The legal representative plays an important role in the operation of a company. New changes introduced by the Enterprise Law 2014 and Civil Code 2015 regarding legal representative of a company are both positive and negative.
- On the positive side, now a company may have more than one legal representative. this change allows more operational flexibility. In addition it also reduces the risk that a company is held hostage by an uncooperative legal representative.
- On the negative side, the authorities of a legal representative of a company now pretty much depend on the Charter of the relevant company. Therefore, without checking the Charter of a relevant company, one may not know whether a legal representative of the company have sufficient authority to enter into a transaction. A contract signed by an unauthorised legal representative may be invalid. A further problem is to get hold of the Charter of a company in Vietnam which is not usually publicly available. Before July 2015, a legal representative is entitled to enter into any transaction on behalf of the company unless otherwise provided by the law. Therefore, in most cases, a legal representative is authorised under old laws to enter into contracts.