correct contribution of assets as committed within the specified timeframe. – In case of failure to contribute the full amount on time: the company will proceed with adjusting the charter capital and the members' capital contribution ratios according to the actual contributions. |
| Transfer of capital contributions/shares | – Shares are freely transferable, except in cases stipulated in Clause 3, Article 119 of the 2014 Enterprise Law and where the company's charter contains provisions restricting the transfer of shares. – The transfer is carried out by contract in the usual way or through transactions on the stock market. | – If a member wishes to transfer part or all of their capital contribution, they must first offer that capital contribution to the remaining members in proportion to their respective capital contributions in the limited liability company, under the same conditions. – Members can only transfer their shares to non-members if the remaining members of the limited liability company do not purchase or do not purchase all of the shares within 30 days from the date of the offer. |
| Structure | – A joint-stock company has a General Meeting of Shareholders (GSM), a Board of Directors (BOD), a Chairman of the BOD, and a Director/General Director. – Joint-stock companies with more than 11 individual shareholders or with an organization owning more than 50% of the total shares of the joint-stock company must have a supervisory board. – The General Meeting of Shareholders is the highest decision-making body. – The board of directors is the governing body of a joint-stock company. | – A limited liability company with two members has a Board of Members, a Chairman of the Board of Members, and a Director/General Director. A limited liability company with 11 or more members must establish a Supervisory Board. – The Board of Members is the highest decision-making body of the company. |
| Management mode | – Establishing and managing a joint-stock company is more complex than that of a limited liability company due to being tightly bound by legal regulations. – Conflicts of interest are always present in these companies. | – The management rights of the company are closely tied to the founding members based on their capital contributions. – Cases of conflicting interests are less common in companies compared to joint-stock companies. |
| Legal basis | Enterprise Law 2014 | |
