In a market economy, valuation activities play a crucial role in ensuring transparency and fairness in financial transactions, investments, and asset acquisitions. A legal representative of a valuation enterprise not only serves as a connection between the enterprise, its clients, and competent State authorities, but also takes responsibility for supervising and ensuring that valuation results comply with professional standards and legal requirements. To qualify as a legal representative, an individual must satisfy multiple conditions, including professional qualifications, practical experience, and stringent statutory requirements. 

The above article analyzes both the essential role of the legal representative of the valuation enterprise and the conditions required to assume such a position.

I. The role of legal representatives of valuation enterprises 

Legal representatives of valuation enterprises play an essential role in ensuring accuracy, transparency, and legal compliance in valuation activities. They are responsible for executing service contracts, supervising the valuation process, and certifying results before they are provided to clients. 

At the same time, the representatives must ensure that valuation reports comply with legal provisions, thereby avoiding errors that could result in legal liability. In addition, they act as the connection between the enterprise and regulatory authorities, enabling the enterprises to operate lawfully and maintain their reputation in the market. Should disputes arise, the representatives may participate in dispute resolution and safeguard the enterprise’s rights and interests.

II. Legal provisions on legal representatives of valuation enterprises 

1. What is a valuation enterprise?

Pursuant to Clause 1, Article 48 of the Law on Prices 2023, a valuation enterprise is an enterprise duly established and registered to operate valuation service business under the Law on Enterprise, and issued a Certificate of eligibility for providing valuation services by the Ministry of Finance in accordance with this Law.

2. Who is the legal representative of the valuation enterprise?

The legal representative of the valuation enterprise is the statutory representative of the enterprise, typically holding the title of Director or General Director, and must be a valuer registered to practice at the enterprise.

The representative plays a main role in ensuring the lawfulness and transparency of valuation activities. They must meet professional practice conditions, oversee the valuation process, ensure accurate results, and comply with State-mandated standards. Furthermore, they have obligations on reporting and take responsibility for valuation activities before regulatory authorities and clients.

3. Conditions for becoming the legal representative of the valuation enterprise

Pursuant to Clause 1, Article 51 of the Law on Prices 2023, the legal representative, Director, or General Director of the valuation enterprise must satisfy the following conditions:

  • Being the legal representative, Director, or General Director recorded in the Enterprise Registration Certificate;
  • Being a valuer registered at the enterprise;
  • Having at least 36 months of experience as a practicing valuer;
  • Maintaining the conditions stipulated under Points a, b, d, and dd of Clause 1, Article 45 of this Law;
  • Not falling into the cases where they previously held the above positions of another valuation enterprise whose Certificate of Eligibility for providing Valuation Services was revoked within 12 months (in case of a first-time revocation), or within 60 months (in case of two or more revocations) from the time of filing an application for issuance or re-issuance of the Certificate of Eligibility.

III. Questions concerning the legal representative of a valuation enterprise

1. Is it mandatory for the legal representative of the valuation enterprise to be a certified valuer?

Pursuant to Point b, Clause 1, Article 51 of the Law on Prices 2023, the legal representative, Director, or General Director of the valuation enterprise must:

  • Being a valuer registered at the enterprise. 

Accordingly, by law, the legal representative of the valuation enterprise is required to be a registered valuer at such enterprise.

2. Under what circumstances may the valuation enterprise be suspended from providing valuation services?

Pursuant to Clause 1, Article 54 of the Law on Prices 2023, the valuation enterprise shall be suspended from providing valuation services in the following circumstances:

  • Failure to satisfy one of the conditions stipulated in Clause 1, Article 49 of this Law for three consecutive months;
  • Issuance of valuation certificates or reports signed by a person who is not a registered valuer;
  • Other cases of suspension as prescribed by the Law on Enterprise, and administrative or criminal sanctions.

3. Conditions for providing valuation services

Pursuant to Clause 1, Article 52 of the Law on Prices 2023, conditions for providing valuation services include: obtaining a Certificate of Eligibility for providing Valuation Services and maintaining the conditions stipulated in Articles 49 and 50 of this Law.

4. What conditions must the legal representative of the valuation enterprise satisfy?

Under Clause 1, Article 51 of the Law on Prices 2023, the legal representative of the valuation enterprise must meet the following conditions:

  • Being the legal representative, Director, or General Director recorded in the Enterprise Registration Certificate;
  • Being a valuer registered at such enterprise;
  • Having at least 36 months of experience as a practicing valuer;
  • Maintaining the conditions stipulated under Points a, b, d, and dd of Clause 1, Article 45 of this Law;
  • Not falling into the cases where they previously held the above positions of another valuation enterprise whose Certificate of Eligibility for providing Valuation Services was revoked within 12 months (in case of a first-time revocation), or within 60 months (in case of two or more revocations) from the time of filing an application for issuance or re-issuance of the Certificate of Eligibility.

5. What are the legal liabilities of the legal representative of the valuation enterprise in case of errors in valuation reports?

According to Article 18 of Decree No. 87/2024/ND-CP, for violations relating to reporting obligations in valuation activities, the legal representative of the valuation enterprise may be subject to administrative fines ranging from 5,000,000 VND to 20,000,000 VND, depending on the severity of the violation.

6. What authority does the legal representative of the valuation enterprise hold in executing contracts and certifying valuation results?

The legal representative of the valuation enterprise holds substantial authority in executing contracts and certifying valuation results. Under the Law on Enterprise 2020, the legal representative of the enterprise has the authority to enter into contracts related to valuation activities and represent the enterprise in civil and commercial transactions.

Furthermore, according to the Law on Prices 2023, the legal representative must ensure that valuation results conform to professional and legal standards. They are responsible for certifying valuation reports before submission to Clients or competent State authorities, thereby ensuring accuracy and transparency. In cases of errors or violations, they may take legal liability, including administrative sanctions or suspension of the enterprise’s business operations.

The foregoing constitutes an overview addressing frequently asked questions regarding the legal representative of the valuation enterprise, provided by NGOC PHU LAW COMPANY LIMITED. Should readers require further clarification on any issues related to this subject, please contact NPLaw for specific legal advice.