Decision-making authority of the General Meeting of Shareholders in a Joint Stock Company in Vietnam

Decision-making authority of the General Meeting of Shareholders in a Joint Stock Company in Vietnam (Internet image)

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

1. Rights and obligations of the General Meeting of Shareholders in a Joint Stock Company in Vietnam

According to Article 138 of the Law on Enterprise 2020, the rights and obligations of the General Meeting of Shareholders (GMS) in a Joint Stock Company are stipulated as follows:

- The GMS shall consist of all voting shareholders and is the supreme body of a joint stock company.

- The GMS has the following rights and obligations:

= Ratify the orientation for development of the company;

= Decide the types of authorized shares and quantity of each type; decide the annual dividends of each type of shares;

= Elect, dismiss members of the Board of Directors and Controllers;

= Decide investment in or sale of assets that are worth at least 35% of the total assets written in the latest financial statement, unless another ratio or value is specified in the company's charter;

= Decide revisions to the company’s charter;

= Ratify annual financial statements;

= Decide repurchase of more than 10% of total sold shares of each type;

= Take actions against violations committed by members of the Board of Directors and Controllers that cause damage the company and its shareholders;

= Decide reorganization or dissolution of the company;

= Decide the budget or total salaries, bonuses and other benefits of the Board of Directors and the Board of Controllers;

= Approve the rules and regulations of the company, the Board of Directors and the Board of Controllers;

= Approve the list of independent audit companies; choose independent audit companies carry out audit of the company; dismiss independent audits where necessary;

= Other rights and obligations prescribed by Law and the company's charter.

Thus, according to the above regulations, it can be seen that the General Meeting of Shareholders is the highest decision-making body of a joint stock company, with the authority to decide on most important decisions of the company.

2. When is the General Meeting of Shareholders convened in a Joint Stock Company?

Pursuant to Clause 1, Article 140 of the Law on Enterprise 2020, Board of Directors shall convene annual and ad hoc GMS.

- An ad hoc GMS shall be convened in the following cases:

(i) The meeting is necessary for the company’s interests;

(ii) The quantity of remaining members of the Board of Directors and Board of Controllers is smaller than the minimum quantity prescribed by law;

(iii) The meeting is requested by the shareholder or group of shareholders mentioned in Clause 2 Article 115 of this Law;

(iv) The meeting is requested by the Board of Controllers;

(v) Other cases prescribed by law and the company's charter

-  Unless otherwise prescribed by the company's charter, the Board of Directors shall convene the GMS within 30 days from the date of occurrence of the event mentioned in (ii) or the day on which the request for holding the meeting mentioned in (iii) and (iv). 

If the Board of Directors fails to convene such GMS, the President and members of the Board of Directors shall pay compensation for the damage incurred by the company.

- In case the Board of Directors fails to convene a GMS as prescribed in above, the Board of Controllers shall convene a GMS within the next 30 days in accordance with regulations of the Law on Enterprise 2020.

If the Board of Controllers fails to convene the GMS, it shall pay compensation for the damage incurred by the company

- In case the Board of Controllers fails to convene a GMS as prescribed in Clause 3 of this Article, the shareholder or group of shareholders prescribed in Clause 2 Article 115 of the Law on Enterprise 2020 may convene the GMS on behalf of the company in accordance with the Law on Enterprise 2020.

Nguyen Ngoc Que Anh

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