ADOPTION OF RESOLUTIONS BY COLLECTING WRITTEN OPINIONS OF THE GMS

The issue of collecting written opinions of the GMS is recognized under Vietnamese corporate law as a flexible decision-making mechanism that enables a joint-stock company to promptly approve important matters without convening a physical shareholders’ meeting. This mechanism enhances efficiency in terms of time and cost, particularly in cases where shareholders are geographically dispersed. However, it also entails potential legal risks if not conducted in accordance with statutory procedures, such as the risk of the resolution being declared invalid, disputes over the validity of voting ratios, or violations of shareholders’ rights to access information.

Legal validity of resolutions adopted by collecting written opinions of the GMS

Under the Law on Enterprises 2020, a resolution adopted by collecting written opinions of the GMS (Geneneral meeting of shareholders) has the same legal validity as a resolution adopted at a GMS meeting. “Equivalent legal validity” means that such a resolution may serve as a legal basis for corporate governance and management activities, as well as admissible evidence in case of disputes.

It should be noted that, for a resolution adopted by collecting written opinions of the GMS to take effect, it must be approved by more than 50% of the total voting shares of all shareholders entitled to vote in favor of the resolution. The specific voting ratio shall be applied in accordance with the Company’s Charter.

Matters eligible for adoption by collecting written opinions of the GMS

Not all matters under the authority of the GMS may be adopted by collecting written opinions. Unless otherwise provided in the Company’s Charter, the GMS must be convened in person to decide on the following matters:

– Amendments or supplements to the Company’s Charter;

– The Company’s development orientation;

– Classes of shares and the total number of shares of each class;

– Election, dismissal, or removal of members of the Board of Directors and the Supervisory Board;

– Decisions on investment or sale of assets valued at 35% or more of the total asset value recorded in the Company’s latest financial statements, unless the Charter provides for another ratio or value;

– Approval of the annual financial statements;

– Reorganization or dissolution of the Company.

It can be seen that the matters restricted from adoption by collecting written opinions of the GMS are those of fundamental importance, directly affecting the Company’s organizational structure, strategic direction, and legal existence. Voting on such matters requires in-person discussions, exchanges, and even questioning among shareholders, with the aim of ensuring transparency, publicity, and an accurate reflection of the will of voting shareholders.

Procedures and timelines to ensure the validity of a resolution adopted by collecting written opinions of the GMS

A GMS decision-making process that violates statutory provisions or the Company’s Charter constitutes a legitimate ground for major shareholders to request the annulment of a GMS resolution.

Unless otherwise provided in the Charter, the procedure for adopting a resolution by collecting written opinions of the GMS must comply with the following steps and timelines:

– Preparation of the list of shareholders entitled to attend the GMS: at least 10 days prior to the date of dispatch of the notice of solicitation.

The list of shareholders entitled to attend the GMS is prepared based on the Company’s register of shareholders and must include at least the following details: (i) full name, contact address, nationality, and legal identification number for individual shareholders; or name, enterprise code or legal identification number, and registered office address for institutional shareholders; (ii) number and class of shares held; (iii) shareholder registration number and date for each shareholder.

– Meeting notification by the Board of Directors (BOD): no later than 10 days prior to the deadline for returning written ballots.

The BOD shall prepare written ballots, the draft GMS resolution, and explanatory materials, and send them to all shareholders entitled to vote.

Each written ballot must include at least the following information: (i) name, registered office address, enterprise code; (ii) purpose of solicitation; (iii) full name, contact address, nationality, and legal identification number for individual shareholders; name, enterprise code or legal identification number, and registered office address for institutional shareholders; or information on the representative of an institutional shareholder; (iv) the matter to be voted on; (v) voting options including “for,” “against,” and “abstain”; (vi) deadline for returning the completed ballot to the Company; and (vii) full name and signature of the Chairperson of the BOD.

– Shareholders entitled to vote must return their completed ballots within the time limit specified in the solicitation notice.

Ballots may be submitted by post, fax, or email.

– The BOD must send the adopted resolution to shareholders within 15 days from the date of completion of the vote count.

The vote counting minutes and the adopted resolution must be delivered to all shareholders, except where the Company has an official website and discloses such documents publicly thereon.

It should also be noted that all related documents including the completed ballots, vote counting minutes, adopted resolutions, and accompanying documents must be retained at the Company’s head office for at least the minimum period prescribed by law.

Balancing flexibility in corporate governance with strict compliance with legal standards is essential to ensure the lawfulness and sustainability of business operations. Enterprises should recognize that any streamlined decision-making mechanism, despite its administrative efficiency, must operate within the bounds of the law to safeguard shareholders’ legitimate rights and interests. Only by maintaining this lawful and rational balance can a company establish a transparent, stable governance foundation and prevent unnecessary legal risks in its operations.

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