Regulations on the legal representative constitute an important legal institution and attract the attention of many individuals and enterprises. The following article sets out the applicable legal provisions governing the legal representative and addresses a number of related issues in order to assist individuals and organizations in protecting their lawful rights and interests.

I. Overview of issues relating to regulations on the legal representative

Regulations on the legal representative are among the legal provisions of particular interest to many individuals and organizations and represent a fundamental legal institution in the establishment and execution of representative transactions.

The legal representative of an enterprise plays a continuous and pivotal role throughout the enterprise’s operation, administration, and governance. Therefore, having a correct and comprehensive understanding of the current legal framework governing the legal representative is essential.

II. Understanding the regulations on the legal representative

To gain a clearer understanding of the regulations on the legal representative, please refer to the following contents.

1. What are the regulations on the legal representative, and what is the basic role of the legal representative in a company?

  • Pursuant to Clause 1, Article 12 of the Law on Enterprise 2020 as amended in 2025, the legal representative of an enterprise is an individual who represents the enterprise in exercising rights and obligations arising from the enterprise’s transactions; represents the enterprise in the capacity of a petitioner in civil matters, a plaintiff, a defendant, or a person with related rights and obligations before arbitration bodies and courts; and exercises other rights and obligations as prescribed by law.
  • In accordance with Article 12 of the Law on Enterprise 2020 as amended in 2025, the legal representative plays a critical role in the company, including:
  • Representing the enterprise in exercising rights and obligations arising from the enterprise’s transactions;
  • Representing the enterprise in the capacity of a petitioner in civil matters, a plaintiff, a defendant, or a person with related rights and obligations before arbitration and courts, and executing other rights and obligations as prescribed by law.

Accordingly, the regulations on the legal representative clearly provide that the legal representative is the central individual who, on behalf of the enterprise, exercises rights and performs obligations arising from transactions and represents the enterprise before the law, courts, and arbitration.

2. What are the principal duties of the legal representative under the applicable regulations?

Pursuant to Article 13 of the Law on Enterprise 2020 as amended in 2025, the legal representative of an enterprise has the following responsibilities:

  • To exercise the assigned rights and obligations in an honest, prudent, and optimal manner in order to ensure the lawful interests of the enterprise;
  • To act with loyalty to the interests of the enterprise; not to abuse position or title, and not to use information, trade secrets, business opportunities, or other assets of the enterprise for personal gain or for the benefit of other organizations or individuals;
  • To promptly, fully, and accurately notify the enterprise of any enterprise in which the legal representative or his/her related persons hold ownership, shares, or contributed capital in accordance with this Law.

The legal representative shall take personal liability in accordance with law for any damage caused to the enterprise due to a breach of the responsibilities stipulated in this Article (this provision is amended by Clause 4, Article 1 of the amended Law on Enterprise 2025).

Accordingly, the principal duties of the legal representative generally include the foregoing contents.

3. How do the regulations determine the personal liability of the legal representative before the law?

Pursuant to Clause 2, Article 13 of the Law on Enterprise 2020 as amended by Clause 4, Article 1 of the amended Law on Enterprises 2025, the legal representative of an enterprise shall take personal liability in accordance with law for damage caused to the enterprise as a result of a breach of the obligations specified in Clause 1 of this Article. Specifically:

  • Duty of honesty and prudence: The legal representative must exercise the assigned rights and obligations in an honest, prudent, and optimal manner to ensure the lawful interests of the enterprise.
  • Duty of loyalty: The legal representative must act loyally in the interests of the enterprise and must not abuse position or title, or use information, trade secrets, business opportunities, or other assets of the enterprise for personal gain or for the benefit of other organizations or individuals.
  • Duty of timely disclosure: The legal representative has the obligation to promptly, fully, and accurately notify the enterprise of any enterprise in which he/she or his/her related persons hold ownership, shares, or capital contributions in accordance with the Law on Enterprise 2020 as amended in 2025.
  • Liability for compensation for damages: Where a breach causes damage, the legal representative shall take personal liability for compensating the enterprise for the damage caused by his/her acts in accordance with Article 13 of the Civil Code 2015.
  • Joint and several liability: Where there is more than one legal representative and a breach results in consequences that cannot be separately attributed, the legal representatives may bear joint and several liability in accordance with Clause 2, Article 12 of the Law on Enterprises 2020 as amended in 2025.

In summary, the personal liability of the legal representative within an enterprise is determined in accordance with the above provisions.

4. What are the conditions relating to legal capacity under the regulations on the legal representative?

Pursuant to Article 19 of the Civil Code 2015, the civil act capacity of an individual is the ability of such individual, by his/her own acts, to establish and perform civil rights and obligations.

Pursuant to Clause 2, Article 134 of the Civil Code 2015, where the law so provides, the representative must have civil legal capacity and civil act capacity appropriate to the civil transaction to be established and performed.

Pursuant to Clause 3, Article 12 of the Law on Enterprise 2020 as amended in 2025, an enterprise must ensure that it always has at least one legal representative residing in Viet Nam. Where only one legal representative resides in Viet Nam, such person must, upon exit from Viet Nam, authorize in writing another individual residing in Viet Nam to exercise the rights and the obligations of the legal representative. In such a case, the legal representative remains responsible for the exercise of the rights and the obligations that have been authorized.

Accordingly, the conditions relating to legal capacity applicable to the legal representative include:

  • The legal representative of an enterprise must be an individual aged 18 years or older with full civil act capacity (not having lost or had limited civil act capacity, and not facing difficulties in cognition or behavioral control);
  • The individual must not fall within the cases prohibited from establishing and managing an enterprise as prescribed in Clause 2, Article 17 of the Law on Enterprise 2020 as amended in 2025;
  • The enterprise must ensure that it always has at least one legal representative residing in Viet Nam.

Therefore, the legal representative must satisfy the legal capacity requirements prescribed by law.

III. Relevant legal provisions governing the legal representative

Understanding the regulations on the legal representative is a common need of many entities. Accordingly, the following are the principal legal instruments currently governing the legal representative.

1. Which legal instruments provide specific guidance on the legal representative that enterprises should be aware of?

The principal legal instruments governing the legal representative that enterprises should be aware of include:

- Law on Enterprise 2020 as amended in 2025: Providing for the legal representative of enterprises and the responsibilities of the legal representative.

  • Pursuant to Clause 1, Article 12 of this Law, the legal representative of an enterprise is an individual who represents the enterprise in exercising rights and obligations arising from the enterprise’s transactions; represents the enterprise in the capacity of a petitioner in civil matters, a plaintiff, a defendant, or a person with related rights and obligations before arbitration and courts; and exercises other rights and obligations as prescribed by law.

- Civil Code 2015: Providing general provisions on representation, representation of legal entities, and the rights and obligations of representatives in civil transactions.

  • Pursuant to Clause 1, Article 134 of this Code, representation means an individual or a legal entity (hereinafter collectively referred to as the “representative”) acting in the name and for the benefit of another individual or legal entity (hereinafter referred to as the “represented person”) to establish and conduct civil transactions.

- Decree No. 168/2025/ND-CP: Providing regulations on dossiers, order, and procedures for enterprise registration and the business registration authority.

  • Pursuant to Article 43 of this Decree, the procedures for registration of changes to the legal representative of limited liability companies and joint-stock companies are prescribed.

In general, the legal framework governing the legal representative is primarily set out in the Civil Code 2015 and the Law on Enterprise 2020 as amended in 2025.

2. What are the procedures for registering a change of the legal representative with the business registration authority?

Pursuant to Clauses 1 and 5, Article 43 of Decree No. 168/2025/ND-CP, the procedures for registering a change of the legal representative of a limited liability company or a joint-stock company are as follows:

  • The company submits an application dossier for registration of changes to the enterprise registration contents to the provincial-level business registration authority where the company’s headquarter is located.

The dossier includes the following documents:

  • An application for registration of the change of legal representative;
  • A copy or the original of the resolution or decision on the change of the legal representative issued by: The company owner (for a single-member limited liability company); the Members’ Council (for a multi-member limited liability company); the General Meeting of Shareholders in cases where the change of the legal representative results in an amendment to the company charter; or the Board of Directors in cases where the change does not result in amendments to the company charter other than changes to personal information and the signature of the legal representative as prescribed in Article 24 of the Law on Enterprise.

Upon receipt of the enterprise registration dossier, the provincial-level business registration authority shall issue a receipt and an appointment schedule for receiving the result to the applicant.

Within 03 working days from the date of receipt of the enterprise registration dossier, the provincial-level business registration authority shall examine the validity of the dossier and issue the Enterprise Registration Certificate to the enterprise in accordance with regulations; where the dossier is invalid, the authority shall notify the enterprise in writing of the contents that need to be amended or supplemented.

Accordingly, the basic procedures for registering the change of the legal representative with the business registration authority are as set out above.

3. What are common errors in implementing the regulations on the legal representative that lead to internal disputes?

Common errors in implementing the regulations on the legal representative that may lead to internal disputes include:

  • Unclear allocation of authority where there are multiple legal representatives: Pursuant to Clause 2, Article 12 of the Law on Enterprise 2020 as amended in 2025, if a company has more than one legal representative, the company charter must specifically stipulate the rights and obligations of each legal representative. Where the charter does not clearly define the scope of authority of each legal representative, situations may arise where multiple parties sign the same contract or execute contradictory documents.
  • Exceeding the scope of representation: The legal representative performs acts or enters into contracts beyond the scope permitted by the company charter or resolutions of the Members’ Council/Board of Directors.
  • Unauthorized use of the corporate seal and documents: One of the multiple legal representatives retains control of the corporate seal and unilaterally conducts transactions without approval from other members/shareholders, leading to internal disputes.

In general, the above violations commonly occur in practice and may result in internal disputes within enterprises.

IV. Questions relating to the legal representative

To better understand the regulations on the legal representative, below are several frequently asked questions and answers.

1. Do the regulations allow the legal representative to authorize another person to exercise all rights on behalf of the company? Why or why not?

Pursuant to Clause 1, Article 138 of the Civil Code 2015, individuals and legal entities may authorize other individuals or legal entities to establish and conduct civil transactions.

Pursuant to Clauses 1 and 2, Article 141 of the Civil Code 2015, a representative may only establish and execute civil transactions within the scope of representation determined on the following bases:

  • Decision of the competent authority;
  • Charter of the legal entity;
  • Contents of the authorization;
  • Other provisions of law.

If the scope of representation cannot be specifically determined, the representative has the right to establish and execute all civil transactions for the benefit of the represented person, except where otherwise provided by law.

At the same time, Clause 3, Article 12 of the Law on Enterprise 2020 as amended in 2025 provides that an enterprise must always have at least one legal representative residing in Viet Nam. Where only one legal representative resides in Viet Nam, such person must, upon exit from Viet Nam, authorize in writing another individual residing in Viet Nam to exercise the rights and perform the obligations of the legal representative. In such a case, the legal representative remains responsible for the exercise of the authorized rights and obligations.

Based on the above legal grounds, the legal representative may authorize another person to exercise certain rights within an agreed scope; however, such authorization must be clearly defined in terms of scope, contents, and specific authority. 

2. How do the regulations determine the commencement and termination of representative authority?

Pursuant to Clause 4, Article 140 of the Civil Code 2015, representation by operation of law terminates in the following cases:

  • The represented person is an individual who has reached full age or whose civil act capacity has been restored;
  • The represented person is an individual who has died;
  • The represented person is a legal entity that ceases to exist;
  • Other cases as prescribed by this Code or other relevant laws.

Clauses 1 and 2 of this Article further provide that the term of representation is determined in accordance with the authorization document, the decision of the competent authority, the charter of the legal entity, or provisions of law.

Where the term of representation is not specified, the term shall be determined as follows:

  • If the representative authority is connected to a specific civil transaction, the term of representation lasts until the completion of such a transaction;
  • If the representative authority is not connected to a specific civil transaction, the term of representation is one year from the date the representative authority arises.

In addition, where a legal entity changes its legal representative with the business registration authority, the representative authority terminates from the time the enterprise receives the Enterprise Registration Certificate bearing the name of the new legal representative according to Clause 5, Article 43 of Decree No. 168/2025/ND-CP.

In conclusion, the commencement and termination of representative authority are determined in accordance with the above legal provisions.

3. If an enterprise violates the regulations on the legal representative by using forged documents, what legal consequences are commonly imposed?

Where an enterprise violates the regulations on the legal representative by using forged documents, the common legal consequences include:

  • Administrative sanctions: Pursuant to Article 43 of Decree No. 122/2021/ND-CP, an enterprise that commits violations in declaring enterprise registration dossiers may be fined from 20,000,000 VND to 30,000,000 VND for acts of untruthful or inaccurate declaration in the enterprise registration dossier or dossier for registration of changes to enterprise registration contents in order to obtain an Enterprise Registration Certificate or a Certificate of Change to Enterprise Registration Contents.
  • Criminal liability: If forged documents relating to the legal representative are used to fabricate seals or documents of agencies or organizations, the individual committing the violation may be subject to criminal prosecution for the offense of forging seals or documents of agencies or organizations, or using forged seals or documents of agencies or organizations, as prescribed in Article 341 of the Penal Code 2015 (as amended and supplemented in 2017), with sanctions of imprisonment of up to seven years depending on the severity of the offense.

In summary, enterprises that violate the regulations on the legal representative by using forged documents may be subject to administrative sanctions or criminal liability depending on the nature and seriousness of the violation.

4. What measures can be taken to mitigate legal risks relating to the legal representative?

To mitigate legal risks relating to the legal representative, enterprises should implement the following governance and control measures:

  • If an enterprise has multiple legal representatives, the rights and obligations of each legal representative should be clearly stipulated in the company charter to avoid overlaps or evasion of responsibility.
  • Scope of representation should be clearly limited by specifying the types of transactions and contracts that the legal representative may decide independently and those that require approval of the Members’ Council/Board of Directors.
  • Establishment of periodic reporting procedures on the exercise of rights and duties by the legal representative to promptly detect signs of exceeding authority or abuse of power.
  • Review of the scope of authorization: If the legal representative authorizes another person to exercise rights, the scope of authorization must be clearly defined to prevent the authorized person from exceeding authority and causing damage.

The above are the main measures that enterprises should note in order to prevent legal risks relating to the legal representative.

V. Are you looking for a reputable legal expert to support issues relating to the legal representative?

The above information provides guidance and clarification on issues relating to the legal representative for readers. With a team of experienced lawyers and legal specialists, NPLaw provides reputable and professional legal services, ensuring optimal protection of clients’ lawful rights and interests. Should you require legal support, you may contact NPLaw for consultation and assistance.

The above information is for reference purposes only. For detailed advice on specific cases, please contact Ngoc Phu Law Company Limited for prompt consultation.