Directors of joint stock companies in Vietnam

Director is an extremely important position in the management apparatus of a joint stock company. The director is the person who directly manages the company’s daily business; Be supervised and responsible before the Board of Directors and the law for the implementation of assigned rights and obligations. Below Viet An Law shares regulations related to the rights and obligations of directors of joint stock companies in Vietnam.

Legal basis

Law on Enterprise 2020 and documents guiding the implementation.

General regulations on directors of joint stock companies in Vietnam

According to Clause 1, Article 162 of the Enterprise Law 2020: “The Board of Directors appoints a member of the Board of Directors or hires another person to be the Director or General Director.” Thus, it can be understood that the Director of a joint stock company is an individual whose Board of Directors of the Company appoints one of the members of the Board of Directors or hires another person to perform assigned rights and obligations. for this position.

The director is the person who runs the company’s daily business, who is supervised and responsible before the Board of Directors and the law for the implementation of assigned rights and obligations.

The Director’s working time is calculated according to the term. Each term does not exceed 05 years and can be reappointed without limit on the number of terms depending on the Decision of the Board of Directors.

Conditions to become directors of joint stock companies in Vietnam

To become a director of a joint stock company, an individual must satisfy the following requirements and conditions:

• Have full civil act capacity;
• Not prohibited from business activities or charged with business-related crimes.
• Have experience in management, leadership, professional qualifications in the company’s business administration or qualifications specifically stipulated by the company’s charter.

For public companies and state-owned enterprises as prescribed in Point b, Clause 1, Article 88 of the Enterprise Law 2020 and subsidiaries of state-owned enterprises as prescribed in Clause 1, Article 88 of the Enterprise Law 2020, the Director or General Director must meet the following standards and conditions:

• Not subject to regulations in Clause 2, Article 17 of the Enterprise Law 2020;
• Must not be a person related to the family of the business manager, the company’s controller and the parent company; representative of state capital, representative of enterprise capital at the company and parent company;
• Have professional qualifications and experience in the company’s business administration.

Rights and obligations of directors of joint stock companies in Vietnam

According to Clause 3, Article 162 of the Enterprise Law 2020, the director has the following rights and obligations:

• Decide on issues related to the company’s daily business that are not under the authority of the Board of Directors;
• Organize the implementation of resolutions and decisions of the Board of Directors;
• Organize the implementation of the company’s business plan and investment plan;
• Proposing the company’s organizational structure and internal management regulations;
• Appoint, dismiss management positions in the company, except for positions under the authority of the Board of Directors;
• Decide on salaries and other benefits for employees in the company, including managers under the appointment authority of the Director or General Director;
• Labor recruitment;
• Proposing plans to pay dividends or handle business losses;
• Other rights and obligations according to the provisions of law, the Company’s Charter and resolutions and decisions of the Board of Directors.

Salary, remuneration, bonus and other benefits

• The Company has the right to pay remuneration, salary and bonuses to the Director according to business results and efficiency.
• If the company charter does not provide otherwise, the salary, remuneration, bonus and other benefits of the Director are paid according to the following regulations:
• The Director’s salary and bonus are decided by the Board of Directors.
• The Director’s remuneration and salary are included in the company’s business expenses according to the provisions of the law on corporate income tax, shown as a separate item in the company’s annual financial report and must be reported. Report to the General Meeting of Shareholders at the annual meeting.

Consulting services related to joint stock company operations of Viet An Law Firm

• Consulting, preparing documents, and on behalf of customers carrying out procedures with state agencies to establish joint stock companies.
• Consulting and preparing documents to carry out capital contribution procedures to establish a joint stock company.
• Consulting and preparing documents to change business registration of joint stock companies.
• Consulting and preparing documents to transfer capital contributions in joint stock companies.
• Consulting, preparing documents, and on behalf of clients carrying out procedures with state agencies to transfer capital and change the capital ownership ratio in joint stock companies.
• Legal advice, finance, establishment of intellectual property rights, labor law, joint stock company contracts,…

Above is advice from Viet An Law about rights and obligations of directors of joint stock companies in Vietnam, please contact us Viet An Law for the most dedicated advice and support!