A joint-stock company is a very popular type of business in our country. The Law on Enterprises has clear provisions on the organizational structure of joint-stock companies. Let’s find out this issue with Lawyer X through the following situation: “Hello, Lawyer! I would like to ask, what are the main agencies and departments of a Joint Stock Company? What is the legal status of these agencies in a joint-stock company? Thanks for the reply Lawyer!”
Legal grounds
Enterprise Law 2020
The organizational structure of the joint-stock company
Unless otherwise provided by the law on securities, a joint-stock company has the right to choose an organization to manage and operate under one of the following two models:
+ The General Meeting of Shareholders, the Board of Directors, the Supervisory Board, and the Director or General Director. In case a joint-stock company has less than 11 shareholders and the shareholders are organizations holding less than 50% of the total shares of the company, it is not required to have a Supervisory Board;
+ The General Meeting of Shareholders, the Board of Directors, and the Director or General Director. In this case, at least 20% of the members of the Board of Directors must be independent members and have an Audit Committee under the Board of Directors. The organizational structure, functions, and tasks of the Audit Committee are specified in the company’s charter or the operation regulations of the Audit Committee issued by the Board of Directors.
– In case the company has only one legal representative, the Chairman of the Board of Directors or the Director or General Director shall be the legal representative of the company. Unless otherwise provided for in the Charter, the Chairman of the Board of Directors is the legal representative of the company. In case the company has more than one legal representative, the Chairman of the Board of Directors and the Director or General Director are automatically the legal representative of the company.
Rights and obligations of the General Meeting of Shareholders
The General Meeting of Shareholders, consisting of all shareholders with voting rights, is the highest decision-making body of a joint-stock company.
The General Meeting of Shareholders has the following rights and obligations:
+ Through the development orientation of the company;
+ Decide on the class of shares and the total number of shares of each type that are entitled to offer for sale; decide on the annual dividend rate of each class of shares;
+ Besides, electing, dismissing, and removing members of the Board of Directors and Supervisors;
+ Decide to invest in or sell assets valued at 35% or more of the total value of assets recorded in the company’s most recent financial statement, unless the company’s charter stipulates a percentage or a percentage of total assets. other value;
+ Decide to amend and supplement the company’s charter;
+ Approving annual financial statements;
+ Decide to buy back more than 10% of the total number of shares sold in each class;
+ To consider and handle violations committed by members of the Board of Directors and Controllers, causing damage to the company and its shareholders;
+ Decide to reorganize or dissolve the company;
+ Decide the budget or total remuneration, bonus, and other benefits for the Board of Directors, and the Supervisory Board;
+ Approving internal governance regulations; operating regulations of the Board of Directors and Control Board;
+ Approving the list of independent auditing companies; decide on an independent audit firm to inspect the company’s operations, dismiss the independent auditor when deeming it necessary;
+ Other rights and obligations as prescribed by the Enterprise Law and the company’s charter.
Administrative Council
The Board of Directors is the management agency of the company and has full authority to make decisions on behalf of the company and to exercise the rights and obligations of the company, except for the rights and obligations falling under the authority of the General Meeting of Shareholders.
The Board of Directors has the following rights and obligations:
+ Decide the strategy, medium-term development plan, and annual business plan of the company;
+ Proposing the type of shares and the total number of shares to be offered for sale in each class;
+ Decide to sell unsold shares within the number of shares authorized to be offered for sale of each class; decide to raise additional capital in other forms;
+ Besides, decide the selling price of shares and bonds of the company;
+ Decide to repurchase shares as prescribed in Clauses 1 and 2, Article 133 of the Law on Enterprises;
+ To decide on investment plans and investment projects within its competence and the limits prescribed by law;
+ Decide on solutions for market development, marketing, and technology;
+ Approving purchase, sale, borrowing, lending, and other contracts and transactions with a value of 35% or more of the total value of assets recorded in the company’s most recent financial statement, unless otherwise specified in Article 2 of this Decree. The company’s charter prescribes a different ratio or value, and contracts and transactions fall under the decision-making authority of the General Meeting of Shareholders as prescribed at Point d, Clause 2, Article 138, Clauses 1 and 3, Article 167 of the Law on Enterprises. Karma;
+ Electing, dismissing, and removing the Chairman of the Board of Directors; appointing, dismissing, signing contracts, terminating contracts with the Director or General Director and other important managers as provided for in the company’s charter; deciding on the salary, remuneration, bonus and other benefits of such managers; appoint an authorized representative to participate in the Members’ Council or the General Meeting of Shareholders in another company and decide on the remuneration and other benefits of such persons;
+ Supervising and directing the Director or General Director and other managers in running the company’s daily business;
+ To decide on the organizational structure, and internal management regulations of the company, to decide on the establishment of subsidiaries, branches, and representative offices, and to contribute capital and purchase shares of other enterprises;
+ Approve the program, the content of documents in service of the General Meeting of Shareholders, convene the General Meeting of Shareholders or collect opinions for the General Meeting of Shareholders to pass a resolution;
+ Submit annual financial statements to the General Meeting of Shareholders;
+ Proposing the level of dividends to be paid; decide on the time limit and procedures for paying dividends or dealing with losses arising in the course of business;
+ Proposing the reorganization and dissolution of the company; request for bankruptcy of the company;
+ Other rights and obligations as prescribed by the Enterprise Law and the company’s charter.
– The Board of Directors shall adopt resolutions, make decisions by voting at the meeting, and collect opinions in writing or other forms prescribed by the company’s charter. Each member of the Board of Directors has one vote.
– In case a resolution or decision passed by the Board of Directors is contrary to law, a resolution of the General Meeting of Shareholders; or the company’s charter, causing damage to the company, the members agree to approve the resolution. such decision or decision must be jointly and personally liable for such resolution or decision and must compensate the company for damage; Members who object to the adoption of the above resolution are exempt from liability. In this case, the company’s shareholders have the right to request the Court to suspend the implementation or cancel the aforesaid resolution or decision.
Director, General Director of the company
– The Board of Directors appoints one member of the Board Directors or hires another person to act as the Director or General Director.
– The director or general director is the person who runs the company’s day-to-day business; under the supervision of the Board of Directors; takes responsibility before the Board of Directors and before the law for the performance of assigned rights and obligations.
The term of the Director or General Director shall not exceed 5 years and may be re-appointed for an unlimited number of terms.
The Director or General Director has the following rights and obligations:
+ To decide on issues related to the company’s day-to-day 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 organizational structure plan, and internal management regulations of the company;
+ Appointing, dismissing, and dismissing managerial positions in the company, except for those under the authority of the Board of Directors;
+ Decide salary and other benefits for employees in the company, including managers under the appointment authority of the Director or General Director;
+ Labor recruitment;
+ Proposing a plan to pay dividends or deal with business losses;
+ Moreover, other rights and obligations as prescribed by law, the company’s charter, and resolutions and decisions of the Board of Directors.
The director or general director must run the day-to-day business of the company by the law, the company’s charter, the labor contract signed with the company, and the resolutions and decisions of the Board of Directors. treat. In case of operating contrary to the provisions of this Clause, causing damage to the company, the director or general director shall be responsible before the law and must compensate for the damage to the company.
– For public companies, state-owned enterprises as prescribed at Point b, Clause 1, Article 88 of the Law on Enterprises and subsidiaries of state enterprises as prescribed in Clause 1, Article 88 of the Law on Enterprises, the Director or the General Director must satisfy the following criteria and conditions:
+ Not falling into the categories specified in Clause 2, Article 17 of the Enterprise Law;
+ Must not be a person related to the family of the business manager, controller of the company and the parent company; the representative of the state capital portion, the representative of the enterprise’s capital portion at the company and parent company;
+ Having professional qualifications and experience in business administration of the company.
Supervisory Board
– The Supervisory Board has from 03 to 05 Supervisors. The term of the Supervisors shall not exceed 5 years and may be re-elected for an unlimited number of terms.
– The Head of the Supervisory Board is elected by the Supervisory Board from among the Supervisors; election, dismissal, and removal from office on the principle of majority. The rights and obligations of the Head of the Control Board are stipulated in the company’s charter. The Supervisory Board must have more than half of the Controllers residing in Vietnam. The head of the Supervisory Board must have a university degree or higher in one of the majors in economics, finance, accounting, auditing, law, business administration, or a major related to the enterprise’s business activities. industry, unless the company’s charter stipulates a higher standard.
– In case a Supervisor ends at the same time, but the new-term Supervisor has not been elected, the Supervisor whose term has expired will continue to exercise his rights and obligations until the new-term Supervisor is elected and assumed duties.
Related article:
- CONDITIONS FOR BUSINESS SUSPENSION OF JOINT-STOCK COMPANY IN VIETNAM
- PROCEDURES FOR OFFERING SHARES TO THE PUBLIC OF A JOINT-STOCK COMPANY IN VIETNAM
Frequently asked questions:
In case a company has only one legal representative, the Chairman of the Board of Directors or the Director or General Director shall be the legal representative of the company. Unless otherwise provided for in the Charter, the Chairman of the Board of Directors is the legal representative of the company.
In case the company has more than one legal representative, the Chairman of the Board of Directors and the Director or General Director are automatically the legal representative of the company.
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