“If I am the sole owner, I set up a single-member LLC; if friends contribute capital too, what changes in decision-making power?” — This is the most common question when choosing a business form. The core difference is not in the name but in governance structure: who makes the final decision, how decisions are passed, and whether capital transfers are restricted.
This article compares the two under the Law on Enterprises (consolidated document 67/VBHN-VPQH of 2025 — consolidating Law 59/2020/QH14, Law 03/2022/QH15 and Law 76/2025/QH15, effective from 01/7/2025). Note: consolidated document 67/VBHN-VPQH of 2025 is the Law on Enterprises (distinct from 67/VBHN-VPQH of 2026, the IP Law).
1. Single-member LLC: the owner decides unilaterally
Individual owner (Article 85): a single mandatory structure — Company President + Director/General Director. The owner is concurrently the Company President and may double as or hire another person as Director/General Director.
Organizational owner (Article 79): two models to choose from — (a) Company President + Director/General Director; or (b) Members’ Council (3 to 7 members, Article 80) + Director/General Director.
- Decision-making: the owner decides unilaterally on matters within its competence — charter amendments, capital increases, capital transfers, reorganization, dissolution, profit use — with no meeting or voting (Article 76).
- Board of Supervisors: not mandatory, unless the company is a state-owned enterprise under Point b, Clause 1, Article 88 (Clause 2, Article 79).
- Legal representative: the Chair of the Members’ Council, the Company President, or the Director/General Director; if the charter is silent, the Chair of the Members’ Council or the Company President is the legal representative (Clause 3, Article 79).
2. Multi-member LLC: the Members’ Council votes
A single mandatory model (Clause 1, Article 54): Members’ Council + Chair of the Members’ Council + Director/General Director. The Members’ Council comprises all members and is the highest decision-making body (Article 56); its Chair is elected by the Council and may double as Director/General Director (Article 57).
- 65%/75% voting thresholds (Clause 3, Article 59 — unless the charter provides otherwise): a resolution is passed at a meeting when members attending the meeting holding at least 65% of the total contributed capital of all attending members vote for it; at least 75% for major matters: sale of assets worth 50% or more of total assets (per the latest financial statements); charter amendments; company reorganization or dissolution. For written consultations: at least 65% of charter capital (Clause 5, Article 59).
- Restricted capital transfers (Clause 1, Article 52): a transferring member must first offer the stake to the remaining members pro rata on the same terms; only after 30 days without full uptake may it transfer to an outsider. If the transfer leaves only one member, the company converts to a single-member model and must register the change within 15 days (Article 52).
- Board of Supervisors: not mandatory, unless the company is a state-owned enterprise or a subsidiary of one (Clause 2, Article 54; Clause 1, Article 88); otherwise the company decides itself.
- Legal representative: the Chair of the Members’ Council or the Director/General Director; if the charter is silent, the Chair of the Members’ Council is the legal representative (Clause 3, Article 54).
3. Comparison table
| Criterion | Single-member LLC | Multi-member LLC | Basis |
|---|---|---|---|
| Highest decision body | The owner (unilateral decisions) | Members’ Council (voting pro rata to capital) | Art. 76; Art. 56 |
| Organizational model | Individual: 1 model (Company President + D/GD). Organization: 2 models (Company President or 3–7-member Council + D/GD) | 1 single model (Council + Council Chair + D/GD) | Art. 85; Art. 79; Art. 54 |
| Board of Directors? | No — neither type has a Board of Directors (the equivalent is the Members’ Council / Company President) | Art. 79, 85; Art. 137 | |
| Members’ Council mandatory? | No (Company-President model needs none) | Yes | Clause 1, Art. 79; Clause 1, Art. 54 |
| Board of Supervisors | Mandatory only for state-owned enterprises | Mandatory only for SOEs or SOE subsidiaries; otherwise optional | Clause 2, Art. 79; Clause 2, Art. 54 |
| How decisions are made | Unilaterally | 65% ordinary / 75% major matters (unless charter differs) | Art. 76; Clause 3, Art. 59 |
| Capital transfer | Free (owner’s decision) | Restricted: internal offer first, 30 days before outside sale | Art. 76; Clause 1, Art. 52 |
| Adding new members | Must convert the company type (Art. 68) | Admit new members’ capital contributions (Point b, Clause 1, Art. 68) | Art. 68 |
| Capital increase | Decided by the owner | Decided by the Members’ Council; new capital allocated pro rata (Clause 2, Art. 68) | Art. 76; Art. 68 |
| Capital contribution deadline | 90 days from issuance of the enterprise registration certificate; a single-member owner is liable with all of its assets for shortfalls | Art. 47; Art. 75 | |
(All bases cited are from the Law on Enterprises — consolidated document 67/VBHN-VPQH of 2025.)
4. Common trap: the “11-member” threshold does not apply to LLCs
Many secondary sources write that “a company with 11 or more members must establish a Board of Supervisors” — but that threshold belongs to joint-stock companies (Point a, Clause 1, Article 137: a joint-stock company with fewer than 11 shareholders, of which institutional shareholders hold under 50%, is not required to have a Board of Supervisors). It does not apply to multi-member LLCs. For LLCs, a Board of Supervisors is mandatory only for state-owned enterprises or their subsidiaries.
Likewise, an LLC has no “Board of Directors,” and a single-member owner does not “vote” — the owner decides unilaterally; there is no vote.
5. Points to address when drafting the charter
- Minority member groups (holding 10% or more of charter capital) enjoy the rights in Clause 2, Article 49 — the charter should spell them out to protect small investors.
- The charter may set different voting ratios from the statutory 65%/75% defaults (Clause 3, Article 59) — a tool for negotiating veto rights.
- Clearly designate the legal representative in the charter to avoid falling back on statutory defaults during internal disputes.
- Related-party transactions: in a multi-member LLC they require Members’ Council approval, with the related member barred from voting (Article 67); in a single-member LLC, loan/borrowing contracts and asset sales worth 50% or more of total assets are approved by the owner (Point e, Clause 1, Article 76).
Choosing the right LLC form or drafting a company charter? Reach us via the Contact page of FLAT Law Firm for governance structure advice, voting ratios and charter drafting under current enterprise law.
Note: This article provides general legal information for reference only and does not constitute legal advice for any specific case. The cited provisions reflect the law in force at the time of writing (14/10/2026) and may change; consult a lawyer or legal professional before applying them.
Transparency notice: This article was drafted by FLAT Law Firm’s AI content production system and is undergoing internal review (AI Legal Council QA and owner approval before publication). It has not been reviewed by a human lawyer.