Can a proposal to dismiss a board member sent on time be included in the Annual General Meeting of Shareholders?

Is the dismissal of a member of the board of directors under the authority of the General Meeting of Shareholders?

Pursuant to Article 138 of the Law on Enterprises 2020, the rights and obligations of the General Meeting of Shareholders shareholders:

Rights and obligations of the General Meeting of Shareholders

1. The General Meeting of Shareholders includes all shareholders with voting rights and is the highest decision-making body of a joint stock company.

2. The General Meeting of Shareholders has the following rights and obligations:

a) Approve the company’s development orientation;

b) Decide on the types of shares and the total number of shares of each type that can be offered for sale; Decide on the annual dividend level of each type of share;

c) Elect, dismiss, dismiss members of the Board of Directors and Controllers;

d) Decide to invest or sell assets with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, except in cases where the company charter stipulates a ratio or value other;

Thus, the dismissal of board members falls under the authority of the General Meeting of Shareholders according to regulations.

Can a proposal to dismiss a member of the Board of Directors sent on time be included in the Annual General Meeting of Shareholders?

Pursuant to Article 142 of the Law on Enterprises 2020, Agenda and content of the General Meeting of Shareholders

Agenda and content of the General Meeting of Shareholders east

1. The person who convenes the General Meeting of Shareholders must prepare the agenda and content of the meeting.

2. Shareholders or groups of shareholders specified in Clause 2, Article 115 of this Law have the right to propose issues to be included in the agenda of the General Meeting of Shareholders. Proposals must be in writing and sent to the company no later than 03 working days before the opening date, unless the company charter stipulates another deadline. The proposal must clearly state the name of the shareholder, the number of each type of shareholder’s shares, and the issue proposed to be included in the meeting agenda.

3. In case the convener of the General Meeting of Shareholders refuses the proposal specified in Clause 2 of this Article, at least 02 working days before the opening date of the General Meeting of Shareholders must respond in writing and clearly state the reason. The person convening the General Meeting of Shareholders may only refuse a proposal if it falls into one of the following cases:

a) The proposal is not sent in accordance with the provisions of Clause 2 of this Article;

b) The proposed issue is not under the decision-making authority of the General Meeting of Shareholders;

c) Other cases as prescribed in the Charter ty.

4. The convener of the General Meeting of Shareholders must accept and include the recommendations specified in Clause 2 of this Article in the proposed agenda and content of the meeting, except for the cases specified in Clause 3 of this Article; The proposal will be officially added to the agenda and content of the meeting if approved by the General Meeting of Shareholders.

Thus, it can be seen that, proposals for inclusion in the agenda of the General Meeting of Shareholders by a shareholder or group of shareholders specified in Clause 2, Article 115 of the 2020 Enterprise Law must  must be in writing and sent to the company no later than 03 working days before the opening date, unless the Company Charter stipulates another deadline.

Accordingly, customers need to check the following issues:

– Is there a time limit specified in the company’s charter for submitting proposals for issues to be included in the agenda of the General Meeting of Shareholders that is different from the provisions of law?

– Does the group of shareholders submitting the petition belong to the shareholder of the shareholder or the group of shareholders specified in Clause 2, Article 115 of the 2020 Enterprise Law.

In case the company charter does not stipulate this issue and a group of shareholders with the right to submit a petition can be identified, then based on the provisions of Article 142 of the 2020 Enterprise Law:

The convenor of the General Meeting of Shareholders has the right to refuse the petition to dismiss a member of the board of directors on the grounds that “The petition was sent not in accordance with the provisions of Clause 2, Article 142 of the Law on Enterprises 2020”.

Note: The person convening the General Meeting of Shareholders must have the obligation to send a written refusal no later than 02 working days before the opening date of the General Meeting of Shareholders.

In what cases does the General Meeting of Shareholders dismiss members of the Board of Directors?

Pursuant to Article 160 of the Law on Enterprises 2020 dismissal, dismissal, replacement and addition of members of the Board of Directors:

Removal, dismissal, replacement and addition of members of the Board of Directors

1. The General Meeting of Shareholders dismisses members of the Board of Directors in the following cases:

a) Does not meet the standards and conditions as prescribed in Article 155 of this Law;

b) Has a resignation letter and is accepted;

c) Other cases specified in the Company’s Charter.

2. The General Meeting of Shareholders dismisses members of the Board of Directors in the following cases:

a) Not participating in the activities of the Board of Directors for 06 consecutive months, except in cases of force majeure;

b) Other cases specified in the Company’s Charter.

3. When deemed necessary, the General Meeting of Shareholders decides to replace members of the Board of Directors; dismiss or dismiss members of the Board of Directors other than the cases specified in Clauses 1 and 2 of this Article.

Thus, the General Meeting of Shareholders dismisses members of the Board of Directors in the following cases:

– Not participating in the activities of the Board of Directors for 06 consecutive months, except in cases of force majeure;

– Other cases specified in the company’s charter.

In addition, when deemed necessary, the General Meeting of Shareholders decides to dismiss members of the Board of Directors other than the case specified in Clause 2, Article 160 of the 2020 Enterprise Law.