Chairman of the BOM of a multiple-member limited company in Vietnam
In a multiple-member limited liability company (LLC), the Board of Members (“BOM”) is the highest authority and must be established to operate, manage and make important decisions regarding policies, orientation and development of the company. These are based on the provisions of the Company’s Charter and relevant legal provisions. Below is an article on the rights and obligations in Vietnam of the Chairman of the BOM of a multiple-member limited company in Vietnam.
Law on Enterprise 2020 and documents guiding the implementation.
Regulations on the Chairman of the BOM of a multiple-member limited liability company
The BOM of a multiple-member limited liability company includes all company members who are individuals and authorized representatives of company members who are organizations.
The Chairman of the BOM of the company is an individual elected from among the members of the BOM. The Chairman of the BOM can concurrently be the Director or General Director of the company.
The term of the Chairman of the BOM shall not exceed 05 years (depending on the provisions of the company’s charter). The Chairman of the BOM can be re-elected without limited terms. Thus, after the end of his or her term of office, the Chairman of the BOM can still hold this position if elected by the BOM.
Conditions to become Chairman of the BOM
All organizations and individuals can become a chairman of the BOM when elected by the BOM in accordance with the law and have the right to participate in company management except for the cases specified in Clause 2. Article 17 of the Enterprise Law 2020 is as follows:
State agencies and units of the people’s armed forces use state assets to: establish a business for private profit for your agency or unit;
Cadres, civil servants and public employees according to the provisions of the Law on Cadres and Civil Servants 2008, as amended and supplemented in 2019 and the Law on Public Employees 2010, as amended and supplemented in 2019;
Officers, non-commissioned officers, professional soldiers, workers, and defense officials in agencies and units of the Vietnam People’s Army officers, professional non-commissioned officers, and police workers in agencies and units under the People’s Public Security of Vietnam, except those appointed as authorized representatives to manage the State’s capital contribution in the enterprise or management at state-owned enterprises;
Leaders and professional managers in state-owned enterprises as prescribed in Point a, Clause 1, Article 88 of the Law on Enterprises 2020, except for those appointed as authorized representatives to manage the State’s capital contribution at other enterprises;
Minors; people with limited civil act capacity; people who have lost their civil act capacity; people with difficulty in cognition and behavior control; organizations without legal status;
People who are being prosecuted for criminal liability, are detained, are serving prison sentences, are serving administrative measures at compulsory detoxification facilities, compulsory education establishments or are being banned by the Court holding positions, prohibiting practicing certain professions or doing certain jobs; Other cases according to the provisions of the Law on Bankruptcy and the Law on Prevention and Combat of Corruption.
In case Business Registration Agency have request, registrant establish a business must submit a criminal record card;
Organizations are commercial legal entities banned from doing business and operating in certain fields according to the provisions of the Criminal Code 2015.
Therefore, if you fall into the cases specified above, you will not be eligible to become Chairman of the BOM.
In addition, if the Chairman of the BOM concurrently holds the position of Director or General Director, he must ensure additional regulations in Article 64 of the Law on Enterprises 2020 on standards and conditions for being Director or General Director. as follows:
Have professional qualifications and experience in the company’s business administration.
Pursuant to the company’s Charter and other regulations related to standards and conditions for being Director and General Director.
For state-owned enterprises as prescribed in Point b, Clause 1, Article 88 of the Law on Enterprises 2020 and subsidiaries of state-owned enterprises as prescribed in Clause 1, Article 88 of the Law on Enterprises 2020, the Director or General The director must also meet the standards and conditions prescribed in Clauses 1 and 2, Article 64 of the Enterprise Law 2020 and must not be a family member of the manager, Controller of company as well as parent company; representative of the enterprise’s capital, representative of the state capital at the company and parent company.
Rights and obligations of the chairman of the BOM of a multiple-member limited liability company in Vietnam
According to the provisions of Clause 2, Article 56 of the Law on Enterprises 2020, the Chairman of the BOM of a limited liability company with 2 or more members has the following rights and obligations:
The Chairman of the BOM has the right to convene a meeting of the BOM or has the obligation to convene a meeting at the request of a member or group of members of the BOM.
Prepare programs and activity plans of the BOM;
Prepare agenda, content, and documents for meetings of the BOM or to collect opinions from members;
Convene, chair and chair meetings of the BOM or organize consultations with members;
Supervise or organize supervision of the implementation of resolutions and decisions of the BOM;
On behalf of the BOM, sign resolutions and decisions of the BOM;
Other rights and obligations according to the provisions of the Enterprise Law 2020 and the Company Charter.
In addition, if in case the Chairman of the BOM is absent or unable to perform his or her rights and obligations, a member must be authorized in writing to perform the rights and obligations of the Chairman of the BOM. members according to the principles stipulated in the company’s charter. In case there is no authorized member or the Chairman of the BOM dies, is missing, is detained, is serving a prison sentence, is serving administrative measures at a compulsory detoxification facility, or is serving a prison sentence, compulsory education, absent from place of residence, having limited or lost civil act capacity, having difficulty in cognition or controlling behavior, being banned by the Court from holding a position, practicing a profession or working. For certain tasks, one of the members of the Members’ Council convenes a meeting of the remaining members to elect one person from among the members to temporarily act as Chairman of the Members’ Council according to the principle that a majority of the remaining members approve until there is a new decision of the BOM.
Salary, remuneration, bonus and other benefits of the Chairman of the BOM
The Company has the right to pay salary, remuneration, bonuses and other benefits to the Chairman of the BOM according to business results and efficiency.
Salaries, remunerations, bonuses and other benefits of the Chairman of the BOM, Director or General Director and other managers are included in business expenses according to the provisions of law on corporate income tax. relevant laws and must be presented in a separate section in the company’s annual financial report.
In short, the Chairman of the BOM plays an important role in managing and operating the company and making strategic directions and key decisions of the company.
Above is advice from Viet An Law about rights and obligations in Vietnam of the chairman of the BOM of a multiple-member limited company in Vietnam. If clients have inquiries about corporate issues, please contact Viet An Law for the most dedicated advice and support!
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