中文When a company leaves the General Director position vacant although the charter provides for it, the most practical questions are: who signs contracts, and who is accountable before the law during the vacancy? Under Article 12 of the Law on Enterprises 2020 (not amended by Law No. 76/2025/QH15), if the charter does not clearly delineate authority among the legal representatives, then each legal representative is a fully authorized representative of the enterprise vis-à-vis third parties; all legal representatives bear joint liability for damage caused to the enterprise in accordance with civil legislation.
1. Responsibility of the remaining representatives
During the General Director vacancy, the remaining legal representatives (if the charter provides for multiple representatives) retain full authority to conclude transactions and represent the company before Arbitration and Courts. However, they bear joint liability for damage caused to the enterprise — meaning they cannot invoke the excuse of “waiting for the new General Director” to evade responsibility for decisions they have signed.
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2. Where the company’s sole representative is the General Director
This is the highest-risk scenario: the company has no one with lawful representative authority. Contracts signed during this period risk disputes over validity; the company has no representative in litigation and cannot sign banking or tax dossiers. The solution: the Board of Directors/Members’ Council must promptly appoint a new General Director or amend the charter to designate another representative, and register the change under Article 43 of Decree No. 168/2025/ND-CP. The longer the vacancy, the greater the risk.
3. Internal liability of the Board for delayed appointment
Delaying the appointment of a replacement when the charter provides for the position is a breach of the management duty of the Board of Directors/Members’ Council. If the delay causes damage to the company (lost business opportunities, penalties for having no representative to file dossiers, etc.), Board members may bear compensation liability under the provisions on the liability of company managers — Article 71 (for multi-member limited liability companies) and Article 161 (for joint-stock companies) of the Law on Enterprises 2020.
Notes on applying current legal provisions
This article is presented for reference purposes, helping readers understand the legal issue at a general level. Where advice is needed, please contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.
Common risks to watch for
- A company whose sole representative is the General Director leaving the position vacant.
- Remaining representatives avoiding signing for fear of joint liability.
- The Board delaying appointment and causing damage to the company.
How can ANT Legal help?
ANT Legal advises on manager liability, reviews charters, and handles disputes over representative authority. For prompt advice, please contact our lawyers at 0966.475.966.
Frequently asked questions
If the company leaves the General Director position vacant, who signs contracts?
If the charter does not clearly delineate authority among the legal representatives, each legal representative is a fully authorized representative of the enterprise vis-à-vis third parties (Article 12 of the Law on Enterprises 2020); the remaining representatives retain full authority to conclude transactions and represent the company before Arbitration and Courts.
What if the company’s sole representative is the General Director and the position is vacant?
The company has no one with lawful representative authority; contracts signed during this period risk disputes over validity; the company has no representative in litigation and cannot sign banking or tax dossiers. The Board of Directors/Members’ Council must promptly appoint a new General Director or amend the charter to designate another representative.
How is a Board that delays appointing a General Director handled?
Delaying the appointment of a replacement when the charter provides for the position is a breach of the management duty of the Board of Directors/Members’ Council; if the delay causes damage to the company, Board members may bear compensation liability under Article 71 (for multi-member LLCs) / Article 161 (for joint-stock companies) of the Law on Enterprises 2020 on the liability of company managers.
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