The legal representative plays a pivotal role in every transaction and legal relationship a company enters into — every decision and signature made by this individual can create binding obligations for the entire company. Since 1 July 2025, the rules governing legal representatives have been amended to strengthen individual accountability, making it essential for companies and those holding this role to fully understand the requirements to avoid unnecessary legal risk.

1. Concept and Role

The legal representative of a company is an individual who represents the company in exercising rights and performing obligations arising from the company’s transactions; represents the company as a petitioner in civil matters, or as plaintiff, defendant, or an interested party before arbitration tribunals, courts, and state authorities; and exercises other rights and obligations as prescribed by law. LLCs and joint-stock companies may have one or more legal representatives; private enterprises and partnerships have their own representation mechanisms suited to their structure (the owner of a private enterprise is always the legal representative; all general partners in a partnership have the right to represent the company).

2. Conditions and Qualifications to Serve as Legal Representative

An individual serving as legal representative must satisfy the following basic conditions:

• Possess full civil act capacity as prescribed by the Civil Code;
• Not fall within the categories prohibited from managing a business under bankruptcy law, not be currently facing criminal prosecution, not be serving a prison sentence, and not be subject to a court order banning them from practicing a profession or holding a related position;
• May be a Vietnamese citizen or a foreign national, depending on the company’s charter and enterprise type;
• The company must ensure at least one legal representative resides in Vietnam at all times; if the sole legal representative departs the country, they must issue a written authorization to another individual residing in Vietnam to exercise the corresponding rights and obligations during their absence.

3. Rights and Responsibilities of the Legal Representative

The legal representative is responsible for exercising assigned rights and performing obligations honestly, diligently, and in the best lawful interest of the company; they must not exploit their position, company information, or business opportunities for personal gain or to benefit another organization or individual. Where a company has multiple legal representatives and the company’s charter has not clearly allocated the rights and obligations of each, every legal representative is deemed to have full authority to represent the company before third parties, and all are jointly liable for any damage caused to the company under civil law and other relevant regulations.

4. Penalties for Breach of Duty

Where a legal representative breaches their duty of honesty and diligence, or causes damage to the company through improper management conduct, they are personally liable to compensate the damage using their own assets, and may not shift that liability onto the company. This is a point specifically strengthened under the 2025 Law Amending the Law on Enterprises, addressing a previous gap in which the representative’s responsibility was largely internal in nature, lacking specific enforcement mechanisms when actual violations occurred.