Do members of a company in Vietnam have the right to file lawsuits against the President of the Board of Members who fails to notify the company of the enterprises that she/he owns?

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• Do members of a company in Vietnam have the right to file lawsuits against the President of the Board of Members who fails to notify the company of the enterprises that she/he owns?
• In Vietnam, who will pay proceedings costs in lawsuits against the President of the Board of Members who fails to notify the company of the enterprises that she/he owns?
• What information on enterprises under his/her ownership is the President of the Board of Members required to notify?

Do members of a company in Vietnam have the right to file lawsuits against the President of the Board of Members who fails to notify the company of the enterprises that she/he owns?

Under the provisions of Point a, Clause 1, Article 72 of the Law on Enterprises 2020 on the right to file lawsuits against executives:

Filing lawsuits against executives

1. Members may, in their own names or in the company’s name, file lawsuits against the President of the Board of Members, Director/General Director, legal representatives and other executives in the following cases:

a) They violate regulations of Article 71 of this Law;

b) They fail to comply with or fully and punctually perform their rights and obligations as prescribed by law, the company's charter, resolution or decision of the Board of Members;

...

Referring to the provisions of Point c, Clause 1, Article 71 of the Law on Enterprises 2020:

Responsibilities of the President of the Board of Members, the Director/General Director, other executives, legal representatives and Controllers

1. The President of the Board of Members, the Director/General Director, other executives, legal representatives and Controllers have the following responsibilities:

…

c) Promptly and fully notify the company of the enterprises that they own or have shares/stakes or that their related persons own, jointly own or have separate controlling shares/stakes.

...

Thus, according to the above provisions, members of a company in Vietnam have the right to file lawsuits against the President of the Board of Members who fails to promptly, fully, and accurately notify the company of the enterprises that she/he owns in their own names or in the company’s name.

In Vietnam, who will pay proceedings costs in lawsuits against the President of the Board of Members who fails to notify the company of the enterprises that she/he owns?

Under the provisions of Clause 3, Article 72 of the Law on Enterprises 2020:

Filing lawsuits against executives

…

2. Lawsuits shall be filed in accordance with civil proceedings laws.

3. Proceedings costs in case the lawsuit is filed on behalf of the company shall be recorded as the company’s expense unless the lawsuit is rejected.

Under the provisions of Clause 2, Article 70 of the Civil Procedure Code 2015:

Rights and obligations of the involved parties

The involved parties shall have equal rights and obligations when participating in civil procedures. When participating in civil procedures, the involved parties shall have the following rights and obligations:

1. To respect courts, and strictly observe the court's rules;

2. To advance Court fees and charges and pay Court fees and charges and other expenses as prescribed by law;

...

Thus, proceedings costs in case the lawsuit is filed by members on behalf of the company shall be recorded as the company’s expense.

In case the lawsuit is rejected, members must pay proceedings costs under law.

What information on enterprises under his/her ownership is the President of the Board of Members required to notify?

Under the provisions of Clause 3, Article 71 of the Law on Enterprises 2020 on the responsibilities of the President of the Board of Members:

Responsibilities of the President of the Board of Members, the Director/General Director, other executives, legal representatives and Controllerslers

...

3. The notification mentioned in Point c Clause 1 of this Article shall be made in writing and contain the following information:

a) Names, EID numbers, headquarters addresses of the enterprises they own or have shares/stakes in; the holdings and time of owning or holding the shares/stakes;

b) Names, EID numbers, headquarters addresses of the enterprises their related persons own, jointly own or have separate controlling shares/stakes.

4. The notification mentioned in Clause 3 of this Article shall be sent within 05 working days from the day on which the event or change occurs. The company shall compile a list of the entities mentioned in Clause 3 of this Article, their contracts and transactions with the company. This list shall be kept at the company’s headquarters. Members, executives, Controllers and their authorized representatives are entitled to see, copy part or all of the information specified in Clause 3 of this Article during office hours following the procedures specified in the company's charter.

Thus, when notifying the company of enterprises under his/her ownership, the President of the Board of Members must notify Names, EID numbers, and headquarters addresses of such enterprises.

Note: The notification must be sent within 05 working days from the day on which the event or change occurs.