Not every exit is a full departure. Many LLC members want to sell only part of their capital contribution — reducing their involvement while staying in the company with the remainder. This “partial sale” has its own legal mechanics: it triggers the remaining members’ pre-emptive right over exactly the portion to be sold, tax is computed only on the sold portion with correspondingly split cost basis, and the registration work stops at a member change without touching charter capital. This article covers the full procedure and tax of a partial sale.
1. The pre-emptive offer mechanism over the portion to be sold
Article 52 of the Law on Enterprises 59/2020/QH14 places a mandatory gate before every capital contribution transfer in an LLC: the transferring member must offer that capital portion to the remaining members of the company in proportion to their capital contributions. In a partial sale, the object of the pre-emptive offer is exactly the portion to be sold — not the seller’s entire stake. The remaining members have 30 days from the offer date to decide to buy all of it, buy part per their ratio, or not buy; only if they do not buy, or do not buy all of the offered portion, may the seller transfer (the unbought remainder) to a non-member, unless the charter provides otherwise. On the conditions of an outside sale: the portion sold to an outsider may not be sold on terms more favourable than those offered to in-company members — an anti-circumvention mechanism similar to pre-emptive rights in new issuances. Every offer step must be documented with proof of delivery, because this is the decisive evidence of the transfer’s validity when a member later claims their pre-emptive right was bypassed.
2. The procedure of a partial sale
Step 1 — Internal offer notice: the seller sends the offer of the portion to be transferred (capital amount, expected price, payment terms) to the company and the remaining members; the 30-day pre-emption clock starts from the valid offer date. Step 2 — Processing pre-emptive responses: remaining members subscribe per their ratios (and may take up leftover portions others in the pre-emptive group decline, per internal agreement/the charter); the portion nobody in the pre-emptive group takes may be sold outside on exactly the offered terms. Step 3 — Transfer agreement: the partial transfer agreement between seller and buyer (existing member or outsider) states the transferred portion in amount and in percentages before/after the transaction, the price, the payment schedule and attached conditions. Step 4 — Payment through the correct channel: if the buyer or seller is a foreign investor, the transfer price is paid through the corresponding investor’s ICA under Circular 38/2026/TT-NHNN; if the purchase raises a foreign investor’s ratio in a market-access-conditioned line, capital contribution purchase approval from the investment registration authority under the Law on Investment 143/2025/QH15 must be obtained before registering the member change. Step 5 — Change registration: the company registers the member and ratio change with the business registration authority within 10 days under Article 30 of the Law on Enterprises, updates the member register, amends the related charter contents, and for a foreign-invested company amends the investor information on the Investment Registration Certificate correspondingly.
3. Tax: computed only on the sold portion, with split cost basis
The tax principle of a partial sale is clear: only the sold portion generates transfer income — the retained portion carries no tax “mark” at all and keeps its cost basis untouched for future transactions. The taxable income of the sold portion is: the transfer price of the sold portion − the corresponding cost basis of the sold portion − reasonable expenses of that transfer. The corresponding cost basis is split pro rata: if a member contributed VND 10 billion in total for 40% of the capital and sells half of their stake (20% of the company), the sold portion’s cost basis is VND 5 billion — provided the contribution records and prior capital adjustments are archived consistently to prove this split. Rates follow the seller: a resident individual bears personal income tax on capital transfer income under the Law on Personal Income Tax 109/2025/QH15 (20% on transfer income; where purchase price and expenses cannot be determined, the mechanism on transfer price applies as prescribed); a domestic organisation records capital transfer income in its corporate income tax finalisation; a foreign investor selling a portion bears the corresponding capital transfer tax mechanism with source withholding through the buyer/company as prescribed. The buyer/company withholds and declares per its role in the transaction, and the tax payment evidence is a condition for the foreign investor’s transfer money to move through the bank.
4. After a partial sale: quiet but important changes
A partial sale does not change total charter capital, but it changes the company’s power map — the part most often forgotten. The seller’s reduced voting ratio may drop them below charter rights thresholds: veto thresholds on high-majority matters, rights to nominate managers, information and agenda rights tied to minimum ratios. Conversely, a buying member may cross a new rights threshold. Before signing the transfer agreement, both sides should re-check the charter and members’ agreement against the post-transaction ratio structure and adjust governance documents if needed (a members’ agreement addendum recording which rights the seller retains or loses with the remaining stake). On long-term records: the company must archive the partial sale’s full chain — the offer notice and pre-emption expiry evidence, the transfer agreement, payment evidence through the correct channel, tax returns and vouchers, the change registration file — because this chain is the cost-basis split evidence for every subsequent capital transaction of both seller and buyer. A partial sale done right makes future capital transactions simple; one done sloppily turns them into an endless tracing exercise.
I want to sell only part of my capital contribution and keep the rest — what is the procedure?
Under Article 52 of the Law on Enterprises 59/2020/QH14: first offer exactly the portion to be sold to the remaining members in proportion to their contributions (a 30-day pre-emption period from the offer date); only the part they do not buy may be sold to an outsider, on terms no more favourable than those offered internally. Then sign the partial transfer agreement, pay through the correct channel (via the ICA where a foreign investor is involved), and the company registers the member and ratio change within 10 days under Article 30, updating the member register and charter.
Is income tax computed on the sold portion or on my entire contribution?
Only on the sold portion. Taxable income = the transfer price of the sold portion − the corresponding cost basis of the sold portion (split pro rata from total contributed cost) − reasonable transfer expenses. The retained portion generates no tax and keeps its cost basis for future transactions. A resident individual bears PIT on capital transfer income under the Law on Personal Income Tax 109/2025/QH15 (20% on income); an organisation bears CIT on transfer income.
Must the company charter be amended after a partial sale?
Yes, in the affected part: total charter capital is unchanged, but each member’s contribution ratio is charter content (Article 24 of the Law on Enterprises 2020), so the charter must be amended to record the new ratios of the seller, the buyer and other members, with the member list updated. A charter amendment resolution belongs to the group requiring at least 75% of attending members’ votes under Article 59(2).
Do the remaining members have a pre-emptive right over the portion I plan to sell?
Yes. Article 52 of the Law on Enterprises 2020 requires the transferring member to first offer the portion to be transferred to the remaining members in proportion to their capital contributions; only if they do not buy, or do not buy it all, within 30 days from the offer date may the remainder be transferred to a non-member, and not on terms more favourable than those offered to in-company members (unless the charter provides otherwise).