Joint-stock companies are one of the most popular businesses in Vietnam. The apparatus of joint stock companies is structured in accordance with the law and the company’s charter with a structural principle to ensure standards, transparency and effective operations. This is the type of enterprise with the strictest organizational structure, in which the General Meeting of Shareholders has the highest decision-making authority of the company, while the Board of Directors is the management body, which has the right to decide on issues. The subject does not fall under the authority of the General Meeting of Shareholders.
Rights and obligations of the Board of Directors are prescribed as follows:
- Deciding on the company’s annual strategy, medium-term development plan and annual business plan;
- Propose the type of shares and the total number of authorized shares of each type;
- Decide to sell new shares within the number of authorized shares of each type; decide to raise additional capital in other forms;
- Decide on selling prices of shares and bonds of the company;
- Decide to repurchase shares but not exceeding 10% of the total number of shares of each type that have been offered for sale within 12 months;
- Decide on investment plans and investment projects within their competence and limits according to law provisions;
- Decide solutions for market development, marketing and technology;
- Through contracts of purchase, sale, loan, loan and other contracts with a value equal to or greater than 35% of the total value of assets recorded in the latest financial statements of the company, unless the company’s charter provides another ratio or value. This provision does not apply to contracts and transactions specified at Point d, Clause 2, Article 135, Clause 1 and Clause 3, Article 162 of the Enterprise Law 2014;
- Elect, dismiss and dismiss the Chairman of the Board of Directors; appoint, dismiss, sign the contract, terminate the contract with the Director / General Director and other important managers prescribed by the company’s charter; decisions, salaries and other benefits of such managers; appoint authorized representatives to participate in the Board of members or the General Meeting of Shareholders in other companies, decide the remuneration and other benefits of such people;
- Supervise and direct the Director / General Director and other managers in running daily business of the company;
- Decide on organizational structure, internal management rules of the company, decisions on establishment of subsidiaries, branches, representative offices, and capital contribution and share purchase of other enterprises;
- Approving the agenda, the content of documents serving the General Meeting of Shareholders, convening the General
- Meeting of Shareholders or collecting opinions for the General Meeting of Shareholders to approve the decision;
- Submitting annual financial statements to the General Meeting of Shareholders;
- Propose the level of dividends to be paid; decide the time limit and procedures for dividend payment or settlement of losses arising in the business process;
- Propose reorganization, dissolution, or bankruptcy of the company.
2. Term of office and number of members of the Board of Directors
- The Board of Directors has from 3 to 11 members. The company’s charter specifies the number of members of the Board of Directors.
- The term of office of members of the Board of Directors and independent members of the Board of Directors shall not exceed 5 years and may be re-elected with an unlimited number of terms. The specific number and duration of terms and the number of members of the Board of Directors who must reside in Vietnam are prescribed by the company’s charter.
- In case all members of the Board of Directors come to the end of their term of office, those members will continue to be members of the Board of Directors until a new member is elected to replace and take over the work, except for Article The company charter has other rules.
- In case a joint-stock company is organized and managed under a model with an internal control board under the Board of Directors, the papers and transactions of the company must clearly state “independent member” before the full name of the company. Members of the Board of Directors respectively.
Standards and conditions to be a member of the Board of Directors
- Member of the Board of Directors for the Joint Stock Company model has the Supervisory Board:
- Having full civil act capacity, not subject to not managing enterprises under Clause 2, Article 18 of the Enterprise Law 2014;
- Having professional qualifications and experience in business management of the company and not necessarily a shareholder of the company, unless otherwise prescribed by the company’s charter.
- A member of the Board of Directors of a company may also be a member of the Board of Directors of another company.
- For subsidiary companies where the State holds more than 50% of charter capital, members of the Board of Directors must not be spouses, fathers, adoptive fathers, biological mothers, adoptive children, adopted children, biological brothers. , sister, sister-in-law, brother-in-law, brother-in-law, sister-in-law, sister-in-law of the Director, General Director and other managers of the company; must not be related persons of managers, persons competent to appoint managers of the parent company.
3. Independent members of the Board of Directors have the following criteria and conditions, unless otherwise prescribed by the law on securities:
- Not being a person who is currently employed by the company or its subsidiaries; not be a person who used to work for the company or its subsidiaries for at least 03 previous years.
- Not being a person receiving salaries or remuneration from the company, except for allowances enjoyed by members of the Board of Directors as prescribed;
- Not being a spouse, father, adoptive father, mother, adoptive mother, children, adopted children, siblings, siblings who are the major shareholders of the company; be a manager of the company or its subsidiaries;
- Not being a person who directly or indirectly owns at least 1% of the total voting shares of the company;
- Not a person who used to be a member