The Enterprise Law 2021 passed by the National Assembly has 10 chapters, 218 articles with many breakthroughs, creating favorable conditions for businesses and takes effect from January 1, 2021. The introduction of the Enterprise Law in 2021 as well as the new points of the Enterprise Law in 2021 are important events marking very important innovations related to businesses.
1. Simplify procedures
When the Enterprise Law 2021 takes effect, the following procedures will be eliminated:
Notice of use, change or cancellation of seal specimen
Companies no longer have to notify the licensing authority about the use, change or cancellation of the seal sample. It also stipulates that the seal can be made in the form of a physical seal or an electronic signature according to the regulations on electronic transactions.
Under the new law, businesses will also be free to decide on the number, form and content of their seals without the intervention of a competent authority.
Notice of change of information of business manager
Enterprises no longer have to notify the licensing agency when there are any changes to members of the Board of Directors, members of the Supervisory Board, Inspectors, Director or General Director.
Notice of private placement of joint stock company
Effectively, eliminating this notification requirement will shorten the time to issue shares and simplify the procedure for private placement as joint stock companies will no longer have to notify the agency. license and wait for the notification period to expire to ensure that there are no objections from the licensing authority before proceeding with their plans for a private release.
2. Changes related to voting rights
a) Voting Threshold
This threshold is reduced to “more than 50%” of the votes in favor of the attending shareholders.
This change is notable for its consistency with the change of the Investment Law 2021 which stipulates that an enterprise will be considered a foreign investor when “more than 50%” of the charter capital is owned by the investor(s). foreign investment holdings.
b) Voting rights of preferred shareholders
According to the Enterprise Law 2021, resolutions of the General Meeting of Shareholders leading to adverse changes to the rights and obligations of preferred shareholders must be approved by preferred shareholders holding at least 75% of the total number of shares. preferred portion of the affected class of shares.
3. Protecting minority shareholders
The protection of minority shareholders, an important objective of corporate governance, has long been stipulated in corporate legislation. In particular, minority shareholders will have certain rights to protect them from being dependent on majority shareholders, such as:
(i) The right to nominate candidates to the Board of Directors and the Supervisory Board;
(ii) The right to request the convening of the General Meeting of Shareholders;
(iii) Right to view and extract company records;
(iv) The right to request an inspection of matters related to the management and operation of the company.
According to the New Enterprise Law 2021, minority shareholders or a group of minority shareholders also include shareholders holding at least 5% of the total number of ordinary shares (or another smaller percentage specified in the company’s charter). ) without requiring any holding period requirement. such sharing. This change has broadened the scope of organizations/shareholders covered under regulations regarding minority shareholders.
4. Change management structure
- Person holding the position of President of a single-member limited liability company owned by an individual
The organizational and management structure of a single-member limited liability company is owned by an individual, including the Chairman and the Director (or General Director).
Under the Enterprise Law 2014, it is not yet clear whether the individual owner will act as the Chairman of the Company on his own or he can appoint another person to take over the position. This has led to different interpretations of the licensing authority in practice.
This ambiguity has now been resolved under the Enterprise Law 2021 that the individual owner will act as the Chairman of the Company on his own.
- State-owned enterprises must establish a Control Board
Under the new law, the appointment of the Supervisory Board/Inspection is only required when the limited company is a State-owned enterprise or a subsidiary of a State-owned enterprise. The term of Supervisors shall not exceed 05 years and may be re-appointed but not exceeding 02 consecutive terms at that company. In case the Supervisory Board has only 01 Supervisor, that Controller is concurrently the Head of the Control Board and must meet the criteria of the Head of the Control Board.