Regulations on convening meetings of the Board of Members according to Vietnamese law

Meeting with fellow members according to the law? Conditions and procedures for conducting meetings of the Board of Members?

1. Regulations on the Board of members?

According to Article 55 of the Law on Enterprises 2020, the regulations on the Board of Members are as follows:

– The Board of Members is the company’s highest decision-making body, including all company members who are individuals and authorized representatives of company members who are organizations. The company’s charter stipulates the meeting of the Board of members, but it must meet at least once a year.

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

+ Decide on the company’s development strategy and annual business plan;

+ Decide to increase or decrease charter capital, decide when and how to mobilize additional capital; decision to issue bonds;

+ Decide on investment and development projects of the company; solutions for market development, marketing and technology transfer;

+ Approve loan, loan, asset sale contracts and other contracts prescribed by the company’s Charter with a value of 50% or more of the total asset value recorded in the company’s most recent financial statement at the time of publication or another smaller ratio or value specified in the company’s Charter;

+ Election, dismissal, dismissal of the Chairman of the Board of Members; decide to appoint, dismiss, dismiss, sign and terminate contracts with the Director or General Director, Chief Accountant, Controller and other managers specified in the company’s Charter;

+ Decide on salaries, remunerations, bonuses and other benefits for the Chairman of the Board of Members, Director or General Director, Chief Accountant and other managers specified in the company’s Charter;

+ Approve the company’s annual financial report, profit use and distribution plan or loss handling plan;

+ Decide on the company’s organizational and management structure;

+ Decision to establish subsidiaries, branches, representative offices;

+ Amending and supplementing the company charter;

+ Decision to reorganize the company;

+ Decision to dissolve or request bankruptcy of the company;

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

Accordingly, the Board of Members is the highest decision-making body in a limited liability company, including company members who are individuals and organizations. The Board of Members must meet at least once a year.

2. Convene a meeting of the Board of Members

Article 57 of the Law on Enterprises 2020 stipulates the convening of a meeting of the Board of Members, specifically:

– The Board of Members is convened for a meeting at the request of the Chairman of the Board of Members or at the request of a member or group of members specified in Clauses 2 and 3, Article 49 of this Law. In case the Chairman of the Board of Members does not convene a meeting of the Board of Members at the request of a member or group of members within 15 days from the date of receiving the request, that member or group of members shall convene a meeting of the Board of Members. Reasonable expenses for convening and conducting meetings of the Board of Members will be reimbursed by the company.

– The Chairman of the Board of Members or the person convening the meeting prepares the agenda, content of meeting documents, convenes, presides and chairs the meeting of the Board of Members. Members have the right to propose additions to the meeting agenda in writing. The proposal must include the following main contents:

+ Full name, contact address, nationality, legal document number of individual for individual members; name, business code or legal document number of the organization, head office address for organizational members; full name, signature of the petitioning member or their authorized representative;

+ Capital contribution ratio, number and date of capital contribution certificate;

+ Proposed content included in the meeting agenda;

+ Reason for recommendation.

– The Chairman of the Board of Members or the person convening the meeting must approve the proposal and supplement the meeting agenda of the Board of Members if the proposal has all the content as prescribed in Clause 2 of this Article and is sent to the company’s headquarters at least 01 working day before the meeting of the Board of Members; In case the proposal is presented immediately before the start of the meeting, the proposal will be approved if a majority of the members attending the meeting agree.

– Notice of invitation to a meeting of the Board of Members can be sent by invitation, phone, fax, electronic means or other methods prescribed by the Company’s Charter and sent directly to each member of the Board of Members. The content of the meeting invitation must clearly identify the time, location and meeting agenda.

– The meeting agenda and documents must be sent to company members before the meeting. Documents used in meetings related to decisions on amendments and supplements to the company charter, approval of company development strategy, approval of annual financial reports, reorganization or dissolution of the company must be sent to members no later than 07 working days before the meeting date. The time limit for sending other documents is prescribed by the company Charter.

– In case the company Charter does not stipulate, the request to convene a meeting of the Board of Members as prescribed in Clause 1 of this Article must be in writing and include the following main contents:

+ Full name, contact address, nationality, legal document number of the individual for individual members; name, business code or legal document number of the organization, head office address for organizational members; ratio of capital contribution, number and date of issuance of capital contribution certificate of each requesting member;

+ Reason for request to convene a meeting of the Board of Members and issues to be resolved;

+ Expected meeting agenda;

+ Full name, signature of each requesting member or authorized representative of them.

– In case the request to convene a meeting of the Board of Members does not have enough content as prescribed in Clause 6 of this Article, the Chairman of the Board of Members must notify in writing the non-convening of a meeting of the Board of Members to the relevant members and groups of members within 07 working days from the date of receiving the request. In other cases, the Chairman of the Members’ Council must convene a meeting of the Members’ Council within 15 days from the date of receiving the request.

– In case the Chairman of the Members’ Council does not convene a meeting of the Members’ Council as prescribed in Clause 7 of this Article, he must be personally responsible for damage caused to the company and related company members.

Accordingly, the convening of a meeting of the Board of Members will be at the request of the Chairman of the Board of Members or the request of a member or group of members of the company. Reasonable expenses for convening and conducting meetings of the Board of Members will be reimbursed by the company. Notice of invitation to a meeting of the Board of Members will be sent to each member of the Board of Members. The content of the meeting invitation must clearly identify the time, location and meeting agenda.

3. Conditions and procedures for conducting meetings of the Board of Members?

According to the provisions of Article 58 of the Law on Enterprises 2020 on the conditions and procedures for conducting meetings of the Board of Members as follows:

– A meeting of the Board of Members is conducted when the number of attending members owns 65% or more of the charter capital; The specific ratio is prescribed by the company’s Charter.

– In case the first meeting of the Board of Members does not meet the conditions to proceed as prescribed in Clause 1 of this Article and the Company’s Charter has no other provisions, the convening of a meeting of the Board of Members is carried out as follows:

+ The second meeting invitation must be sent within 15 days from the intended date of the first meeting. The second meeting of the Board of Members is conducted when the number of attending members owns 50% or more of the charter capital;

+ In case the second meeting of the Board of Members does not meet the conditions to proceed according to the provisions of Point a of this Clause, the notice inviting the third meeting must be sent within 10 days from the intended date of the second meeting. The third meeting of the Board of Members is conducted regardless of the number of members attending the meeting and the amount of charter capital represented by the number of members attending the meeting.

– Members and authorized representatives of members must attend and vote at the meeting of the Board of Members. The procedure for conducting a meeting of the Board of Members and the form of voting are prescribed by the Company’s Charter.

– In case a meeting meeting the conditions specified in this Article does not complete the meeting agenda within the expected time limit, it may be extended but must not exceed 30 days from the opening date of that meeting.

Thus, in your case, the fact that the company still holds a meeting even though only 50% of the members attend the meeting cannot be said to be inconsistent with the law. Because the law does not consider the number of members attending the meeting but based on the percentage of charter capital. That is, if 50% of the members attending that meeting own 65% or more of the charter capital, it is reasonable for your company to conduct a meeting of the Board of Members, based on the provisions of Clause 1, Article 58 of the Law on Enterprises 2020.