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Advantages of the organizational structure of a JSC in Vietnam

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Hello Lawyer X, a joint stock company is one of the most popular types of companies today because of its flexibility in calling for capital and high-profit potential. What is the organizational structure of a JSC in Vietnam? What are the advantages of the organizational structure of a JSC in Vietnam? Looking forward to having a lawyer answer your questions To answer the above question, please consult with Lawyer X through the following article.

Enterprise Law 2020

What is a regulated joint stock company?

According to the provisions of Article 111 of the Enterprise Law 2020, a joint stock company (JSC) is an enterprise in which:

– Charter capital is divided into equal parts called shares;

– Shareholders can be organizations or individuals; the minimum number of shareholders is 03 and there is no limit to the maximum number;

– Shareholders are only responsible for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise;

– Shareholders have the right to freely transfer their shares to others, except for the cases specified in Clause 3, Article 120 and Clause 1, Article 127 of this Law.

– A joint stock company has legal status from the date of issuance of the Certificate of Business Registration.

– Joint stock companies have the right to issue shares of all kinds to raise capital.

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:

Basic organizational structure of a JSC in Vietnam

– 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.

– General Meeting of Shareholders, Board of Directors and 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 Internal Audit Committee under the Board of Directors. Independent members of the Board of Directors or independent members of the Board of Directors perform the function of supervising and organizing the exercise of control over the management and administration of the company.

General Meeting of Shareholders has the 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 the annual dividend rate of each class of shares.

– Electing, dismissing and removing members of the Board of Directors and Supervisors.

– Decide to invest or sell assets with a value equal to or greater than 35% of the total value of assets recorded in the company’s most recent financial statement if the company’s charter does not stipulate a ratio or a price. other treatment.

  • Decide to amend and supplement the company’s charter.
  • Approval of annual financial statements.
  • Decide to buy back more than 10% of the total number of shares sold of each class.
  • Review and handle violations of the Board of Directors and Control Board, causing damage to the company and its shareholders.
  • Decide to reorganize and dissolve the company.
  • Other rights and obligations prescribed by the company’s charter.
  • Notice of the general meeting of shareholders in a joint-stock company

Administrative Council

The Board of Directors is the governing body of the company. Having the full right to act on behalf of the company to decide and perform the rights and obligations of the company that are not under the authority of the General Meeting of Shareholders. The company’s charter specifies the number, rights, obligations, and method of organizing and coordinating activities of independent members of the Board of Directors. Meetings of the Board of Directors can be periodic or extraordinary. The Board of Directors meets at the company’s headquarters or elsewhere. The meeting of the Board of Directors shall be convened by the Chairman of the Board of Directors when he considers it necessary, but must meet at least once a quarter.

Number of members and tenure of members of the Board of Directors
The Board of Directors has from 03 to 11 members. The term shall not exceed 5 years and may be re-elected for an unlimited number of terms. The number of members of the Board of Directors must permanently reside in Vietnam as stipulated in the charter of the joint-stock company.

In case all members of the Board of Directors terminate at the same time. Those members will continue to be members of the Board of Directors until a new member is elected to replace and take over the job. Unless otherwise provided for in the company’s charter. The case of a joint stock company is organized and managed according to the second model mentioned above. The company’s documents and transactions must clearly state “independent member” before the full name of the respective member of the Board of Directors.

Chairman of the board

The Chairman of the Board of Directors is elected by the Board of Directors. The Chairman of the Board of Directors may concurrently be the Director or General Director of the company. As the chairman of the General Meeting of Shareholders, the meeting of the Board of Directors. Unless otherwise provided in the Charter, the Chairman of the Board of Directors is the legal representative of the company.

Director or General Manager

The Director, General Director is the person who runs the company’s day-to-day business. Appointed or hired by the Board of Directors through a labor contract. The Director or General Director has a term of not more than 5 years. May be reappointed for an unlimited number of terms. The Director and General Director are under the supervision of the Board of Directors and the Control Board. The Director, General Director may be the legal representative of the company.

The director or general director must run the day-to-day business of the company in accordance with the law, the company’s charter, the labor contract signed with the company and the resolution of the board of directors. Including appointment, dismissal and dismissal of management positions in the company. Except for positions under the authority of the Board of Directors. Including decisions on salary and other benefits for employees in the company, including managers under the appointment authority of the Director or General Director;…

Supervisory Board

The Supervisory Board has the function of supervising the Board of Directors, Director or General Director in the management and administration of the company. The Supervisory Board is responsible to the General Meeting of Shareholders in performing the assigned tasks…

The Supervisory Board has from 3 to 5 members, the term of the Supervisory Board does not exceed 5 years and the Supervisory Board members can be re-elected for an unlimited number of terms. The head of the Supervisory Board must be a professional accountant or auditor and must work full-time at the company. Unless the company’s charter stipulates a higher standard. The Supervisory Board must have more than half of its members permanently residing in Vietnam.

The organizational and management structure and operation of a joint stock company will not have a Supervisory Board in the following cases
– The company has less than 11 shareholders and shareholders are organizations holding less than 50% of the total shares.

– Or at least 20% of the members of the Board of Directors are independent members and have an Internal Audit Committee under the Board of Directors.

What are the advantages of the organizational structure of a joint stock company?

– Compared to the type of private company or limited company, the joint stock company has a more complex operating system that helps the management apparatus to manage, review and check more carefully to avoid many problems. Risks in the process of running the company

– The liability regime of a joint stock company is limited liability. Shareholders are only responsible for the debts and other property obligations of the company within their contributed capital, so the risk level of shareholders is not high.

In the organization, although there are many different departments, performing different functions and tasks, they are all unified and focused to create results for the defined goals of the organization.

– All members of the organization have a certain role and contribute their efforts to bring the organization to achieve common goals.

– The division of labor for each member, ensuring the expertise and deep activities of a member on a certain job. Proper assignment will impact the effectiveness of the organization.

An organization must have unity of leadership, this is a condition that creates order in the organization. At the same time, contributing to creating efforts, efforts, increasing the responsibility of members in the organization who want to operate more effectively and scientifically.

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Frequently asked questions

What is the regulation on shareholders in a joint-stock company?

The Enterprise Law 2020 stipulates that a joint-stock company only limits the minimum number of shareholders to 3 (a decisive condition for establishing a company) but does not limit the maximum number of shareholders of a joint-stock company. Therefore, a joint stock company can increase the number of shareholders contributing capital according to the needs of the business.
There are 3 types of shareholders:
Founding shareholder: means a shareholder owning at least one common share and signing on the list of founding shareholders of a joint-stock company;
Ordinary Shareholder: is the owner of common shares;
Preference Shareholder: A person who owns preferred shares.

Disadvantages of joint stock company?

The company’s organizational structure is complicated, so the management and operation of a joint stock company is also more difficult because the number of shareholders is very large, many shareholders may not know each other and there may be a division into different companies. groups of shareholders in the company are opposed to each other in terms of interests;
For a joint-stock company, it will be more difficult to make a decision whether it is about corporate management or business because it has to go through the Board of Directors, the General Meeting of Shareholders… So it is easy to ignore these issues. business opportunities for enterprises;
Confidentiality in business and finance is limited because the company must disclose and report to shareholders at annual meetings.
In addition, in fact, the enterprise registration certificate of a joint stock company will not clearly show the list and information of each founding shareholder. Therefore, the company must set up a shareholder book to monitor the situation of shareholders contributing capital to the company.
In addition, when shareholders transfer shares, they are obliged to submit a personal income tax return and pay personal income tax at the tax rate of 0.1% on the share transfer price each time.

Conclusion: So the above is Advantages of the organizational structure of a JSC in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com

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