Who Are Called Enterprise Managers? May the Director of an LLC Serve as an Enterprise Manager?

Who is an enterprise manager?

Under Clause 24, Article 4 of the Law on Enterprises 2020 on the concept of enterprise manager as follows:

“Article 4. Definitions

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In this Law, the terms below are understood as follows:

…

24. An enterprise manager is a manager of a private enterprise and a manager of a company, including the private enterprise owner, general partners, President of the Members’ Council, members of the Members’ Council, Company President, President of the Board of Directors, members of the Board of Directors, Director or General Director, and individuals holding other managerial titles as prescribed in the company charter.”

Thus, the concept of enterprise manager is not defined clearly but is presented in listed form, specifically corresponding to each type, the enterprise manager positions are prescribed as follows:

+ Private enterprise: the private enterprise owner.

+ Single-member limited liability company: the Company President;

+ Multi-member limited liability company: the President of the Members’ Council, members of the Members’ Council;

+ Joint stock company: the President of the Board of Directors, members of the Board of Directors;

+ Partnership: general partners.

In addition, enterprise managers may be other titles prescribed in the company charter such as: Director, General Director, Head of specialized departments/divisions.

May the Director of a multi-member limited liability company serve as an enterprise manager?

Under Clause 24, Article 4 of the Law on Enterprises 2020 on enterprise managers, which mentions that enterprise managers may be Directors or General Directors or individuals holding other managerial titles as prescribed in the company charter.

Accordingly, at Clause 1, Article 54 of the Law on Enterprises 2020 on the organizational structure of a multi-member limited liability company (not a state-owned enterprise) as follows:

The management organizational structure of a multi-member limited liability company comprises the Members’ Council, the President of the Members’ Council, and the Director or General Director.

Pursuant to the above provisions, the Director of a multi-member limited liability company may be an enterprise manager if the company charter so provides.

How is the Director of a multi-member limited liability company regulated?

Under Article 63 of the Law on Enterprises 2020 on the Director of a multi-member limited liability company as follows:

– The Director is the person operating the company’s daily business activities, responsible to the Members’ Council for exercising their rights and obligations.

– The Director has the following rights and obligations:

+ Organizing the implementation of resolutions and decisions of the Members’ Council;

+ Deciding on matters related to the company’s daily business activities;

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

+ Promulgating the company’s internal management regulations, unless the company charter provides otherwise;

+ Appointing, dismissing, and removing managers in the company, except titles under the authority of the Members’ Council;

+ Signing contracts on behalf of the company, except where under the authority of the President of the Members’ Council;

+ Proposing the company’s organizational structure plan;

+ Submitting annual financial statements to the Members’ Council;

+ Proposing plans for using and distributing profits or handling business losses;

+ Recruiting employees;

+ Other rights and obligations prescribed in the company charter, resolutions and decisions of the Members’ Council, and labor contracts.

The standards and conditions for serving as Director are prescribed in Clause 1, Article 64 of the Law on Enterprises 2020 as follows:

– Not falling under the subjects prescribed in Clause 2, Article 17 of the Law on Enterprises 2020.

– Having professional qualifications and experience in the company’s business administration and other conditions prescribed in the company charter.

Thus, enterprise managers include the private enterprise owner, general partners, President of the Members’ Council, members of the Members’ Council, Company President, President of the Board of Directors, members of the Board of Directors, Director or General Director, and individuals holding other managerial titles as prescribed in the company charter. The Director of a multi-member limited liability company may be an enterprise manager under the company charter and must satisfy the standards and have the rights and obligations of a Director as prescribed by law.