Compare legal representative with representative managing capital contribution

The legal representative and the representative managing capital contribution represent the organization and exercise certain rights and obligations on behalf of that organization. Many people confuse these two subjects when performing work. Therefore, through the article below, Viet An Law would like to share some information so that clients can compare legal representative with representative managing capital contribution.

What is a legal representative?

The notion of a legal representative

In Clause 1, Article 12 of the Enterprise Law 2020, the definition of a legal representative is as follows:

The legal representative of an enterprise is an individual who represents the enterprise in exercising the rights and obligations arising from the enterprise’s transactions and represents the enterprise as a requester to resolve civil matters. This includes plaintiffs, defendants, people with related rights and obligations before the Arbitrator or court, and other rights and obligations according to the provisions of law.

Some regulations on legal representatives of enterprises:

• The company charter specifies the number, management titles rights, and obligations of the enterprise’s legal representative.
• If the company has more than one legal representative, the company charter specifically stipulates the rights and obligations of each legal representative. If it is not stipulated in the company’s charter, each legal representative is a competent representative of the business before a third party; all legal representatives must be jointly responsible for damages caused to the enterprise according to the provisions of civil law and other relevant laws.
• Must ensure that there is always at least one legal representative residing in Vietnam. When the sole representative leaves the country, he/she must authorize in writing another individual residing in Vietnam. In this case, the legal representative is still responsible for exercising the authorized rights and obligations. If the authorization period expires and the legal representative has not returned to Vietnam, it will be handled as follows:
• The authorized person continues to exercise the rights and obligations of the legal representative of the private enterprise;
• The authorized person continues to exercise the rights and obligations of the legal representative of the limited liability company unless the company owner, the Board of Members, and the Board of Directors decide to appoint such a person. Another person is the legal representative of the enterprise.
• In cases where there is only one legal representative who is absent from Vietnam for more than 30 days without authorizing another person, dies, goes missing, is subject to restrictive measures such as (temporary detention, execution) imprisonment, …) or in cases according to Clause 5, Article 12 of the Enterprise Law 2020, it will be handled as follows:
• The company owner, Board of members, and Board of Directors appoint another person to be the legal representative of the company;
• For a limited liability company with two members and one member is an individual who is the legal representative, in this case, the remaining member is automatically the legal representative of the company until when there is a new decision of the Board of Members on the legal representative of the company.

What is a representative managing capital contribution?

The notion of a representative managing capital contribution

According to the provisions of Article 14 of the Enterprise Law 2020, the representative managing the contributed capital is understood as the authorized representative of the owner, member, and shareholder of the company being an organization and must be an authorized individual in writing on behalf of the owner, member or shareholder to exercise the rights and obligations following the provisions of this Law.

Regulations on representatives managing capital contributions

• In case there are multiple representatives managing capital contributions of the same organization:

• Must specifically determine the capital contribution and number of shares for each authorized representative;
• If not specifically determined, the capital contribution and number of shares will be divided equally among all authorized representatives.
  • The representative manages the capital contribution on behalf of the authorizing subject to exercise the rights according to the provisions of the Enterprise Law 2020 based on the authorizing subject’s title. Any restrictions of owners, members, or shareholders on authorized representatives in exercising the rights and obligations of owners, members, and shareholders of the respective company at the Board of Members, General Assembly The shareholders’ meeting does not affect third parties;
  • The representative managing the capital contribution is responsible to the authorizing entity. Owners, members, and shareholders appoint representatives to be accountable before third parties for responsibilities related to rights and obligations performed through authorized representatives.

Compare legal representative with representative managing capital contribution

Similarities

The legal representative and the representative managing capital contribution have the following things in common:

• They are all entities that represent an organization to exercise rights and obligations on behalf of that organization;
• All are individuals and must have at least one person;
• Must be a person with full capacity for civil liability and not belong to the subjects specified in Article 17 of the Enterprise Law 2020.

Different

The legal representative and the representative managing capital contribution have the following differences:

Above is the basic legal information to compare legal representative with representative managing capital contribution. If clients still have problems or need support, please contact Viet An Law for timely support.