The corporate investor establishing a one-member limited liability company in Vietnam shall decide the company’s organizational structure. In this case, Law on Enterprise 2020 provides two organizational structure models to opt for below[1]:
The company owner must also decide which seat would be the legal representative of the company. As provided by the law, the company must have at least one legal representative who holds one of the titles of chairperson of the members’ council, company president or director/general director. In case the legal representative is not provided in the company’s articles of association, the chairperson of the members’ council or the company’s president shall be the legal representative of the company[2].
1. Company owner
Company owner has the right to appoint, dismiss, or remove managers and executive; decide the company’s annual business plan and development strategy; decide to reorganize, dissolve and request bankruptcy of the company.
For one-member limited liability company owned by an organization/company, the company owner also has the right to pass contracts or decided to sell the property with a value equal to or greater than 50% of the company’s total asset value as stipulated under the financial statement of the company or a lesser proportion as provided in the articles of association…[3]
2. Company president
Company president is appointed by the owner. The company president shall exercise the rights and obligations of the company owner on behalf of the owner; perform the rights and obligations of the company on behalf of the company, except for the rights and obligations of the director or general Director, be accountable to the law and the company owner for his performance in accordance with the articles of association, the Law on Enterprise and other relevant laws[4].
3. Members’ Council
Members of the members’ council shall be appointed and dismissed by the company owner, comprising from 3 to 7 members with a term of not exceeding 5 years.
The members’ council shall exercise the rights and obligations of the company owner on its behalf; perform rights and obligations of the company on behalf of the company, except for the rights and obligations of the director or general director. The chairperson of the members’ council shall be appointed by the owner or elected by members of the members’ council on the principle of majority votes, according to the order and procedures prescribed in the articles of association[5].
4. Director or General Director
Director or general director is appointed or recruited by the members’ council or the company president for a term of not exceeding 5 years. It should be noted that the chairperson of the members ‘council, another member of the members’ council or the company president may concurrently act as the director or general director unless otherwise provided by law or the articles of association[6].
The director or general director shall run the company’s day-to-day business operation; implement decisions of the members’ council or the company president; appoint, dismiss or remove managers in the company, except for those who fall under the authority of the members’ council or the company president; enter into a contract on behalf of the company, except under the authority of the company owner, chairperson of the members’ council or company president[7].
5. Board of Supervisors or Supervisors
The company owner may voluntarily appoint a board of supervisors or supervisors to supervise the activities of the executives[8].
In case the company owner sets up a board of supervisors, the members of the board of supervisors comprise from 1 to 5 members with a term of not exceeding 5 years and unlimited numbers of term[9]. It should be noted that the individual who holds a seat in board of supervisors or becomes the supervisors must meet the qualification as provided by Law on Enterprise 2020[10].
[1] Law on Enterprise 2020, Article 79
[2] Law on Enterprise 2020, Article 79.3
[3] Law on Enterprise 2020, Article 76.1 (e)
[4] Law on Enterprise 2020, Article 81
[5] Law on Enterprise 2020, Article 80
[6] Law on Enterprise 2020, Article 82.1
[7] Law on Enterprise 2020, Article 82.2
[8] Law on Enterprise 2020, Article 79.2
[9] Law on Enterprise 2020, Article 65.2
[10] Law on Enterprise 2020, Article 103.3
