Compilation of guidelines on the latest Enterprise Law in Vietnam

Compilation of guidelines on the latest Enterprise Law in Vietnam

Below are documents guiding the Enterprise Law 2020:

(1) Decree 89/2024/ND-CP on converting state companies established and operating under the State Enterprise Law into one-member limited liability companies organized and operating under the regulations of the Enterprise Law.

(2) Decree 16/2023/ND-CP on the organization, management, and operation of enterprises directly serving national defense, security, and enterprises combining economic activities with defense, security; amending the provisions at Point g, Clause 1, Article 23 of Decree 47/2021/ND-CP guiding the Enterprise Law.

(3) Decree 08/2023/ND-CP amending and suspending the implementation of certain provisions in the Decrees on private placement and trading of corporate bonds in the domestic market and offering corporate bonds to the international market.

(4) Decree 65/2022/ND-CP amending Decree 153/2020/ND-CP on regulations about private placement and trading of corporate bonds in the domestic market and offering corporate bonds to the international market.

(5) Decree 23/2022/ND-CP on the establishment, reorganization, conversion of ownership, and transfer of representative rights of state-owned enterprises holding 100% of charter capital.

(6) Decree 122/2021/ND-CP on sanctions against administrative violations in the field of planning and investment.

(7) Decree 47/2021/ND-CP guiding the Enterprise Law.

(8) Decree 01/2021/ND-CP on enterprise registration.

(9) Decree 153/2020/ND-CP on regulations regarding private placement and trading of corporate bonds in the domestic market and offering corporate bonds to the international market.

Compilation of guidelines on the latest Enterprise Law in Vietnam (Image from the internet)

Legal representative of the enterprise in Vietnam

Article 12 of the Enterprise Law 2020 stipulates the legal representative of an enterprise as follows:

1. The legal representative of an enterprise is an individual who acts on behalf of the enterprise to exercise rights and obligations arising from transactions of the enterprise, represents the enterprise as the requester in civil matters, plaintiff, defendant, or a concerned party before arbitration, court, and other rights, obligations as prescribed by law.

2. Limited liability companies and joint-stock companies may have one or multiple legal representatives. The company's charter specifies the number, management titles, and rights and obligations of the legal representatives of the enterprise. If the company has more than one legal representative, the company's charter must specify the rights and obligations of each legal representative. In case the distribution of rights and obligations of each legal representative is not clearly defined in the charter, each legal representative of the company is deemed to have full authority to bind the enterprise before a third party; all legal representatives have joint liability for damages caused to the enterprise under civil law and other relevant laws.

3. The enterprise must ensure that there is always at least one legal representative residing in Vietnam. When there remains only one legal representative residing in Vietnam, that person must authorize in writing another individual residing in Vietnam to exercise the rights and obligations of the legal representative when departing from Vietnam. In this case, the legal representative remains responsible for the authorized rights and obligations.

4. In the event of the expiration of the authorization period in Clause 3 of this Article where the legal representative has not returned to Vietnam and has not appointed another person, the following applies:

- The authorized person continues to exercise the rights and obligations of the legal representative for sole proprietorships until the legal representative returns to work at the enterprise;

- The authorized person continues to exercise the rights and obligations of the legal representative for limited liability companies, joint-stock companies, partnerships until the company's legal representative returns to work at the company or until the company's owner, Members' Council, or Board of Directors appoints another legal representative.

5. Except as provided in Clause 6 of this Article, for enterprises with only one legal representative and that person is absent from Vietnam for more than 30 days without authorizing another person to exercise the legal representation rights and obligations, or if the legal representative dies, is missing, is under criminal investigation, is detained, is serving a prison sentence, undergoing administrative treatment measures at a compulsory detoxification center or compulsory education establishment, has restricted or lost civil act capacity, has difficulty in recognizing, mastering acts, or is prohibited by the court from holding a position, practicing a profession or doing certain work, the company owner, Members' Council, or Board of Directors appoints another legal representative of the company.

6. For limited liability companies with two members, if a member who is an individual serving as the legal representative of the company dies, is missing, is under criminal investigation, is detained, is serving a prison sentence, undergoing administrative treatment measures at a compulsory detoxification center or compulsory education establishment, absconds from the residence, is restricted or lost in civil act capacity, has difficulty in recognizing and mastering acts, is prohibited by the court from holding a position, practicing a profession or doing certain work, the remaining member automatically becomes the legal representative of the company until the Members' Council makes a new decision regarding the legal representative of the company.

7. Courts and other competent procedural authorities are entitled to appoint a legal representative to participate in proceedings according to the law.

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