The charter (Điều lệ) (akin to the Articles of Association ) is probably the most an important corporate document of a Vietnamese company. However, many company charters in Vietnam simply just reflect (sometimes word-by-word) standard provisions of the Enterprise Law and its implementing regulations. Following the law in the charter may ensure that the company will have a charter that complies with the law. However, by doing so the shareholders/members of the company may not take advantages of the flexibilities in operation allowed by the Enterprise Law. Below is some examples:
- The Enterprise Law provides that assets that can be used for capital contribution in a company in Vietnam include cash, gold, foreign currencies, land user rights, intellectual property rights and “other assets specified in charter”. So if a company wants to receive other assets as a capital contribution (e.g. shares in other companies, cars), it should specify those other assets in its charter;
- The Civil Code provides that a legal person has the capacity to perform the rights and obligations consistent with its “operational objectives”. The operation objectives of a legal person are provided in the charter of such legal person. As such, having a broad operational objectives in the company’s charter would somehow provide a legal ground (or defense) for a company to perform many activities which are not clearly provided by law;
- The Enterprise Law requires certain matters in a joint stock company to be approved at a physical meeting of the general meeting of shareholders unless otherwise provided by the charter. A joint stock company may therefore opt out of this requirement if it considers having a physical meeting of the shareholders is cumbersome; and
- The Enterprise Law requires the collection of written opinions from shareholders by a joint stock company to follow a quite complicated procedures unless otherwise provided by the charter. A joint stock company may therefore opt out of these complicated procedures if it considers these procedures cumbersome.