Change director of joint stock company in Vietnam

According to the provisions of the Enterprise Law 2020, a joint stock company can have more than one person as a legal representative with the title of director or president of the company. During operations, there will be times when businesses need to make changes in positions to suit the working environment as well as the development orientation of the business. In the article below, Viet An Law will present the legal content related to change director of joint stock company in Vietnam.

Legal basis

• Law on Enterprise 2020;
• Circular 01/2021/TT-BKHDT guiding on business registration;
• Decree 01/2021/ND-CP on business registration.

Law regulations on company directors

According to the provisions of the Enterprise Law 2020, the Director is the person who directly manages the company’s daily business; subject to the supervision of the Board of Directors; and is responsible before the Board of Directors and before the law for the implementation of assigned rights and obligations.

A joint stock company may have one or more legal representatives. The company charter specifies the number, management titles rights, and obligations of the legal representative of the enterprise. The Director of a joint stock company may be appointed by the Board of Directors to appoint a member of the Board of Directors or hire another person to be the Director.

Article 162 of the Enterprise Law 2020 stipulates that the term of office of the Director shall not exceed 5 years and depending on the decision of the Board of Directors, the Director of a joint stock company can be reappointed for an unlimited number of terms.

Conditions and standards to become a Director

• Director is an individual aged 18 years or older;
• The director has full civil capacity;
• Never worked as a director of another company that has been suspended by tax code on tax management and business management data;
• Not be ineligible subject to regulations in Clause 2, Article 17 of the Enterprise Law 2020;
• Have professional qualifications and experience in business administration of the company and other conditions prescribed by the company charter;
• 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 must meet the standards, conditions specified in Clause 1 and Clause 2, Article 64 of the Law on Enterprises 2020 and must not be a person related to the family of the company manager, controller of the company and of the parent company; representative of the enterprise’s capital, representative of the state capital at the company and parent company.

Note: The Director does not necessarily have to be a capital contributor to the company. Enterprises must ensure that they always have at least one legal representative residing in Vietnam.

Procedures for changing the Director of a joint stock company who is also the legal representative

Step 1: Decide to choose a new director to replace the old director

The decision of who will be the new director of the joint stock company will be discussed and decided by the General Meeting of Shareholders, including the following contents: Removal of the old Director; Appointment of a new Director; Change the representative according to the law and the content of the company charter.

Step 2: Draft a document to change the company director

Documents for changing the company director will be prepared by the company and submitted to the registration agency.

Step 3: Apply change of Director to the Department of Planning and Investment

The application for changing the company director will be submitted by the enterprise to the Department of Planning and Investment for appraisal and issuance of a new enterprise registration certificate, which records the company’s new director information on the business registration. or submit online through the National Information Portal on business registration.

Step 4: Get results

If the application is valid, the Department of Planning and Investment will issue a new enterprise registration certificate, which will record the information of the new director in place of the old director.

Step 5: Publish information about changing company directors on the national portal

After the change of director is completed, the enterprise will carry out procedures to publish information on the national information portal about the change.

Step 6: Change some related documents and information of the business when there is a change of director

The director of a joint stock company is the legal representative of the joint stock company. Therefore, when changing directors, the company will need to adjust some information related to the director such as bank accounts and information with tax authorities.

Procedures for changing the Director not be the legal representative

Step 1: Shareholders’ meeting

The General Meeting of Shareholders of a joint stock company meets to come to a unanimous decision to change the company’s director.

Step 2: Elect and vote on a new director

Depending on the nature of the job and the company’s charter, you can choose an appropriate voting method such as secret ballot, public vote, or based on current capacity. Through the meeting, the old director was dismissed and a new director was replaced. The final results are announced by the meeting chair and a decision is made before the Board.

Step 3: Prepare documents, store and notify

According to Article 31 of the Enterprise Law 2020, there is no need to notify the Business Registration Authority when changing the company director but not at the same time the legal representative. This record will be stored directly at the headquarters and notified in writing to the company’s partners and customers.

Dossier of change director of joint stock company in Vietnam

Application for change of company director who is also the legal representative

According to Article 50 of Decree 01/2021/ND-CP, change documents include:

• Notice of change of legal representative (form Appendix II-2 issued with Circular 01/2021/TT-BKHDT );
• A valid copy of one of the personal identification documents of the new legal representative and the person authorized to carry out the procedure (if any);
• Resolution and copy of the minutes of the General Meeting of Shareholders of the joint stock company on changing the legal representative in case the change of legal representative changes the content of the company’s Charter;
• Authorization document for the person to submit the application and receive results if not the legal representative. This document is not required to be notarized or certified.

Note: The person signing the notice of change of legal representative is the Chairman of the Board of Directors for joint stock companies. In case the Chairman of the Board of Directors is the legal representative, the person signing the notice is the Chairman of the Board of Directors elected by the Board of Directors.

Documents to change the company director are not at the same time as the legal representative

When changing the Director in this case, the company does not need to carry out the registration procedure to change the content of the Enterprise Registration Certificate but only needs a Decision in the minutes of the company’s General Meeting of Shareholders. After the company approves the appointment of a director, the company only needs to notify the change in tax registration information at the Business Registration Office. This agency will automatically update and convert information on the General Department of Taxation.

Deadline for submission and processing

The joint stock company is responsible for registering changes in the content of the Enterprise Registration Certificate within 10 days from the date of change of the legal representative. Processing time is 3 working days from receipt of complete and valid documents. In case the dossier is not valid, the Business Registration Office must notify the company in writing of the content that needs to be amended or supplemented within 3 working days from the date of receipt of the dossier.

Business consulting services of Viet An Law

• Support and advice on processes and procedures for changing company directors;
• Instructions for preparing necessary documents for changing the company Director;
• Drafting and representing clients to apply for changing director of the joint stock company with competent state agency;
• Consulting on other legal issues related to changing the company Director

If you have any questions or legal needs related to change director of joint stock company in Vietnam, please contact Viet An Law Firm for the best advice and support!