Employer Can the Chairman of the Board of Members in a two-member limited liability company also hold the position of Director?

Can the Chairman of the Board of Members in a two-member limited liability company also hold this position of Director?

1. How is the management organizational structure in a two-member limited liability company?

Pursuant to Article 54 of the Law on Enterprises 2020, which stipulates the company’s organizational and management structure as follows:

“Article 54. Company’s organizational and management structure

1. Limited liability company with two or more members have a Board of members, Chairman of the Board of members, Director or General Director.

2. A limited liability company with two or more members that is a state-owned enterprise as prescribed in Point b, Clause 1, Article 88 of this Law and a subsidiary of a state-owned enterprise as prescribed in Clause 1, Article 88 of this Law must establish a Control Board; other cases are decided by the company regulations.

3. The company must have at least one legal representative who holds one of the following positions: Chairman of the Board of Members or Director or General Director. If the Company Charter does not stipulate, the Chairman of the Board of Members is the legal representative of the company.”

Accordingly, a limited liability company with two or more members has a Board of members, a Chairman of the Board of Members, Director or General Director. The company must have at least one legal representative who holds one of the following positions: Chairman of the Board of Members or Director or General Director. In cases where the company charter does not stipulate, the Chairman of the Board of Members is the legal representative of the company. 

2. Regulations on Director and General Director in a two-member LLC?

For the position of Director and General Director in a two-member LLC, it is stipulated in Article 63 of the Law on Enterprises 2020, specifically:

– The Director or General Director is the person who manages the company’s daily business activities and is responsible to the Board of Members for exercising the rights and obligations of the Company. me.

– The Director or General Director has the following rights and obligations:

+ Organize the implementation of resolutions and decisions of the Board of Members;

+ Decide on issues related to the company’s daily business activities;

+ Organize the implementation of the company’s business plans and investment plans company;

+ Issuing internal management regulations of the company, unless otherwise stipulated in the company charter;

+ Appointing, dismissing, dismissing managers in the company, except for positions under the authority of the Board of members;

+ Signing contracts on behalf of the company, except in cases falling under the authority of the Chairman of the Board of Members member;

+ Proposing a plan for the company’s organizational structure;

+ Submitting annual financial reports to the Board of members;

+ Proposing a plan for using and dividing profits or handling losses in business;

+ Recruiting labor;

+ Rights and obligations Other services are stipulated in the company charter, resolutions and decisions of the Board of members, labor contract.

3. Can the Chairman of the Board of Members also hold the title of Director of a two-member LLC?

Pursuant to Article 56 of the Law on Enterprises 2020, which regulates the Board of Members in a two-member LLC as follows:

– The Board of Members elects one member to be the Chairman. The Chairman of the Board of Members can concurrently be the Director or General Director of the company.

– The Chairman of the Board of Members has the following rights and obligations:

+ Prepare programs and activity plans of the Board of Members;

+ Prepare the agenda, content, and documents for meetings of the Board of Members or to collect opinions from members member;

+ Convene, preside and chair a meeting of the Board of Members or organize consultation of members;

+ Supervise or organize supervision of the implementation of resolutions and decisions of the Board of Members;

+ Sign resolutions and decisions of the Board of Members on behalf of the Board of Members; member;

+ Other rights and obligations according to the provisions of this Law and the company’s Charter.

– The term of office of the Chairman of the Board of Members is prescribed by the company’s Charter but must not exceed 05 years and can be re-elected for an unlimited number of terms.

– In case the Chairman of the Board of Members is absent or unable to perform his or her rights and obligations, a member must be authorized in writing to exercise the rights and obligations of the Chairman of the Board of Members according to the principles stipulated in the company’s Charter. In case there is no authorized member or the Chairman of the Board of Members dies, is missing, is temporarily detained, is serving a prison sentence, is serving administrative measures at a compulsory detoxification facility, compulsory education facility, escapes from the place of residence, has limited or lost civil act capacity, has difficulty in cognition, controlling behavior, is banned by the Court from holding a position, practicing a profession or doing certain jobs, then one of the members of the Board of Members shall convene. at a meeting of the remaining members, elect one person from among the members to temporarily act as Chairman of the Members’ Council according to the principle that the majority of the remaining members agree until there is a new decision of the Members’ Council.

Thus, the Chairman of the Members’ Council can concurrently be the Director or General Director of a limited liability company with two or more members according to Clause 1, Article 56 of the Law on Enterprises 2020.