Reviewing the Law on Enterprises, businesses synthesize 34 confusing contents
"Who has the right to convene a meeting of the Board of Directors when the Chairman is detained" is one of 34 contents that businesses requested clarification when amending the Enterprise Law.
The Vietnam Federation of Commerce and Industry (VCCI) has just sent a document to the Ministry of Planning and Investment, summarizing the problems and shortcomings that need to be amended in the Enterprise Law.
“Reformative provisions in the Enterprise Law 2020 such as the Enterprise Registration Certificate no longer stating the registered business lines; enterprises are autonomous in terms of seals; have multiple legal representatives; contribute capital to establish enterprises with assets... have created great convenience for enterprises when entering the market and organizing business activities, clearly demonstrating the idea of freedom of business. However, in the past, during the application process, some provisions in the Enterprise Law 2020 have arisen with some shortcomings and problems, which need to be considered for amendment,” VCCI expressed its opinion in this document.
The proposed amendments relate to the authorized representatives of the owners, members, and shareholders of the company being organizations; Effective date of changes to the Business Registration Certificate; Valuation of contributed assets; Minutes of the meeting of the Board of Members; Capital contribution by assets; Resolutions and decisions of the Board of Members; Responsibility of the owner of a one-member LLC when not contributing enough capital; Withdrawal of capital and reduction of charter capital of a one-member LLC; Minimum number of members attending the meeting of the Board of Members of a one-member LLC...
These are issues arising in the implementation of the Enterprise Law since the Law took effect on January 1, 2021.
Who has the right to convene a meeting of the Board of Directors other than the Chairman of the Board of Directors?
According to Clause 4, Article 156 of the 2020 Enterprise Law, in case the Chairman of the Board of Directors dies, goes missing, is detained, etc., the remaining members shall elect one of the members to hold the position of Chairman of the Board of Directors according to the principle of majority approval of the remaining members until a new decision of the Board of Directors is made.
However, the Enterprise Law 2020 does not clearly stipulate who has the right to convene this meeting, how the re-election meeting is organized (there is a requirement for a minimum number of members to attend the meeting as prescribed in Clause 8, Article 157).
This is the reason why businesses propose to add specific regulations on the issue of authority to convene meetings of the Board of Directors, the organization of meetings to re-elect the Chairman of the Board of Directors in the case mentioned in Clause 4, Article 156 of the Law on Enterprises 2020. VCCI proposes a possible mechanism of applying a mechanism whereby one of the members of the Board of Directors can convene a meeting of the remaining members to elect the Chairman (as in the case of LLCs in Clause 4, Article 56 of the Law on Enterprises 2020).
The Law on Enterprises does not stipulate the entity with the authority to accept the resignation of a member of the Board of Directors.
Because, point b, clause 1, Article 160 of the Law on Enterprises stipulates that the General Meeting of Shareholders shall dismiss a member of the Board of Directors in the event of “a resignation letter that is accepted”. In the event that the resignation letter is not accepted, the General Meeting of Shareholders shall not have the right to dismiss, remove, or replace a member of the Board of Directors.
VCCI recommends clearly defining the subject that approves the resignation of a member of the Board of Directors and the criteria for approval or disapproval.
What is the date the change was recorded?
The question seems simple, but it is very difficult to answer in practice. According to the provisions of Clause 2, Article 30 of the Enterprise Law, "Enterprises are responsible for registering changes to the contents of the Enterprise Registration Certificate within 10 days from the date of change".
The problem that confuses businesses is that the Law does not clearly stipulate the date of recording the change. Because there are currently two dates directly related to the content of the change, one is the date recorded in the decisions of the business and the other is the date the business registration authority reissues the Business Registration Certificate.
In practice, the date the business registration authority reissues the Business Registration Certificate is considered the effective date of these changes to ensure information disclosure and protect the rights of third parties (although there is no clear regulation on this issue).
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| Yamaha Motor Vietnam Co., Ltd. encountered difficulties when carrying out procedures to change legal representatives. |
However, in the document sent to the Ministry of Planning and Investment and VCCI to request amendments to the above clause, Yamaha Motor Vietnam Co., Ltd. mentioned difficulties in carrying out procedures to change legal representatives.
Specifically, the enterprise issues a decision to change the legal representative and the legal representative will take over from a specific date, here the decision is issued on March 10, the new legal representative will take over from April 1.
However, when the enterprise carried out the procedure to register a change of legal representative and was granted a Certificate of Business Registration on March 27.
So, with the above timelines, what is the effective date of the change of the legal representative of the enterprise, April 1 or March 27?
In addition, businesses also ask, according to the provisions of the Enterprise Law, businesses must register changes to the contents of the Enterprise Registration Certificate within 10 days from the date of change. So is the "date of change" here considered the date of issuance of the decision/resolution (March 1) or the date the legal representative begins to assume the position according to the decision (April 1)?
This ambiguity caused Yamaha Motor Vietnam to face difficulties in its business operations during the period from March 27 to March 30 because the business registration authority had updated the information of the new legal representative...
Because, if the date the business registration authority reissues the Business Registration Certificate is considered the effective date of the change, the content about the date of commencement of the legal representative's duties in the enterprise's decision/resolution is meaningless and the enterprise cannot exercise its right to choose and decide on the date of change of legal representative.
If the date is determined to be the date stated in the enterprise's decision/resolution, it is necessary to clearly specify which date is considered the date of change to the contents of the Enterprise Registration Certificate.
In the document sent to the Ministry of Planning and Investment and VCCI, the Company proposed to clarify that the date of change is the date the enterprise decides to change the content of business registration.
Procedures for changing information of FDI enterprises
Recording information of foreign-invested economic organizations in both the Investment Registration Certificate and the Enterprise Registration Certificate is also a problem that FDI enterprises often encounter.
The current mechanism for granting Investment Registration Certificates to foreign investors and Business Registration Certificates to foreign-invested economic organizations leads to many difficulties and inconveniences for enterprises when they need to register to adjust their information.
For example, when registering to increase charter capital (which is also the contributed capital of the investment project), the enterprise must register to amend both the Enterprise Registration Certificate and the Investment Registration Certificate.
Or when notifying a change in business lines, enterprises must carry out both the procedure for notifying a change in business lines at the business registration agency and the procedure for registering an adjustment to the Investment Certificate at the investment registration agency.
In addition, in the document sent to the Ministry of Planning and Investment, VCCI also raised the issue that current law does not clearly stipulate whether procedures must be carried out at the business registration agency or at the investment registration agency first in the above cases.
“This leads to different interpretations and applications in each locality. We recommend that research be conducted to ensure clarity and consistency when implementing these two procedures,” VCCI sent a recommendation.
Will abolish and replace unreasonable regulations
Previously, the Ministry of Planning and Investment requested VCCI to assess the advantages, difficulties, obstacles and shortcomings in the process of implementing and applying the provisions of the Enterprise Law 2020 and to propose amendments and supplements. Because in the process of monitoring the implementation of the Enterprise Law, the Ministry has received many reflections and recommendations from agencies, organizations and individuals on a number of related contents such as: Some contents are no longer suitable for practice, creating a burden of compliance costs; some contents are no longer compatible with some provisions of the newly issued law; some contents need to be further improved to improve the quality of corporate governance according to good practices, increasing the level of safety for shareholders and investors.
In particular, in the Draft Report summarizing and evaluating the implementation of the Enterprise Law in 2020, the Ministry of Planning and Investment determined to continue to perfect the legal framework on corporate governance organization according to international standards, promote business development, attract investment in production and business, contributing to improving the quality of the business environment.
Specifically, the direction of amending the law is to inherit and promote the impacts of reforms in previous versions of the Enterprise Law; ensure full and consistent implementation of reforms of the Enterprise Law; amend, supplement, replace, and abolish unreasonable regulations, those that are in conflict with the law or are no longer suitable to practical requirements; amend unclear regulations, those that have different interpretations, etc.
The Ministry has also compiled 25 groups of issues that need to be clarified and revised...
Source: https://baodautu.vn/ra-soat-luat-doanh-nghiep-doanh-nghiep-tong-hop-34-noi-dung-gay-lung-tung-d224029.html
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