May a Person Concurrently Serve as Supervisor of a Multi-Member LLC and a State-Owned Enterprise?

What are the standards and conditions for a Supervisor in a multi-member Limited Liability Company?

Article 169 of the Law on Enterprises 2020 regulates the standards and conditions for a Supervisor in a multi-member Limited Liability Company as follows:

“Article 169. Standards and conditions for a Supervisor

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1. A Supervisor must meet the following standards and conditions:

a) Not being subject to the cases prescribed in Clause 2, Article 17 of this Law;

b) Having been trained in one of the majors in economics, finance, accounting, auditing, law, business administration, or a major suitable to the business activities of the enterprise;

c) Not being a family member of members of the Board of Directors, the Director or General Director, or other managers;

d) Not being a manager of the company; not necessarily being a shareholder or employee of the company, unless otherwise stipulated in the company charter;

dd) Other standards and conditions prescribed by other relevant laws and the company charter.

2. In addition to the standards and conditions prescribed in Clause 1 of this Article, Supervisors of public companies and State-owned enterprises prescribed in point (b), Clause 1, Article 88 of this Law must not be family members of the enterprise managers of the company and its parent company; representatives of the enterprise’s capital contributions, or representatives of State capital at the parent company and at the company.”

Accordingly, a Supervisor in a multi-member LLC must ensure:

– Not being subject to the cases prescribed in Clause 2, Article 17 of this Law;

– Having been trained in one of the majors in economics, finance, accounting, auditing, law, business administration, or a major suitable to the business activities of the enterprise;

– Not being a family member of members of the Board of Directors, the Director or General Director, or other managers;

– Not being a manager of the company; not necessarily being a shareholder or employee of the company, unless otherwise stipulated in the company charter;

– Other standards and conditions prescribed by other relevant laws and the company charter.

May a person concurrently serve as Supervisor of a multi-member LLC and a State-owned Enterprise?

Article 103 of the Law on Enterprises 2020 regulates the Board of Supervisors and Supervisors in State-owned Enterprises, specifically:

– Depending on the scale of the company, the owner’s representative agency shall decide to establish a Board of Supervisors comprising from 01 to 05 Supervisors, including a Head of the Board of Supervisors. A Supervisor’s term of office shall not exceed 05 years and may be reappointed but for no more than 02 consecutive terms at the same company. Where the Board of Supervisors has only 01 Supervisor, that Supervisor shall concurrently act as the Head of the Board of Supervisors and must meet the standards of the Head of the Board of Supervisors.

– An individual may concurrently be appointed as Head of the Board of Supervisors or Supervisor of no more than 04 State-owned enterprises.

– The Head of the Board of Supervisors and Supervisors must meet the following standards and conditions:

+ Holding a university degree or higher in one of the majors in economics, finance, accounting, auditing, law, business administration, or a major suitable to the business activities of the enterprise, and having at least 03 years of working experience; the Head of the Board of Supervisors must have at least 05 years of working experience;

+ Not being a manager of the company or a manager at another enterprise; not being a Supervisor of an enterprise that is not a State-owned enterprise; not being an employee of the company;

+ Not being a family member of the head or deputy head of the owner’s representative agency of the company; members of the Members’ Council of the company; the Company Chairman; the Director or General Director; Deputy Directors or Deputy General Directors, the Chief Accountant; or other Supervisors of the company;

+ Other standards and conditions prescribed in the company charter.

– The Government shall provide detailed regulations for this Article.

Accordingly, to become a Supervisor in a State-owned Enterprise, the following conditions and standards must be met:

+ Holding a university degree or higher in one of the majors in economics, finance, accounting, auditing, law, business administration, or a major suitable to the business activities of the enterprise, and having at least 03 years of working experience; the Head of the Board of Supervisors must have at least 05 years of working experience;

+ Not being a manager of the company or a manager at another enterprise; not being a Supervisor of an enterprise that is not a State-owned enterprise; not being an employee of the company;

+ Not being a family member of the head or deputy head of the owner’s representative agency of the company; members of the Members’ Council of the company; the Company Chairman; the Director or General Director; Deputy Directors or Deputy General Directors, the Chief Accountant; or other Supervisors of the company;

+ Other standards and conditions prescribed in the company charter.

Accordingly, in your case, if you are currently a Supervisor of a multi-member LLC, you may not concurrently serve as a Supervisor of a State-owned Enterprise pursuant to point (b), Clause 3, Article 103 of the Law on Enterprises 2020.

How are the responsibilities of a Supervisor in a State-owned Enterprise regulated?

Article 107 of the Law on Enterprises 2020 regulates the responsibilities of a Supervisor in a State-owned Enterprise as implemented below:

– Comply with the law, the company charter, decisions of the owner’s representative agency, and professional ethics in exercising the rights and obligations of a Supervisor.

– Exercise assigned rights and obligations honestly, prudently, and in the best manner to protect the interests of the State, the company, and the lawful interests of the parties at the company.

– Be loyal to the interests of the State and the company; not abuse position or authority, and not use the company’s information, know-how, business opportunities, or other assets for personal gain or to serve the interests of other organizations or individuals.

– Where a violation of the responsibilities prescribed in this Article causes damage to the company, the Supervisor shall bear personal or joint liability to compensate for such damage; depending on the nature, severity of the violation, and the damage, the Supervisor may also be subject to disciplinary action, administrative penalties, or criminal prosecution as prescribed by law; and shall return to the company all income and benefits obtained from violating the responsibilities prescribed in this Article.

– Promptly report to the owner’s representative agency, and at the same time request the Supervisor to terminate the violation and remedy the consequences, where the Supervisor is found to have violated the assigned rights, obligations, and responsibilities.

– Promptly report to the owner’s representative agency of the company, other Supervisors, and related individuals, and at the same time request such individuals to terminate the violation and remedy the consequences in the following cases:

+ Where a member of the Members’ Council, the Company Chairman, the Director or General Director, or other managers are found to have acted contrary to the regulations on their rights, obligations, and responsibilities, or are at risk of doing so;

+ Where acts of violating the law, the company charter, or the company’s internal governance regulations are found.

– Other responsibilities as prescribed by this Law and the company charter.