Can the agenda of a meeting of the Board of a Vietnamese Joint Stock Company be changed during the meeting?

Under the Enterprise Law 2020, the General Shareholder Meeting (GSM) of a joint stock company (JSC) can decide to change its agenda and approve the new agenda when the meeting commences. There is no such provision with regard to a Board meeting. Accordingly, it is not clear if the Board can decide to change the agenda of a Board meeting during the meeting. That said, it is reasonable that the Board should be entitled to do so.

In particular, the Board could decide to change the agenda of a Board meeting based on the following grounds:

  • the Enterprise Law 2020 does not prohibit the Board from changing the agenda of a Board meeting at the meeting;

  • it is reasonable that the provisions concerning a meeting of GSM could apply to a meeting of the Board by analogy. In such case, the Board should have the right to change the agenda of a Board meeting as the GMS does; and

  • in practice, allowing the Board to change the agenda of a Board meeting will make the operation of a JSC more efficient. Since instead of scheduling for another meeting, the Board could decide on the relevant matter immediately at the current meeting. 

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Written by Nguyen Quang Vu On In , ,

When is an acquisition of assets considered a gain of control of another company?

Under the Competition Law 2018, an acquisition by purchase of assets sufficient to enable the acquiring company to gain control of either the acquired company or one business of such company is considered a form of economic concentration, and could be subject to merger filing requirement (if certain thresholds are met).

Article 2.1(b) of Decree 35/2020 further clarifies, among other thing, that “controlling or dominating a company or one business of a company” includes the case where “the acquiring company gains the ownership or the right to use more than 50% of the assets of the acquired company in all businesses or one business of such company”. It is unclear as to whether this provision should be interpreted as:

·        Interpretation 1: the acquiring company gains the ownership or the right to use more than 50% of the total assets of the acquired company which are used for all businesses or one business of such company; or

·        Interpretation 2: the acquiring company gains the ownership or the right to use more than 50% of the assets of either all businesses or one business of the acquired company.

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Written by Nguyen Quang Vu On In

The completion time of a de-merger of a Vietnamese company

In case of a de-merger of a company, the Enterprise Law 2020 does not make clear when will the de-merger of the new company from a de-merged company (or existing company) be considered as legally competed. However, it appears that a de-merger could be considered completed when (1) a new enterprise registration certificate of the new company is issued, and (2) assets and liabilities of the existing company are transferred to the new company in accordance with the de-merger decision of the owners/shareholders of the existing company. This is because the Enterprise Law 2020 provides that:

  • after registration of the enterprise, the new company and the existing company are jointly liable for the obligations and liabilities of the existing company; and

  • the new company will automatically inherit all rights and obligations allocated to it in accordance with the de-merging decision of the owners/shareholders of the existing company.

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Written by Nguyen Quang Vu On In ,

Is the list of related persons of a Vietnamese joint stock company expanded?

When determining who is a related person of a non-public joint stock company (JSC), as a routine, one would turn to Article 4.23 of the Enterprise Law 2020. Article 4.23 lists out the related persons of a company. However, Article 167.1 of the Enterprise Law 2020 on related party transactions (RPTs) applicable to JSCs suggests that the list of related persons under Article 4.23 might not be exhaustive.

Article 167.1 reads that: the General Meeting of Shareholders or the Board of Directors approve contract and transactions between the JSC and “the following related persons”:

(a) shareholders, authorized representatives of shareholders holding more than 10% ordinary shares and their related persons;

(b) members of the Board of directors, (general) director and their related persons; and

(c) enterprises that the members of the Board of directors, supervisory committee, (general) directors, and other managers of the company have an interests and must report to the JSC in accordance with Article 164.2 of the Enterprise Law 2020.

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Written by Nguyen Quang Vu On In ,