What are requirements for holding the position of Director of the multi-member limited liability company in Vietnam? What are rights and obligations of the Director of the multi-member limited liability company in Vietnam?

What are requirements for holding the position of Director of the multi-member limited liability company in Vietnam?

Pursuant to Article 64 of the Law on Enterprises in 2020 stipulating requirements for holding the position of Director/General Director:

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 busines 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.

As regulated above, a person may hold the position of Director/General Director if he/she:

[1] Is not in one of the persons specified as follows:

- State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their own interests;

- Officials and public employees defined by the Law on Officials and the Law on Public Employees;

- Commissioned officers, non-commissioned officers, career military personnel, military workers and public employees in agencies and units of Vietnam People’s Army; commissioned officers, non-commissioned officers and police workers in police authorities and units, except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises;

- Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1 Article 88 of this Law, except those who are designated as authorized representatives to manage state-owned stakes in other enterprises;

- Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons;

- People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, has limited legal capacity or is incapacitated, is not able to control his/her own behaviors, is banned by the court from holding certain positions or doing certain works; other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law.

If requested by the business registration authority, the applicant shall submit the judicial records;

- Juridical persons that are banned from business operation or banned from certain fields as prescribed by the Criminal Code.

[2] Has professional qualifications and experience of busines administration and satisfies other conditions specified in the company's charter.

[3] If the company is a state-owned enterprise, of which over 50% of charter capital or voting shares is held by the State, or a subsidiary company of a state-owned enterprise, 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.

What are requirements for holding the position of Director of the multi-member limited liability company in Vietnam? What are rights and obligations of the Director of the multi-member limited liability company in Vietnam? - image from internet

What are rights and obligations of the Director of the multi-member limited liability company in Vietnam?

Pursuant to Clause 2 Article 63 of the Law on Enterprises in 2020 stipulating rights and obligations of the Director of the multi-member limited liability company in Vietnam:

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

- Decide everyday operating issues of the company;

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

- Issue the company’s rules and regulations unless otherwise prescribed by the company's charter;

- Designate, dismiss the company’s executives, except those within jurisdiction of the Board of Members;

- Enter into contracts on behalf of the company, except those within jurisdiction of the President of the Board of Members;

- Propose the company’s organizational structure;

- Submit annual financial statements to the Board of Members;

- Propose plans for use and distribution of profits or settlement of business losses;

- Recruit employees;

- Other rights and obligations specified in the company's charter, resolution and decisions of the Board of Members, and his/her employment contract.

What are grounds for salaries of the Director of the multi-member limited liability company in Vietnam?

Pursuant to Article 66 of the Law on Enterprises in 2020 stipulating salaries, remunerations, bonuses and other benefits of the President of the Board of Members, Director/General Director and other executives:

Salaries, remunerations, bonuses and other benefits of the President of the Board of Members, Director/General Director and other executives

1. The company shall pay salaries, remunerations, bonuses and provide other benefits for the President of the Board of Members, the Director/General Director and other executives according to the company’s business performance.

2. Salaries, remunerations, bonuses and other benefits for the President of the Board of Members, the Director/General Director and other executives shall be recorded as operating costs in accordance with regulations of law on corporate income tax and relevant laws and placed in a separate section in the company’s annual financial statements.

As regulated above, the multi-member limited liability company in Vietnam shall pay salaries for the Director according to the company’s business performance.

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