Representation of joint stock company under the law of vietnam

establish and conduct all civil transactions for the benefits of the represented person. 2.2.2. Rights and obligations of the parties in the representative relationship of JSC 2.2.2.1. Obligations and liabilities of representative for JSC The obligations include: exercising rights and duties within the scope of representation; being honest, careful; be loyal to the company’s interests; not use information, knowhow, business opportunities, position, and assets of the company for selfinterest or for the benefit of other organizations or individuals; complying with competition restrictions with the company; preservation of assets and documents assigned by the company. Regarding the handling of the representative’s liabilities for JSC when committing acts of violations: determining the liabilities of JSC’s representative must be based on the provisions of law, the company’s Charter, labor contract or power of attorney. 2.2.2.2. Obligations of the represented person to the representative The represented person (JSC) has a number of obligations to the representative such as: obligation to pay representative remuneration and reimburse relevant costs; obligation to provide information, documents, assets, and tools necessary for the representative to perform the representative obligations; obligation not to interfere with the representative’s operations. 2.2.3.3. Obligations, liabilities of the representative and JSC to the third party in the transaction established and performed by the representative In principle, if the representative carries out the representative obligations within the representative authorization, then the company shall be responsible for the rights and obligations to the third party, and the representative shall be released from liability to the third party and to the

GRADUATE ACADEMY OF SOCIAL SCIENCES

GRADUATE ACADEMY OF SOCIAL SCIENCES

Scientific Supervisor: Assoc Prof PhD Tran Dinh Hao

Reviewer 1: Prof PhD Tran Dinh Hao

Reviewer 2: Assoc Prof PhD Nguyen Duc Minh

Reviewer 3: Assoc Prof PhD Duong Dang Hue

The dissertation will be defended before the thesis review council of the Academy at the Graduate Academy of Social Sciences

at hour minute, day month year.

The thesis can be found at:

- National Library of Vietnam

- Library of Graduate Academy of Social Sciences

PREAMBLE

1 The urgency of the topic

Representation in general and representation of Joint Stock Company (JSC) is a topic of legal and economic science that is early interested in the world Although there are regulations on representation of JSC in the law of Vietnam, but compared with the laws of developed countries, there are many incompatible points Awareness of status and the role of the representative in a JSC is not uniformly understood; some new regulations need to be specifically studied on the conditions of application; the internal control mechanism has not really promoted its role as expected; the support mechanism for law enforcement on representation of JSC has not been effective

This situation shows that it is necessary to continue improving the law and mechanism of law enforcement on representation of JSC in our country Therefore, the research on representation of JSC under the law of Vietnam currently is very necessary in order to continue improving the legal regulations on enterprises

2 The research purpose and tasks of the thesis

The research purpose

The thesis studies the theoretical and practical issues surrounding the regulations on representation of JSC, thereby forming basic theory, builds scientific foundations, and proposes solutions to amend and supplement to improve the law on representation of JSC in Vietnam today

The research tasks

In order to achieve the above objectives, the author identifies the

following research tasks: Analysis, clarification of the basic theory on representation of JSC; analysis, evaluation of current legal status on representation of JSC in Vietnam; identification of the needs and views of improving the law on representation of JSC, thereby giving recommendations

on improving the law as well as perfecting the mechanism of law enforcement

on representation of JSC in Vietnam today

3 Research object and scope of the thesis

Research scope of the topic

The thesis limits the research representative scope of JSC under the provisions of Business Law 2014 and Civil Code 2015

Research object of the topic

The thesis focuses on studying legal provisions on representation of JSC under the law of Vietnam at present and current legal mechanism to enforce the law on representation of JSC in Vietnam

4 Methodology and research methods of the thesis

Based on the methodology of dialectical materialism and historical materialism, the thesis uses the following research methods: Normative analysis method; comparative law; legal economics; information collection;

in addition, the thesis also uses a number of specific methods including analysis, synthesis, historical method, etc

5 New scientific contributions of the thesis

The thesis has the following major new contributions:

5.1 In terms of theory, the thesis contributes to clarifying a number of

basic theoretical issues on representation of JSC

5.2 On assessing the current state of law and applying the law on representation of JSC in Vietnam today

The thesis has pointed out the progressive and appropriate points as well as the limitations and inadequacies of the law of Vietnam on representation of JSC

5.3 Some new proposals contributing to the improvement of law and the implementation of law on representation of JSC

Through studying, analyzing and evaluating the limitations and inadequacies of law and the implementation of law on representation, the

thesis has proposed a number of solutions to improve the law on representation of JSC; perfecting the law enforcement mechanism for representation of JSC; and other support solutions

6 Theoretical and practical significances

Theoretical significance, the thesis will supplement and contribute

to enriching the theory about representation of JSC

Practical significance, the research results of the thesis has a

valuable research and reference for law-making bodies, training institutions

and JSCs

7 Structure of the thesis

Chapter 1: Overview of the research situation and issues related to the thesis

Chapter 2: Theoretical issues of representation and the law on representation of JSC in Vietnam

Chapter 3: Legal status of representation of JSC in Vietnam today Chapter 4: Solutions to develop and implement the law on representation of JSC in Vietnam today

Chapter 1 OVERVIEW OF THE RESEARCH SITUATION AND ISSUES

RELATED TO THE THESIS 1.1 Overview of the research situation related to the thesis

New approaches in the areas of scientific topics at ministry and

facility levels, theses, dissertations and group articles:

Existing theoretical studies on representation of JSC; existing studies

on the status quo of representation of JSCs; research situation on solutions and recommendations to improve the law on representation of JSC in Vietnam today

1.2 General assessment of the research situation related to the thesis topic

There is a general point: have formed the theoretical basis of representation, confirmed the role and the importance of representation in

companies in general and a JSC in particular;

1.3 The issues will be clarified in the thesis

It deepens the understanding of representation of JSC under the law

of Vietnam; studies and evaluates the law on representation of JSC in accordance with Civil Code 2015 and Business Law 2014, in comparison with representation institutions of JSC in the law of some countries, pointing out unreasonable, contradictive and overlapping points; collects additional data on representative relationship in JSCs in Vietnam as evidence of the arguments as well as finds out the gaps between the law and practice of such regulations; proposes more solutions to contribute to improving the representation institutions as well as promoting the role of representative of JSC under the law of Vietnam

1.3 Theoretical foundation and approaches of the thesis

General theory and specific theory, approaches and contents of the topic; analytical framework to clarify the theory; systematic approach,

multidisciplinary approach, interdisciplinary approach, historical approach, logical approach, etc

Conclusion of chapter 1

At present, there are more and more research works on representation in general and representation of JSCs in particular Authors focus on resolving the issues of representative theory and the separation between the owner and the representative, as well as the monitoring mechanism to ensure that the representative fully and seriously fulfils his/her obligations; domestic authors also study, compare and learn corporate management experience of advanced countries, proposes directions to improve the law on representation of JSCs in Vietnam

The research works have analyzed and evaluated the actual situation

of institutional framework, legal policy of each country, territory and have similar points when assessing the actual situation, existence, limitations as well as propose solutions to improve the institution, policy on representation of JSCs These values help the author reinforce perceptions

as the basis for identifying the research results that the thesis will inherit, the problems that have not been solved by the research works or need to be further studied Theoretical knowledge on the need for solutions and acquisition of international experience on this issue are important documents for comparative study between Vietnam and some other reference countries when proposing effective solutions for this issue in our country

Chapter 2 THEORETICAL ISSUES OF REPRESENTATION AND THE LAW

ON REPRESENTATION OF JSC

2.1 Theoretical issues of representation and JSC’s representation

2.1.1 Conception of representation and JSC’s representation

In history, the conception of representation has been formed and developed quite early and become an important institution in the law of many countries For representation of JSC, the law on JSC of the developed countries is interested in representative issue

2.1.2 Concept of representation and JSC’s representation

2.1.2.1 Concept of representation

Civil Code 2015 defines: “Representation is the fact that an

individual or legal entity (hereinafter referred collectively to as the representative) establishes or implements civil transactions on behalf of and for the benefit of other individual or legal entity”

2.1.2.2 Concept of JSC’s representation

Scientifically, in the broadest sense, representation of a JSC,

including legal representation and authorized representation, is the

relationship between the representative and the JSC, accordingly, the representative identifies or implements transactions within the scope of activities of that Company on behalf of and for the benefit of the JSC

2.1.3 Classification of the representatives of a JSC

2.1.3.1 General criteria for classifying representatives

There are various criteria for classifying representatives such as: authority, authorization nature, independence in representation, etc

2.1.3.2 Specific classification of the representatives of a JSC

First: Legal representative of a JSC

The legal representative of a JSC is an individual acting on behalf of

the Company to exercise rights and obligations arising from the Company’s transactions, represents the Company as plaintiff, defendant, person with related rights and obligations to the arbitration, the court and other rights and obligations as prescribed by law

Second: Authorized representative of JSC

The authorization in a JSC includes internal authorization (authorized to manage the Company’s internal activities) and external authorization (authorized to act on behalf of the Company to perform its rights and obligations with third parties)

2.1.4 The role of the representative of a JSC

The legal representative of company is one of the legal conditions for the company to operate normally, plays a very important role in establishing and implementing the Company’s rights and obligations

2.1.5 Obligation to comply with ethical standards of the representative of JSC

The professional ethics of a representative include: i) Loyalty; ii) Honesty, prudence; iii) Compliance with the Company’s orders and reasonable instructions; iv) Keeping information confidential; v) No conflict of interest with the represented person

2.2 Theoretical issues on the regulatory scope for the representative relationship of JSC

2.2.1 Representative scope and authorization of JSC

The basis for determining the representative scope and authorization

is usually based on the Company’s Charter, the decision of competent authority or authorization contents Where it is not possible to specifically identify the representative scope, the legal representative shall be entitled to

establish and conduct all civil transactions for the benefits of the represented person

2.2.2 Rights and obligations of the parties in the representative relationship

of JSC

2.2.2.1 Obligations and liabilities of representative for JSC

The obligations include: exercising rights and duties within the scope of representation; being honest, careful; be loyal to the company’s interests; not use information, know-how, business opportunities, position, and assets of the company for self-interest or for the benefit of other organizations or individuals; complying with competition restrictions with the company; preservation of assets and documents assigned by the company

- Regarding the handling of the representative’s liabilities for JSC when committing acts of violations: determining the liabilities of JSC’s

representative must be based on the provisions of law, the company’s Charter, labor contract or power of attorney

2.2.2.2 Obligations of the represented person to the representative

The represented person (JSC) has a number of obligations to the representative such as: obligation to pay representative remuneration and reimburse relevant costs; obligation to provide information, documents, assets, and tools necessary for the representative to perform the representative obligations; obligation not to interfere with the representative’s operations

2.2.3.3 Obligations, liabilities of the representative and JSC to the third party in the transaction established and performed by the representative

In principle, if the representative carries out the representative obligations within the representative authorization, then the company shall

be responsible for the rights and obligations to the third party, and the representative shall be released from liability to the third party and to the

JSC Except for the absence of the right to represent or exceeding the representative scope and authorization

2.2.3 Representation term and termination of the representative relationship of JSC

2.2.3.1 Representation term of JSC

Representation term means a defined period of time that the representative is authorized by the represented person to exercise the representative work

2.2.3.2 Termination of representative relationship of JSC

The representative relationship between a JSC with its representative terminates in the flowing cases: As agreed between the representative with the JSC; expiration of representation term; representative purposes have been achieved; termination due to legal events (death, loss of civil act capacity, imprisonment); either party unilaterally terminates the

representative relationship; other bases as prescribed by law

Conclusion of chapter 2

Chapter 2 of the thesis studies common perceptions about the representation of JSC, thereby showing that: Most of developed countries have relatively strict regulations on representation of a company; the principle of free agreement in the representative relationship of JSCs is the basis for the formation of common standards such as obligations and liabilities of the parties in the representative relationship and in relations to the third parties; representative scope and authorization; representation term and termination of representation Legislation creates a legal corridor for the free formation of representative relationship, and respect the agreement in the spirit of goodwill

Contents of chapter 2 have solved a number of questions raised in the part of theoretical basis of the thesis, namely: Concept, characteristics,

classification of representation of JSCs; the role of representative; rights and obligations of the parties in the representative relationship; the representative scope and authorization; representation term and termination

of representative relationship Clarifying the nature of the representative relationship of JSC, if the representative acts within the scope of representation, the rights and obligation from that action will legally bind

on the JSC

From the point of view of the division of social labor, representation

is a highly specialized profession, however, the interest in professional training and fostering, the formation of ethical rules of representatives and representative associations has not been fully paid attention by the State, the investors and the representatives of companies themselves

Chapter 3

LEGAL STATUS OF REPRESENTATION OF JSC

IN VIETNAM TODAY 3.1 The provisions of law on representative models of JSCs in Vietnam

3.1.1 JSC model with only one legal representative

Regarding the representative scope and authorization: the legal representative is not restricted to the representative scope and authorization suitable to the business conditions of JSCs registered with the State agency

3.1.2 JSC model with a number of legal representatives

From Business Law 2014, a LLC and JSC may have one or more legal representatives The company’s Charter shall specifies the number, managerial title, rights and obligations of these legal representatives In this model, the determination of the representative scope and authorization among legal representatives of JSC is a complex issue both in theory and

practice

3.1.3 Authorization cases of JSC

3.1.3.1 JSC authorizes branches, representative offices

The regulations of authorizing branches and representative offices have conflicts between Business Law 2014 and Civil Code 2015, as the branches and representative offices are dependent units of a company and

do not have legal status

3.1.3.2 JSC authorizes other individuals, legal entities to establish and perform a specific task, such as: seeking customers, buying or selling

company assets, negotiating contracts, signing contract, recruiting personnel, advertising; representing the JSC as the plaintiff, defendant, person with related rights and obligations to the arbitration or the court, etc

3.1.3.3 The manager of company authorizes other individuals to perform the duties of the Company’s manager