I. Overview of resolutions of the Board of Directors

A resolution of the Board of Directors is a written record of decisions adopted by the Board of Directors during meetings or through other voting methods as prescribed by law and the company’s charter. It serves as the foundation for management and operational activities within a joint stock company.

II. Legal provisions on resolutions of the Board of Directors

1. What is a resolution of the Board of Directors?

Pursuant to Article 153 of the Law on Enterprise 2020, the Board of Directors is a management body of a company with full authority to act on behalf of the company to decide and exercise the company’s rights and obligations, except for matters under the authority of the General Meeting of Shareholders.

A resolution of the Board of Directors represents the results of discussions and voting by its members on issues within its competence.

2. What should resolutions of the Board of Directors contain?

According to Article 158 of the Law on Enterprise 2020, a resolution of the Board of Directors generally includes the following principal contents:

  • Company information: Name, tax code, and head office address;
  • Time and venue of the meeting;
  • List of members attending, those absent, and reasons for absence;
  • Purpose, agenda, and contents of the meeting;
  • Matters discussed and decided upon;
  • Voting results, including the number of votes in favor, against, and abstentions;
  • Matters adopted and corresponding approval ratios;
  • Signatures of the chairperson and the recorder.

3. Who adopts resolutions of the Board of Directors and when are they adopted?

Resolutions of the Board of Directors are adopted by members of the Board through voting at meetings, written consultation, or other forms as provided in the company’s charter. According to Clause 12, Article 157 of the Law on Enterprise 2020, a resolution is adopted when it is approved by the majority of members attending the meeting, unless a higher approval ratio is stipulated in the company’s charter. In the event of a tie vote, the final decision belongs to the Chairperson of the Board.

III. Questions about resolutions of the Board of Directors

1. What are the procedures for adopting resolutions of the Board of Directors?

The procedures for adopting resolutions of the Board of Directors include the following main steps:

  • Convening the meeting: The Chairperson of the Board of Directors or an authorized person convenes the meeting in accordance with Article 157 of the Law on Enterprise 2020;
  • Preparing and sending meeting invitations: Notices of meeting must be sent to all members of the Board of Directors and the Supervisory Board (if any) at least three working days before the meeting, unless otherwise stipulated in the charter;
  • Conducting the meeting: The meeting shall proceed when the quorum prescribed by law or the charter is met;
  • Voting and adopting resolutions: Members of the Board vote on matters in the agenda;
  • Preparing minutes and issuing the resolution: Minutes of the meeting must be prepared and signed by the chairperson and the recorder.

2. How are unlawful resolutions of the Board of Directors handled?

Under Clause 4, Article 153 of the Law on Enterprise 2020, if the resolution of the Board of Directors is adopted in contravention of the law, members who voted in favor of the resolution shall take joint and several personal liability for such resolution and must compensate for any resulting damage to the company. Members who voted against the resolution are exempt from liability. Shareholders have the right to request the Court to suspend the implementation or annul such resolution.

3. When do resolutions of the Board of Directors take effect? Who is responsible for its implementation?

According to Articles 156 and 162 of the Law on Enterprise 2020, the resolution of the Board of Directors takes effect from the time it is adopted, unless otherwise specified in the resolution itself. The Chairperson of the Board of Directors is responsible for organizing the adoption and supervising the implementation of the resolutions. The General Director (or Director) and relevant departments within the company are responsible for executing the contents stated in the resolution.

4. Is it mandatory for the Board of Directors to issue resolutions if meeting minutes are already prepared?

Pursuant to Article 158 of the Law on Enterprise 2020, all meetings of the Board of Directors must be recorded in minutes, which may be stored through written, audio, video, or electronic means. Whether a resolution is issued depends on the meeting’s content and outcomes. If no matter requires formal adoption, the Board may simply prepare the minutes without issuing a resolution.

5. When are resolutions of the Members’ Council of a one-member limited liability company adopted?

A resolution reflects all decisions made during the meeting of the Members’ Council. Accordingly, direct voting at the meeting plays a vital role. Specifically, Clause 6, Article 80 of the Law on Enterprise 2020 provides that:

  • A resolution or decision of the Members’ Council is adopted when approved by more than 50% of the attending members or by members representing more than 50% of the total voting rights of those attending. Amendments to or supplements of the company charter, reorganization of the company, or transfer of part or all of the company’s charter capital must be approved by at least 75% of the attending members or by members representing at least 75% of the total voting rights of those attending.

Accordingly, the adoption of resolutions by the Members’ Council depends on the number of attending members or the total agreed votes. Unless otherwise provided in the charter, each member of the Council shall have one vote of equal value.

Furthermore, the Members’ Council of a one-member limited liability company may adopt resolutions through written consultation (for example, written voting forms).

Thus, it can be concluded that resolutions of the Members’ Council of a one-member limited liability company may be adopted either through direct voting at meetings (e.g., show of hands, secret ballots) or through written consultation. Unless otherwise provided in the charter, such resolutions take effect from the date of adoption or from another effective date specified in the resolution.

IV. Legal consultancy services related to resolutions of the board of directors

The foregoing article presents all detailed information provided by NPLaw to support clients in understanding matters concerning resolutions of the Board of Directors. Should you have any further inquiries regarding the above issues or other legal matters, please contact NPLaw for direct consultation and assistance from our team of legal professionals.