How many times can a director of a joint stock company be reappointed in Vietnam?

Regarding this matter, LawNet would like to answer as follows:

1. How many times can a director of a joint stock company be reappointed in Vietnam?

According to the provisions of Clauses 1 and 2, Article 162 of the Law on Enterprise 2020 on Directors and General Directors:

- The Board of Directors shall designate one of its members or hire a person as the Director/General Director.

- 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.

Therefore, the Director or General Director of a joint stock company is not limited in the number of times he can be reappointed. The term of office of the Director/General Director shall not exceed 05 years without term limit

This means that the Director of a joint stock company can be reappointed many times without a maximum number of times, as long as the term of 5 years for each appointment is not exceeded.

2. What rights and obligations do directors of joint stock companies in Vietnam have?

According to the provisions of Clause 3, Article 162 of the Law on Enterprise 2020, the Director/General Director has the following rights and obligations in Vietnam:

- Decide everyday operating issues of the company that are outside the jurisdiction of the Board of Directors;

- Organize the implementation of resolutions and decisions of the Board of Directors;

- Organize implementation of the company’s business plans and investment plans;

- Propose the company’s organizational structure, rules and regulations;

- Designate, dismiss the company’s executives, except those under jurisdiction of the Board of Directors;

- Decide salaries and other benefits of the company’s employees, including the executives designated by the Director/General Director;

- Recruit employees;

- Propose plans distribution of dividends or settlement of business losses;

- Other rights and obligations specified by law, the company's charter, resolutions and decisions of the Board of Directors.

At the same time, the Director/General Director shall manage the company’s everyday business in accordance with law, the company’s charter, his/her employment contract with the company, resolutions and decisions of the Board of Directors.

Otherwise, the Director/General Director shall be legally responsible for and pay damages to the company.

Thus, the Director of a joint stock company has main rights such as: deciding on everyday operating issues; organizing the implementation of resolutions of the Board of Directors; designating the company’s executives; deciding on salaries and other benefits; recruiting employees; proposing plans for the for the distribution of dividends; and other rights according to law.

The main obligation of the Director is to operate the business in accordance with the law, the company charter, employment contract and resolutions of the Board of Directors. In case the violation causes damage, they must be responsible for compensation.

3. What are the responsibilities of the Director of a joint stock company?

Members of the Board of Directors, the Director/General Director and other executives have the following responsibilities:

- Perform their rights and obligations in accordance with the Law on Enterprise 2020, relevant laws, the company's charter and resolution of the GMS;

- Perform their rights and obligations in an honest and prudent manner to serve the best and lawful interests of the company;

- Be loyal to the company’s interests; do not abuse their power and position or use the enterprise’s information, secrets, business opportunities and assets for personal gain or serve any other organization’s or individual’s interests;

- Promptly and fully provide the company with the information specified in Clause 2 Article 164 of the Law on Enterprise 2020;

- Other responsibilities prescribed by the Law on Enterprise 2020 and the company's charter.

At the same time, the member of the Board of Directors, Director/General Director or executive that violates Clause 1 of Article 165 of the Law on Enterprises 2020 shall be personally or jointly responsible for the loss, return the benefits received and pay damages to the company and the third parties.

(Pursuant to Article 165 of the Law on Enterprise 2020)

Best regards!

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