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한국어Before establishing a business, investors must spend a lot of time to learn and choose the form of business to suit their resources. One of the core criteria for choosing a business type is based on organizational structure. Through today’s article, Bi Law Firm will help entrepreneurs better understand the basic organizational management structure of a joint stock company.
I. Organizational structure of management of joint-stock companies
Pursuant to the provisions of Article 137 of the Enterprise Law 2020, a joint-stock company has the right to choose a management organization and operate according to one of the following two models:
a) The General Meeting of Shareholders, the Board of Directors, the Supervisory Board and the Director or General Director. In case a joint-stock company has less than 11 shareholders and institutional shareholders own less than 50% of the total shares of the company, it is not required to have a Supervisory Board;
b) The General Meeting of Shareholders, the Board of Directors and the Director or General Director. In this case, at least 20% of the members of the Board of Directors must be independent members and have an Audit Committee under the Board of Directors. The organizational structure, functions and tasks of the Audit Committee are specified in the company’s charter or the operation regulations of the Audit Committee promulgated by the Board of Directors.
Unless otherwise provided for by the law on securities, joint-stock companies must comply with the provisions of legal documents on securities.
In case the company has only one legal representative, the Chairman of the Board of Directors or the Director or General Director is the legal representative of the company. Unless otherwise provided for in the Charter, the Chairman of the Board of Directors is the legal representative of the company. In case the company has more than one legal representative, the Chairman of the Board of Directors and the Director or General Director are automatically the legal representative of the company.
II. Responsibilities of the company manager
Pursuant to the provisions of Article 165 of the Enterprise Law 2020, members of the Board of Directors, Director or General Director and other managers have the following responsibilities:
a) Perform assigned rights and obligations in accordance with the Law on enterprises, other relevant laws, the company’s charter, resolutions of the General Meeting of Shareholders;
b) Perform assigned rights and obligations honestly, carefully and in the best way to ensure the maximum legitimate interests of the company;
c) Loyalty to the interests of the company and shareholders; not abuse their position and position and use information, know-how, business opportunities and other assets of the company for personal gain or to serve the interests of other organizations and individuals;
d) Promptly, fully and accurately notify the company of the contents:
– Name, enterprise identification number, head office address, line of business of the enterprise in which they own or own contributed capital or shares; the proportion and time of ownership, ownership of such contributed capital or shares;
– Name, enterprise identification number, head office address, line of business of the enterprise in which their related persons own, jointly own or separately own contributed capital or shares of more than 10% of charter capital;
dd) Other responsibilities as prescribed by the Law on enterprises and the company’s charter.
Members of the Board of Directors, Director or General Director and other managers who violate the provisions of the above articles will be personally or jointly liable to compensate for lost benefits, return received benefits and compensate for all damages to the company and third parties.
Above is our legal view on the organizational structure of a joint stock company. Feel free to contact us if you have any questions. Bi Law Firm is committed to being your trusted legal advisor.
