The company charter stipulates that if holding 30% of the charter capital, then automatically becoming a member of the Board of Directors is appropriate?

1. What is the Board of Directors?

According to Article 153 of the Law on Enterprises 2020, the provisions on the Board of Directors are as follows:

– 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. Dong.

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

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

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

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

+ Decide on 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 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, unless the company’s charter stipulates a different ratio or value and the contracts and transactions fall under the decision-making authority of the company. The General Meeting of Shareholders according to the provisions of Point d, Clause 2, Article 138, Clause 1 and Clause 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 running 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 contributions and share purchases of other enterprises;

+ Browse chapters Submit and content of documents to serve 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 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.

– The Board of Directors passes resolutions and decisions by voting at meetings, collecting 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, the 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.

2. Is it appropriate to become a member of the Board of Directors if the company’s charter stipulates that holding 30% of the charter capital?

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 do not necessarily have to be a shareholder of the company, unless otherwise stipulated in the company’s Charter;

+ A member of the Board of Directors of a company 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;

+ Not be a person who has served as a member of the Board of Directors or Supervisory Board of the company for at least the previous 5 consecutive years, unless 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, the company’s charter stipulates that holding 30% of the charter capital and automatically becoming a member of the Board of Directors is only appropriate in terms of charter capital as a standard to become a candidate for the position of member of the Board of Directors at Point b, Clause 1 above. To become a member of the Board of Directors, one must meet the above standards and not automatically own only 30% of the charter capital to become a member. of the Board of Directors. So this rule is not appropriate.

3. Is it appropriate to become the Chairman of the Board of Directors if the company’s charter stipulates that holding 50% of the charter capital?

According to Article 156 of the Law on Enterprises 2020, the provisions on the Chairman of the Board of Directors are as follows:

“Article 156. Chairman of the Board of Directors

1. Chairman of the Board of Directors elected, dismissed, or dismissed by the Board of Directors among the members of the Board of Directors.

2. The Chairman of the Board of Directors of public companies and joint stock companies specified in Point b, Clause 1, Article 88 of this Law cannot concurrently be the Director or General Director.

Accordingly, the Chairman of the Board of Directors is elected, dismissed, or dismissed by the Board of Directors among the members of the Board of Directors. Therefore, if the company charter stipulates that holding 50% of the charter capital, becoming Chairman of the Board of Directors is obviously not appropriate.