Does a branch have the function of being an authorized representative of the company?

Pursuant to Clause 1, Article 44 of the Law on Enterprises 2020, the regulations on branches are as follows: as follows:

“Article 44. Branches, representative offices and business locations of enterprises

1. Branches are dependent units of the enterprise, responsible for performing all or part of the functions of the enterprise, including the function of authorized representation. The branch’s business lines must be consistent with the business lines and lines of the enterprise. enterprise.

2. A representative office is a dependent unit of the enterprise, with the mandate to represent the enterprise’s interests and protect those interests.

3. Business location is the place where the enterprise conducts specific business activities.

Thus, a branch is a part of the enterprise that is responsible for performing all or part of the enterprise’s functions, including the function of authorized representation.

What rights and obligations does a branch have?

The branch is a dependent unit of the enterprise, therefore, the branch will have the following rights and obligations:

Pursuant to Article 19 of the Commercial Law 2005 stipulates the rights of branches as follows:

“Article 19. Rights of Branches

1. Renting headquarters, renting and purchasing necessary facilities and equipment for the Branch’s operations.

2. Recruiting human workers Vietnamese, foreigners to work at the Branch in accordance with Vietnamese law.

3. Enter into contracts in Vietnam in accordance with the activities specified in the Branch establishment license and according to the provisions of this Law.

4. Open an account in Vietnamese Dong, in foreign currency at a bank licensed to operate in Vietnam.

5. Transfer profits abroad according to the provisions of Vietnamese law.

6. Have a seal bearing the name of the Branch according to the provisions of Vietnamese law.

7. Carry out goods purchase and sale activities and other commercial activities in accordance with the establishment license in accordance with Vietnamese law and international treaties to which the Socialist Republic of Vietnam is a member.

8. Other rights as prescribed by law.”

Pursuant to Article 20 of the Commercial Law 2005 stipulating the obligations of branches as follows:

“Article 20. Obligations of Branches

1. Implement accounting regime according to Vietnamese law; In case it is necessary to apply another common accounting regime, it must be approved by the Ministry of Finance of the Socialist Republic of Vietnam.

2. Report on Branch operations in accordance with Vietnamese law.

3. Other obligations as prescribed by law.”

Can a company authorize a branch to sign commercial contracts with partners?

As mentioned above, if you are responsible for performing all or part of the functions of the enterprise, including the function of authorized representation and according to Article 84 of the 2015 Civil Code, which regulates branches and representative offices of legal entities, then:

“Article 84. Branches and representative offices of legal entities

1. Branches and representative offices are dependent units of legal entities, not legal entities.

2. The branch is responsible for performing all or part of the functions of the legal entity.

3. Representative offices have the responsibility to represent within the scope assigned by the legal entity, protecting the interests of the legal entity.

4. The establishment and termination of branches and representative offices of legal entities must be registered in accordance with the law and announced publicly.

5. The head of the branch or representative office performs tasks authorized by the legal entity within the scope and time limit of authorization.

6. Legal entities have civil rights and obligations arising from civil transactions established and performed by branches and representative offices.

Accordingly, the branch is a dependent unit of the company, without legal status. Therefore, in terms of subject matter, the branch does not have independent status to sign contracts with other subjects. Normally, the branch will be assigned tasks by the parent company, allowing it to sign contracts with the company’s partners in the company’s capacity (at the time of deciding to establish the branch or the authorization document associated with the purpose of establishing the branch).

Thus, the legal representative of the company can make a document authorizing the head of the branch (dependent unit) to act as an authorized representative of the company, signing the contract on behalf of the company.