In short: When an individual member of a multi-member limited liability company dies, their heir under the will or by law automatically becomes a company member — no approval from the Members’ Council is needed. This is Article 53(1) of the Enterprise Law (59/2020/QH14, as amended by Law 76/2025/QH15). If the heir does not wish to become a member, the capital contribution is repurchased by the company or transferred under the statutory rules.
1. The “automatic member” principle
Article 53 of the Enterprise Law, titled “Handling of capital contributions in special cases”, provides in Article 53(1): where a company member who is an individual dies, the heir under the will or by law of that member becomes a company member.
“Automatic” means:
- No approval from the Members’ Council or remaining members is required;
- The offer-to-members transfer procedure (Article 52) does not apply;
- The heir succeeds to all rights and obligations attached to the inherited contribution.
Note: the heir must not fall into the categories prohibited from establishing or managing enterprises under Article 17 of the Enterprise Law.
2. What if the heir does not want to be a member?
Article 53(4) addresses heirs who do not wish to become members. The capital contribution is then handled in one of two ways under Articles 51 and 52 of the Enterprise Law:
- Repurchase by the company; or
- Transfer to another person (with priority offered to the remaining members).
This is an important practical escape route: not every heir wants — or is able — to participate in running the business, especially where the contribution carries unfulfilled capital obligations.
3. No heir, refusal or disqualification
Article 53(5): where the deceased member’s contribution has no heir, the heir refuses the inheritance, or is disqualified from inheriting, the contribution is handled under civil law.
In practice, the company works with the competent authorities to determine how to deal with the contribution and completes the member-change registration accordingly.
4. Inheritance vs. gift of capital contributions
A common confusion. Article 53(6) governs gifts separately from inheritance:
- A donee who is a statutory heir (spouse, parents, children and relatives up to the third inheritance rank under Article 651 of the Civil Code) → automatically becomes a member;
- A donee who is not in that category → becomes a member only with Members’ Council approval.
So only inheritance (upon a member’s death) is always automatic; gifts to outsiders still need the company’s consent.
5. Administrative procedures after inheritance
Once the heir becomes a member, the company should:
- Update the member register and the company charter;
- Register the member change for the multi-member LLC with the business registration authority under Decree 168/2025/ND-CP;
- Settle related tax obligations on the inheritance (personal income tax on inherited assets, if applicable) under tax law.
6. Practical notes
- A clear will prevents disputes among heirs over the contribution, especially for valuable companies;
- The charter or member agreement may pre-arrange handling when a member dies (e.g., buy-back priority for remaining members), but cannot override the heir’s automatic right under Article 53(1);
- Where several heirs share one contribution, they should agree on a representative to exercise membership rights.
FAQ
Q: Can a minor heir become a company member?
A: In principle yes — a minor heir automatically becomes a member under Article 53(1). Membership rights and obligations are exercised through a legal representative under civil law.
Q: Can remaining members object to the heir?
A: No. The law makes the heir a member automatically, without Members’ Council approval. If they do not want the heir involved, the remaining members can agree to buy back the contribution.
Q: Is tax payable on inheriting a capital contribution?
A: Receiving an inheritance may trigger personal income tax obligations under tax law. Seek tax advice for each specific case.
Sources
- Enterprise Law 59/2020/QH14, as amended by Law 76/2025/QH15 (Articles 17, 51–53)
- Civil Code 91/2015/QH13 (Article 651 — inheritance ranks)
- Decree 168/2025/ND-CP on enterprise registration
This article is for general information only and does not constitute legal advice for any specific case. Content is pending review by the QA Council (FLAW AI Legal Council).
