New regulations on management of public companies in Vietnam

The Government has just issued Decree No. 71/2017/NĐ-CP providing regulations on company management applicable to public companies on June 6^th 2017 and shall take effects on August 1^st 2017. This Decree contains many new principles of management and operation of public companies. Viet An Law Firm provides our Clients some main facts as follows:

Board of Directors:

Members of the Board of Directors:

A new regulation should be paid attention is the Chairman of the Board of Director shall not hold the position as Director (General Director) at the same time of 01 public company. This regulation shall take effects on August 1^st 2020.

Besides that, members of the Board of Directors of 01 public company shall not be members of the Board of Directors of more than 05 other companies. This regulation shall take effects on August 1^st 2019.

Structure of the Board of Directors:

The structure of the Board of Directors shall maintain the balance of executive and non-executive members. At least one third of the Board of Directors must be non-executive members.

Non-executive members are members of the Board of Directors but not Directors, General Directors, Deputy Directors, Deputy General Directors, Chief Accountants and other executives of the company.

Meeting of the Board of Directors:

The Board of Directors must hold meetings at least once a month.

Controllers:

Controllers of a public company shall not be:

• Working in accounting department, financial department of the company;
• Members or employees of any dependent audit firm auditing financial statements of the company in consecutive 03 previous years.

Regarding listed companies and public companies in which the State holds more than 50% of the charter capital, controllers must be accountants or auditors.

Publish information:

Public companies shall publish its information fully, accurately and timely periodical information and irregular information about operation, financial status and management status of the company to shareholders and the public. Public companies shall publish fully, accurately and timely other information if those could affect the stock price and decisions made by shareholders and investors. Information and publishing methods shall be conducted as the laws and the Articles of Associates.

Contents of published information:

About the structure of organization and management of the company: Public companies shall report to the State Securities Commission, the Stock Exchange and publish the information of the organization and management structure of the company.

About the management of the company: The company shall publish information of company management in annual shareholders meetings and in the annual report of the company as stipulated in the laws on securities.

About income of Directors (General Directors): Income of Directors (General Directors) and other managers shall be stated in a separate category in the annual financial statement of the company and be reported to the Board of Shareholders at the annual meeting.

About members of the Board of Directors, controllers, directors (general directors): Members of the Board of Directors, controllers, directors (general directors) shall report to the Board of Directors, Board of controllers about transaction between the company and any company in which they are founding members or member of the Boards of Directors, Directors, General Directors in 03 nearest years before the time of transaction or with any company in which relatives of them are members of the Board of Directors, Directors, General Directors or major shareholders.

Legal consulting services on investment, enterprises and commerce at Viet An Law Firm:

• Consult about regulations and procedures related to enterprises, investment and commerce in Vietnam;
• Consult about regulations and procedures for issuance of Investment Registration Certificate, Business Registration Certificate, sublicenses…;
• Consult about conditional business sectors and detailed conditions applied to each sector;
• Consult about regulations applied to foreign investors when investing in Vietnam;
• Draft, submit the application and work with state-authorized agencies when Clients grant authorization;
• Consult about related legal issues: tax, intellectual property, contracts, Vietnamese labor, foreign labor working in Vietnam, social insurance, commercial franchise…;

If you are looking for legal advice on regulations and procedures related to enterprises, commerce and investment in Vietnam, please feel free to contact Viet An Law Firm for more information!