The husband is the legal representative and also the General Director of a joint stock company, and the wife is a shareholder. When the husband dies, does the wife have to pay debts to the company?

The husband is the legal representative and also the General Director of a joint stock company, and the wife is a shareholder. If the husband dies, does the wife have to pay the debt to the company?

Pursuant to Clause 1, Article 12 of the 2020 Enterprise Law, it is stipulated:

legal representative of the enterprise

1. The legal representative of an enterprise is an individual who represents the enterprise to exercise the rights and obligations arising from the enterprise’s transactions, represents the enterprise as a requester to resolve civil matters, plaintiff, defendant, person with related rights and obligations before the Arbitrator, Court and other rights and obligations according to the provisions of law.

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Pursuant to Article 13 of the Law on Enterprises 2020, it is stipulated:

Responsibilities of the legal representative of the enterprise

1. The legal representative of the enterprise has the following responsibilities:

a) Exercise assigned rights and obligations honestly, carefully, and in the best way to ensure the legitimate interests of the enterprise;

b) Loyal to the interests of the enterprise; Do not abuse your position or position and use information, know-how, business opportunities, or other assets of the enterprise for personal gain or to serve the interests of other organizations or individuals;

c) Notify enterprises promptly, fully and accurately about the enterprises in which they, their related persons own or have shares or capital contributions according to the provisions of this Law.

2. The legal representative of the enterprise is personally responsible for damage to the enterprise due to breach of responsibility specified in Clause 1 of this Article.

Pursuant to Point c, Clause 1, Article 111 of the 2020 Enterprise Law stipulates:

Joint stock company

1. A joint stock company is an enterprise in which:

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c) Shareholders are only responsible for the debts and other property obligations of the enterprise within the amount of capital contributed to the enterprise;

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Pursuant to Clause 3, Article 162 of the 2020 Enterprise Law, it is stipulated:

Director, General Director of the company

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3. The Director or General Director has the following rights and obligations:

a) Decide on issues related to the company’s daily business that are not under the authority of the Board of Directors;

b) Organize the implementation of resolutions and decisions of the Board of Directors;

c) Organize the implementation of the company’s business plans and investment plans company;

d) Proposing organizational structure plans and internal management regulations of the company;

dd) Appointing, dismissing, dismissing management positions in the company, except for positions under the authority of the Board of Directors;

e) Deciding on salaries and other benefits for employees in the company, including managers under the authority appointment of the Director or General Director;

g) Recruitment of labor;

h) Proposing plans to pay dividends or handle business losses;

i) Other rights and obligations according to the provisions of law, the company’s Charter and resolutions and decisions of the Board of Directors.

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Here, it is necessary to clearly understand that, according to the law, the legal representative is the person who represents the enterprise to exercise the rights and obligations arising from the enterprise’s transactions, represents the enterprise as a requester to resolve civil matters, plaintiff, defendant, person with related rights and obligations before the Arbitrator, Court and other rights and obligations according to the provisions of law.

The legal representative has no obligation to repay the business’s debts, unless the legal representative is the one who causes damage by not fulfilling his responsibilities.

The debt repayment obligation of a joint stock company belongs to the shareholders according to the value of the shares contributed, not to the legal representative.

Therefore, if the husband is only a legal representative, does not own shares, and is not in the case of failing to fulfill his responsibility to cause damage, then when the husband dies, the wife is not fully responsible for the company’s debt. Here, the wife is a shareholder so she is only responsible within the scope of capital contribution.

Who has the right to sign the notice of change of the legal representative of a joint stock company?

The person with the right to sign the notice of change of the legal representative of a joint stock company is specified in Clause 2, Article 50 of Decree 01/2021/ND-CP as follows:

Register to change the legal representative of a limited liability company or joint stock company

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2. The person signing the notice of change of legal representative is one of the following individuals:

a) Chairman of the Board of Members or Chairman of the company for a one-member limited liability company;

b) Chairman of the Board of Members for limited liability companies with two or more members. In case the Chairman of the Members’ Council is the legal representative, the person signing the notice is the Chairman of the Members’ Council elected by the Members’ Council;

c) Chairman of the Board of Directors for joint stock companies. In case the Chairman of the Board of Directors is the legal representative, the person signing the notice is the Chairman of the Board of Directors elected by the Board of Directors;

d) In case the Chairman of the Board of Members or the Chairman of the Board of Directors is absent or unable to perform their rights and obligations, the person signing the notice of change of legal representative is the person authorized by the Chairman of the Board of Members or Chairman of the Board of Directors. In case there is no authorized member or the Chairman of the Board of Members or the Chairman of the Board of Directors dies, is missing, is detained, is serving a prison sentence, is serving administrative measures at a compulsory detoxification facility, compulsory education facility, escapes from the place of residence, has limited or lost civil act capacity, has difficulty in cognition, controlling behavior, is banned by the Court from holding a position, practicing certain professions or doing certain jobs, the person who signs the notice will act on his/her behalf. change the legal representative who is temporarily elected as Chairman of the Board of Members, Chairman of the Board of Directors according to the provisions of Clause 4, Article 56, Clause 3, Article 80 and Clause 4, Article 156 of the Law on Enterprises.

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Accordingly, the person with the right to sign the notice of change of the legal representative of the joint stock company is the Chairman of the Board of Directors.

In case the Chairman of the Board of Directors is the legal representative, the person signing the notice is the Chairman of the Board of Directors elected by the Board of Directors.