Is joint chairmanship in a joint stock company (JSC) allowed under Vietnamese law?

Under Vietnamese law, joint chairmanship in a JSC is not allowed since the position of Board of Directors (BOD) Chairman can only be held by one person:

  • Article 152 of the Enterprise Law 2014 expressly provides that the BOD will elect one member of the BOD as the chairman, without any exception that can be provided in the charter;

  • Various qualifications of a BOD member under the Enterprise Law 2014 suggest that BOD members as well as the BOD Chairman should be natural persons (i.e. having expertise, experience in managing the business of the company). A joint chairmanship is not a natural person as such.

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Written by Nguyen Quang Vu On In

New Law on Enterprises 2020 for Companies in Vietnam

Introduction

In June 2020, the National Assembly passed a new Law on Enterprises 2020 (Enterprise Law 2020) to replace the Enterprise Law 2014 from 1 January 2021. The Enterprise Law 2020 was issued just four years after the Enterprise Law 2014 came into effect. So, in just 20 years Vietnam already has four different versions of the Law on Enterprises. Such frequent changes could cause concerns to investors since they will not know for sure that their rights as a member or shareholder in a company in Vietnam will not be adversely affected by another set of changes in 2025. The fact that many of the changes introduced under Enterprise Law 2020 are just wording changes (but at the same time fail to clarify various unclear issues under the Enterprise Law 2014) also raises questions about the quality of the law-making process in Vietnam.

This post is written by Nguyen Quang Vu. Our comments are based on the version of the Enterprise Law 2020 supplied by Mr. Truong Trong Nghia, a member of the National Assembly and Vietnam Business Lawyers Club (VBLC). Since the official version of the Enterprise Law 2020 has not been released, our comments are subject to change. For easy reference, a compared version between the Enterprise Law 2020, and the Enterprise Law 2014 in Vietnamese can be downloaded here.

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Written by Nguyen Quang Vu On In ,

Decree 35/2020 – The concept of “control” in merger control rules in Vietnam

The concept of control is important under the new merger control rules under the Competition Law 2018 and Decree 35/2020. In particular, economic concentration in the form of acquisition will arise if the acquiring entity acquires control over the target. Besides, the concept of control is also used to determine whether a company is an affiliate of another company when applying the size-of-person test under merger filing requirements.

Decree 35/2020, the acquiring enterprise establishes control over the target or a business line of the target in any of the following circumstances:

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Written by Nguyen Quang Vu On In ,

Exemptions Of Tender Offer Under The Securities Law 2019

Under the Securities Law 2019, regarding a public joint stock company (the target company), those entities who fall into tender offer triggering circumstances do not have to conduct a tender offer in some specific circumstances. In particular:

· Circumstance 1: Purchasing of newly issued shares, which results in the ownership reaching the tender offer triggering limits, in accordance with the issuance plan approved by the target company’s General Shareholder Meeting.

· Circumstance 2: Receiving the transfer of the outstanding voting shares, which results in the ownership reaching the tender offer triggering limits, as approved by the target company’s General Shareholder Meeting. In such circumstances, the General Shareholder Meeting must clearly identify the transferor and the transferee.

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Written by Nguyen Quang Vu On In , ,