Who is the representative of state capital invested in a joint stock company? What standards must be met?

Who is the representative of state capital invested in a joint stock company?

The representative of the state capital invested in a joint stock company is specified in Clause 6, Article 3 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014 as follows:

Explanation of words

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

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5. The representative of the capital portion of an enterprise in which 100% of the charter capital is held by the State in a joint stock company or limited liability company (hereinafter referred to as the representative of the capital portion of the enterprise) is an individual authorized in writing by the enterprise to exercise the rights and responsibilities of the enterprise with respect to the capital portion of the enterprise invested in the joint stock company or limited liability company.

6. The representative of the state capital invested in a joint stock company or limited liability company with two or more members (hereinafter referred to as the representative of the state capital) is an individual authorized in writing by the owner’s representative agency to exercise the rights and responsibilities of the representative of the state owner with respect to the state capital invested in a joint stock company or limited liability company with two or more members.

7. Enterprise managers include the Chairman and members of the Board of Members, the Company President, the General Director or Director, Deputy General Director or Deputy Director, and the Chief Accountant.

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Thus, according to regulations, the representative of the state capital invested in a joint stock company is an individual authorized in writing by the owner’s representative agency to exercise the rights and responsibilities of the representative of the state owner with respect to the state capital invested in the joint stock company.

What standards must a representative of state capital invested in a joint stock company meet?

Pursuant to Article 46 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014, the representative of state capital invested in a joint stock company must meet the following standards:

(1) Vietnamese citizen, permanent resident in Vietnam;

(2) Have political and moral qualities, have full capacity for civil acts, and are healthy enough to complete assigned tasks;

(3) Understanding the law and consciously obeying the law;

(4) Have the capacity, professional qualifications, and work experience consistent with the requirements of the position and title appointed as representative;

(5) Not during the period of ban from holding positions, considering disciplinary action, investigating, prosecuting, adjudicating, serving prison sentences, or implementing disciplinary decisions;

(6) Not be the spouse, biological father, adoptive father, biological mother, adoptive mother, biological child, adopted child, biological brother, biological sister, biological brother, brother-in-law, sister-in-law, sister-in-law of the Chairman and members of the Board of Directors, Controllers, General Director or Director, Deputy General Director or Deputy Director, Chief Accountant of the enterprise;

(7) Other standards according to the provisions of law on enterprises and other relevant laws.

When can a representative of state capital invested in a joint stock company not continue to be a representative?

In case the representative of state capital is not allowed to continue to be the representative, it is stipulated in Clause 5, Article 48 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014 as follows:

Rights and responsibilities of the representative of state capital

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2. Report promptly on joint stock companies and limited liability companies with two or more members operating at a loss, not ensuring solvency, not completing assigned tasks and other cases of violations.

3. Quarterly, annually and irregularly at the request of the owner’s representative agency, the representative of the state capital summarizes and reports on production, business, financial situation and recommends solutions.

4. Require joint stock companies and limited liability companies with two or more members to pay profits and dividends to the state budget corresponding to the state capital invested in the company.

5. Do not continue to act as a representative when improperly exercising assigned rights and responsibilities or no longer meeting the standards of a representative.

6. Be responsible before the law for violations that cause loss of state capital.

7. Exercise other rights and responsibilities prescribed in the charter of joint stock companies, limited liability companies with two or more members, laws on enterprises and other relevant laws.

Thus, according to regulations, the representative of the state capital invested in a joint stock company is not allowed to continue to be the representative when improperly exercising the assigned rights and responsibilities or no longer meeting the representative’s standards.