Legal status of The president of the Board of Member of Multiple-member LLC in Viet Nam
The Board of members of a Multiple-member LLC plays an important role in deciding main business plans and strategies of the company. Therefore, it is essential to notice to the legal status of the president of the Board of Members of Multiple-member LLC. Let’s find out this issue with Lawyer X through the following case: “Dear Lawyer! I would like to learn about rights and obligations of the president of the Board of Members of a multiple-member LLC according to Viet Nam Law on Enterprises. How long is the term of office of the President of the Board of Members? Thanks for answering me!”
Legal grounds
2020 Viet Nam Law on Enterprises
What is a multiple-limited liability company?
The definition of an enterprise is specified in Clause 10, Article 4 of Law on Enterprise 2020, whereby: “Enterprise means an organization that has a proper name, assets, premises, is established or registered in accordance with law for business purposes.”
According to the Enterprise Law 2020, inheriting the previous legal regulations, currently enterprises include the following four types: private enterprises, partnerships, limited liability companies, joint-stock companies. Thus we can answer the question if enterprise and company are the same? Enterprise has broader connotations than company. Company refers to types of enterprises that are: Partnerships, Limited Liability Companies, Joint-Stock Companies. All types of companies are considered as enterprises. But not every type of enterprises is considered as a corporation, in particular private enterprise is not considered a company.
Limited liablity company comprises 2 types which are single-member limited liability company and Multiple-member limited liability company.
A multiple-member limited liability company is an enterprise which has characteristics as follows:
– A multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals. A member’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise, except for the cases specified in Clause 4 Article 47 of Law on Enterprises. The member’s stake (contributed capital) may only be transferred in accordance with Articles 51, 52 and 53 of Law on Enterprises.
– A multiple-member limited liability company has the status of a juridical person from the day on which the Enterprise Registration Certificateis issued.
– Multiple-member limited liability companies must not issue shares except for equitization.
– Multiple-member limited liability companies may issue bonds in accordance with Law on Enterprises and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of Law on Enterprises.
What is the Board of Members of a multiple-limited liability company?
The Board of Members is the supreme governing body of the company, consists of all members that are individuals and authorized representatives of members that are organizations. The company’s charter shall specify the frequency of meetings of the Board of Members but at least one meeting shall be held per year.
The Board of Members has the following rights and obligations:
– Decide the company’s annual business plan and development strategy;
– Decide increase or decrease in charter capital, time and method for raising more capital; issuance of bonds;
– Decide investments in the company’s development projects; solutions for market development, marketing and technology transfer;
– Approve contracts for borrowing, lending, sale of assets and other contracts prescribed by the company’s charter whose value are at least 50% of the total assets written in the latest financial statement (or a smaller ratio or value specified in the company’s charter);
– Elect, dismiss the President of the Board of Members; designate, dismiss, sign and terminate contracts with the Director/General Director, chief accountant, controllers and other executives specified in the company’s charter;
– Decide the salaries, remunerations, bonuses and other benefits of the President of the Board of Members, Director/General Director, chief accountant, controllers and other executives specified in the company’s charter;
– Ratify annual financial statements, plans for use and distribution of profits or settlement of losses;
– Decide the company’s organizational structure;
– Decide establishment of subsidiary companies, branches and representative offices;
– Revise the company’s charter;
– Decide reorganization of the company;
– Decide dissolution or file bankruptcy of the company;
– Other rights and obligations prescribed by Law and the company’s charter.
President of the Board of Members
The Board of Members shall select a member as the President, who may concurrently hold the position of Director/General Director of the company.
The President of the Board of Members has the following rights and obligations:
– Plan the activities of the Board of Members;
– Draw up agenda and prepare documents for meetings or surveys of the Board of Members;
– Convene and chair meetings of the Board of Members or organize surveys of the Board of Members;
– Supervise or organize supervision of the implementation of resolutions and decisions of the Board of Members;
– Sign resolutions and decisions of the Board of Members on its behalf;
– Other rights and obligations prescribed by Law and the company’s charter.
– The term of office of the President of the Board of Members shall be specified in the company’s charter bust must not exceed 05 years and has no term limit.
In case the President of the Board of Members is not present or not able to perform his tasks, he/she shall authorize another member in writing to perform the rights and obligations of the President of the Board of Members in accordance with the company’s charter. In case no member is authorized or the President is dead, missing, detained, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, making a getaway; has limited legal capacity or is incapacitated, has difficulty controlling his/her behavior, is prohibited by the court from holding certain positions or doing certain works, one of the Board of Members shall convene a meeting with the remaining members to elect one of them as the interim President under the majority rule until a new decision is issued by the Board of Members.
Services of Lawyer X
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On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
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Frequently asked questions
The Board of Members shall select a member as the President.
Yes! The president of The board of members of a multiple-limited liability company may concurrently hold the position of Director/General Director of the company.
Yes! The President of the Board of Members has the right to draw up agenda and prepare documents for meetings or surveys of the Board of Members.
Conclusion: So the above is Legal status of The president of the Board of Member of Multiple-member LLC in Viet Nam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
