What you need to know when you want to become the legal representative of the business?

What is a legal representative?

According to Clause 1, Article 12 of the Law on Enterprises 2020, regulations on legal representatives of enterprises are as follows:

legal representative of the enterprise
1. The legal representative of an enterprise is an individual who represents the enterprise to exercise the rights and obligations arising from the enterprise’s transactions, represents the enterprise as a requester to resolve civil matters, plaintiff, defendant, person with related rights and obligations before the Arbitrator, Court and other rights and obligations according to the provisions of law.
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Accordingly, the legal representative of the enterprise is the subject exercising the rights and obligations. cases arising from transactions of enterprises, representing enterprises as requesters to resolve civil matters, plaintiffs, defendants, people with related rights and obligations before Arbitration, Court and other rights and obligations according to the provisions of law.

In addition, the legal representative of the enterprise must also hold one of the following positions in the enterprise:

[1] LLC with 02 or more members: Chairman of the Board of Members or Director or General Director (Article 54 of the Law on Enterprises 2020)

[2] One-member LLC: Chairman of the Board of Members, Company President or Director or General Director (Article 79 of the Law on Enterprises 2020)

[3] Joint stock company: Chairman of the Board of Directors or Director or General Director (Article 139 of the Law on Enterprises 2020)

[4] Partnership company: Partnership members are the legal representatives of the company (Article 184 of the Law on Enterprises 2020)

[5] Private enterprise: The owner of a private enterprise is the legal representative (Article 190 of the Law on Enterprises 2020)

Can there be multiple legal representatives in the same enterprise?

According to Clauses 2 and 3, Article 12 of the Law on Enterprises 2020, regulations on legal representatives of enterprises are as follows:

legal representative of the enterprise
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2. Limited liability companies and joint stock companies can have one or more legal representatives. The company charter specifies the number, management titles and rights and obligations of the legal representative of the enterprise. If the company has more than one legal representative, the company charter specifically stipulates the rights and obligations of each legal representative. In case the division of rights and obligations of each legal representative is not clearly stipulated in the company’s charter, each legal representative of the company is a competent representative of the enterprise before a third party; All legal representatives must be jointly responsible for damages caused to the enterprise according to the provisions of civil law and other relevant laws.
3. Enterprises must ensure that they always have at least one legal representative residing in Vietnam. When there is only one remaining legal representative residing in Vietnam, this person must, when leaving Vietnam, authorize in writing another individual residing in Vietnam to exercise the rights and obligations of the legal representative. In this case, the legal representative is still responsible for implementing the authorized rights and obligations.
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According to Article 184 of the Law on Enterprises 2020, regulations on business operations of partnerships are as follows:

Business management of the partnership company
1. General partners are the legal representatives of the company and organize the daily business operations of the company. Any restriction on a general partner in carrying out the day-to-day business of the company is only effective against a third party when he or she is made aware of the restriction.
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Accordingly, limited liability companies and joint stock companies can have many legal representatives. For partnerships, it is required to have at least 02 legal representatives.

In addition, if the company has many legal representatives, one person must reside in Vietnam.

For private enterprises, there are not many legal representatives, only the business owner is the representative.

What are the responsibilities of the legal representative of the enterprise?

According to Article 13 of the Law on Enterprises 2020, the responsibilities of the legal representative of an enterprise are as follows:

– Carry out assigned rights and obligations honestly, carefully, and in the best way to ensure the legitimate interests of the business;

– Loyal to the interests of the business; Do not abuse your position or position and use information, know-how, business opportunities, or other assets of the enterprise for personal gain or to serve the interests of other organizations or individuals;

– Timely, fully and accurately notify the enterprise about the enterprise in which you, your related person owns or has shares or capital contributions.

In addition, the legal representative of the enterprise is personally responsible for damages to the enterprise due to breach of his or her responsibilities.