In what cases does the Board of Directors in a Joint Stock Company need to add members? How are the rights and obligations of the Board of Directors in a Joint Stock Company regulated?

What is the Board of Directors in a Joint Stock Company?

Pursuant to Clause 1, Article 156 of the Law on Enterprises 2020, the regulations on the Board of Directors in a Joint Stock Company are as follows: as follows:

“Article 153. Board of Directors

1. The Board of Directors is the company’s management body, with full authority on behalf of the company to decide and exercise the rights and obligations of the company, except for the rights and obligations under the authority of the General Meeting of Shareholders.

[…]”

Accordingly, the Board of Directors is the company’s management agency, with full authority on behalf of the company to make decisions and exercise the rights and obligations of the company, except for the rights and obligations under the authority of the General Meeting of Shareholders.

In what cases must the Board of Directors in a Joint Stock Company add members?

According to Article 160 of the Law on Enterprises 2020, which regulates the removal, dismissal, replacement and addition of members of the Board of Directors, as follows:

– The General Meeting of Shareholders dismisses members of the Board of Directors in the following cases:

+ Does not meet the standards and conditions prescribed in Article 155 of this Law;

+ There is a resignation letter and it is accepted;

+ Other cases specified in the company’s Charter.

– The General Meeting of Shareholders dismisses members of the Board of Directors in the following cases:

+ Not participating in the activities of the Board of Directors for 06 consecutive months, except in cases of force majeure;

+ Other cases specified in the company’s Charter.

– When deemed necessary, the General Meeting of Shareholders decides to replace members of the Board of Directors; dismiss or dismiss members of the Board of Directors other than the cases specified in Clauses 1 and 2 of this Article.

– The Board of Directors must convene a General Meeting of Shareholders to elect additional members of the Board of Directors in the following cases:

+ The number of members of the Board of Directors is reduced by more than one-third compared to the number specified in the company’s Charter. In this case, the Board of Directors must convene a General Meeting of Shareholders within 60 days from the date the number of members is reduced by more than one-third;

+ The number of independent members of the Board of Directors has decreased, not ensuring the ratio as prescribed in Point b, Clause 1, Article 137 of this Law;

+ Except for the cases specified in Points a and b of this Clause, the General Meeting of Shareholders elects new members to replace members of the Board of Directors who have been dismissed or dismissed at the most recent meeting.

Accordingly, the company will have to add members to the Board of Directors in the following cases:

+ The number of members of the Board of Directors is reduced by more than one-third compared to the number specified in the company’s Charter. In this case, the Board of Directors must convene a General Meeting of Shareholders within 60 days from the date the number of members is reduced by more than one-third;

+ The number of independent members of the Board of Directors has decreased, not ensuring the ratio as prescribed in Point b, Clause 1, Article 137 of this Law;

+ Except for the cases specified in Points a and b of this Clause, the General Meeting of Shareholders elects new members to replace members of the Board of Directors who have been dismissed or dismissed at the most recent meeting.

The Board of Directors in a Joint Stock Company must add members in the cases specified as above.

What are the rights and obligations of the Board of Directors in a Joint Stock Company?

Pursuant to Clause 2, Article 156 of the Law on Enterprises 2020, which regulates the rights and obligations of the Board of Directors, specifically:

– The Board of Directors has the following rights and obligations:

+ Strategic decisions, medium-term development plans and annual business plans of the company;

+ Propose types of shares and total number of shares authorized to be offered for sale of each type;

+ Decide to sell unsold shares within the number of shares authorized to be offered for each type; decide to mobilize additional capital in other forms;

+ Decide the selling price of the company’s shares and bonds;

+ Decide to repurchase shares according to the provisions of Clauses 1 and 2, Article 133 of this Law;

+ Decide on investment plans and investment projects within the authority and limits prescribed by law;

+ Decide on solutions for market development, marketing and technology;

+ Approve contracts to buy, sell, borrow, lend and other contracts and transactions with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, except in cases where the Company’s Charter stipulates a different ratio or value and the contract or transaction falls under the decision-making authority of the General Meeting of Shareholders as prescribed in Point d, Clause 2, Article 138, Clauses 1 and 3, Article 167 of this Law;

+ Election, dismissal, dismissal of the Chairman of the Board of Directors; appoint, dismiss, sign contracts, terminate contracts with the Director or General Director and other important managers as prescribed by the company’s Charter; decide on salaries, remunerations, bonuses and other benefits of those managers; appoint authorized representatives to participate in the Board of Members or General Meeting of Shareholders in other companies, and decide on the remuneration and other benefits of those persons;

+ Supervise and direct the Director or General Director and other managers in operating the company’s daily business;

+ Decide on the company’s organizational structure, internal management regulations, decide on the establishment of subsidiaries, branches, representative offices and capital contribution and share purchase of other enterprises;

+ Approve the agenda and content of documents for the General Meeting of Shareholders, convene a General Meeting of Shareholders or collect opinions for the General Meeting of Shareholders to pass a resolution;

+ Submit annual financial reports to the General Meeting of Shareholders;

+ Propose the amount of dividends to be paid; decide on the time limit and procedures for paying dividends or handling losses arising during the business process;

+ Proposing the reorganization and dissolution of the company; request company bankruptcy;

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

– The Board of Directors passes resolutions and decisions by voting at meetings, soliciting opinions in writing or in other forms prescribed by the company’s charter. Each member of the Board of Directors has one vote.

– In case a resolution or decision passed by the Board of Directors is contrary to the provisions of law, resolutions of the General Meeting of Shareholders, or the Company’s Charter, causing damage to the company, the members who approve the resolution or decision must jointly bear personal responsibility for that resolution or decision and must compensate the company for damage; Members who oppose the adoption of the above resolutions and decisions are exempted from liability. In this case, the company’s shareholders have the right to request the Court to suspend the implementation or cancel the above resolutions and decisions.