Opening the way for businesses The Enterprise Law (amended) passed at the 8th session of the 13th National Assembly, in Clause 2, Article 14 stipulates: "public [...]
Enterprise Law (amended) passed at the 8th session of the 13th National Assembly, in Clause 2, Article 14 stipulates: “responsible companieslimited liability company (LLC) and joint stock company may have one or more legal representatives. In this case, the legal representative has the same rights, duties and obligations and the company charter must specifically stipulate the number and management titles of the legal representatives of the enterprise (DN), which must be registered with the Business Registration Authority.
The above regulation is one of the new and progressive points of the Enterprise Law (amended). Because, with the current rigid regulation that each enterprise only has one legal representative, many difficulties have occurred for businesses when, for some reason, the legal representative of the enterprise does not perform its obligations. For example, due to disagreements with founding shareholders or capital contributing members, the legal representative has left office and no longer manages and directs the enterprise's operations, while changing the legal representative is under the authority of the General Meeting of Shareholders for joint stock companies and the Board of Members for limited liability companies. When the enterprise has not organized a meeting according to regulations or the meeting cannot agree on changing the representativelegally present, the enterprise will cease operations. Allowing joint stock companies and limited liability companies to have multiple legal representatives, the above difficulties, if they arise, will be overcome immediately.
| The new regulations on legal representatives of businesses are considered one of the highlights of this (amended) Enterprise Law to facilitate business operations. |
Furthermore, for multi-industry businesses, in which one industry is in the list of conditional businesses and the law requires that the legal representative must have a practicing certificate, it will be impossible to carry out business activities in that industry if there is only one legal representative and does not have a practicing certificate as prescribed. In this case, businesses can register a second legal representative, have a practicing certificate and manage all business activities of the corresponding industry.
However, the regulation 'In this case, the legal representative has the same rights, duties and obligations' is unclear. Before the law, the legal representative who manages any field must take full responsibility for that field. However, within an enterprise, when there are two or more legal representatives, the rights, duties and obligations of each legal representative cannot be the same. More importantly, the company charter must specifically stipulate the number and management titles of the legal representatives of the enterprise and must be registered with the Business Registration Authority. That is an important legal basis to ensure transparency in enterprise management and determine the obligations of each legal representative before the law.
Procedures
