Enterprise management

Legal base: Law on Enterprise 2020

1. Director, General Director

Have the capacity for civil acts in full and does not fall into the objects of not being enable to manage an enterprise according to the provisions of Law on Enterprise.

Have the right expert, experience in business administration of the company if the charter of the company does not have other regulation.

2. Rights and obligations of the director, general director to each form of enterprise, specifically:

Two-member limited liability companies

• Director or General Director of the company is a person who operating the daily business activities of the company, taking responsibilities before the Board of members on the implementation on his or her rights and obligations.
• Director and General Director have the following rights and obligations:

+ To operate the implementation of the resolution of Board of members;

+ To operate the issues relating to the daily business activities of the company;

+ To operate the implementation of the plans on business and investment measures of the company;

+ To promulgate the internal management regulation of the company, except that the Charter of the company has other regulations;

+ To appoint, relieve of duty and remove from office managers of the company, except cases falling within the competence of the Board of members;

+ To sign contracts in the name of the company, except cases falling within the competence of the chairman of the Board of members.

+ To make recommendations on the company’s organizational structure;

+ To submit annual financial statements to the Board of members;

+ To make recommendations on the plan for use of profits or for handling of losses in business;

+ To recruit employees;

+ To have other rights and obligations provided in the company charter and in the labor contract which the Director or General Director has signed with the company in accordance with the resolution of the Board of members.

Single-member limited Liability Company

• The Board of Members or the President of the company may appoint or hire a Director or General Director for term which is not over 05 years to operating daily business activities of the company. The Director or General Director is responsible before the laws and Board of Members or the President of the company for the implementation of its rights and obligations. The President of the Board of members, other members of the Board of members or President of the company can also hold the position of the Director or General Director except that the laws and the charter of the company have other regulations.  
• The Director or General Director have the following rights and obligations:

+ To organize the implementation of decisions of the board of members or the president of the company;

+ To decide on all matters related to day-to-day business operations of the company;

+ To organize the implementation of business plans and investment plans of the company;

+ To issue the internal management regulation of the company;

+ To appoint, relieve of duty and remove from office managers in the company, except those falling within the competence of the board of members or the president of the company;

+ To sign contracts in the name of the company, except cases falling within the competence of the chairperson of the Members’ Council or the company president;

+ To make recommendations on the organizational structure of the company;

+ To submit annual financial statements to the Board of members or the President of the company;

+ To make recommendations on the plan for use of profits or handling of losses in business;

+ To recruit employees;

+ Other rights or obligations stipulated in the Charter of the company, labor contracts that the Director or General Director signs with the President of the Board of members or the President of the company.

Joint-stock company

• The Director or Director General shall manage day-to-day business operations of the company; submit to supervision by the Board of Directors; and be responsible to the Board of Directors and before law for the exercise of his/her vested powers and the performance of his/her assigned obligations.
• The term of office of the director or director general must not exceed 5 years; the director or director general may be re-appointed for an unlimited number of terms.
• The director or director general has the following powers and obligations:

+ To decide on issues relating to day-to-day business operations of the company independently from decisions of the Board of Directors;

+ To organize the implementation of resolutions of the Board of Directors;

+ To organize the implementation of business plans and investment plans of the company;

+ To propose the organizational structure and internal management regulations of the company;

+ To appoint, relieve of duty and remove from office managers in the company, except those within the competence of the Board of Directors;

+ To decide on wages and other benefits for employees of the company, including managers who may be appointed by the director or director general;

+ To recruit employees;

+ To propose methods of paying dividends and dealing with loss in business;

+ Other powers and obligations provided by law, the company charter and resolutions of the Board of Directors.

Hence, it is noted that:

• At present, there is no regulation of law specifies that an enterprise has a Director or General Director. The so-called Director or General Director is depending on the size and different options of each enterprise. However, depending on the organizational structure and management of each company, there will be a different way of calling, such as a company with many directors, the person who runs the company is called General Director.
• At present, the law no longer limits the Director or General Director to be only the Director or General Director of a company and naturally the legal representative of the enterprise, except for the case of being Director or General Director of a state enterprise.
• There are many different ways to form the position of Director, General Director including: appointing, hiring, electing and self-holding. The appointment, hiring, electing and dismissing the Director is one of the internal activities of the enterprise, thereby based on the business situation and needs of the company, the company specifically offered jobs for the purpose of stability, development for the company.

Above is the consult on “Enterprise management: Director and General Director in an enterprise” of Hnlaw & Partners. Customers who have any questions or need to use legal services please contact the Company directly for detailed consult and best support.

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