There is only a business Laws system for both local and foreign investors to do business in Vietnam, deals with the establishment, organization, restructuring, dissolution, legal representative and relevant activities of enterprises, in forms of limited liability companies, joint-stock companies, partnerships, sole proprietorships, and groups of enterprises.
It would be our pleasure 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.
REGULATIONS ON THE LEGAL REPRESENTATIVES
Legal representative of an enterprise is the individual that exercises the rights and fulfills the obligations on when making transactions on behalf of the enterprise, represents the enterprise as the plaintiff, defendant, and person with relevant interests and duties before the arbitral tribunal, the court, exercises other rights and fulfills other obligations as prescribed by law.
A Single Member limited liability company, Multi-Member Limited Liability Company or joint-stock company may have one or multiple legal representatives. The quantity, titles, rights and obligations of legal representative of the enterprise shall be specified in the company’s charter.
There must always be at least one legal representative that resides in Vietnam. If the enterprise has only one legal representative, such person must reside in Vietnam and authorizes another person in writing to perform the legal representative’s rights and obligations when leaving Vietnam. In this case, the legal representative is still responsible for the performance of delegated rights and obligations.
In case the legal representative does not return to Vietnam at the end of the authorization period and does not give another authorization:
- The authorized person of the sole proprietorship shall keep performing the legal rights and obligations within the scope of authorization until the legal representative goes back to work at the enterprise;
- The authorized person of the limited liability company, joint-stock company, or partnership shall keep performing the legal representative’s rights and obligations within the scope of authorization until the legal representative goes back to work at the enterprise, or until the company owner, the Board of members, or the Board of Directors decides to designate another person as the legal representative of the enterprise.
If the enterprise has only one legal representative and such person is not present in Vietnam for more than 30 days without authorizing another person to act as the legal representative, or such person is dead, missing, detained, sentenced to imprisonment, or legally incompetent, then the company owner, the Board of members, or the Board of Directors shall designate another person as the legal representative.
With regard to a limited liability company with two members, if the member who is the legal representative of the company is detained or sentenced to imprisonment, decampment, is missing or legally incompetent, or is banned from practicing by the court for smuggling, producing counterfeits, running illegal businesses, tax evasion, fraud, or another crime defined by the Criminal Code, the other member is naturally the company’s legal until the Board of members makes a decision on company’s legal representatives.
In some special cases, the Court is entitled to appoint the legal during the proceedings.
RESPONSIBILITIES OF THE ENTERPRISE’S LEGAL
- Performing the given rights and obligations in a truthful, careful manner to ensure the enterprise’s lawful interests;
- Acting in the best interest of the enterprise; do not use information, secrets, business opportunities of the enterprise; do not misuse the position, power, or property of the enterprise for self-seeking purposes or serving the interest of other entities;
- Timely and fully notifying the enterprise that the representative and his / her related individuals own or have controlling stake or share in other enterprises.
- The legal representative of the enterprise is personally responsible for the damage caused by his/her violations against the obligations.
Read more:
- How to name a company?
- Enterprise establishment procedures.
- Manage company’s compliance procedures.
- How to set up a company/enterprise in Vietnam?
- Capital Contribution For Establishment A Company
- Form of enterprises – advantages and disadvantages.
- Restructuring, dissolution, and bankruptcy of enterprises.
- Doing business in Vietnam – General terms and conditions.
- Establish A Representative Office Of An Enterprise In Vietnam
- Assurance of Vietnam Government about Non State-owned Enterprises
- Representative Office vs Subsidiary vs Branch? How to transform business models in Vietnam
- Assurance Of Vietnam Government About Non State-Owned Enterprises And Owners Of Enterprises
