Vietnam: Can a person hold the position of director of multiple joint stock companies at the same time? When does a joint-stock company have the status of a juridical person?
When does a joint-stock company in Vietnam have the status of a juridical person?
Pursuant to Clause 2, Article 111 of the Law on Enterprises 2020 stipulating as follows:
"Joint stock companies
1. A joint stock company is an enterprise in which:
a) The charter capital is divided into units of equal value called shares;
b) Shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders;
a) A shareholder’s liability for the company’s debts and liabilities is equal to the amount of capital contributed to the company by the shareholder;
d) Shareholders may transfer their shares to other persons except for the cases specified in Clause 3 Article 120 and Clause 1 Article 127 of this Law.
2. A joint stock company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
3. A joint stock company may issue shares, bonds and other kinds of securities."
Accordingly, a joint-stock company in Vietnam has the status of a juridical person from the date of issuance of the Enterprise Registration Certificate.
Can a person in Vietnam hold the position of director of multiple joint stock companies at the same time?
According to Clause 2, Article 162 of the Law on Enterprises 2020 stipulating as follows:
"The Director/General Director
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2. The Director/General Director shall manage the company’s everyday business operation, is supervised by and responsible to the Board of Directors Members and the law for his/her performance.
The term of office of the Director/General Director shall not exceed 05 years without term limit."
In addition, according to Article 64 of the Law on Enterprises 2020 as follows:
"Requirements for holding the position of Director/General Director
A person may hold the position of Director/General Director if he/she:
1. Is not in one of the persons specified in Clause 2 Article 17 of this Law.
2. Has professional qualifications and experience of business administration and satisfies other conditions specified in the company's charter.
3. If the company is a state-owned enterprise prescribed in Point b Clause 1 Article 88 of this Law or a subsidiary company of a state-owned enterprise prescribed in Clause 1 Article 88 of this Law, is not a relative of the executives and controllers of the company and the parent company, of the representative of enterprise’s investment or state investment in the company and the parent company."
In addition, according to Clause 2, Article 12 of the Law on Enterprises 2020 as follows:
"Article 12. The enterprise’s legal representative
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2. A limited liability company or joint stock company may have one or more than one legal representative. The enterprise’s charter shall specify the quantity, position, rights and obligations of its legal representatives. In case there are more than one legal representative, the charter shall specify the rights and obligations of each of them. Otherwise, each of the legal representatives shall fully be representative of the enterprise and take joint responsibility for any damage to the enterprise as prescribed by civil laws and relevant laws.
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Comparing the above provisions, unless the company's charter provides the other regulations, you can hold the position of Director of multiple joint stock companies at the same time.
How many founding shareholders is a new joint stock company in Vietnam required to have?
According to Clause 1, Article 120 of the Law on Enterprises 2020 stipulating as follows:
"Ordinary shares of founding shareholders
1. A new joint stock company shall have at least 03 founding shareholders. A joint stock company converted from a state-owned enterprise or limited liability company or after division, consolidation, acquisition of another joint stock company is not required to have founding shareholders. Instead, the company's charter in the enterprise registration application shall contain signatures of the company’s legal representatives or ordinary shareholders.
2. The founding shareholders shall subscribe for at least 20% of the total authorized ordinary shares upon enterprise registration.
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Accordingly, a new joint stock company must have at least 03 founding shareholders.
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