Regulations on the legal representative of the enterprise

1. Definition of Enterprise

“An enterprise is an organization with its own name, assets, and transaction office, established or registered under the provisions of law for business purposes”, Pursuant to Clause 10, Article 4 of the Law on Enterprises 2020.

2. Who is the legal representative of a legal entity?

According to the provisions of Article 134 and Article 137 of the 2015 Civil Code, specifically:

“Article 134. Representation

1. Representation is the act of an individual or legal entity (hereinafter collectively referred to as representative) on behalf of and for the benefit of an individual or legal entity. Other individuals (hereinafter referred to as the represented person) establish and perform civil transactions.

2. Individuals and legal entities may establish and perform civil transactions through a representative. Individuals may not let other people represent them if the law requires that they must establish and perform that transaction themselves.

3. Where required by law, the representative must have legal capacity civil, civil act capacity appropriate to established and performed civil transactions.”

….

Article 137. Legal representation of legal entities

1. The legal representative of a legal entity includes:

a) A person appointed by the legal entity according to its charter;

b) A person with representative authority according to the provisions of law;

c) A person appointed by the Court during proceedings at the Court.

2. A legal entity may have many legal representatives and each representative has the right to represent the legal entity according to the provisions of Article 140 and Article 141 of this Code.”

It can be seen:

– Representation is the act of an individual or legal entity (hereinafter collectively referred to as the representative) on behalf of and for the benefit of another individual or legal entity (hereinafter collectively referred to as the represented person). Establish and carry out civil transactions.

– legal representatives of a legal entity include: Persons appointed by the legal entity according to its charter; Person authorized to represent according to the provisions of law; A person appointed by the Court during proceedings at the Court. A legal entity can have many legal representatives and each representative has the right to represent the legal entity according to regulations.

3. Who is the legal representative of an Enterprise?

According to the provisions of Article 12 of the Law on Enterprises 2020 on the legal representative of an enterprise, as follows:

– 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, representing the enterprise as a requester to resolve civil matters. lawsuit, plaintiff, defendant, person with related rights and obligations before the Arbitrator, Court and other rights and obligations according to the provisions of law.

– Limited liability companies and joint stock companies may have one or more legal representatives. The company charter specifies the number, management titles and rights and obligations of the legal representative of the enterprise. If the company has more than one legal representative, the company charter specifically stipulates the rights and obligations of each legal representative. In case the division of rights and obligations of each legal representative is not clearly stipulated in the company’s charter, each legal representative of the company is a competent representative of the enterprise before a third party; All legal representatives must be jointly responsible for damages caused to the enterprise according to the provisions of civil law and other relevant laws.

– Enterprises must ensure that there is always at least one legal representative residing in Vietnam. When there is only one remaining legal representative residing in Vietnam, this person must, when leaving Vietnam, authorize in writing another individual residing in Vietnam to exercise the rights and obligations of the legal representative. In this case, the legal representative is still responsible for exercising the authorized rights and obligations.

– In case the authorization period expires as prescribed in Clause 3 of this Article but the legal representative of the enterprise has not returned to Vietnam and there is no other authorization, the following regulations shall apply:

+ The authorized person continues to exercise the rights and obligations of the legal representative of the private enterprise until the legal representative of the enterprise returns to work at the enterprise. Enterprise;

+ The authorized person continues to exercise the rights and obligations of the legal representative of a limited liability company, joint stock company, or partnership until the company’s legal representative returns to work at the company or until the company owner, Board of members, Board of Directors decides to appoint another person to be the legal representative of the business. Enterprise.

– Except for the case specified in Clause 6 of this Article, for an enterprise there is only one legal representative and this person is absent from Vietnam for more than 30 days without authorizing another person to exercise the rights and obligations of the legal representative of the enterprise or is dead, missing, being prosecuted for criminal liability, detained, serving a prison sentence, or being subject to administrative handling measures at an arrest detention facility. Compulsory education, compulsory educational institutions, limited or lost capacity for civil acts, difficulty in cognition and behavior control, banned by the Court from holding positions, practicing certain professions or doing certain jobs, the company owner, Board of Members, Board of Directors shall appoint another person to be the legal representative of the company.

– For a limited liability company with two members, if there is an individual member to be the representative. According to the law of the company, if he/she dies, is missing, is being prosecuted for criminal liability, is detained, is serving a prison sentence, is serving administrative handling measures at a compulsory detoxification facility, compulsory education facility, escapes from his/her place of residence, has limited or lost civil act capacity, has difficulty in cognition or behavior control, is prohibited by the Court from holding certain positions, practicing certain professions or doing certain jobs, the remaining member will automatically be the legal representative of the company. company until there is a new decision of the Board of Members regarding the legal representative of the company.

– Courts and other agencies competent to conduct proceedings have the right to appoint legal representatives to participate in proceedings according to the provisions of law.

With the above provisions, we summarize a few main ideas as follows:

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

– Limited liability companies and joint stock companies may have one or more legal representatives. The company charter specifies the number, management titles and rights and obligations of the legal representative of the enterprise.

Enterprises must ensure that there is always at least one legal representative residing in Vietnam. When there is only one remaining legal representative residing in Vietnam, when leaving Vietnam, this person must authorize in writing another individual residing in Vietnam to exercise the rights and obligations of the legal representative.

4. What do the responsibilities of the legal representative of an enterprise include?

Pursuant to Article 13 of the Law on Enterprises 2020, regulations on the responsibilities of the legal representative of an enterprise are as follows:

“Article 13. Responsibilities of the legal representative of an enterprise

1. legal representative Enterprises have the following responsibilities:

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

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

c) Notify the enterprise promptly, fully and accurately about the enterprise in which he or her related person owns or has shares or capital contribution in accordance with the provisions of this Law.

2. The legal representative of the enterprise is personally liable for damage to the enterprise due to violation of the responsibilities specified in Clause 1 of this Article.”

Thus, it can be seen that the legal representative of the enterprise has the following responsibilities:

– Carry out assigned rights and obligations honestly, carefully, and in the best way to ensure the legitimate interests of the business;

– Loyal to the interests of the business; 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;

– Notify enterprises promptly, fully and accurately about enterprises in which they, their related persons own or have shares or capital contributions according to the provisions of this Law. The legal representative of the enterprise is personally responsible for damages to the enterprise due to breach of prescribed responsibilities.