Limited Liability Company (P1) – Multi-Member Limited Liability Company

limited liability company

Limited Liability Company (P1) – Multi-Member Limited Liability Company

There is a only business Law system for both local local and foreigner investors to do business in Viet Nam, deals with the establishment, organization, restructuring, dissolution, and relevant activities of enterprises, including limited liability company, joint-stock companies, partnerships, sole proprietorships, and groups of enterprises.

We would like to introduce to you four of key topics to know about the business regulations in Viet Nam:

It would be our pleasures to share with you for any query or question about the terms and conditions as well as practical cases which we have been experiencing since years 2000, where the first law on enterprise has allowed private sector to born and blooming.

limited liability companyFORMs OF ENTERPISES – LIMITED LIABILITY COMPANY

One of THE MOST POLULAR FORM OF ENTERPRISES IN VIET NAM

TYPE 1: MULTI-MEMBER LIMITED LIABILITY COMPANY

1. Multi-member limited liability company

Multi-member limited liability company is a enterprise where:

  • Members are organizations and/or individuals; the number of members does not exceed 50;
  • Members are liable for debts and other liabilities of the enterprise up to the value of capital they contribute to the enterprise, except for some special case.
  • A multi-member limited liability company has a legal status from the issuance date of the Certificate of Business registration.
  • Multi-member limited liability companies must not issue shares.

2. Capital contribution to company establishment and issuance of certificate of capital contribution

Charter capital of a multi-member limited liability company upon business registration is the total value of capital contribution to the company promised by the members.

Every member must contribute capital properly in terms of sufficiency and type of assets as agreed within 90 days from the day on which the Certificate of Business registration is issued. Company’s members may only contribute assets other than the promised assets it such assets are approved by the majority of other members. After the said deadline, each member has the rights and obligations proportional to their promised capital contribution.

In case a member fails to contribute capital or fails to fully contribute capital by the deadline mentioned above:

  • The member who fails to contribute capital as promised is obviously no longer a company’s member;
  • The member who fails to fully contribute capital as promised shall have the rights proportional to his/her contributed capital;
  • The right to contribute capital of the member who fails to contribute capital shall be offered under a decision of the Board of members.

If a member fails to contribute capital or fails to fully contribute capital as agreed, the company shall register a change to charter capital and the member’s stake holding within 60 days from the deadline for making sufficient capital contribution prescribed above. Any member who fails to contribute capital or fails to fully contribute capital as agreed shall take responsibility up to the value of promised capital contribution for the company’s financial obligations incurred before the day on which the company registers the changes to the charter capital and its members’ stakes.

When a member fully contributes capital, the company shall issue a Certificate of capital contribution to such member. The certificate of capital contribution shall contains:

  • The enterprise’s name, ID number, and headquarter address;
  • The enterprise’s charter capital;
  • Full name, permanent residence, nationality, ID/passport number if the member is an individual; name, establishment decision number or company ID number, headquarter address if the member is an organization;
  • The member’s stake and value thereof;
  • Number and date of issue of certificate of capital contribution;
  • Full name and signature of the company’s legal representative.

In case a certificate of capital contribution is lost, damaged, or otherwise destroyed, its holder shall has it reissued in accordance with the procedures provided for by the company’s charter.

3. Member register

The company shall make a member register as soon as the Certificate of Business Registration is issued. The member register shall contain:

  • The enterprise’s name, ID number, and headquarter address;
  • Full names, permanent residences, nationalities, ID/passport numbers of members being individuals; names, establishment decision numbers or company ID numbers, headquarter addresses of members being organizations;
  • Stakes and values thereof; date of capital contribution, types of contributed assets; quantity and value of each type of assets contributed by each member;
  • Signatures of members being individuals or legal representatives of members being organizations;
  • Numbers and dates of issue of certificates of capital contribution of every member.

The member register shall be kept at the company’s headquarter.

4. Rights of members

  • Participate in meetings of the Board of members; discuss, propose, votes for the issues within the competence of the Board of members.
  • Cast a number of votes that is proportional to the member’s stake.
  • Receive a proportion of profits that is proportional to the member’s stake after the company has settled all taxes and fulfilled other financial obligations as prescribed by law.
  • Receive a proportion of remaining assets that is proportional to the member’s stake after the company is dissolved or goes bankrupt.
  • Has the preemptive right to contribute additional capital when the company’s charter capital is increased.
  • Dispose of his/her own stake by transfer part or all of it, give, donate or otherwise in accordance with law and the company’s charter.
  • File a lawsuit against the President of the Member assembly, Director/General Director, legal representative, or another manager, whether single-handedly or on behalf of the company.
  • Any member or group of members that owns at least 10% of the charter capital (or a smaller amount prescribed by the company’s charter) shall have the additional rights below:
    – Request meetings of the Board of members to resolve issues within its competence;
    – Inspect, examine books and monitors transactions, accounting books, and annual financial statements;
    – Inspect, examine, copy the member register, meeting minutes, Resolutions of the Board of members, and other documents of the company.
    – Request the Court to annul the resolution of the Board of members within 90 days from the ending date of the meeting if the procedures, conditions for meeting, or contents of such resolution are not correct or not conformable with the law and the company’s charter.

5. Obligations of member

  • Contribute capital fully and punctually; take liability for the debts and other liabilities of the company up to the value of capital contributed.
  • Do not withdraw contributed capital in any shape or form, except for the cases by law.
  • Comply with the company’s charter.
  • Comply with resolutions and decisions of the Board of members.
  • Take personal responsibility when committing the following acts on behalf of the company:
    – Violations of law;
    – Business operations or transactions that do not serve the company’s interests and cause damage for other persons;
    – Payment of undue debts while the company is facing financial risk.
    – Fulfill other obligations prescribed by this Law.

6. Repurchasing stakes

Every member is entitled to request the company to repurchase his/her stake if such member votes against the resolution of the Board of members on:

  • Amendments to the company’s charter that are related to rights and obligations of members and/or the Board of members;
  • Company restructuring;
  • Other cases prescribed by the company’s charter.
  • The request for repurchase of a stake must be made in writing and sent to the company within 15 days from the day on which the Resolution is ratified as prescribed in this Clause.

When such a request is made, if an agreement on the price is not reached, the company shall repurchase the member’s stake at the market price or at a price determined according to the company’s charter within 15 days from the day on which the request is received. The payment shall only be made if the company is still able to repay its debts and settle other liabilities after paying for the stake.

If the company does not repurchase the stake as prescribed above, the member is entitled to transfer his/her stake to another member or a person other than members.

7. Transferring stakes

Except for the cases by law, every member of multi-member limited liability company are entitled to transfer part or all of his/her stake to another person as follows:

  • Offer the stakes to other members in proportion to their stakes in the company under the same conditions;
  • Only transfer the stake under the same conditions applied other members prescribed in Point a of this Clause to persons other than members if the members do not buy or do not buy completely within 30 days from the offering date.

The transferring member still has the rights and obligations to the company in proportion to his/her stake until information about the buy mentioned above is written on the member register.

If the transfer or change of the stake causes the company to have only one member, the company shall be converted into a single-member limited liability company and register the business registration changes within 15 days from the day on which the transferred is finished.

8. Settlement of stakes in some special cases

If a member being an individual dies, his/her inheritor according to the will or law shall be the company’s member. If a member being an individual is declared missing by court, his/her asset management according to civil law shall be the company’s member.

If a member becomes legally incompetent, his/her rights and obligations shall be performed by his/her guardian.

A member’s stake shall be transferred or repurchased by the company in the following cases:

  • The inheritor does not wish to become a member;
  • The mentioned recipient is not accepted by the Board of members as a member;
  • The member is an organization that has been dissolved or bankrupt.

If a member being an individual dies without an inheritor, the inheritor renounces the inheritance or is disinherited, such stake shall be settled in accordance with civil law.

A member is entitled to give part or all of his/her stake to another person.

The recipient is the member’s spouse, parent, child, or a person within three ranks of inheritance, is naturally the company’s member. If the recipient being another person shall only become the company’s member if accepted by the Board of members.

If the member uses his/her stake to pay debts, the recipient is entitled to use such stake to:

  • Become a company’s member if accepted by the Board of members; or
  • Offer and transfer it in accordance with the Law.

9. Organizational structure

  • A multi-member limited liability company has:
  • A the Board of members,
  • A the Chairperson of the Board of members,
  • A Director/General Director,
  • Every multi-member limited liability company that has 11 members or more shall establish a the Control Board,
  • A company with fewer than 11 members may also establish a the Control Board if necessary for the business administration.

Rights, obligations, standards, requirements, and conditions of the Control Board and Chief of the Control Board shall be provided for in the company’s charter.

10. The Board of members

The Board of members consists of all company’s members and is the supreme decision-making body of the company. The frequency of meetings of the Board of members shall be specified by the company’s charter. Nevertheless, there must be at least one meeting per year. The Board of members has the following rights and obligations:

  • Decide the annual business plan and development strategy of the company;
  • Decide the increase or decrease of charter capital; decide the time method for raising additional capital;
  • Decide development investment projects of the company;
  • Decide solutions for market development; marketing, technology transfers; ratifying contracts for taking loans, granting loans, selling assets of which the value is higher than 50% of total asset value written in the latest financial statement (or a smaller rate or value prescribed by the company’s charter);
  • Elect, dismiss the Chairperson of the Board of members; decide the designation of, dismissal of, conclusion and termination of contracts with the Director/General Director, Chief accountant, and other managers prescribed by the company’s charter;
  • Decide the salaries, bonuses, and other benefits for the Chairperson of the Board of members, Director/General Director, Chief accountant, and other managers prescribed by the company’s charter;
  • Ratify annual financial statements, plans for use and distribution of profit, or plans for loss settlement of the company;
  • Decide the company’s organizational structure
  • Decide establishment of subsidiaries, branches, and representative offices;
  • Amend the company’s charter;
  • Decide the company restructuring;
  • Decide the dissolution or petition for bankruptcy of the company;
  • Other rights and obligations prescribed by the law and the company’s charter.

If an individual being a member of a limited liability company is detained, imprisoned, or derived for the right to practice by the Court as prescribed by Criminal Code, such member may authorize another person to participate in the Board of members of the company.

11. Chairperson of the Board of members

The Board of members shall elect a member as the Chairperson. The Chairperson of the Board of members may concurrently hold the position of the company’s Director/General Director. The Chairperson of the Board of members has the following rights and obligations:

  • Prepare the agenda and operation plan of the Board of members;
  • Prepare the agenda, contents, documents of meetings of the Board of members or for absentee voting;
  • Convene and chair meetings of the Board of members or organize the absentee voting;
  • Carry out or organize supervision of implementation of Resolutions of the Board of members;
  • Sign Resolutions of the Board of members on behalf of the Board of members;
  • Other rights and obligations prescribed by the law and the company’s charter.

The term of office of a the Chairperson of the Board of members shall not exceed 05 years. The Chairperson of the Board of members may be re-elected without term limit.

If the Chairperson of the Board of members is absent or incapable of performing his/her rights and obligations, he/she may authorize another member in writing to perform rights and obligations of the Chairperson of the Board of members in accordance with the company’s charter. If no member is authorized, one of the members of the Board of members shall convene a meeting to elect one of the members to temporarily perform rights and obligations of the Chairperson of the Board of members under the majority rule.

12. Meetings of the Board of members

The Board of members shall be convened at the request of the Chairperson of the Board of members or a member or group of member prescribed above. Every meeting of the Board of members must be held at the company’s headquarter, unless otherwise prescribed by the company’s charter.

The Chairperson of the Board of members shall prepare the agenda, documents, and convene meetings of the Board of members. Members may propose additional contents to the agenda in writing. The proposal must contain:

  • The full name, permanent residence, nationality, ID/passport number of if the member is an individual; name, establishment decision number or company ID number, headquarter address if the member is an organization; full name, signature of the member or the member’s authorized representative;
  • Proportion of stake, number and date of issue of the certificate of capital contribution;
  • Additional contents;
  • The Chairperson of the Board of members must accept the proposal and change the agenda if such proposal is valid and sent to the company’s headquarter at least 01 working day before the meeting date; if a proposal is put forward right before the meeting, it shall be accepted if the majority of the attending members approve.

Invitations to meetings of the Board of members may be made in writing, by phone, fax, or another electronic medium as prescribed by the company’s charter, and sent directly to each member of the Board of members. The invitation must specify the time, location, and contents of the meeting.

The agenda and documents must be sent to the company’s members before the meeting takes place. Documents related to amendments to the company’s charter, approval of the company’s development orientation, approval of annual financial statements, restructuring or dissolution of the company must be sent to the members at least 07 days before the meeting date. Time limits for sending other documents shall be prescribed by the company’s charter.

In case the Chairperson of the Board of members fails to convene a meeting of the Board of members at the request of a member/group of member prescribed above within 15 days from the day on which the request is received, such member/group of member shall convene the meeting.

Unless otherwise prescribed by the company’s charter, the convention of a meeting of the Board of members prescribed above must be made in writing and contain the following information:

  • Full names, permanent residences, nationalities, ID/passport numbers of members being individuals; names, establishment decision numbers or company ID numbers, headquarter addresses of members being organizations; proportion of stake, number and date of issue of the certificate of capital contribution of each member that makes the request;
  • Reasons for convening the meeting and issues that need solving;
  • Intended agenda;
  • Full names and signatures of every member that makes the request or their authorized representatives.

If the request for convention of a meeting of the Board of members does not contain sufficient information, the Chairperson of the Board of members shall send a written notification to the member/group of member within 07 working days from the day on which the request is received.

In other cases, the Chairperson of the Board of members shall convene a meeting of the Board of members within 15 days from the day on which the request is received.

In case the Chairperson of the Board of members fails to convene a meeting of the Board of members as prescribed, the Chairperson shall be personally responsible for the damage to the company and relevant members. In this case, the member/group of members that makes the request is entitled to convene a meeting of the Board of members. Reasonable expenditures for the convention and organization of the meeting of the Board of members shall be reimbursed by the company.

13. Conditions and formalities of meetings of the Board of members

A meeting of the Board of members shall be convened when it is attended by a number of members that hold at least 65% of charter capital; the specific ratio shall be prescribed by the company’s charter.

If the conditions for holding a meeting of the Board of members prescribed in Clause 1 of this Article are not satisfied, the second meeting shall be held as follows unless otherwise prescribed by the company’s charter:

  • The second meeting shall be held within 15 days from the intended date of the first meeting. The second meeting shall be held when it is attended by a number of members that hold at least 50% of example;
  • If the conditions for holding the second meeting of the Board of members prescribed in Point a Clause 2 of this Article are not satisfied, the third meeting shall be held within 10 working days from the intended date of the second meeting. In this case, the meeting of the Board of members shall be held regardless of the number of attending members and the amount of charter capital held by the attending members.

Members, authorized representatives of members shall attend and casts votes at meetings of the Board of members. Meeting formalities and voting methods shall be prescribed by the company’s charter.

The duration of a meeting session may be extended where necessary to complete the agenda. Nevertheless, the duration must not exceed 30 days from the beginning date.

14. Resolutions of the Board of members

The Board of members shall ratify the Resolutions within its competence through voting at the meeting, absentee voting, or another voting method prescribed by the company’s charter. Unless otherwise prescribed by the company’s charter, the following issues shall be resolved through voting at the meeting of the Board of members:

  • Amendments to the company’s charter;
  • The company’s development orientation;
  • Election, dismissal of the Chairperson of the Board of members; designation, dismissal of Director/General Director;
  • Approval for the annual financial statement;
  • Restructuring or dissolution of the company.

Unless otherwise prescribed by the company’s charter, the Resolution of the Board of members shall be ratified at the meeting in the following cases:

  • It receives a number of votes that represents at least 65% of total stakes of attending members, except for the case in Point b of this Clause;
  • In case of a decision to sell assets of which the value is ≥ 50% of total asset value according to the latest financial statement (or a smaller ratio prescribed by the company’s charter; in case of amendments to the company’s charter; in case of restructuring or dissolution of the company, the resolution must receives a number of votes that represents at least 75% of total stakes of attending members.

A member is considered to have attended and cast votes at the meeting of the Board of members when such person:

  • Attend and directly vote at the meeting;
  • Authorize another person to attend and cast votes at the meeting;
  • Attend and cast votes through online meeting, cast electronic votes or use another electronic medium;
  • Send votes to the meeting by post, fax, or email.

A Resolution of the Board of members shall be ratified in the form of absentee voting if this method is approved by a number of members that holds at least 65 % of charter capital. The specific ratio shall be prescribed by the company’s charter.

15. Minutes of meetings of the Board of members

Meetings of the Board of members must be recorded in writing, audio recordings, or other electronic media of recordings. The minutes of the meeting must be completed and ratified right before the end of the meeting. The minutes must have the following content:

  • Time, location, purposes, agenda of the meeting;
  • Full names, proportions of stakes, numbers and issuance dates of certificates of capital contribution of members or authorized representatives of members that attend the meeting; Full names, proportions of stakes, numbers and issuance dates of certificates of capital contribution of members or authorized representatives of members that do not attend the meetings;
  • The issues discussed and voted; summary opinions of members about each issue;
  • Total number of valid votes, invalid votes, affirmative votes, and negative votes for each issue.
  • The decisions ratified;
  • Full names and signatures of the minutes maker and the chair of the meeting.

The minutes maker and the chair of the meeting are jointly responsible for the accuracy and truthfulness of the meeting minutes.

16. Procedures for ratifying Resolutions of the Board of members by absentee voting

  • Unless otherwise prescribed by the company’s charter, the procedures for absentee voting to ratify a Resolution shall be as follows:
  • The Chairperson of the Board of members decides to collect absentee ballots from members of the Board of members to cast to ratify the issues within its competence;
  • The Chairperson of the Board of members shall organize the drafting, sending of reports on the issues that need deciding, the Draft Resolution, and absentee ballots to members of the Board of members;
  • The absentee ballot shall contain:
    – Name, enterprise ID number, headquarter address;
    – The full name, address, Nationality, ID/passport number, stake holding of the member;
    – The issues and responses in the following order: in favour, against, and abstentions;
    – Deadline for submitting the absentee ballot;
    – Full name and signature of the Chairperson of the Board of members.

An absentee ballot that contains sufficient information, bears the signature of the member, and is sent to the company by the deadline is considered valid;

The Chairperson of the Board of members shall organize the vote counting, make a vote counting report, notify the result and the ratified decisions to members within 07 working days from the deadline for submitting the enquiry form. The report on vote counting result is as valuable as the minutes of meeting of the Board of members and must contain the following information:

  • Purposes and the issue of the absentee voting;
  • Full names, proportions of stakes, numbers and issuance dates of certificates of capital contribution of members or authorized representatives that submit valid absentee ballots; Full names, proportions of stakes, numbers and issuance dates of certificates of capital contribution of members or authorized representatives that do not submit absentee ballots or that submit invalid absentee ballots;
  • The issues that need voting; summary opinions of members about each issue (if any);
  • Total number of valid absentee ballots, invalid absentee ballots, unsubmitted absentee ballots; total number of valid forms with assenting opinions, those with dissenting opinions with regard to each issue;
  • The decisions ratified and the corresponding ratio of votes;
  • Full name and signature of the counter and the Chairperson of the Board of members. The counter and the Chairperson of the Board of members are jointly responsible for the accuracy and truthfulness of the report on vote counting result.

17. Effect of Resolution of the Board of members

Unless otherwise prescribed by the company’s charter, the Resolution of the Board of members shall be effective from the day on which it is ratified or from its effective date written therein.

In case a member/group of member request the Court or arbitral tribunal to annul a ratified Resolution, it is still effective until the decision of the Court or arbitral tribunal comes into force.

18. Director/General Director

The Director or General Director of a company is the person who administer the everyday business operation of the company and is responsible to the Board of members for the performance of his/her rights and obligations. The Director/General Director has the following rights and obligations:

  • Organize the implementation of Resolutions of the Board of members;
  • Decide the issues related to the company’s everyday business operation;
  • Organize the implementation of the company’s business plans and investment plans;
  • Promulgate the company’s rules and regulations, unless otherwise prescribed by the company’s charter;
  • Designate, dismiss the company’s managerial positions, except for those within the competence of the Board of members;
  • Sign contracts on behalf of the company, except for those within the competence of the Board of members;
  • Propose organizational structure plan;
  • Submit annual financial statements to the Board of members;
  • Propose plans for use of profits or loss settlement;
  • Hire employees;
  • Perform other rights and obligations prescribed in the company’s charter, employment contract between Director/General Director and the company according to the Resolution of the Board of members.

19. Standards and conditions of Director/General Director

  • The Director/General Director must be legally competent and is not banned from enterprise management as prescribed by law.
  • The Director/General Director must have experience and qualifications in business administration, unless otherwise prescribed by the company’s charter.
  • With regard to a subsidiary of which over 50% of charter capital is held by the State in the form of stakes of shares, apart from the standards and requirements above, the Director/General Director must not be a spouse, birth parent, adoptive parent, birth child, adopted child, brother, sister, brother-in-law, sister-in-law of the manager of the parent company and the representative of state capital in such company.

20. Wages, salaries, and bonuses for the Chairperson of the Board of members, Director/General Director, and managers

  • The company shall pay wages, salaries, and bonuses for the Chairperson of the Board of members, Director/General Director, and other managers according to the business outcomes.
  • The wages, salaries of the Chairperson of the Board of members, Director/General Director, and other managers shall be included in operating expense as prescribed by regulations of law on corporate income tax, relevant regulations of law, and recorded as a separate item in the annual financial statement.

21. Contracts and transactions subject to approval by the Board of members

The following contracts and transactions between the company and the following entities are subject to approval by the Board of members:

  • Members, authorized representatives of members, Director/General Director, company’s legal representative;
  • Related persons of the persons mentioned above;
  • The manager of the parent company, the person competent to designate the manager of the parent company.

The person who concludes the contract or makes the transaction must send a notification to members of the Board of members and the Controller of the entities relevant to such contract or transaction. The notification shall be enclosed with the draft contract or main contents of the transaction to be made. Unless otherwise prescribed by the company’s charter, the Board of members shall decide whether to accept the contract/transaction within 15 days from the day on which the notification is received. In this case, the contract/transaction shall be accepted if it is approved by the majority of the members who represent at least 65% of voting capital. Members who involve in the contract/transaction must not vote.

The contract/transaction carried out against the regulations above and causing damage to the company shall be annulled and dealt with as prescribed by law. The person who concludes the contract or makes the transaction, members involved and their related persons shall pay compensation for the damage inflicted, return to the company the income from such contract/transaction which is carried out against or causes damage to the company.

22. Adjustment to charter capital

The company may increases its charter capital in the following cases:

  • Capital contribution of members is increased;
  • Capital contributions are made by new members.

When increasing stakes of members, the additional capital shall be split to the members according to their proportion of stakes to the company’s charter capital. Every member may transfer the right to contribute capital to another person as prescribed above. Any member who objects to the decision on increase of charter capital may refuse to contribute more capital. In this case, the additional capital contributed by the member shall be split among other members according to their proportion of stakes to the company’s charter capital, unless otherwise agreed among the members.

The company may decreases its charter capital in the following forms:

  • Part of stakes is returned to members according to their stake holding if the company has run for more than 02 consecutive years from the date of business registration, provided the debts and other liabilities can be paid after the return is made.
  • company repurchases a member’s stake;
  • Charter capital is not contributed fully and punctually by members.

Within 10 days from the date of increase or decrease in charter capital, the company must send a written notification to the business registration authority. The notification shall contain:

  • Name, ID number, headquarter address of the enterprise;
  • Charter capital, the intended increase or decrease in charter capital;
  • Time, reasons, and methods of increase or decrease;
  • Full name and signature of the company’s legal representative

If charter capital is increased, the notification must be enclosed with the Resolution and meeting minutes of the Board of members. If charter capital is decreased, the notification must be enclosed with the Resolution, meeting minutes of the Board of members, and the latest financial statement. Business registration authority shall update information about increase or decrease in charter capital within 03 working days from the day on which the notification is received.

23. Conditions for profit distribution

The company shall only distribute profits to its members when its business operation is profitable, tax liability and other financial obligations are fulfilled in accordance with law, debts and other liabilities can be paid after profit distribution.

24. Withdrawal of returned stake or distributed profit

When a stake is returned due to an decrease to charter capital against some regulations above, or profits are distributed to members against the regulations, the members must return the money or assets they receive, or take joint responsibility for the debts and other liabilities of the company until the amount of money or assets returned by the members is equivalent to the decrease in capital or the distributed profits.

25. Responsibilities of the Chairperson of the Board of members, Director/General Director, legal representative, Controllers, and other managers

The Chairperson of the Board of members, Director/General Director, legal representative, Controllers, and other managers have responsibilities to:

  • Perform the given rights and obligations in an honest, careful manner to serve the best legitimate interests of the company;
  • Act in the best interest of the company; not use the company’s business opportunities, information, secrets; not abuse power or position; not use the company’s property for self-seeking purpose or serve the interests of another entity;
  • Provide the company with timely, sufficient, and accurate information about the enterprises in which they and their related person own or have the controlling stake or shares;
  • Perform other rights and obligations prescribed by law and the company’s charter.

The Director or General Director must not increase salaries or pay bonuses if the company is not able to pay due debts.

A notification of related persons mentioned above shall contain the following information:

  • Names, enterprise identification numbers, addresses of headquarters of the enterprises in which they have stakes or shares; holding and time of ownership;
  • Names, enterprise identification numbers, addresses of headquarters of the enterprises in which their related persons have private ownership or joint ownership of shares or stakes that make up over 10% of charter capital.

The information mentioned above must be declared within 05 working days from the day on which relevant interests occur or change. The company shall compile a list of related persons of the company and their transactions with the company. The list must be kept at the company’s headquarter. Members, managers, controllers of the company, and their authorized representative are entitled to examine and copy part or all of the related information during working hours in accordance with the procedures in company’s charter.

26. Lawsuits against managers

Members of the company shall, single-handedly or on behalf of the company, file liability or civil lawsuits against the President of the Member assembly, Director/General Director, legal representative, and other managers that commit violations against the manager’s duties in the following cases:

  • The violations the commitments;
  • Failure to adhere to or acts against regulations of law or the company’s charter on given rights and obligations; failure to implement or adequately, promptly implement Resolutions of the Board of members;
  • Other cases defined by law and the company’s charter.

Procedures for filing lawsuits shall comply with regulations of law on civil proceedings. The proceeding costs when a member file a lawsuits on behalf of the company shall be included in the company’s expense, unless such lawsuit is denied.

 

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