Legal provisions on convening meetings of the members’ council

In the operation of enterprises, particularly limited liability companies with two or more members, the convening of meetings of the Members’ Council plays a crucial role in making strategic decisions. Such meetings provide a mechanism for members to discuss, vote on, and decide main issues related to the company’s business operations, finance, and governance.

The following article by NPLaw will analyze the legal provisions on convening meetings of the Members’ Council for readers’ reference.

I. Overview of convening meetings of the Members’ Council

The Members’ Council is the highest decision-making body in limited liability companies with two or more members. Meetings of the Members’ Council are vital to approving decisions regarding corporate governance, business operations, finance, and human resources.

However, if the convening process does not comply with the requirements set out in the Law on Enterprise and the company’s charter, such meetings shall be deemed invalid.

II. Legal provisions on convening meetings of the Members’ Council

1. Definition of convening meetings of the Members’ Council

Under Article 55 of the Law on Enterprise 2020, the Members’ Council is the highest authority of the company, comprising all individual members and the authorized representatives of organizational members. The company charter determines the frequency of meetings, but the Members’ Council must meet at least once a year.

Convening a meeting of the Members’ Council refers to the process of organizing a meeting among its members in a limited liability company to deliberate and make main decisions concerning the company’s operation.

2. Conditions for convening meetings of the members’ council

According to Article 58 of the Law on Enterprise 2020, a meeting of the Members’ Council may proceed when the attending members represent at least 65% of the charter capital, unless a different percentage is prescribed in the company’s charter.

If the first meeting fails to meet the required quorum and the charter does not provide otherwise, the subsequent meetings shall be convened as follows:

• The second meeting notice must be sent within 15 days from the scheduled date of the first meeting. The second meeting may proceed when attending members represent at least 50% of the charter capital;
• If the second meeting also fails to meet the quorum, the third meeting notice must be sent within 10 days from the scheduled date of the second meeting. The third meeting may proceed regardless of the number of attendees or the represented charter capital.

3. Main notes when convening meetings of the members’ council

• Members and authorized representatives must attend and vote at the meeting. The meeting procedures and voting methods shall be prescribed by the company’s charter;
• If a duly convened meeting cannot complete its agenda within the scheduled time, it may be extended, but not exceeding 30 days from the opening date of such a meeting.

III. Questions on convening meetings of the members’ council

1. May a general partner convene a meeting of the members’ council?

According to Article 183 of the Law on Enterprise 2020, regarding convening meetings of the Members’ Council in a partnership company, the persons entitled to convene such meetings include the Chairperson of the Members’ Council and other general partners.

Accordingly, if the Chairperson fails to convene a meeting at the request of a general partner, such a partner is entitled to convene the meeting of the Members’ Council.

2. Is the chairperson of the members’ council in a partnership company authorized to convene a meeting?

Under Article 183 of the Law on Enterprise 2020, the Chairperson of the Members’ Council may convene meetings when deemed necessary or at the request of a general partner.

Therefore, the Chairperson of the Members’ Council in a partnership company is entitled to convene meetings of the Members’ Council.

3. Is a written invitation mandatory when convening a meeting of the members’ council?

Clause 4, Article 57 of the Law on Enterprise 2020 provides that the notice of meetings may be delivered via written invitation, telephone, fax, electronic means, or other methods as provided by the company’s charter, and must be sent directly to each member of the Members’ Council. The notice must clearly specify the meeting time, venue, and agenda.

Thus, a written invitation is not mandatory. The notice may be delivered through alternative means such as telephone, fax, electronic communication, or other methods prescribed in the charter, provided it is sent directly to each member.

4. Are members or groups holding 10% or more of the charter capital entitled to reimbursement of meeting costs?

Pursuant to Clause 1, Article 57 of the Law on Enterprise 2020, meetings of the Members’ Council may be convened at the request of the Chairperson or at the request of a member or group of members as specified in Clauses 2 and 3 of Article 49. If the Chairperson fails to convene a meeting within 15 days from receipt of the request, the requesting member or group may convene the meeting themselves. The reasonable expenses for convening and holding the meeting shall be reimbursed by the company.

Accordingly, members or groups holding at least 10% of the charter capital are entitled to reimbursement of reasonable expenses incurred for convening and holding the meeting of the Members’ Council in limited liability companies with two or more members. 

5. What should be done if the chairperson of the Members’ Council in limited liability companies with two members fails to convene a meeting?

Under Article 57 of the Law on Enterprise 2020, if the Chairperson fails to convene a meeting within 15 days from receipt of a valid request from a member or group of members, those members are entitled to convene the meeting themselves. The reasonable expenses for convening and conducting the meeting shall be reimbursed by the company.

Accordingly, if the Chairperson of the Members’ Council fails to convene the meeting within 15 days of the request, the requesting member(s) have the right to convene the meeting. In such a case, the Chairperson shall be legally responsible for any damages caused to the company or its members, and the reasonable costs incurred in convening and holding the meeting shall be reimbursed by the company.

IV. Legal consultancy services related to convening meetings of the members’ council

The above information, provided by NPLaw, aims to assist clients in understanding the legal provisions concerning the convening of meetings of the Members’ Council. Should you have any further questions regarding the aforementioned issues or other legal matters, please contact NPLaw for direct consultation and professional support.