Is a joint stock company required to have a director? How long is the term of office of a Director in a joint stock company?

How are directors in joint stock companies regulated?

According to Article 162 of the Law on Enterprises 2020, regulations on Directors and General Directors of companies are as follows:– The Board of Directors appoints a member of the Board of Directors or hires another person to be the Director or General Director.

– The Director or General Director is the person who runs the company’s daily business; subject to the supervision of the Board of Directors; Be responsible before the Board of Directors and before the law for the implementation of assigned rights and obligations.

The term of office of the Director or General Director shall not exceed 05 years and may be reappointed for an unlimited number of terms.

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

+ Decide on issues related to the company’s daily business that are not under the authority of the Board of Directors;

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

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

+ Recommend the company’s organizational structure and internal management regulations;

+ Appoint, dismiss, and dismiss management positions in the company, except for positions under the authority of the Board of Directors;

+ Decide salaries and other benefits for employees in the company, including managers under the appointment authority of the Director or General Director;

+ Labor recruitment;

+ Proposing plans to pay dividends or handle business losses;

+ Other rights and obligations according to the provisions of law, the Company’s Charter and resolutions and decisions of the Board of Directors.

– The Director or General Director must manage the company’s daily business in accordance with the provisions of law, the company’s Charter, the labor contract signed with the company and the resolutions and decisions of the Board of Directors. In case of operating contrary to the provisions of this Clause and causing damage to the company, the Director or General Director must be responsible before the law and must compensate the company for damage.

– For public companies and state-owned enterprises as prescribed in Point b, Clause 1, Article 88 of this Law and subsidiaries of state-owned enterprises as prescribed in Clause 1, Article 88 of this Law, the Director or General Director must meet the following standards and conditions:

+ Not subject to provisions in Clause 2, Article 17 of this Law;

+ Must not be a person related to the family of the business manager, controller of the company and the parent company; representative of state capital, representative of enterprise capital at the company and parent company;

+ Have professional qualifications and experience in business administration of the company.

Is a joint stock company required to have a director?

According to Article 137 of the Law on Enterprises 2020, the regulations on the organizational structure of management of joint stock companies are as follows:

“Article 137. Organizational structure of management of joint stock companies part

1. Unless otherwise prescribed by securities law, a joint stock company has the right to choose a management organization and operate according to one of the following two models:

a) General Meeting of Shareholders, Board of Directors, Supervisory Board and Director or General Director. In case a joint stock company has less than 11 shareholders and institutional shareholders own less than 50% of the company’s total shares, it is not required to have a Supervisory Board;

b) General Meeting of Shareholders, Board of Directors and Director or General Director. In this case, at least 20% of the members of the Board of Directors must be independent members and there must be an Audit Committee under the Board of Directors. The organizational structure, functions, and tasks of the Audit Committee are specified in the Company Charter or the operating regulations of the Audit Committee issued by the Board of Directors.

2. In case the company has only one legal representative, the Chairman of the Board of Directors or the Director or General Director is the legal representative of the company. In case there is no regulation in the Charter, the Chairman of the Board of Directors is the legal representative of the company. In case the company has more than one legal representative, the Chairman of the Board of Directors and the Director or General Director are of course the legal representatives of the company.”

Accordingly, a joint stock company has the right to choose a management organization and operate according to one of the following two models:

– General Meeting of Shareholders, Board of Directors, Supervisory Board and Director or General Director. In cases where a joint stock company has less than 11 shareholders and institutional shareholders own less than 50% of the company’s total shares, a Supervisory Board is not required;

– General Meeting of Shareholders, Board of Directors and Director or General Director. In this case, at least 20% of the members of the Board of Directors must be independent members and there must be an Audit Committee under the Board of Directors. The organizational structure, functions, and tasks of the Audit Committee are specified in the Company Charter or the operating regulations of the Audit Committee issued by the Board of Directors.

Thus, no matter which form is chosen, a joint stock company must have a Director or General Director.

What is the term of office of a Director in a joint stock company?

According to Clause 2, Article 162 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 162. Director, General Director of the company

[…]

2. The Director or General Director is the person who runs the company’s daily business; subject to the supervision of the Board of Directors; Be responsible before the Board of Directors and before the law for the implementation of assigned rights and obligations.

The term of office of the Director or General Director does not exceed 05 years and can be reappointed for an unlimited number of terms.

Accordingly, the term of office of the Director or General Director shall not exceed 05 years and may be reappointed for an unlimited number of terms.