In the intricate web of corporate governance, the role of the legal representative stands as a linchpin, guiding the company through the labyrinth of legal matters and representing it in crucial dealings. Additionally, regulations governing the legal representative of a company are paramount, ensuring transparency, accountability, and adherence to the law. Therefore, this discussion delves into the essential aspects of these regulations, shedding light on the responsibilities, qualifications, and procedures involved in appointing and changing a company’s legal representative.
Question:
Can the Chief Accountant be the legal representative of a joint stock company?
Answer:
Law on Enterprise 2020 does not contain provisions limiting the Chief Accountant from serving as the legal representative of a joint stock company. As a result, the company can undertake the procedures for registering (or changing) the legal representative as stipulated by the regulations.
Question:
1. In the case where I am the legal representative: I am the Chairman of the Board of Directors and the Director, but I registered the position of legal representative as the Chairman of the Board of Directors. Do I need to provide information in the Director (CEO) Information section of the application form?
2. If I provide the information, is it acceptable to include only the name of the CEO without the phone number?
Answer:
1. In the situation where I am the legal representative as the Chairman of the Board of Directors and also the Director, but I have registered the legal representative position as the Chairman of the Board of Directors, it is advisable that the company include information in the CEO Information section of the registration application.
2. It is not obligatory to include the CEO’s phone number in this section.
Question:
I would like to ask about my company, which is a 2 member Limited Liability Company. There is an internal disagreement between the owner and the legal representative. The legal representative often signs documents without unanimous agreement from all members, such as contracts, which affects the rights of other members. Now, there is a request to remove this individual from their position and replace the legal representative. However, this person refuses to sign any change documents. In this situation, how can we change the legal representative, including the required documentation?
Answer:
In accordance with Articles 58 and 59 of Law on Enterprises 2020:
+ Article 58 of Law on Enterprises 2020
“1. The meeting shall be conducted when it is participated by a number of members that hold at least 65% of charter capital; a specific ratio shall be specified in the company’s charter.
2. In case the conditions for conducting a meeting specified in Clause 1 of this Article are not fulfilled and the company’s charter does not provide for this situation otherwise:
a) The invitation to the second meeting shall be sent within 15 days from the first meeting date. The second meeting shall be when it is participated by a number of shareholders that hold at least 50% of charter capital;
b) In case the conditions for conducting the second meeting prescribed in Point a of this Clause are not fulfilled, the invitation to the third meeting shall be sent within 10 days from the second meeting date. The third meeting shall be conducted regardless of the number of charter capital held by the participants.
3. Members and their authorized representatives shall participate in and vote at meetings of the Board of Members. The procedures for conducting meetings of the Board of Members and voting methods shall be specified in the company’s charter.
4. In case the duration of a meeting is longer than expected, it may be extended but must not exceed 30 days from its opening date.”
+ Article 59 of Law on Enterprises 2020
“1. The Board of Members shall ratify its resolution and decisions by voting at the meeting, questionnaire survey or another method specified in the company’s charter.
2. Unless otherwise prescribed by the company’s charter, a decision on one of the following issues shall be voted on at the meeting:
a) Revisions to the company’s charter;
b) Orientation for development of the company;
c) Election, dismissal of the President of the Board of Members; designation, dismissal of the Director/General Director;
d) Ratification of the annual financial statement;
dd) Reorganization or dissolution of the company.
3. Unless otherwise prescribed by the company’s charter, a resolution or decision of the Board of Members will be ratified at the meeting if:
a) It is voted for by a number of participants that hold at least 65% of the total stakes of all participants, except the case in Point b of this Clause;
b) It is a resolution or decision to sell assets whose value is at least 50% of the total assets written in the latest financial statement (or a smaller ratio or value specified in the company’s charter), a resolution or decision on revisions to the company’s charter, reorganization or dissolution of the company, and is voted for by a number of participants that hold at least 75% of the total stakes of all participants.
4. It will be considered that a member participates in and votes at the meeting of the Board of Members in the following cases:
a) The member directly participates in and votes at the meeting;
b) The member authorizes another person to participate in and vote at the meeting;
c) The member participates and votes online or through other electronic methods;
d) The member sends the votes to the meeting by post, fax or email.
5. In case of questionnaire survey, a resolution or decision will be ratified when it is voted for by a number of members that hold at least 65% of charter capital (a specific ratio shall be specified in the company’s charter).”
– Companies should execute the documentation, process, and steps for changing the legal representative in compliance with regulations. These regulations detailed in Article 50 of Decree No. 01/2021/NĐ-CP regarding enterprise registration. Companies may consult the sample forms and procedures on the website “www.dangkykinhdoanh.gov.vn/latest news/Reference forms” for enterprise registration. This is in line with the provisions of the Law on Enterprises No. 59/2020/QH14.
Conclusion
In conclusion, in the ever-evolving landscape of business, the role of the legal representative remains central to a company’s operations. Consequently, navigating the regulations surrounding this position is indispensable for both the company and its stakeholders. Moreover, it ensures legal compliance, safeguards the company’s interests, and promotes transparency in corporate affairs. Therefore, understanding these regulations and fulfilling them diligently is not merely a legal requirement. It is a fundamental aspect of sound corporate governance. Consequently, this underpins the success and integrity of any business entity.
HMLF is always available to offer assistance in understanding the procedures with authorities.
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