Common mistakes in enterprise merger agreement appendices that cause serious legal risks

An enterprise merger agreement appendix is an important instrument used to supplement and clarify the contents of the principal agreement. However, many enterprises still make mistakes when drafting and using enterprise merger agreement appendices, thereby leading to disputes and unnecessary legal risks. The article below will help you better understand the applicable legal regulations, avoid common mistakes, and effectively protect your lawful rights and interests.

I. Common mistakes relating to enterprise merger agreement appendices

Many enterprises tend to underestimate the importance of enterprise merger agreement appendices, resulting in unfortunate legal mistakes. In some cases, appendices are drafted with provisions that contradict the principal agreement, thereby creating difficulties during implementation and interpretation. In addition, failing to clearly determine signing authority or neglecting to implement procedures for registration of changes in accordance with legal regulations are also common errors.

Furthermore, enterprise merger agreement appendices are sometimes improperly used to amend matters beyond the permissible scope, leading to dispute risks and directly affecting the lawful rights and interests of the relevant parties.

II. Understanding enterprise merger agreement appendices

1. What is an enterprise merger agreement appendix, and what is it commonly used for?

Pursuant to Article 403 of the Civil Code 2015, a contract appendix is a document attached to a contract to detail certain contractual provisions and has legal validity equivalent to that of the principal contract. However, the contents of the appendix must not contradict the contents agreed upon in the principal contract.

With respect to enterprise mergers, under Clause 1, Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), a merger refers to a process whereby one or more companies transfer all assets, rights, obligations, and lawful interests to the acquiring company, while the merged company ceases to exist.

Accordingly, an enterprise merger agreement appendix may be understood as a supplementary document attached to a merger agreement, used to clarify, amend, or detail matters agreed upon between the parties during the merger process.

In practice, enterprise merger agreement appendices are commonly used for the following purposes:

• Clarifying provisions relating to the transfer of assets, liabilities, and employees;
• Supplementing detailed information regarding the timeline and methods for implementing the merger;
• Adjusting certain matters arising after execution of the principal agreement where execution of a new agreement is not yet necessary;
• Specifying the rights and obligations of the parties in order to minimize disputes.

The proper use of a contract appendix enables enterprises to flexibly adjust contractual arrangements while still ensuring legal validity and consistency with the original merger agreement.

2. Who has the authority to sign an enterprise merger agreement appendix within a company?

Pursuant to Clause 1, Article 12 of the Law on Enterprise 2020 (as amended and supplemented in 2025), the legal representative of an enterprise is the individual representing the enterprise in exercising rights and obligations arising from transactions. Thus, as an integral part of the agreement, an enterprise merger agreement appendix must be signed by the legal representative of the enterprise or implemented by a person lawfully authorized. 

3. What are the essential contents that should be included in an enterprise merger agreement appendix?

Based on the nature of merger agreements, an enterprise merger agreement appendix is generally drafted to specify and clarify the following important matters:

• Information of the relevant parties: Clearly stating the names and head office addresses of the acquiring company and the merged company in order to accurately identify the parties;
• Merger procedures and conditions: Clarifying the implementation sequence, required conditions, or important legal milestones in the merger process;
• Labor utilization plan: Specifying matters relating to employee retention, termination, or adjustment of employee rights and benefits following the merger;
• Methods for transfer of assets and capital: Providing detailed regulations regarding methods, procedures, and timelines for the transfer of assets, as well as the conversion of contributed capital, shares, or bonds from the merged company to the acquiring company;
• Implementation timeline and schedule: Clearly determining the completion deadlines for each stage and for the overall merger process.

In addition, the appendix may supplement detailed matters arising during implementation, such as obligations toward creditors, responsibilities for notifying employees, or specific commitments between the parties, in order to ensure that the merger agreement is implemented in compliance with legal regulations.

4. How does an enterprise merger agreement appendix affect the principal provisions of the merger agreement?

Pursuant to Article 403 of the Civil Code 2015, a contract appendix has legal validity equivalent to that of the contract itself and is used to detail agreed contractual provisions. Therefore, an enterprise merger agreement appendix may clarify, supplement, or amend the contents of the principal agreement, thereby helping contractual provisions become more specific and easier to apply in practice.

However, the law also clearly stipulates that the contents of the appendix must not contradict the contents of the principal agreement. In the case that the appendix contains provisions inconsistent with the principal agreement, such conflicting provisions shall be invalid unless the parties expressly agree that the appendix is intended to amend the agreement.

III. Legal regulations relevant to enterprise merger agreement appendices

1. What procedures are prescribed by law for signing an enterprise merger agreement appendix?

Pursuant to Clause 2, Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), although the law does not separately prescribe procedures for signing an enterprise merger agreement appendix, as the appendix forms part of the merger agreement, its execution and implementation must comply with the procedures applicable to merger activities, specifically as follows:

• First, the relevant companies must prepare the merger agreement and the draft Charter of the acquiring company, in which the appendix may be attached to detail important matters. Thereafter, the merger agreement (including the appendix, if any) must be approved by the members, owners, or shareholders of the relevant companies, and enterprise registration procedures must be implemented in accordance with legal regulations.
• Next, the merger agreement must be sent to all creditors and notified to employees within fifteen (15) days from the date of approval. It is an important step to ensure transparency and protect the rights and interests of the relevant parties.
• Finally, after the acquiring company completes enterprise registration procedures, the merged company shall cease to exist, and the acquiring company shall inherit all lawful rights, obligations, and interests, including those stipulated in the agreement appendix.

2. How does an enterprise merger agreement appendix affect tax obligations and reporting responsibilities toward tax authorities?

An enterprise merger agreement appendix may directly affect tax obligations and reporting responsibilities where the contents of the appendix alter matters relating to assets, revenue, expenses, or financial obligations of the enterprise.

Specifically, where the appendix adjusts matters such as the value of transferred assets, liabilities, methods for handling financial obligations, or the timing of merger implementation, such changes shall serve as the basis for tax authorities to reassess arising tax obligations. At the same time, the acquiring enterprise is responsible for inheriting all outstanding tax obligations of the merged enterprise in accordance with legal regulations.

In addition, where the appendix results in changes to tax registration information or previously declared contents, the enterprise must amend and supplement tax declaration dossiers and notify the tax authority in accordance with tax administration regulations. Failure to timely update such information may result in risks of tax reassessment or administrative sanctions. 

3. How is the failure to implement registration procedures for changes after signing an enterprise merger agreement appendix handled?

Pursuant to Article 57 of Decree No. 115/2024/ND-CP, although there are no separate provisions specifically applicable to enterprise merger agreement appendices, where an appendix leads to changes in enterprise registration information and the enterprise fails to implement registration procedures as required by law, the enterprise may be subject to administrative sanctions.

Specifically, enterprises may be subject to fines ranging from 20,000,000 VND to 30,000,000 VND for violations such as failing to register changes to enterprise information, failing to send or sending late the merger agreement to creditors and employees, or failing to implement notification procedures with the business registration authority regarding the termination of existence of the merged enterprise.

In addition, enterprises may also be required to implement remedial measures, including mandatory delivery of the merger agreement to creditors, notification to employees, and completion of all required registration or notification procedures with the business registration authority in accordance with law.

It should be noted that the above fine levels apply to organizations; for individual violators, the fine amount shall be equal to one-half of the applicable organizational fine pursuant to Clause 2, Article 4 of Decree No. 122/2021/ND-CP.

Failure to register changes after signing an enterprise merger agreement appendix may result in fines of up to 30 million VND and compulsory remedial measures. Therefore, enterprises should fully comply with registration obligations in order to avoid legal risks.

IV. Questions relating to enterprise merger agreement appendices

1. Should an enterprise merger agreement appendix include a separate dispute resolution clause?

An enterprise merger agreement appendix may include a separate dispute resolution clause; however, such clause must not contradict the principal agreement in accordance with the principle set out in Article 403 of the Civil Code 2015. In practice, the appendix should only supplement or refer to the existing dispute resolution mechanism in order to clarify its implementation, rather than establish an entirely different mechanism, thereby avoiding legal conflicts and ensuring consistency throughout the contractual relationship.

2. If an enterprise merger agreement appendix conceals debts or contingent obligations, how may the aggrieved party initiate legal proceedings?

In cases where an enterprise merger agreement appendix conceals debts or contingent obligations, the aggrieved party has the right to initiate legal proceedings before a competent Court in order to protect its lawful rights and interests. Pursuant to Article 127 of the Civil Code 2015, if such concealment is determined to constitute fraudulent conduct during contract formation, the aggrieved party may request the Court to declare the contract or the relevant appendix invalid.

Where a contract is declared invalid, the transaction shall not lead to the rights and obligations agreed upon by the parties. Simultaneously, the parties must restore each other to the original status by returning what has been received and compensating for damages, if any.

3. Are there any special limitations or conditions applicable to enterprise merger agreement appendices involving foreign investors?

Pursuant to Clause 2, Article 19 of the Law on Investment 2025, foreign investors participating in capital contributions, share acquisitions, or transactions resulting in changes to an economic organization (including mergers) must satisfy market access conditions applicable at the time of implementation. Such conditions are prescribed under Article 9 of the same Law and include restrictions relating to business sectors and lines, foreign ownership ratios, operational scope, and other conditions under Vietnamese law or international treaties.

Accordingly, where an enterprise merger agreement appendix results in changes to factors such as ownership ratios, capital structure, or the control rights of foreign investors, the appendix must comply with the foregoing conditions and may trigger obligations to implement investment registration procedures in accordance with applicable regulations.

4. What remedies may shareholders request where an enterprise merger agreement appendix gives rise to conflicts of interest involving managers?

Pursuant to Articles 71 and 72 of the Law on Enterprise 2020 (as amended and supplemented in 2025), enterprise managers are obligated to act honestly, prudently, loyally, and refrain from abusing their positions for personal gain or the benefit of other individuals or organizations.

Where an enterprise merger agreement appendix leads to conflicts of interest or results in breaches of such obligations, shareholders have the right to initiate legal proceedings against the managers and request compensation for damages as well as restitution of unlawful benefits obtained.

In addition, the law establishes mechanisms enabling shareholders to request disclosure of information, supervise transactions, and protect their lawful rights and interests, particularly in circumstances where managers show signs of abusing their authority and causing damage to the company.

5. What are the common legal consequences for the aggrieved party when an enterprise merger agreement appendix lacks warranty and indemnity provisions?

Pursuant to Articles 360 and 585 of the Civil Code 2015, where a party breaches contractual obligations and causes damage, such party must compensate for all actual damages incurred, even if the contract or appendix does not specifically provide for indemnification provisions.

However, the absence of warranty and indemnity provisions in the appendix places the aggrieved party at a disadvantage in proving the extent of damages, determining the scope of liability, and calculating compensation amounts. As a result, the risks of disputes increase, and dispute resolution processes may become more prolonged and complicated.

Furthermore, in the absence of clear contractual provisions, the breaching party may only be liable to the minimum extent prescribed by law, or disputes may arise regarding whether contractual sanctions and damages may be applied concurrently.

V. Are you looking for a reputable legal expert to assist with issues relating to enterprise merger agreement appendices?

If you are facing issues relating to enterprise merger agreement appendices, seeking assistance from a specialized legal advisory firm is a necessary step to minimize risks. NPLaw is a law firm experienced in the fields of corporate law, investment, and M&A, providing comprehensive consulting services ranging from contract drafting and review to handling arising disputes.

With a team of highly experienced lawyers possessing practical expertise, NPLaw is capable of assisting enterprises in assessing legal risks, ensuring the validity of agreement appendices, and protecting their interests in complex merger transactions.

The above information is provided for reference purposes only. Should you require detailed advice regarding a specific case, please contact NPLaw Firm for prompt consultation and assistance.