If a limited liability company loses its Charter, will it be punished?

How must the Charter of a Limited Liability Company be kept?

According to the provisions of Article 11 of the Law on Enterprises 2020 on the document retention regime of enterprises as follows: as follows:

“Article 11. Enterprise document retention regime

1. Depending on the type, the enterprise must retain the following documents:

a) Company charter; internal management regulations of the company; member registration book or shareholder registration book;

b) Protection certificate industrial property rights; certificates of registration of product, goods and service quality; licenses and other certificates;

c) Documents and papers confirming ownership of the company’s assets;

d) Voting sheets, vote counting minutes, minutes of meetings of the Board of Members, General Meeting of Shareholders, Board of Directors; decisions of the business enterprise;

d) Prospectus for offering or listing securities;

e) Report of the Supervisory Board, conclusions of the inspection agency, conclusions of the auditing organization;

g) Accounting books, accounting documents, annual financial reports.2. Enterprises must retain regulatory documents specified in Clause 1 of this Article at the head office or other location specified in the company’s Charter; the retention period shall comply with the provisions of law.”

However, Circular 09/2011/TT-BNV has expired and has been replaced by Circular 10/2022/TT-BNV, according to section 3 of Appendix I attached to Circular 10/2022/TT-BNV stipulating documents on organizations, officers, civil servants, public employees, and workers as follows:

Documents on formulation and promulgation of Charter on organization and operation of agencies and organizations; Working regulations, regulations, and organizational instructions of agencies and organizations have a preservation period of 20 years.

Pursuant to the above legal regulations, the Limited Liability Company Charter must be kept at the headquarters or other location specified in the Company Charter with a retention period of 20 years, not a permanent preservation period as in the old regulations.

If a limited liability company loses its Company Charter, will it be punished?

Pursuant to Point d, Clause 2, Article 52 of Decree 122/2021/ND-CP stipulates the penalty for the act of losing the Company Charter as follows:

“Article 52. Other related violations to the organization and management of enterprises

…

2. Fine from 30,000,000 VND to 50,000,000 VND for one of the following acts:

a) Failure to issue capital contribution certificates to company members;

b) Failure to keep books registration of members, register of shareholders issuing shares;

c) Do not affix the business name at the head office, do not write or affix the name of the branch, representative office, business location at the branch headquarters, representative office, business location;

d) Do not keep documents at the head office or other locations specified in the Company Charter ty.”

Accordingly, the act of losing the Company Charter is a case of not keeping documents at the headquarters or other locations specified in the Company Charter, so it can be punished in the form of a fine from 30,000,000 VND to 50,000,000 VND. In addition, according to the provisions of Clause 2, Article 4 of Decree 122/2021/ND-CP, the above fine is the fine applied to organizations, the fine for individuals is 1/2 the fine for organizations. This means that violators will be fined from 15,000,000 VND to 25,000,000 VND.

What is the solution for a limited liability company whose charter is lost?

According to the provisions of the 2020 Enterprise Law as well as the guiding Decrees and Circulars, there are no specific instructions for this case. However, if the company charter has been lost, the company owner/Board of Directors/Board of members should agree and issue a new charter.

The promulgation of a new Company Charter does not require notification to the business registration authority unless there are changes and adjustments on the business registration certificate such as changing the type of business, charter capital, changing the legal representative, then the enterprise will carry out the necessary procedures at the business registration authority.

If the new Charter contains changes compared to the old Charter, please note the provisions in Clause 3, Article 25 of the Law on Enterprises 2020 as follows:

“Article 25. Company Charter

…

3. The amended and supplemented charter must have the full names and signatures of the following people:

a) Chairman of the Board of Members for partnerships;

b) Owner, legal representative of the owner or legal representative for one-member limited liability companies;

c) legal representative for with limited liability companies with two or more members and joint stock companies.”