Responsibilities of Controllers in a Joint-Stock Company: Dismissal and Removal Cases

What Are the Rules on Salaries, Remuneration, Bonuses, and Other Benefits of Controllers in a Joint-Stock Company?

Under Article 172 of the Law on Enterprises 2020, the salaries, remuneration, bonuses, and other benefits of Controllers in a Joint-Stock Company are specifically regulated as follows:

Where the company charter does not provide otherwise, the salaries, remuneration, bonuses, and other benefits of Controllers shall be implemented as follows:

– Controllers shall be paid salaries, remuneration, bonuses, and other benefits under decisions of the General Meeting of Shareholders. The General Meeting of Shareholders shall decide the total salaries, remuneration, bonuses, and other benefits and the annual operating budget of the Supervisory Board;

– Controllers shall be reimbursed for reasonable expenses of food, accommodation, travel, and use of independent consultancy services. The total remuneration and expenses shall not exceed the annual operating budget of the Supervisory Board approved by the General Meeting of Shareholders, except where the General Meeting of Shareholders decides otherwise;

– Salaries and operating expenses of the Supervisory Board shall be accounted as business expenses of the company in accordance with the law on corporate income tax, other relevant laws, and must be presented as a separate item in the company’s annual financial statements.

What Are the Responsibilities of Controllers in a Joint-Stock Company?

Pursuant to Article 173 of the Law on Enterprises 2020, the responsibilities of Controllers in a Joint-Stock Company are as follows:

“Article 173. Responsibilities of Controllers

1. Strictly complying with the law, the company charter, resolutions of the General Meeting of Shareholders, and professional ethics in exercising assigned rights and obligations.

2. Exercising assigned rights and obligations honestly, carefully, and in the best manner to ensure the maximum lawful interests of the company.

3. Being loyal to the interests of the company and shareholders; not abusing position or office and not using the company’s information, know-how, business opportunities, or other assets for personal gain or to serve the interests of other organizations or individuals.

4. Other obligations prescribed by this Law and the company charter.

5. Where a violation of Clauses 1, 2, 3, and 4 of this Article causes damage to the company or others, the Controller shall bear personal or joint liability for compensation of such damage. Income and other benefits obtained by the Controller from the violation shall be returned to the company.

6. Where a Controller is found to have violated the exercise of assigned rights and obligations, written notice must be given to the Supervisory Board; the violator must be required to cease the violation and remedy the consequences.”

Accordingly, Controllers in a Joint-Stock Company have the following responsibilities:

– Strictly complying with the law, the company charter, resolutions of the General Meeting of Shareholders, and professional ethics in exercising assigned rights and obligations.

– Exercising assigned rights and obligations honestly, carefully, and in the best manner to ensure the maximum lawful interests of the company.

– Being loyal to the interests of the company and shareholders; not abusing position or office and not using the company’s information, know-how, business opportunities, or other assets for personal gain or to serve the interests of other organizations or individuals.

– Other obligations prescribed by this Law and the company charter.

In Which Cases May Controllers in a Joint-Stock Company Be Dismissed or Removed?

Under Article 174 of the Law on Enterprises 2020, the cases of dismissal and removal of Controllers in a Joint-Stock Company are as follows:

(1) The General Meeting of Shareholders shall dismiss a Controller in the following cases:

• No longer satisfying the standards and conditions for being a Controller under Article 169 of this Law;
• Having submitted a resignation letter which has been accepted;
• Other cases prescribed by the company charter.

(2) The General Meeting of Shareholders shall remove a Controller in the following cases:

• Failing to complete assigned tasks and work;
• Not exercising his/her rights and obligations for 06 consecutive months, except in cases of force majeure;
• Repeatedly or seriously violating the obligations of Controllers under this Law and the company charter;
• Other cases under resolutions of the General Meeting of Shareholders.

Thus, the above are the regulations on salaries, remuneration, bonuses, and other benefits of Controllers; the responsibilities of Controllers; and the cases in which Controllers in a Joint-Stock Company may be dismissed or removed.