The legal representative of an enterprise is an indispensable subject in an enterprise. This is considered an important and indispensable piece of information on the Business Registration Certificate. And is also one of the Subjects who have the right to carry out the initial business registration procedures with state agencies.
This article provides complete guidance on the knowledge needed to know about the Legal Representative of a business for those who are working as legal representatives of a business and those who are preparing to establish a business.
1. Concept, role and responsibility of legal representative
1.1. What is the legal representative of an enterprise?
Legal representative of the enterprise means an individual representing the enterprise to exercise the rights and obligations arising from the transaction of the enterprise, representing the enterprise in the capacity of a requester for settlement of civil matters, plaintiff, defendant, person with legal rights and obligations. related rights and obligations before the Arbitrator, the Court and other rights and obligations as prescribed by law.
1.2. Who is the legal representative of the enterprise?
If only based on the above basic concept, it is difficult to determine who will be the legal representative of the enterprise. Therefore, based on each specific type of enterprise to determine the legal representative of the enterprise. But regardless of the type of business, the number and position of the legal representative of the enterprise are clearly recorded in the company's charter.
1.2.1. Legal representative of a One Member LLC
One Member Limited Liability Company may have one or more legal representatives.
In a one-member limited liability company owned by an organization, there must be at least 01 legal representative of the company who is the chairman of the Members' Council, the company's president or the director or general director. Unless otherwise provided in the company's charter, the chairman of the Members' Council or the company's president shall be the legal representative of the company.
1.2.2. Legal representative of a Limited Liability Company with Two or More Members
Similar to a One Member Limited Liability Company, a Limited Liability Company with two or more members can also have one or more legal representatives.
In a two-member limited liability company or more, the company must also have at least one legal representative who is the chairman of the Members' Council or the director or general director. Unless otherwise provided for in the company's charter, the Chairman of the Members' Council is the legal representative of the company.
1.2.3. Legal representative of the Joint Stock Company
A joint stock company may have one or more legal representatives.
For the type of joint stock company, it is stipulated that 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 in the Charter, the Chairman of the Board of Directors is the legal representative of the company. In case a 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.
1.2.4. Legal representative of the Partnership Company
Unlike other types of businesses, for a partnership, the general partners are the legal representatives of the company. In addition, only the Chairman of the Members' Council, the Director or the General Director can "represent the company as a requester for settlement of civil matters, plaintiffs, defendants, persons with interests, related obligations before Arbitration, Court; represent the company to exercise other rights and obligations as prescribed by law”.
Therefore, it can be understood that the legal representative of a partnership is a general partner holding the position of Chairman of the Members' Council, Director or General Director of the Company.
1.2.5. Legal representative of Private Enterprise
The owner of a private business is the legal representative, representing the private enterprise in the capacity of a requester for settlement of civil matters, plaintiff, defendant, person with related interests and obligations before arbitration. Courts, representing private enterprises to exercise other rights and obligations as prescribed by law.
1.3. Responsibilities of the legal representative of the enterprise
The legal representative of the enterprise has the following responsibilities:
- Exercise the assigned rights and obligations in an honest, prudent and best manner to ensure the legitimate interests of the enterprise;
- Loyal to the interests of the business; not abuse position, position and use information, know-how, business opportunities, other assets of the enterprise for self-interest or for the benefit of other organizations or individuals;
- To promptly, fully and accurately notify enterprises of the enterprises they or their related persons own or have shares or capital contributions in according to the provisions of this Law.
- The legal representative of an enterprise is personally responsible for any damage caused to the enterprise due to its breach of responsibility specified above.
2. Who can be the legal representative of the enterprise?
The legal representative must meet the following requirements:
2.1. Have full civil capacity
- From full 18 years of age or older;
- Have full capacity for civil acts. Not Losing Civil Act Capacity; Not a person who has difficulty in perception and behavior control; Not having limited capacity for civil acts.
2.2. Not subject to prohibition from establishing and managing enterprises
“The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
a) State agencies and units of the people's armed forces use state assets to establish profit-making enterprises for their own agencies or units;
b) Cadres, civil servants and public employees according to the provisions of the Law on Cadres and Civil servants and the Law on Public Employees;
c) Officers, non-commissioned officers, professional soldiers, defense workers and officers in agencies and units of the Vietnam People's Army; officers, professional non-commissioned officers, public security workers in agencies and units of the Vietnam People's Public Security, except those appointed as authorized representatives to manage the State's capital contribution in enterprises. or management at a state-owned enterprise;
d) Professional leaders and managers in state-owned enterprises as prescribed at Point a, Clause 1, Article 88 of this Law, except for persons appointed as authorized representatives to manage the State's contributed capital in Vietnam. other enterprises;
e) Minors; persons with limited civil act capacity; persons who have lost civil act capacity; persons with difficulty in cognition and behavior control; organizations without legal status;
f) Persons who are being prosecuted for criminal liability, detained, serving a prison sentence, serving an administrative measure at a compulsory drug rehabilitation facility, a compulsory education facility, or who are prohibited by the Court from holding a position, practicing a profession or doing certain work; other cases as prescribed by the Bankruptcy Law and the Law on Anti-Corruption.
At the request of the business registration authority, the enterprise establishment registrant must submit a judicial record card to the business registration authority;
g) The organization is a commercial legal entity prohibited from doing business or operating in certain fields according to the provisions of the Penal Code.
2.3. Tax code not locked
- Tax code locked on tax management and business management data; Usually due to tax debt being enforced or not completing procedures for another business that person is the legal representative, or individual business households that have not completed tax obligations have their tax code locked.
This case is not clearly regulated in the Enterprise Law, but is limited by the provisions of other relevant specialized laws.
The legal representative is not necessarily a capital contributor at the Company.
3. Number of legal representatives of the enterprise
The fact that an enterprise can have one or more than one legal representative is that the regulation becomes broader and more open than the previous Laws. However, in the opposite aspect, "How many companies can a person represent?", is the legal regulation on this issue similar to the regulation on the number of legal representatives of an enterprise?
3.1. How many companies can one person legally represent?
If the Enterprise Law 2005 stipulates that an individual can only “name” a company, regardless of domestic or foreign; If the director or general director cannot concurrently act as the director or general director of another enterprise, by the Enterprise Law 2014 and the Enterprise Law 2020, this provision has been completely annulled, except for the exception of the law on enterprises. State enterprises.
In addition, according to the provisions of the Civil Code 2015, an individual or legal entity may represent many different individuals or legal entities, but may not act on behalf of the representative to establish and perform civil transactions. with himself or with a third party of which he is also his representative, unless otherwise provided for by law.
From the above, it can be seen that, at present, the enterprise law only stipulates that an enterprise can have more than one legal representative (depending on the type of enterprise) but does not clearly mention the issue of representation. represent the company. It also means that the law has no prohibition in this case.
| Therefore, it is understandable that one person can be named to represent many companies. |
3.2. Points to note in the issue of one person being the legal representative for many companies
The law does not clearly stipulate whether a person may or may not be legally represented for many companies, but there are certain constraints for some specific cases as follows:
For partnership companies:
General partners are the legal representatives of the company. General partners may not own private enterprises; may not be a general partner of another partnership unless otherwise agreed by the remaining general partners.
From the above provisions, it can be seen that if a person is the legal representative of a partnership, he cannot concurrently act as the legal representative of a private enterprise and can only act as the legal representative of the partnership. another partnership with the consent of the remaining general partners.
For private enterprises:
Each individual is only entitled to establish a private enterprise. The owner of a private enterprise cannot concurrently be the owner of a business household or a general partner of a partnership. The owner of a private business is the legal representative of the company.
The above provision is understood that when a person is the legal representative of a private enterprise, he cannot concurrently be the legal representative of another private enterprise or another partnership.
3.3. The company has many legal representatives.
Limited liability companies and joint stock companies may have one or more legal representatives. The company's charter specifies the number, managerial position and rights and obligations of the enterprise's legal representative.
If the company has more than one legal representative, the company's charter specifies rights and obligations of each legal representative.
In case the division of rights and obligations of each legal representative has not yet been clearly stated in the company's charter, each legal representative of the company is a competent representative of the enterprise before the party. Tuesday; all legal representatives must be jointly responsible for damage caused to the enterprise in accordance with the provisions of the civil law and other relevant laws.
3.4. Requirements for the presence and residence of the legal representative of the enterprise
Enterprises must ensure that at least one legal representative resides in Vietnam at all times.
(I.e. Download the Legal Representative Authorization Form here
(*) When there is only one legal representative remaining in Vietnam, this person must, when exiting Vietnam, authorize in writing another individual residing in Vietnam to perform the rights and obligations of the person residing in Vietnam. legal representative.
In this case, the legal representative is still responsible for the performance of the authorized rights and obligations.
(**) In case the time limit for authorization specified at Point (*) expires but the legal representative of the enterprise has not returned to Vietnam and has no other authorization, the following provisions shall apply:
The authorized person continues to exercise the rights and obligations of the legal representative of the private enterprise until the legal representative returns to work at the enterprise;
Authorized person continues to exercise the rights and obligations of the legal representative of a limited liability company, joint stock company or partnership until the legal representative of the company becomes work at the company again or until the company owner, the Members' Council or the Board of Directors decide to appoint another person to be the legal representative of the enterprise.
(i) Except for the case specified in (ii) below, for an enterprise, there is only one legal representative and this person is absent from Vietnam for more than 30 days without authorizing another person to exercise his/her rights. and obligations of the legal representative of the enterprise or is dead, missing, is being examined for penal liability, is detained, is serving a prison sentence, is serving administrative handling measures at the agency. compulsory detoxification establishments, compulsory education establishments, restricted or incapacitated civil acts, having difficulties in cognition or behavior control, being banned by the Court from holding certain positions or practicing professions, or To perform certain jobs, the company owner, the Members' Council or the Board of Directors shall appoint another person to act as the company's legal representative.
(ii) For a limited liability company with two members, if any member being an individual as the legal representative of the company dies, is missing, is being examined for penal liability, or is held in custody, , is serving a prison sentence, is serving an administrative handling measure at a compulsory detoxification establishment, a compulsory education institution, has escaped from his/her place of residence, is restricted or has lost his/her civil act capacity, If the member has difficulties in perception, behavior control, is banned by the Court from holding certain positions, practicing certain professions or doing certain jobs, the remaining members will automatically act as the legal representative of the company until there is a new decision of the Members' Council on the legal representative of the company.
(iii) Courts and other competent procedure-conducting agencies have the right to appoint legal representatives to participate in proceedings in accordance with law.
4. Change of legal representative
According to the law, a business can have one or more Legal Representatives, depending on the type of business. During the operation, the business can add or remove, change Legal Representatives according to the wishes and structure of the company.
However, this change must be subject to the procedure of notifying the change of Legal Representative to the Department of Planning and Investment.
4.1. Documents for changing legal representative
A dossier of change of the legal representative of an enterprise includes:
- Notice of change of legal representative.
- Copy of legal documents of the individual for the new legal representative.
- Resolutions, decisions and copies of meeting minutes in each specific case:
- One member LLC: Resolution, decision of the company owner on changing the legal representative;
- Limited Liability Company with Two or More Members: Resolution, decision and copy of minutes of meeting of the Board of Members on changing legal representative;
- Joint stock company:
- In case the change of the legal representative changes the contents of the company's charter: Resolution and copy of the minutes of the General Meeting of Shareholders on the change of the legal representative;
- In case the change of the legal representative does not change the contents of the company's charter other than the full name and signature of the legal representative of the company specified in Article 24 of the Enterprise Law: Resolutions, decisions and copies of minutes of meetings of the Board of Directors.
- In case of registration of change of legal representative as prescribed in Clause 6, Article 12 of the Law on Enterprises, the Resolution, decision and copy of the minutes of the meeting of the Board of Members shall be replaced by a copy of the document confirming that the legal representative of the company is dead, missing, being prosecuted for criminal liability, being detained, serving a prison sentence, serving an administrative measure at a compulsory drug rehabilitation facility, compulsory education facility, fleeing from the place of residence, having limited or lost civil act capacity, having difficulty in cognition, controlling behavior, being prohibited by the Court from holding a position, practicing a profession or doing certain work.
- In case the applicant is an authorized individual, the application must include:
- Authorization document for an individual to carry out procedures related to business registration;
- Copy of legal documents of authorized individual.
4.2. Steps to change legal representative
Once the application for Change of legal representative has been fully prepared, the enterprise will proceed with the following steps:
Step 1: Submit your application. There are 3 options for businesses to choose from:
- Option 1: Submit directly at the business registration agency under the Department of Planning and Investment where the enterprise's head office is located;
- Option 2: Submit via postal service;
- Option 3: Submit online through the National Portal on business registration.
Step 2: Receiving and processing documents: The business registration office will receive the business's documents and return a receipt with an appointment date to receive the results.
Step 3: Return results: Within 03 (three) working days from receipt of application. There are 2 ways to receive results as follows:
- Option 1: Enterprises directly receive at the business registration agency under the Department of Planning and Investment where the enterprise's head office is located;
- Method 2: Register to receive results via postal service.
4.3. Change legal representative online
During its operation, the enterprise will regularly restructure its organizational model to orient its future development. Some issues revolve around the rights, responsibilities as well as the change of the legal representative.
When conducting a change of the legal representative of an enterprise, there are many ways to proceed with filing with the Business Registration Authority. The most convenient way is to submit an application to change the legal representative online, the process is carried out as follows:
Step 1: Prepare complete documents to change legal representative
Step 2: Submit application via Business Registration Portal
(I.e. Download the online guide to changing legal representative documents here.