Vietnam implements a new Law on Enterprises 2020
18 December 2020 - The Vietnamese authorities have passed a new Law on Enterprises 2020 to replace the Enterprise Law as of 2014, which will become effective on 1 January 2021.
One of the key changes requires joint stock companies (JSCs) to update the shareholder register in order to record a share transfer within 24 hours after a request by the relevant parties. Another amendment provides that an independent director of the Board of a JSC can be appointed for up to two consecutive terms only. A General Director of a public JSC must not be a family-related person with a board member or inspector of (1) the public JSC, or (2) the parent company of the public JSC, or (3) authorised representatives of the parent company in the public JSC.
With respect to general requirements, a company is no longer required to notify the Business Registration Authority of the company’s seal sample and the changes to board member of a company under Articles 44 and 12 of the Enterprise Law 2014. Furthermore, the simple majority voting threshold is lowered from 51% to 50%. Lastly, an amended law stipulates easier removal of an uncooperative Chairman, i.e. if the Chairman or secretary of a meeting of the Members’ Council, the shareholders meeting, or the Board of Directors refuses to sign on a meeting minute, then other attending members or directors could sign the minutes of meeting instead.