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 , ,

Obligations of a Vietnamese company satisfying public company requirements pending an SSC registration

A Vietnamese company which satisfies public company requirements but which has not registered its public company status with the State Securities Commission (SSC) may arguably not need to comply with various obligations of a public company under Vietnamese law.

Under the Securities Law 2019, a public company is a joint stock company that satisfies the following conditions (the Required Conditions):

· having a minimum paid-up charter capital of 30 billion dongs, and

· having at least 10% of the voting shares held by at least 100 investors not being major shareholders.

The Securities Law 2019 also provides that:

· a company satisfying the Required Condition must register its public company status with the State Securities Commission (the SSC); and

· after the SSC confirms the registration of public company status, the relevant company will have various rights and obligations of a public company such as public disclosure, corporate governance, and registration for trading.

However, the law is silent on the obligations of a company which satisfy the Required Conditions but which has not obtained the SSC’s confirmation on public company status.

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Written by Nguyen Quang Vu On In ,

Can a small-size Vietnamese joint stock company operate without an inspection committee and an independent director?

Article 137 of the Enterprise Law 2020 provides that a joint stock company (JSC) can decide to organise itself in accordance with the two options below:

  • Option 1: A General Meeting of Shareholders, a Board of Directors, and an Inspection Committee and general director; and

  • Option 2: A General Meeting of Shareholders, a Board of Directors with at least 20% members being independent directors and a general director.

Under Option 1, the Enterprise Law 2020 further provides that if a JSC has less than 11 shareholders and the shareholders being organizations together own less than 50% of the charter capital of the company, then the company does not have to have an Inspection Committee. However, if a JSC selects option 1 and decides not to have an inspection committee, then on its face, such JSC is organised under option 2. Accordingly, it is not clear if the Board of such JSC must have at least 20% members being independent directors.

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Written by Nguyen Quang Vu On In

GSM’s delegation to the Board under Vietnamese law

Under the law of Vietnam, it is unclear whether the General Shareholder’s Meeting (GSM) of a joint stock company (JSC) is allowed to authorise (or delegate) its power to the Board or to what extent can the GSM delegate its power to the Board, if the former is possible. In particular:

  • Article 15.4 of Decree 156/2020 imposes a penalty on the Chairman of the Board if he/she does not report to the GSM on the implementation of the GSM’s resolution except when he/she is authorised by the GSM. This provision suggests that the GSM of a public JSC may delegate the chairperson of the Board to make change to matters already decided by the GSM. Arguably, if the GSM could delegate its power to the chairperson of the Board then arguably the GSM could delegate its power to the Board.

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Written by Nguyen Quang Vu On In ,