Accounting in limited liability companies (LLCs) plays a crucial role in financial management, helping businesses not only comply with the law but also optimize cash flow. In reality, many LLCs encounter problems with tax authorities not due to fraud, but primarily because their accounting systems were initially operated with the mindset of individual business households. With the introduction of Circular 99/2025/TT-BTC, modern accounting must shift from manual bookkeeping to transparent digital data management to adapt to the new era.
Overview of accounting practices in limited liability companies.
Accounting in limited liability companies (LLCs) is highly strategic, helping owners control legal risks and measure business performance effectively. A core legal characteristic of this type of company is the independence of assets between the owners and the company entity. Members are only liable for the company's debts and financial obligations to the extent of their committed capital contributions.
However, operations in Vietnam often reveal worrying financial loopholes such as the following:
- The practice of owners spontaneously withdrawing personal funds from company accounts for their own consumption creates serious difficulties in justifying expenses when settling taxes.
- Confusing household living expenses with business production expenses can lead to the risk of having all these expenses disallowed and being subject to retroactive corporate income tax collection along with late payment penalties.
- Operating a company without a clear separation of financial management can lead to inaccurate financial reporting, failing to reflect the true health of the business.
Circular 99/2025/TT-BTC not only changes the way transactions are recorded, but also forces accountants of limited liability companies to restructure their entire financial data system towards greater digitalization and real-time data.
Distinct characteristics of accounting for limited liability companies with one member and those with two or more members.
Despite sharing the same limited liability nature, each form of ownership requires different accounting and control techniques to protect the business's interests.
For accounting in a single-member limited liability company, the primary focus is on establishing owner spending limits. The accountant needs to:
- Clearly separate and categorize expenses for personal purposes to ensure the validity of deductible expenses when calculating corporate income tax.
- Keep detailed records of registered capital and capital surpluses when there is a change in sole owner or a partial transfer of capital to external parties.
For accounting in limited liability companies with two or more members, the work is often more complex due to the need to balance the interests of the contributing members. Key tasks include:
- Maintain a strict membership register, accurately recording the time and amount of capital contributed by each member to serve as the basis for distributing benefits.
- The process of accounting for the distribution of after-tax profits and the allocation of funds shall be carried out based on the minutes of the Board of Members' meeting, strictly adhering to Article 47 of the 2020 Enterprise Law.
Organizational chart of the accounting department of a limited liability company according to size and management model.
Establishing a scientific accounting system not only saves operating costs but also creates a robust internal control system. Depending on the size and management strategy, a limited liability company can choose a centralized model at its headquarters or a decentralized model across its branches.
A centralized model is the optimal choice for small and medium-sized enterprises (SMEs) to control data uniformly. Meanwhile, a distributed model allows companies with multiple business locations to track the performance of each unit in greater detail.
Below is a breakdown of the accounting system structure suitable for each stage of a business's development:
| Business size | Proposed human resources model | The value that management brings |
|---|---|---|
| Under 10 employees | A versatile employee or professional accounting service. | Ensuring basic tax compliance at the lowest possible cost. |
| Between 10 and 50 employees | The chief accountant manages the company along with 2-3 accounting staff. | Establish cross-checks between inventory, accounts payable, and cash management functions. |
| Over 50 employees | A complete accounting system and internal control department. | Providing in-depth analytical data to support investment decisions. |
Regardless of size, businesses must ensure that the chief accountant or person in charge of accounting fully meets the professional standards stipulated in the Accounting Law 2015.
Checklist for setting up an accounting system and opening books for a newly established company.
The first steps in establishing accounting records will determine the long-term financial stability of the business. Accountants need to follow this checklist to build a solid foundation:
- Choose the accounting method that best suits your situation: Circular 133/2016/TT-BTC for small-scale businesses or Circular 200/2014/TT-BTC for larger-scale businesses.
- Register the method for calculating value-added tax and the method for depreciating fixed assets right from the first accounting period.
- Establish a system of ledgers, subsidiary ledgers, and general journals on a software platform to ensure rapid data retrieval.
- Complete the registration of digital signatures and establish a process for storing electronic documents according to the 2025 digital standards.
Standardizing the accounting chart of accounts from day one helps businesses avoid complex and costly retrospective adjustments later on.
Important tax procedures that a limited liability company accountant needs to follow.
Tax procedures are mandatory tasks with unavoidable deadlines. Understanding the tax process helps businesses proactively manage cash flow and avoid legal risks.
During the initial phase, the priority tasks included:
- Submit the business license fee declaration form. It should be noted that, according to Decree 22/2020/ND-CP, newly established businesses are usually exempt from business license fees in their first year.
- Register and notify the issuance of electronic invoices with tax authority codes as prescribed in Decree 123/2020/ND-CP.
The obligation to file quarterly reports includes:
- Prepare value-added tax returns and personal income tax returns if any taxable income payments are made.
- Calculate and pay provisional corporate income tax. This should be based on actual business results to avoid late payment penalties if the provisional payment is lower than the amount stipulated for the annual tax settlement.
Accounting system and legal framework applicable in 2025
The year 2025 marks a significant turning point as Circular 99/2025/TT-BTC officially becomes the guiding principle for businesses. This regulation requires accountants to shift from traditional record-keeping to intelligent financial data management. Recording revenue and revaluing assets according to the new standards necessitates continuous training and skill updates for accounting staff.
Simultaneously, the roadmap for adopting International Financial Reporting Standards (IFRS) under Decision 345/QD-BTC is opening up significant opportunities for limited liability companies needing to raise foreign capital or expand internationally. Adhering to IFRS makes a company's financial statements more credible in the eyes of global investors.
Common risks of financial misconduct and solutions for financial control.
Accountants in limited liability companies who lack practical experience are very likely to make mistakes that can cause significant financial losses:
- The company failed to contribute the full amount of charter capital within 90 days but still made fictitious accounting entries, leading to completely inaccurate financial statements regarding its capital capacity.
- Accounting for expenses that do not serve production and business activities can lead to the collection of back taxes on corporate income and heavy fines when the tax authorities conduct an audit.
- Confusing liabilities between shareholders and suppliers can distort the company's solvency indicators.
An effective solution is to establish strict internal spending regulations and apply modern accounting software capable of automatically reconciling data with the General Department of Taxation's portal.
Trends in using accounting services in major cities.
In economic hubs like Ho Chi Minh City and Hanoi, outsourcing accounting services is no longer a stopgap solution but has become the optimal strategy for many businesses. Companies should choose this option when:
- A team of highly qualified experts is needed to handle complex tax matters and represent clients before regulatory authorities.
- The goal is to optimize costs by cutting investments in on-site personnel, office space, and specialized software.
- Seeking an independent financial review board can help business owners identify potential risks early, before regulatory agencies conduct audits.
Professional accounting services today act as strategic consulting partners, helping businesses standardize financial data to serve long-term growth objectives.
Frequently Asked Questions about Accounting for Limited Liability Companies
Here are brief answers to common legal questions that accountants and business owners often have:
- When does a newly established company file its first tax return? Typically, it's the first month of the quarter following the issuance of the business license.
- Can accounting standards be changed during the year? Accounting standards must be applied consistently throughout the fiscal year; any changes can only be made from the beginning of the following fiscal year.
- What is the penalty for late submission of financial statements in 2025? According to Decree 41/2018/ND-CP, this offense can be fined from 10 to 30 million VND depending on the time and severity of the violation.
Conclude
Accounting for limited liability companies (LLCs) from 2025 onwards is not simply about legal compliance, but a core foundation for all growth decisions. Properly applying regulations such as Circular 99/2025/TT-BTC and leveraging digital technology will help businesses go further in a market increasingly demanding transparency. Consider investing in a standardized accounting system as the smartest investment to protect your business's financial security.
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
