Organizational structure of a joint stock company in Vietnam

Organizational structure of a joint stock company in Vietnam (Internet image) 

1. Organizational structure of a joint stock company in Vietnam

The organizational structure of a joint stock company in Vietnam according to Article 137 of the Law on Enterprises 2020 is as follows:

- Unless otherwise prescribed by securities laws, a joint stock company may choose one of the following models:

+ A joint stock company with the GMS, Board of Directors, Board of Controllers and Director/General Director. If the joint stock company has fewer than 11 shareholders and the shareholders that are organizations hold less than 50% of the company’s total shares, a Board of Controllers is not mandatory;

+ A joint stock company with the GMS, Board of Directors and Director/General Director. In this case, at least 20% of the members of the Board of Directors shall be independent members and there has to be an audit committee affiliated to the Board of Directors. The organizational structure, functions and duties of the audit committee shall be specified in the company's charter or the audit committee’s operating regulations promulgated by the Board of Directors.

- If the company has only one legal representative, the President of the Board of Directors or the Director/General Director shall be the legal representative. The President of the Board of Directors shall be the company’s legal representative unless otherwise prescribed by the company's charter. If the company has more than one legal representative, the President of the Board of Directors and the Director/General Director shall be the company’s legal representatives.

2. Rights and obligations of the General Meeting of Shareholders (GMS) in a joint stock company in Vietnam

Rights and obligations of the GMS in a joint stock company according to Article 138 of the Law on Enterprises 2020 are 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.

3. Regulations on General Meeting of Shareholders (GMS) in a joint stock company in Vietnam

Regulations on General Meeting of Shareholders (GMS) in a joint stock company in Vietnam according to Article 139 of the Law on Enterprises 2020 are as follows:

- General Meetings of Shareholders (GMS) shall be convened annually and whenever necessary. The meeting location is the place where the chair attends and shall be within Vietnam’s territory.

- The annual GMS shall be convened within 04 months from the end of the fiscal year. Unless otherwise prescribed by the company's charter, the Board of Directors shall decide deferral of the annual GMS where necessary by up to 06 months from the end of the fiscal year.

- The following issues shall be discussed and ratified at the annual GMS:

+ The company’s annual business plan;

+ The annual financial statement;

+ The report of the Board of Directors on its performance and that of its members;

+ The report of the Board of Controllers on the company’s business performance, performance of the Board of Directors, the Director/General Director;

+ The report of the Board of Controllers on its performance and that of the controllers;

+ Dividend of each type of shares;

+ Other issues within its jurisdiction.

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