Latest regulations on the meeting of the members' council

The meeting of the Members' Council is a mandatory procedure for companies operating under an organizational structure model with the members’ council. Pursuant to the Law on Enterprises 2020, types of company with an organizational structure based on the members’ council model may include the multi-member limited liability company (limited liability company with two or more members) and the single-member limited liability company owned by an organization, and the partnership.

I. The current demand for the meeting of the members’ council

Pursuant to the Law on Enterprises 2020, the meeting of the members' council is a mandatory procedure for companies with an organizational structure with a members' council.

Accordingly, there are main types of company with an organizational structure based on the members’ council model, including the multi-member limited liability company and the single-member limited liability company owned by an organization, and the partnership. However, the members' council model is most commonly found in multi-member limited liability companies. Therefore, this article will only concern legal regulations and related issues regarding the meeting of the members' council for multi-member limited liability companies.

II. Legal regulations on the meeting of the members' council 

Current legal regulations regarding the meeting of the members' council are as follows:

1. Definition of the meeting of the members' council

Current regulations do not have a specific definition for "The Meeting of the Members' Council." Pursuant to Clause 1, Article 55 of the Law on Enterprises 2020, the Members' Council is the highest decision-making body of the company, including all individual members and authorized representatives of organization members of the company. The company's charter regulates the meeting of the Members' Council, but it must be held at least once a year.

Thus, it can be understood that the meeting of the members' council is a meeting, organized under the conditions, procedures, and forms regulated in the company's Charter and in accordance with legal regulations.

2. When will the meeting of the members' council happen? .

Pursuant to Clause 1, Article 55 of the Law on Enterprises 2020, the company's charter regulates the meeting of the Members' Council, but it must be held at least once a year.

The Members' Council is convened at the request of:

- Chairman of the Members' Council; or

- Members or groups of members owning 10% or more of the charter capital or a smaller percentage as regulated by the company's charter; or

- In the case where a company has one member owning more than 90% of the charter capital and the company's charter does not regulate a lower percentage pursuant to Clause 2 of this Article, the remaining group of members automatically has the right to request the convening of the meeting of the Members’ Council.

(Pursuant to Clause 1, Article 57; Clauses 2,3, Article 49 of the Law on Enterprises 2020)

In the event that the Chairman of the Members' Council does not convene a meeting of the Members' Council at the request of a member or group of members within 15 days from the date of receiving the request, that member or group of members shall convene the meeting of the Members' Council. Reasonable expenses for convening and conducting the Members' Council meeting will be reimbursed by the company.

3. Conditions for holding the meeting of the members' council

The meeting of the Members' Council is conducted when the number of attending members holds 65% or more of the charter capital; the specific ratio is regulated by the company's charter.

In the event that the first meeting of the Members' Council does not meet the conditions for proceeding as regulated above and the company's charter does not provide otherwise, the convening of the meeting of the Members' Council shall be carried out as follows:

- The second meeting notice must be sent within 15 days from the date of the first scheduled meeting. The second meeting of the Members' Council is conducted when the number of attending members holds 50% or more of the charter capital.

- In the event that the second meeting of the Member Council does not meet the conditions for proceeding as regulated above, the notice for the third meeting must be sent within 10 days from the date of the intended second meeting. The third meeting of the Members' Council is conducted regardless of the number of members attending and the charter capital represented by the attending members.

Members, or their authorized representatives, must attend and vote at the meeting of the Members’ Council. The procedure for conducting the meeting of the Members’ Council and the voting method are regulated by the company's charter.

In the event that a meeting that satisfies the conditions specified in this Article does not complete the agenda within the planned time frame, it may be extended but not for more than 30 days from the date of the meeting's opening.

(Pursuant to Article 58 of the Law on Enterprises 2020)

4. How is the meeting of the members' council approved?

The Members' Council approves resolutions and decisions within its authority by voting at meetings, obtaining opinions in writing, or through other forms as regulated by the company's charter.

If the company's charter does not provide otherwise, resolutions and decisions on the following issues must be passed by a vote at the meeting of the members' council:

1. Amend and supplement the content of the company's charter;

2. Decide the direction for the company's development;

3. Election, exemption, or dismissal of the Chairman of the Members' Council; designation, exemption, or dismissal of the Director or General Director;

4. Through the annual financial statements;

5. Reorganization or dissolution of the company;

Members are considered to be present and voting at the meeting of the Members’ Council in the following cases:

1. Attend and vote directly at the meeting;

2. Authorize another person to attend and vote at the meeting;

3. Attend and vote through an online meeting, electronic voting, or other electronic forms;

4. Send the vote to the meeting via mail, fax, or email.

Resolutions and decisions of the Members' Council are passed in the form of written opinions when approved by members holding 65% or more of the charter capital; the specific ratio is regulated by the company's charter.

III. Some questions regarding the meeting of the members’ council

1. Is it mandatory to have minutes of meeting after the meeting of the members' council?

Pursuant to Clause 1, Article 60 of the Law on Enterprises 2020, the meeting of the Members' Council must be recorded in minutes and can be audio recorded or recorded and stored in other electronic forms.

Therefore, after the meeting of the members' council, it is mandatory to have minutes of meeting.

2. What is the current approval rate of the meeting of the members’ council?

In the event that the company's charter does not specify a different ratio, the resolutions and decisions of the Members' Council are passed at the meeting in the following cases:

- Approved by members attending the meeting who own 65% or more of the total capital contribution of all attending members, except in the following cases:

- With the approval of members attending the meeting who own 75% or more of the total capital contribution of all members attending the meeting for the resolution, decision to sell assets valued at 50% or more of the total asset value recorded in the company's latest financial statement or a lower ratio or value as regulated in the company's charter; amend, supplement the company's charter; reorganization or dissolution of the company.

(Pursuant to Clause 3, Article 59 of the Law on Enterprises 2020)

3. Is the notice of the meeting of the Members' Council considered an administrative document?

Pursuant to Clause 3, Article 3 of Decree 30/2020/ND-CP, an administrative document is a document formed in the process of directing, operating, and resolving the work of agencies and organizations. At the same time, Article 7 of Decree 30/2020/ND-CP regulates the types of administrative documents, including resolutions (specific), decisions (specific), directives, statutes, regulations, announcements, notices, guidelines, programs, plans, schemes, proposals, projects, reports, minutes, statements, contracts, official documents, official dispatches, memoranda, agreements, powers of attorney, invitations, introductions, leave letters, deposit slips, remittances, advice notes, and official letters.

However, Decree 30/2020/ND-CP only applies to state agencies, organizations, and state-owned enterprises. Pursuant to Clause 1, Article 88 of the Law on Enterprises 2020, state-owned enterprises include: Enterprises in which the State holds 100% of the charter capital; Enterprises in which the State holds more than 50% of the charter capital or the total number of voting shares, except for Enterprises in which the State holds 100% of the charter capital.

Therefore, in the case of a limited liability company with two or more members being a state-owned enterprise, the notice of the meeting of the members’ council will be considered an administrative document. In the case of a company that is not a state-owned enterprise, the notice of the meeting will not be considered an administrative document.

4. When signing the notice of the meeting of the Members’ Council, which ink color should be used?

Pursuant to Clauses 6 and 7, Article 13 of Decree 30/2020/ND-CP, for paper documents, when signing, use a pen with blue ink, avoid easily erasable inks; for electronic documents, the authorized person must perform digital signatures, positions, and images pursuant to Appendix I of Decree 30/2020/ND-CP.

Accordingly, when signing the notice of the meeting of the Members’ Council on paper documents, only blue ink pens may be used, and erasable inks are not allowed.

Specifically for electronic documents, the authorized person performs the digital signature. The position and image of the digital signature are regulated in Appendix I issued with Decree 30/2020/ND-CP.-CP.

However, the above regulation only applies to state-owned enterprises. For companies that are not state-owned enterprises, there is no mandatory regulation regarding ink color; however, it is advisable to sign with blue ink to avoid confusion with printed or photocopied documents. .

IV. Legal consulting services related to the meeting of the members’ council

NGOC PHU LAW COMPANY LIMITED is an entity with experience in advising on internal enterprise procedures and procedures with the business registration agency, including:

- Receiving information from an enterprise needing an advice;

- Assisting enterprises in preparing the necessary documents;

- Drafting, representing, and assisting clients in organizing the meeting of the members’ council;

The above information addresses concerns about the meeting of the members' council that NPLAW sent to our readers. If you have any related questions that need further clarification, please contact NPLAW at the following contact information: