Regulations on the legal representative of the representative office new in 2023

To ensure the operation of the representative office, a legal representative of the representative office is required (also known as the chief of the representative office or the Head of the representative office).

So, what is the role of the legal representative of the representative office? What are the current legal regulations regarding the legal representative of a representative office? What common issues need clarification regarding the legal representative of a representative office?

I. The role of the legal representative of the representative office

The representative office of domestic enterprises, foreign business entities, and cooperatives all have a legal representative. Within the scope of this article, the focus is on analyzing the legal representative of the representative office of domestic enterprises (which is the most common type currently).

Current laws do not have detailed regulations on the roles of the legal representative of a representative office. Pursuant to the Law on Enterprises 2020 and the Civil Code 2015, it can be generally understood that the legal representative of the representative office has the role of performing tasks by authorization, within the scope and duration of the authorization of the enterprise in accordance with current legal regulations.

(Pursuant to Clause 2, Article 44 of the Law on Enterprises 2020; Clause 3, Clause 5, Article 84 of the Civil Code 2015).

II. Legal regulations on the legal representative of the representative office

Current legal regulations on the legal representative of a representative office are as follows:

1. Who is the legal representative of the representative office? Is the legal representative of the company a mandatory content in the company's charter?

Current laws do not have detailed regulations regarding the legal representative of a representative office. Based on the relevant legal regulations, it can be understood that the legal representative of the representative office is the chief of the representative office who performs tasks by authorization, within the scope and duration of the authorization. (Pursuant to Clause 2, Article 44 of the Law on Enterprises 2020; Clause 3, Clause 5, Article 84 of the Civil Code 2015).

The legal representative of the company is a mandatory content in the company's charter. (Pursuant to Article 24 of the Law on Enterprises 2020).

2. Responsibilities of the legal representative of the representative office

The responsibility of the legal representative of the representative office is to perform tasks as authorized, within the scope and duration of the authorization of the enterprise in accordance with current legal regulations. (Pursuant to Clause 2, Article 44 of the Law on Enterprises 2020; Clause 3, Clause 5, Article 84 of the Civil Code 2015).

3. The process of appointing the chief of the representative office

The process of appointing the chief of the representative office in a sole-member limited liability company, a limited liability company with two or more members, and a joint-stock company has certain differences, as follows:

*In a sole-member limited liability company:

- Case 1: The sole-member limited liability company is organized and operates under the model of a Chairman of the company, Director, or General Director. The process for appointing the chief of the company's representative office is as follows:

- Step 1: Based on the Company Charter, determine the authority to appoint the chief of the Company's representative office, which belongs to the Company Owner, the Company Chairman, the Director, or the General Director of the Company. In case the Company's Charter does not specify, the authority to appoint the chief of the representative office belongs to the Company Owner. (Pursuant to Articles 76, 81, and 82 of the Law on Enterprises 2020).

- Step 2: The Company Owner, the Company Chairman, the Director, or the General Director of the Company issues a Decision to appoint the chief of the Representative Office according to the designated authority.

- Case 2: The sole-member limited liability company is organized and operates according to the model of the Members’ Council, Director, or General Director. The process for appointing the chief of the company's representative office is as follows:

- Step 1: Based on the Company's Charter to determine the authority to appoint the chief of the Company's representative office, which belongs to the Company Owner, the Members' Council, the Director, or the General Director of the Company. In case the Company's Charter does not specify, the authority to appoint the chief of the representative office belongs to the Company Owner. (Pursuant to Articles 76, 80, and 82 of the Law on Enterprises 2020).

- Step 2: In the case of determining the authority to appoint the chief of the representative office under the Members' Council, convene a meeting of the Members' Council to pass the Members' Council's Resolution on the appointment of the chief of the representative office.

- Step 3: In the case of determining the authority to appoint the chief of the representative office belonging to the Company Owner, the Director, or the General Director of the Company, the subject with the authority can issue the Decision to appoint the chief of the representative office.

*In a limited liability company with two or more members: the process for appointing the chief of the company's representative office is as follows:

- Step 1: Based on the Company's Charter to determine the authority to appoint the chief of the Company's representative office, which belongs to the Members' Council, Chairman of the Members' Council, Director, or General Director of the Company. In case the Company's Charter does not specify, the authority to appoint the chief of the representative office belongs to the Members' Council. (Pursuant to Articles 55, 56, and 63 of the Law on Enterprises 2020).

- Step 2: In the case of determining the authority to appoint the chief of the representative office under the Members' Council, convene a meeting of the Members' Council to pass the Members' Council Resolution on the appointment of the chief of the representative office. (According to Articles 57, 58, 59, 60, 61, and 62 of the Law on Enterprises 2020).

- Step 3: In the case of determining the authority to appoint the chief of the representative office under the Chairman of the Members' Council, Director, or General Director of the Company, the subject with the authority can issue the Decision to appoint the chief of the representative office.

*In the joint-stock company: the process of appointing the chief of the company's representative office is carried out as follows:

- Step 1: Based on the Company's Charter to determine the authority to appoint the chief of the Company's representative office belonging to the Shareholders' Meeting, Board of Directors, Chairman of the Board of Directors, Director, or General Director of the Company. In case the Company's Charter does not specify, the authority to appoint the chief of the representative office belongs to the Board of Directors. (Pursuant to Articles 138, 153, 156, and 162 of the Law on Enterprises 2020).

- Step 2: In the case of determining the authority to appoint the chief of the representative office under the Shareholders' Meeting, convene a meeting of the Shareholders' Meeting to pass a Resolution of the Shareholders' Meeting regarding the appointment of the chief of the representative office. (According to Articles 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, and 152 of the Law on Enterprises 2020).

- Step 3: In the case of determining the authority to appoint the chief of the representative office under the Board of Directors, convene a Board of Directors meeting to pass the Board of Directors' Resolution on the appointment of the chief of the representative office. (Pursuant to Articles 157 and 158 of the Law on Enterprises 2020).

- Step 4: In the case of determining the authority to appoint the chief of the representative office under the Chairman of the Members' Council, Director, or General Director of the Company, the subject with the authority can issue the Decision to appoint the chief of the representative office.

4. Change the legal representative of the representative office

When changing the legal representative of the representative office, the authorized subject in the Company shall carry out the change through a Resolution, Decision on changing the legal representative of the representative office similar to the Procedure for appointing the chief of the representative office as presented in Section II.3 above. After that, it is necessary to carry out the procedure for changing the content of the representative office's registration according to the following steps:

- Step 1: Prepare the dossiers including:

+ Notice to change the content of the representative office's registration activities;

+ A copy of the legal documents of the legal representative of the representative office;

+ Power of attorney and a copy of the authorized person's legal documents to carry out the procedure.

- Step 2: Submit the dossiers:

+ The company submits the dossiers to the Business Registration Office where the representative office is located.

- Step 3: Process the dossiers:

+ The Business Registration Office issues a Receipt, checks the validity of the dossiers, updates the information on the registration of the representative office in the National Database on enterprise registration, and issues the Certificate of Registration of the Representative Office within 03 working days from the date of receiving valid dossiers. If the enterprise needs it, the Business Registration Office issues a Certificate about changing the representative office's operation registration content.

(Pursuant to Clause 1, Article 12, Clause 2, Article 62 of Decree No. 01/2021/ND-CP)

III. Answering some questions about the legal representative of the representative office

Some common questions that need clarification regarding the legal representative of the representative office are as follows:

1. Does the legal representative of the representative office have to explain upon request along with the notice of revocation of the representative office's operation registration certificate?

Not in all cases does the legal representative of the representative office have to explain upon request along with the notice of revocation of the representative office's operation registration certificate. The legal representative of the representative office is only required to explain upon request along with the notice of revocation of the representative office's operation registration certificate when it falls under one of the cases of revocation of the operation registration certificate and meets the following conditions:

- Belonging to one of the cases of the revocation of the representative office's operation registration certificate, which requires an explanation, including:

+ The representative office has ceased operations for one year without notifying the Business Registration Office and the Tax Authority;

+ According to the court's decision or the request of the competent authority, according to regulations of the law.

+ The legal representative of the representative office is authorized by the legal representative of the enterprise to explain to the Business Registration Office.

(Pursuant to Clauses 1, 3, and 4 of Article 77 of Decree No. 01/2021/ND-CP)

2. Can the chief of the representative office also be the legal representative of that company?

The chief of the representative office can simultaneously be the legal representative of the company because current law does not prohibit it. (pursuant to Clause 5, Article 84 of the Civil Code 2015)

3. Can the chief of the representative office authorize their authority to someone else?

The chief of the representative office can only authorize their authority to another person with the approval of the competent entity that can appoint the chief of the company's representative office or if regulated by the company's charter.

4. Who has the right to change the legal representative in a joint-stock company?

The Board of Directors has the right to change the legal representative in a joint-stock company. (Pursuant to Clause 2, Article 12; Clause 2, Article 137; Point i, Clause 2, Article 153 of the Law on Enterprises 2020)

IV. Legal consulting services regarding the legal representative of the representative office

NGOC PHU LIMITED LIABILITY LAW COMPANY is an experienced unit in advising and carrying out procedures related to the legal representative of the representative office, with the process and tasks including:

- Receive the information that needs consultation, and carry out the procedures related to the legal representative of the representative office;

- Consult and guide customers in preparing documents to complete procedures related to the legal representative of the representative office;

- Drafting dossiers, representing clients in dealings with competent state authorities;

- Receive the results of the procedures related to the legal representative of the representative office and hand over the results to the Customer.

Above is the information addressing the concerns regarding the legal representative of the representative office that NPLAW sent to esteemed readers. If you have any further questions or concerns, please contact NPLAW using the following contact information:

Contact information for NGOC PHU LIMITED LIABILITY LAW COMPANY.