In a joint stock company (JSC), many important issues (such as increase of authorised capital, change of business lines or material transactions) are within the authorities of and need to be decided by the General Meeting of Shareholders (GMS). The GMS gives its decisions by passing resolutions (nghị quyết). In practice, a resolution of the GMS is passed in the following manner:

A meeting of the GMS is held and at the end of the meeting a minutes (biên bản) of the meeting recording, among other things, decisions made in the meeting. Alternatively, the Board may arrange to collect written opinions from the shareholders and prepare a vote counting minutes; and
Based on the approved minutes, the Chairman of the Board signs a document called “Resolution of the GMS” containing the specific decision approved by the GMS at the meeting of the GMS or by way of collecting written opinions from the shareholders. This document is usually provided to the company’s counterparties or licensing authorities.

The Enterprise Law 2014 regulates the first step in details such as quorum of the meeting, voting thresholds, and required contents of the minutes. However, the Enterprise Law 2014 does not have much provision concerning the second step. Therefore, several issues regarding the second step are not clear including:

is this necessary to have a document called “Resolution of the GMS”?
what is the importance of such document?
who could sign such document?

On the first issue, the Enterprise Law 2014 does not expressly require that there must be a document named “Resolution of the GMS”. However, several provisions of the Enterprise Law 2014 suggest that there should be a document called “Resolution of the GMS”. In particular,

under Article 114 of the Enterprise Law 2014, a shareholder has the right to copy and review minutes of the GMS and resolutions of the GMS. This provision suggest that resolutions of the GMS are separate and independent documents from minutes of the GMS;
under Article 123 of the Enterprise Law 2014, the notification for a private placement of shares must include a document being resolution of the GMS; and
under Article 136 of the Enterprise Law 2014, the person convening a meeting of the GMS must prepare a draft resolution of the GMS. Article 139 of the Enterprise Law 2014 provides that a draft resolution of the GMS must be sent to all shareholders attending the meeting.

On the second issue, the Enterprise Law 2014 is not clear whether a document called a “resolution of the GMS” is (1) a requirement for the resolution of the GMS to be valid, or (2) written evidence of the resolution of the GMS which has been passed. Article 136 of the Enterprise Law 2014 above seems to support interpretation (1) since there must be a draft resolution to be circulated before the resolution can be passed. However, interpretation (2) is more reasonable since:

Under Article 143 of the Enterprise Law 2014, a resolution of the GMS will be passed either at a meeting of the GMS or by way of collecting written opinions from shareholders. The Enterprise Law 2014 does not require a document called “Resolution of the GMS” to be issued for a resolution of the GMS to be passed;
Under Article 144 of the Enterprise Law 2014, a resolution of the GMS will be passed if it is approved by certain numbers of votes. If the passing of a resolution of the GMS depends on a document called “Resolution of the GMS” being issued then it is inconsistent with Article 144 of the Enterprise Law 2014. It is illogical that the person controlling the issuance of such document could delay or even prevent a decision of the GMS to take effect;
UnderArticle 147 of the Enterprise Law 2014, a shareholder may request a resolution of the GMS to be cancelled within 90 days after receipt of the minutes of the meeting of the GMS. If a document called “resolution of the GMS” was required for the resolution of the GMS to be valid then the 90 day period should commence on the receipt of such document not the minutes of meeting of the GMS; and
The Enterprise Law 2014 expressly require the minutes of meeting of the GMS to be prepared and to contain, among other things, issues decided by the GMS. Therefore, even if there is no separate document called “Resolution of the GMS” being issued, it is reasonable for the JSC and other persons to rely on the facts including the decisions of the GMS recorded in the minutes.

On the third issue, although a document called “resolution of the GMS” is commonly signed by the Chairman of the Board, there is no express authority under the Enterprise Law 2014 for the Chairman to do so. Presumably, the Chairman of the Board can rely on his/her authority to chair a meeting of the GMS to sign the resolution of the GMS. If a document called “resolution of the GMS” is considered as evidence of resolution of the GMS which has been passed then such document is similar to an extract of the minutes of the meeting of the GMS. In that sense, such document should be signed by the same persons who sign the minutes of the meeting of the GMS (e.g. the chairman and the secretary of the meeting). In addition, it is arguable that the legal representative of the JSC can sign such document for the purpose of authentication. This is similar to the fact that the legal representation of the JSC can sign the charter of the JSC under Article 25 of the Enterprise Law 2014.

This post is contributed in parts by Nguyen Lan Chi, a legal intern at Venture North Law.

Vietnam Business Law