PUBLIC COMPANY ADMINISTRATION

PUBLIC COMPANY ADMINISTRATION

In the context of the constantly developing economy, increasingly changing and diverse business models, effective management is the core factor to ensure the sustainable development of an enterprise. The current legislation establishes the principles and regulations of public corporate governance, to ensure compliance, transparency, and active shareholder participation in accordance with the unique nature this company model. The article below is for reference to learn about some important issues in public company administration under the Law of Vietnam.

1.         How is a public company defined?

Defined by the Law on Security 2019, a public company is a joint stock company in one of two cases:

–           The company has contributed charter capital of VND 30 billion or more and has at least 10% of voting shares held by at least 100 investors who are not major shareholders.

–           The company has successfully conducted the initial public offering of shares through registration with the State Securities Commission in accordance with regulations.

2.         About the administration structure of public company

The admistration structure of a public company is based on the key interaction between the two highest authorities in the company, the General Meeting of Shareholders and the Board of Directors, in the relationship with other management agencies and departments. other reason. The General Meeting of Shareholders, consisting of all shareholders with voting rights, is the highest decision-making body of a joint-stock company. Meanwhile, the Board of Directors is the management agency of the company, has full power on behalf of the company to decide and exercise the rights and obligations of the company (except for the rights and obligations under the authority of the General Meeting of Shareholders). These agencies are required to comply with codes of conduct, financial management, and legal compliance.

PUBLIC COMPANY ADMINISTRATION

>> AUTHORIZED REPRESENTATIVE OF SHAREHOLDERS AS ORGANIZATION, HOW MANY PERSONS AS MAXIMUM? https://linconlaw.vn/authorized-representative-of-shareholders-as-organization-how-many-persons-as-maximum/

3.         Principles and main contents of public company administration

The current law sets out specific regulations for public company administration to be carried out in an orderly manner and to ensure the interests of shareholders, in which the governing bodies need to comply with the election regulations, tenure, and powers; Important decisions such as business, financial and investment plans need to be passed according to the prescribed process.

Positive interaction between shareholders and governing bodies will be an important factor in ensuring participation and transparency in public company administration. Shareholders have the right to participate in important decisions at the general meeting of shareholders and have the right to control the company’s operations. The governing party, including the Board of Directors and the Board of Directors/Board of General Directors, must conduct corporate governance professionally and create value for shareholders.

Specifically, the administration of a public company must comply with the principles applicable to common joint-stock companies under the Law on Enterprise, and at the same time with the following principles in accordance with the Law on Securities:

–           The administration structure shall be reasonable and effective;

–           Ensure effectiveness of the Board of Directors and the Board of Controllers; strengthen the accountability of the Board of Directors to the company and its shareholders;

–           Ensure the rights and equality of shareholders;

–           Ensure the roles of investors, the securities market and intermediate organizations in assisting the company administration;

–           Respect and protect the lawful rights and interests of the parties in company administration;

–           Punctually, adequately, accurately and transparently disclose information about the company’s operation; ensure equal accessibility of information to all shareholders.

Legal basis:

  • Law on Enterprise 2020;
  • Law on Securities 2019.

𝐋𝐈𝐍𝐂𝐎𝐍 𝐋𝐀𝐖 𝐅𝐈𝐑𝐌 – 𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐥𝐞 𝐜𝐨𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧

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