New points of Vietnamese Law on enterprises 2014

New points of Vietnamese Law on enterprises 2014

On 26 November 2014, the Vietnamese National Assembly passed the Law on Enterprises 2014 No.68/2014/QH13, which will come into effect from 01 July 2015. In comparison with Vietnamese Law on Enterprise 2005, the Vietnamese Law on enterprises 2014 has following new key points:

1. Limited Liability Company and Shareholding Company may have one or more legal representatives;

2. The organization and management of Shareholding Company is regulated as follows:

  •  A shareholding company may select either of the following models of organization of management and operation: a) A General Meeting of Shareholders, a Board of Management, an Inspection Committee and director or general director or b) A General Meeting of Shareholders , a Board of Management and director or general director.
  • A meeting of the General Meeting of Shareholders shall be conducted where the number of attending shareholders  represents  at  least  fifty one (51) per  cent  of  the  total  number  of  voting  slips. This rate is consistent with international practices and be reduced from Vietnamese Law on Enterprise 2005 which was 65%;
  • An Independent member of the Board of Management who is not directly involved in managing businesses, owned shares in accordance with the criteria and conditions stipulated in Sub Article 151.2 of Vietnamese Law on Enterprise 2014.
  • Vietnamese Law on Enterprise 2014 annuls certain provisions in accordance with of Vietnamese Law on Enterprise 2005:
    + To annul the provisions "The director or general director of the company cannot be simultaneously the director or general director of another company”
    + To cancel the provisions "Shareholders owning 5% or more of the total number of shares must be registered with the business registrar within 7 days from the date of acquiring that amount of shares”.
    + Annul the provision that Chairman of the board of management will be elected by the
    Shareholders’ Meeting. New law stipulates that Chairman of the board of management will be only elected by the Board of Management.

3. New regulation on the enterprise’s seal: An enterprise has the right to decide on the form, number and contents of its seal. Before  use,  the  enterprise  is  obliged  to  notify the  business  registration  office  of  the  sample  seal  for the purpose of publicly publishing it on the national enterprise registration information portal.

4. Focusing on information technology: Enhancing the application of information technology on the  national  enterprise  registration  information  portal; All  meetings  of  the  Members’  Council  must  be  recorded  in  minutes and  may  be  sound recorded or recorded and stored in other electronic forms;

6. Business lines not recorded on enterprise registration certificate: the contents of enterprise registration certificate only record four contents without  business lines, legal capital etc which is realizing the right to conduct business freely in the sectors and industries not prohibited by law as stipulated by Article 33 of the Constitution.

8. A limited liability company with one member is allowed to reduce charter capital.

Download document here. (Vietnamese verson)

Send us your inquiry