The legal representative is a common issue for many enterprises currently. The article below sets out the legal provisions governing legal representatives and answers several related questions in order to help individuals and organizations protect their lawful rights and interests.

I. Introduction to issues related to the legal representative

In an enterprise, the legal representative holds a leading and extremely important position, setting directions and making decisions that directly affect the operation and development of the business. Therefore, when selecting a legal representative, enterprises must clearly understand the relevant legal provisions in order to ensure their lawful rights and interests when engaging in business activities.

II. Understanding the legal representative

1. Who is a legal representative and what is the basic role of a legal representative in a company?

Pursuant to Clause 1, Article 134 of the Civil Code 2015, representation means that an individual or a legal person (hereinafter referred to as the “representative”) acts in the name and for the benefit of another individual or legal person (hereinafter referred to as the “represented party”) to establish and conduct civil transactions.

Pursuant to Clause 1, Article 12 of the Law on Enterprise 2020 (amended in 2025), the legal representative of an enterprise is an individual who represents the enterprise in exercising rights and obligations arising from the enterprise’s transactions; represents the enterprise as the petitioner in civil matters, plaintiff, defendant, or person with related rights and obligations before Arbitration and Courts, and executes other rights and obligations in accordance with law.

  • For a single-member limited liability company (LLC): The legal representative is the person holding one of the following titles: Chairman of the Members’ Council, Company Chairman, Director, or General Director, pursuant to Clause 3, Article 79 of the Law on Enterprise 2020 (amended in 2025).
  • For a multi-member limited liability company: Pursuant to Clause 3, Article 54 of the Law on Enterprise 2020 (amended in 2025), the legal representative is the person holding one of the following titles: Chairman of the Members’ Council, Director, or General Director. If the company’s Charter does not stipulate otherwise, the Chairman of the Members’ Council shall be the legal representative of the company.
  • For a joint-stock company: Pursuant to Clause 2, Article 137 of the Law on Enterprise 2020 (amended in 2025), if the company has only one legal representative, the Chairman of the Board of Directors or the Director/General Director shall be the legal representative. If the Charter does not provide otherwise, the Chairman of the Board of Directors shall be the legal representative. If the company has more than one legal representative, the Chairman of the Board of Directors and the Director/General Director shall automatically be the legal representatives of the company.
  • For a partnership: Pursuant to Clause 1, Article 184 of the Law on Enterprise 2020 (amended in 2025), general partners are the legal representatives of the company and manage its day-to-day business operations.

Basic roles of the legal representative in a company include:

  • Deciding on and directing the company’s activities, especially in legal, administrative, and civil matters;
  • Representing the enterprise in exercising rights and obligations arising from transactions; acting as petitioner, plaintiff, defendant, or related party before Arbitration and Courts, and executing other rights and obligations as prescribed by law;
  • Taking legal responsibility for the company’s activities; signing economic contracts and transactional documents with partners, customers, and state authorities.

Accordingly, the legal representative plays a central and decisive role in the company.

2. What is the common authority of a legal representative?

Pursuant to Clause 1, Article 12 of the Law on Enterprise 2020 (amended in 2025), the powers of a legal representative include:

  • Representing the enterprise in exercising rights and performing obligations arising from its transactions, including signing contracts, compliance reports, and transaction documents;
  • Representing the enterprise as plaintiff, defendant, or related party before Arbitration and Courts, and exercising other rights and obligations as prescribed by law;
  • Participating in the management and day-to-day operation of the enterprise;
  • Being entitled to salary and other benefits in accordance with the managerial position; if the representative is a foreigner, they are granted a work permit and recognized as having management experience.

Accordingly, the authority of the legal representative includes the contents stated above.

3. To whom and in what cases is the legal representative liable?

The responsibilities of the legal representative are provided in Article 13 of the Law on Enterprise 2020 (amended in 2025), as amended by Clause 4, Article 1 of the amended Law on Enterprise 2025, as follows:

  • Executing assigned rights and obligations honestly, prudently, and in the best interests of the enterprise;
  • Being loyal to the interests of the enterprise; not using information, trade secrets, or business opportunities of the enterprise; not abusing position or powers, nor using the enterprise’s assets for personal gain or for the benefit of other organizations or individuals;
  • Promptly, fully, and accurately notifying the enterprise of their own and related persons’ ownership or controlling shareholdings/capital contributions in other enterprises;
  • Taking personal liability for damages caused to the enterprise due to violations of obligations;
  • Complying with the company’s Charter and the terms of the labor contract.

Accordingly, the legal representative is liable:

  • To the enterprise: For honest and prudent performance of duties; if damage is caused by breach of obligations, the representative must personally compensate for such damage.
  • Before the law: For the legality of transactions and activities performed on behalf of the enterprise before competent State authorities.

The legal representative may take personal or joint liability in the following cases:

  • Breach of duties of loyalty and prudence;
  • Abuse of position for personal gain;
  • Causing material or reputational damage to the company;
  • Non-compliance with laws on tax, insurance, environment, or other business regulations;
  • Acting beyond authorized powers.

4. May the legal representative authorize another person to execute all representative powers?

Pursuant to Clause 1, Article 138 of the Civil Code 2015, individuals and legal persons may authorize other individuals or legal persons to establish and perform civil transactions.

Pursuant to Clause 1, Article 141 of the Civil Code 2015 on the scope of representation, a representative may only establish and perform civil transactions within the scope of representation based on:

  • Decisions of competent authorities;
  • The charter of the legal person;
  • The contents of authorization;
  • Other provisions of law.

If the scope of representation cannot be specifically determined, the legal representative has the right to establish and perform all civil transactions for the benefit of the represented party, unless otherwise provided by law.

Accordingly, the legal representative may authorize another person to perform part or all of the tasks within the scope of their powers.

III. Legal provisions related to the legal representative

Understanding legal provisions on legal representatives is a common need. Accordingly, NPLaw summarizes the latest applicable regulations.

1. Which laws, decrees, or documents regulate the title and authority of the legal representative?

The title and authority of the legal representative are mainly governed by:

  • The Civil Code 2015: It governs the representation regime, including forms, duration, scope of authority, and consequences of transactions beyond authority. In addition, Clause 1, Article 140 of this Code provides that the duration of representation is determined by the authorization document, the decision of a competent authority, the charter of the legal person, or the law.
  • The Law on Enterprise 2020 (amended in 2025): It regulates legal representatives of enterprises and their responsibilities. Accordingly, Clause 1, Article 12 defines the legal representative and their rights and obligations as stated above.
  • Decree No. 168/2025/ND-CP: It guides dossiers and procedures for registration and change of the legal representative on the Enterprise Registration Certificate. In addition, Article 43 of this Decree guides procedures and required documents for changing the legal representative of limited liability companies and joint-stock companies.

2. What are the procedures for registering a change of legal representative?

Pursuant to Clauses 1 and 5, Article 43 of Decree No. 168/2025/ND-CP, the procedures include:

  • The company submits a dossier for change of enterprise registration contents to the provincial Business Registration Authority where the headquarter is located, including:
    + Application for change of legal representative;
    + Copies or originals of resolutions/decisions approving the change by the owner (for single-member LLCs), Members’ Council (for multi-member LLCs), General Meeting of Shareholders (if the change amends the Charter), or the Board of Directors (if the change does not amend the Charter except for personal details and signature of the legal representative).
  • The Business Registration Authority issues a receipt and appointment for result collection upon receipt of a valid dossier.
  • Within 03 working days from receipt of a valid dossier, the Business Registration Authority examines the dossier and issues an amended Enterprise Registration Certificate. If the dossier is invalid, the authority shall notify the enterprise in writing of required amendments.

3. Common mistakes leading to legal risks when appointing or changing a legal representative

Common risks include:

  • Late or no notification: Enterprises must register changes within 10 days from the date of change; late registration may result in administrative fines ranging from 3,000,000 VND to 30,000,000 VND under Decree No. 122/2021/ND-CP.
  • Invalid dossiers: Missing documents or improper signatories result in delays and repeated amendments.
  • Multiple legal representatives without clear division of authority: Failure to specify authority in the Charter may lead to contractual disputes, internal conflicts, and overlapping liabilities.

IV. Questions on legal representatives

1. In a multi-member company, how are the rights and responsibilities of the legal representative usually allocated?

Pursuant to Clause 2, Article 12 of the Law on Enterprise 2020 (as amended in 2025), limited liability companies and joint-stock companies may have one or more legal representatives. The company’s Charter shall specifically stipulate the number, managerial titles, and the rights and obligations of the enterprise’s legal representatives.

If a company has more than one legal representative, the Charter must clearly define the rights and obligations of each legal representative. If the allocation of rights and obligations of each legal representative is not clearly stipulated in the Charter, each legal representative of the company shall be deemed to have full authority to represent the enterprise for third parties; all legal representatives shall take joint and several liability for damages caused to the enterprise in accordance with civil law and other relevant legal provisions.

Therefore, in multi-member companies, the rights and responsibilities of legal representatives are usually specifically allocated in the company’s Charter.

2. Can the legal representative’s authority be restricted in the case of internal disputes? Why?

In the case of internal disputes, the authority of the legal representative may be restricted, including suspension, dismissal, or limitation of the scope of authority to sign documents and conduct transactions. Such restrictions may be based on the company’s Charter, resolutions of the Members’ Council or the General Meeting of Shareholders, or interim decisions of the Court. Specifically:

  • Pursuant to Point d, Clause 2, Article 24 of the Law on Enterprise 2020 (as amended in 2025), the rights and obligations of the legal representative are specified in the Charter; therefore, the Charter may limit the legal representative’s authority. For example, the Charter may require certain transactions to be approved by the Board of Directors or the General Meeting of Shareholders before being signed.
  • In cases of serious internal disputes, the Members’ Council or the General Meeting of Shareholders may issue resolutions or decisions to elect, dismiss, remove, or temporarily suspend the legal representative in accordance with Point d, Clause 2, Article 55 and Point c, Clause 2, Article 138 of the Law on Enterprise 2020 (as amended in 2025).
  • During legal proceedings, the Court may apply temporary urgent measures to restrict the legal representative’s authority if the exercise of such authority may cause harm to the interests of the enterprise or third parties, under Clause 3, Article 111 of the Civil Procedure Code 2015. Additionally, under Clause 7, Article 12 of the Law on Enterprise 2020 (as amended in 2025), the Court or other competent procedural authorities may designate a legal representative to participate in proceedings in accordance with law.

In summary, the legal representative’s powers may be restricted in the case of internal disputes in accordance with the law.

3. What legal consequences commonly arise for a company when the legal representative signs a contract beyond their authority?

Pursuant to Article 143 of the Civil Code 2015, a civil transaction established or performed by a representative beyond the scope of representation shall not lead to rights and obligations of the represented party with respect to the portion exceeding the scope of representation, except in any of the following cases:

  • The represented party consents thereto;
  • The represented party is aware of the transaction but does not object within a reasonable period;
  • The represented party is at fault, resulting in the counterparty being unaware or unable to know that the representative exceeded the scope of representation.

The counterparty has the right to unilaterally terminate performance of, or rescind, the civil transaction in respect of the portion exceeding the scope of representation or the entire transaction and claim damages, unless the counterparty knew or should have known of the excess of authority or the represented party subsequently consented.

Where the representative and the counterparty intentionally establish or perform a civil transaction beyond the scope of representation and thereby cause damage to the represented party, they shall take joint and several liability for compensation.

Accordingly, a legal representative who signs contracts beyond their authority may result in the above legal consequences for the company.

4. When changing the legal representative, how must the company notify the tax authority, banks, and partners in accordance with the law?

When changing the legal representative, the enterprise must perform the following notifications to ensure legal compliance and continuity of business operations:

  • Notification to the tax authority: Pursuant to Clause 1, Article 36 of the Law on Tax Administration 2019, where there is a change in tax registration information, the taxpayer must notify the tax authority in conjunction with changes to enterprise registration. Accordingly, if a change of the legal representative results in changes to taxpayer information, the enterprise must notify the tax authority.
  • Notification to partners and customers: The legal representative is responsible for signing contracts and documents in the course of business operations and represents the enterprise in exercising rights and obligations arising from transactions under Clause 1, Article 12 of the Law on Enterprise 2020 (as amended in 2025). Therefore, upon changing the legal representative, the enterprise must notify customers and related parties.
  • Notification to banks: The enterprise must notify the bank where its accounts are opened and complete procedures to update information on the legal representative. It ensures updated specimen signatures and authorized account holders, and helps avoid transaction disruptions, legal risks, and future disputes.

In conclusion, upon changing the legal representative, the company must notify the tax authority, banks, and relevant partners to avoid violations and transaction disruptions.

5. What issues arise if the legal representative fails to timely register changes with the business registration authority?

Failure by the legal representative to timely register changes with the business registration authority will result in administrative sanctions in accordance with law.

Pursuant to Article 44 of Decree No. 122/2021/ND-CP, sanctions for violations of deadlines for registering changes to the Enterprise Registration Certificate include:

  • A warning for registration delays of 01 to 10 days;
  • A fine ranging from 3,000,000 VND to 5,000,000 VND for delays of 11 to 30 days;
  • A fine ranging from 5,000,000 VND to 10,000,000 VND for delays of 31 to 90 days;
  • A fine ranging from 10,000,000 VND to 20,000,000 VND for delays of 91 days or more.

Remedial measure: Mandatory registration of the changes.

  • A fine ranging from 20,000,000 VND to 30,000,000 VND for failure to register changes at all.

Remedial measure: Mandatory registration of the changes.

Based on the above provisions, enterprises that fail to timely register changes with the business registration authority may be subject to administrative penalties depending on the severity and duration of the delay.

V. Are you looking for a reputable law firm to assist with legal representative issues?

The above information is provided by NPLaw for reference purposes. With an experienced team of lawyers and legal consultants, NPLaw offers professional legal services to best protect clients’ lawful rights and interests. For detailed advice on specific cases, please contact Ngoc Phu Law Company Limited.