Members of the Board of Directors How long does it take to cancel your membership status if you do not contribute capital?

1. What is the Board of Directors?

According to Clause 1, Article 153 of the Law on Enterprises 2020, the Board of Directors is regulated as follows:

“Article 153. Board of Directors

1. 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.

Accordingly, the Board of Directors is the company’s management agency, 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.

2. What rights and obligations does the Board of members have?

According to Clause 2, Article 153 of the Law on Enterprises 2020, the Board of Directors has the following rights and obligations:

– Decide on the company’s strategy, medium-term development plan and annual business plan;

– 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, decide on the remuneration and other benefits of those people;

– 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, and decide on the establishment of the company subsidiaries, branches, representative offices and capital contributions and share purchases 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;

– Recommendations dividend rate to be paid; decide on the time limit and procedures for paying dividends or handling losses arising during the business process;

– Proposing the reorganization or dissolution of the company; request bankruptcy of the company;

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

3. How long does a member of the Board of Directors not contribute capital before the Board of Directors has the right to remove him from being a member of the Board of Directors?

According to Article 155 of the Law on Enterprises 2020, the organizational structure, standards and conditions for being a member of the Board of Directors are as follows:

– Members of the Board of Directors must have the following standards and conditions here:

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

+ Have professional qualifications and experience in business administration or in the company’s field, industry, or business and are not necessarily shareholders of the company, unless otherwise stipulated in the company’s Charter;

+ Members of the Board of Directors of the company have Can simultaneously be a member of the Board of Directors of another company;

+ For 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, members of the Board of Directors must not be family members of the Director, General Director and other managers of the company; of the manager, the person with authority to appoint managers of the parent company.

– Unless otherwise prescribed by securities laws, independent members of the Board of Directors as prescribed in Point b, Clause 1, Article 137 of this Law must have the following standards and conditions:

+ Not a person working for the company, parent company or subsidiary of the company; not be a person who has worked for the company, parent company or subsidiary of the company for at least 3 consecutive years;

+ Not be a person receiving salary or remuneration from the company, except for the allowances that members of the Board of Directors are entitled to according to regulations;

+ Not a person whose spouse, biological father, adoptive father, biological mother, adoptive mother, biological child, adopted child, biological brother, biological sister, or younger sibling is a major shareholder of the company; is a manager of the company or a subsidiary of the company;

+ Not a person who directly or indirectly owns at least 01% of the company’s total voting shares;

+ Must not be a person who has served as a member of the Board of Directors or Supervisory Board of the company for at least 5 consecutive years, except in the case of being appointed for 2 consecutive terms.

– Independent members of the Board of Directors must notify the Board of Directors of no longer meeting the standards and conditions specified in Clause 2 of this Article and of course no longer be independent members of the Board of Directors from the date of not fully meeting the standards and conditions. The Board of Directors must notify the case of an independent member of the Board of Directors that no longer meets the standards and conditions at the nearest General Meeting of Shareholders or convene a meeting of the General Meeting of Shareholders to elect additional or replace independent members of the Board of Directors within 06 months from the date of receiving the notice from the relevant independent member of the Board of Directors.

Accordingly, one of the standards for members of the Board of Directors is to have professional qualifications and experience in business administration or in the company’s field, industry, or business line and not necessarily be a shareholder of the company. Thus, according to the provisions of Point b, Clause 1 above, members of the Board of Directors do not necessarily have to be shareholders of the company, unless otherwise stipulated in the company’s Charter. If in your company’s Charter it is stipulated that a member of the Board of Directors must be a shareholder of the company and this person does not fully pay for the number of shares registered to buy when registering the business within 90 days (or another shorter period specified in the Company’s Charter) from the date of issuance of the Business Registration Certificate, then this person will automatically no longer be a shareholder of the company and will also automatically terminate his status as a member of the Board of Directors according to Article 113 of the Enterprise Law. 2020. The company must register to adjust its charter capital equal to the par value of the fully paid shares and change founding shareholders within 30 days from the end of the period to fully pay for the registered shares.