Đại diện theo pháp luật của doanh nghiệp theo quy định của pháp luật doanh nghiệp việt nam hiện nay TT TIENG ANH

VIET NAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES NGUYEN THI THANH THE LEGAL REPRESENTATIVE OF AN ENTERPRISE UNDER THE CURRENT VIETNAMESE ENTERPRISE LAW Major: Economic Law Code: 93 80 107 THE SUMMARY OF THE DOCTORAL DISSERTATION IN LAW Hà Nội, 2021 The dissertation was completed at GRADUATE ACADEMY OF SOCIAL SCIENCES Supervisors:: Dr Ho Ngoc Hien Dr Nguyen Van Cuong The 1st peer-review: Prof Dr Nguyen Thi Mo The 2nd peer-review: Assoc.Prof Dr Duong Duc Chinh The 3rd peer-review: Assoc.Prof Dr Nguyen Quang Tuyen The dissertation will be defened through the Academy- level dissertation Committee meeting At: …………………………………………………………… At: ………….……date……month……….year…………… The dissertation can be found at: - The National Library of Vietnam - The Library of Graduate Academy of Social Sciences INTRODUCTION The Rationale of the study The legal representative of an enterprise means that a person acting in the name transaction with the third party The enterprise is subject to legislation, but all this participation must be through the representative (from the establishment until operation termination) Because of such an important role, legal documents such as the Civil Code, the Law on Enterprise (LOE), and the Law on Bankruptcy (LOB) provide for the enterprise's legal representative It can be seen that despite having a lot of regulations on the legal representative of an enterprise, the current law also reveals many compelling issues Firstly, the legal representative model of enterprises in Vietnam's corporate law is incomplete, which is evident in the fact that the representative of enterprises has not been built according to the unified legal basis, Secondly, Vietnamese law has not identified a unified legal principle that governs elements related to the legal representative model The determination of their authority and the scope of representation in the case of an enterprise with more than one legal representative is not clear The rights and obligations of the representative have not been fully designed, and the supervisory mechanism and legal responsibility of the representative need to be supplemented and perfected On the other hand, the practice arises cases that need legal guidance are needed, such as: determining the types of transactions that require the approval of all legal representatives or the validity of the contract signed by the enterprise when the representative objected to the document signed by the other co-representative According to current corporate law, the determination of the legal representative's authority based on the company's charter has not guaranteed the right, legitimate interests of a third party if the content of the scope is complex for the third party to review the partnership's charter in order to ensure that the contract does not exceed the capacity of representation Thirdly, the control mechanism and liability of legal representatives have not been strictly regulated, leading to the fact that there are many cases in which legal representatives take advantage of the laxity in internal control regulations for self-seeking purposes Moreover, the legislation is incomplete, leading to the fact that law enforcement has not been optimally effective The above issues show that the systematic research on legal representatives contributes to perfecting the corporate governance structure and improving the efficiency of law implementation in practice The topic "The Legal Representative of an Enterprise under the current Vietnamese Enterprise Law" was chosen for the doctoral dissertation to solve the above practical problems in legal regulations Research purpose and tasks To achieve the above research purpose, the dissertation has the research tasks, as follows: (i) Systemizing a number of theoretical issues on legal representation of enterprises, including concepts; nature; the legal representative role of enterprises; fundamental legal theories related to legal representation of enterprises (ii) Understanding the enterprise's legal representative model in some countries worldwide, as well as the influence of fundamental legal theories related to the representative of enterprises Explain the similarities and differences between national legislation on this issue (ii) Analysis of the actual legislation and law enforcement to the legal representative of enterprises in Vietnam Thereby, pointing out the limitations and inadequacies in the legislation and law enforcement, assessing the causes of those limitations (iii) Proposing solutions to improve legislation for the enterprise's legal representative in Civil Code, the LOE, and the LOB in the coming time (iv) Proposing measures to improve enterprises' efficiency in implementing the law on legal representation in Vietnam Research object and research scope 3.1 Research object The research object of the dissertation is the fundamental legal theories related to enterprise legal representatives, the current legislation, and actual law enforcement in Vietnam The dissertation studies several legal regulations of the UK, the United States, France, Germany, and China related to enterprise legal representatives 3.2 Research scope Scope of contents: The dissertation focuses on researching the enterprise's legal representative in a narrow scope that is a form of the representative regulated by the law, has the right to perform civil transactions on behalf of enterprises, and is responsible for state agencies and third parties Other kinds of the enterprise's legal representatives, such as independent commercial representatives or agents, employees representing the enterprise in business activities, are not within the scope of the dissertation In addition, the defined scope of enterprises includes all types of companies (Limited Company, Joint Stock Company, Joint Stock Company), excluding private enterprises Scope of space: The author studies the law on legal representation and the practice of law enforcement in Vietnam, and the corporate law of some countries in the world such as the UK, the United States, France, Germany, and Japan Spatial scope: The duration of the project is from 2016 to present Methodology and research methods The dissertation is carried out on the basis of the materialist dialectic of Marxism - Leninism The dissertation combines popular research methods such as: descriptive method, analytical method, historical method syndissertation, comparative jurisprudence method New contributions of the dissertation The dissertation systematizes current legal theories affecting defining the legal representative model of enterprises From this theoretical background, the dissertation clarifies which lawful basis is close to Vietnamese enterprises' current legal representation model, compared with some countries such as the United Kingdom, the United States, France, and Germany In addition, the principles governing the legal relationship on legal representation of enterprises - The dissertation analyzes the existing Vietnamese legislation related to the legal representative of enterprises The contents are interpreted from legal documents: LOE in 2014, LOE in 2020; Civil Code 2015, Bankruptcy Law 2014 This issue is also studied in comparison with similar legislation of some countries around the world, as follows: (i) The dissertation points out the limitations in determining the representative authority, delimiting its authority in the case of having more than one legal representative, leading to the conflict of authority and causing damage to the third party (ii) The dissertation clarifies the legislation on the liability of the legal representatives to enterprise and third parties to propose changes in the direction of better protection for bona fide third parties (iii) On the basis of analyzing and clarifying the legal representative's rights, obligations, and responsibilities, the dissertation points out additional points in the LOE, the Bankruptcy Law, to improve the monitoring mechanism of the legal representative's activities - The dissertation clarifies some problems from the practical law enforcement related to legal representatives Since then, some measures have been recommended to enhance the effectiveness of law enforcement, especially in the context that the new LOE takes effect in 2020 Theoretical and practical significance Theoretically, the dissertation has systematized theoretical issues regarding the enterprise's legal representative relationships and models, which include the title of the legal representative in the corporate governance structure, the scope of the representative authority, the rights and obligations of the representative, the mechanism to control the representative The above issues are compared with the laws of some countries to clarify the advantages, weaknesses of Vietnam's legislation and draw suggestive experiences for perfecting legislation Practically, through assessing the practice of implementing the law on legal representatives of enterprises through cases and disputes, the dissertation proposes solutions to enhance the effectiveness of law enforcement In addition, the dissertation is also a valuable source for research, teaching, and learning on this issue in training institutions and research institutions Dissertation Structure In addition to the introduction and conclusion, the dissertation content consists of chapters: Chapter 1: Literature review and theoretical research basis Chapter 2: Legal issues of the legal representative of an enterprise Chapter 3: The actual legislation and law enforcement on the legal representative of an enterprise Chapter 4: Orientations and solutions to perfect the law and enhance the efficiency of law enforcement on the legal representative of an enterprise Chapter 1: LITERATURE REVIEW AND THEORETICAL RESEARCH BASIS 1.1 Literature review Agency relationship in general and the legal representative model of enterprises, in particular, have been mentioned in many domestic and international legal and scientific research works The doctoral author studied published works related to legal representatives and the models of legal representative of enterprises of domestic and foreign authors It is divided into groups: Studies on legal theory related to the issues of the legal representative of enterprises; legal representative models of the enterprise; the scope of representative authority in the agency relationship; the rights and obligations of the legal representative to the enterprise, the responsibilities of the legal representative and the enterprise to a third party; the monitoring mechanism and legal responsibilities of the legal representative of the enterprise 1.2 Literature review evaluation and research problem 1.2.1 Achievements Firstly, fundamental legal theories about the legal nature of enterprises have been systematized and analyzed by domestic and international authors This is the theoretical foundation to understand better the current representative model of enterprises in Vietnam and the world Secondly, the research works have clearly shown the necessity and position of legal representatives of enterprises in corporate governance and business activities Thirdly, the legal representative of an enterprise is a form of agency relationship Yet, despite the differences in the models of representing businesses in countries, the nature of legal representation is still a type of representation Therefore, most scientific research works analyze the agency relationship with common characteristics, classify the agency relationship with related factors such as authority and the scope of representation, rights and obligations of the representative, the relationship between the parties in the agency relationship with other related parties, etc Fourthly, research works on representation in some countries such as Britain, the United States, France, Germany, and China have formed an overall picture of the representative model of enterprises, rights and obligations, and legal responsibilities of legal representatives in different countries 1.2.2 Research problem Based on the research results of previous scientific studies, the author continues to study the legal representative model of enterprises via an approach to the problem from theories of the legal nature of the company, representative theory; characteristics, representative authority, classification of representatives, rights and obligations of the parties in the agency relationship and with a third party; legislative experience and law enforcement process of some developed market economy countries, such as France, Germany, the UK, and the US On the basis of inheriting the results obtained from previous works, the author continues to research and solve some problems: clearly defining the legal representation model of enterprises in Vietnamese law; rights and obligations of the parties in the agency relationship; propose an effective monitoring mechanism from the internal enterprise for the representative and the prosecution for the legal liability of the legal representative if infringing The dissertation analyzes the practical law enforcement on legal representatives in order to propose solutions to perfect legislation and enhance the effectiveness of law implementation 1.3 Research question, Research hypotheses Theoretical Basis The dissertation focuses on answering the following research question: - What is the legal theoretical basis related to the legal representative model of enterprises? - What is the legal representative model of some countries? What are the similarities and differences? Why have the different things? - How is the legal representation model of enterprises regulated in the current Vietnamese enterprise law? Is that model similar or different compared to the corresponding model in some countries such as France, Germany, UK, the USA, China? Why have the different things? - What are the advantages and disadvantages of the current legislation in Vietnam for the legal representative model of enterprises? - What are the advantages and disadvantages of legal responsibilities of enterprises and legal representatives to third parties and handling of legal consequences in transactions without the authority to represent or exceed legal authority? Why? - What is the actual law enforcement in Vietnam? What are the reasons for these limitations? - What solutions need to be taken to perfect the law and enhance the efficiency of law enforcement on the legal representative of an enterprise in Vietnam? The research hypodissertation aims to clarify the research purpose: - The variety of legal theories related to the legal representative of an enterprise is an advantage to choose a legal approach suitable to the socioeconomic conditions, the legal system of Vietnam and to build a reasonable legal model The actual legislation on the enterprise's legal representative, such as the scope of authority, rights and obligations, responsibilities to third parties, and the representative's legal liability, has not well protected the rights and interests of parties - The actual law enforcement on the legal representative of enterprises is still limited - Solutions to perfect the law and enhance the efficiency of law enforcement related to the enterprise's legal representatives should focus on the standard: effective implementation in society The research theory is used: Firstly, regarding the legal theories related to the legal nature of the company The dissertation focuses on fundamental approaches, including Fiction Theory, Realistic Theory, the Nexus of Contracts, and organization theory These are the primary legal theories related to explaining the nature of the legal entity Secondly, the theory of conflict of interest and asymmetric information in corporate governance is applied to consider the monitoring mechanism for legal representatives Chapter 2: LEGAL ISSUES OF THE LEGAL REPRESENTATIVE OF AN ENTERPRISE 2.1 The concept of the legal representative of an enterprise 2.1.1 The concept of Representation Representation is a relationship between entities whereby a person (hereinafter referred to as the representative) acting in the name and for the benefit of another person enters into and performs a civil transaction In the agency relationship, there is a form of legal representation The legal representative is the case of representation prescribed by law or decided by a competent state agency 2.1.2 The concept of the legal representative of an enterprise The legal representative of an enterprise is the statutory representative required to have the enterprise Thereby, the representative is entitled to enter into and/or perform necessary acts with a third person on behalf of the enterprise in accordance with the scope of authorization of the enterprise The statutory nature is reflected in the competence to represent as prescribed in the legal document The representative's identity is determined from the Charter and registration with the state administrative agency 2.2 Legal nature of the legal representative of the enterprise The characteristics showing the nature of legal representation include: (i) The enterprise's legal representative, is the statutory representative, couldn't be confused with other entities in the enterprise such as the business executive manager, authorized representative, representative employee to perform the assigned scope of work (ii) The legal representative of an enterprise is legal (iii) The legal representative of an enterprise is determined based on the internal agreement of the enterprise (iv)The legal representative of an enterprise ensure the enterprise's lawful interests (v) The legal representative of the enterprise can be an individual or a legal entity 2.3 The role of the legal representative of an enterprise The legal representative of an enterprise plays a critical role in the stable development of enterprises via promoting and orienting activities under the law Choosing a legal representative of an enterprise well will ensure the interests of shareholders contributing capital to the company and ensure the interests of business partners, consumers, and the State 2.4 The influence of legal theories on the choice of legal representative model of enterprises The study of legal theories affecting the determination of the appropriate representative model means that it is necessary to clearly define Contractual relationship theory states that a company is an aggregate formed based on a contract of established individuals The theoretical model of corporate governance influenced from this point of view is the Shareholder primacy model, which emphasizes the importance of shareholders in corporate governance Therefore, it is necessary to maximize the interests of shareholders and direct company activities in the direction of financial benefits for shareholders This model will lead to a conflict of interest between shareholders and legal representatives if determined by this model 2.5 Model of legal representation of some countries in the world The legal representative of the enterprise has a significant position in the corporate governance structure This is the entity that represents the business dealing with outsiders The representative model mentioned here is understood as the organizational system and operation of the legal representative of an enterprise, including factors such as the division of representation rights, rights and obligations of the parties in the Agency relationship There is no common denominator for the legal representation model of an enterprise This comes from two main reasons: (i) based on the legal point of view, the legal theory that legislators recognize and apply in the design of that representation model (ii) the establishment and structure of the representative model of each specific company belongs to the internal affairs of each company on the principle of self-determination based on the purpose, industry, and size of business The introduction of a typical representative model in the legal system of countries according to the Civil Law tradition with representatives being France, Germany, countries following the Common Law legal system such as the UK, the US, and the legal systems of other countries Socialist countries like China are studied according to specific aspects: Title and authority of the legal representative; representative supervisory agency; third person protection; obligations of the representative 2.6 Principles governing the agency relationship of enterprises 2.6.1 Ensuring the harmonizing principle between the State's intervention and the right to self-determination in the legal relationship of the enterprise's representative This principle manifests itself in aspects as follows: 10 Firstly, ensuring the guiding role of the enterprise law in the agency relationship of the enterprise's legal representatives Corporate law only regulates the primary issues and principles for handling disputes that may arise related to agency issues Secondly, building a legal representative model of enterprises should be based on appropriate legal theory, ensuring the right of enterprises to selfdetermination in the allocation of administrative power of enterprises Thirdly, this principle is reflected in the legislation on the liability of legal representatives It expresses its management function through a postinspection mechanism to control the activities of enterprises and legal representatives 2.6.2 Ensure principles are consistent with the modern corporate governance structure The modern trend of corporate governance has an impact on the activities of the representative of an enterprise, namely: The representative model associated with corporate governance must be harmonized, aiming for the common goal of protecting the common interests of the enterprise, not protecting the interests of shareholders or group interests of managers due to information asymmetry Mechanisms to monitor people need to be set up in detail This monitoring mechanism is implemented by many methods, including legal provisions and self-regulatory agreements within the company known as civil methods 2.6.3 Ensure the principle of third-party protection in the agency relationship by the law of enterprises The principle is expressed in such matters, such as handling transactions beyond the representative's authority, determining the enterprise's liability to a third party if having violation by the representative Specifically: (i) identification criteria and legal consequences for third parties along with handling transactions without authority, beyond authority (ii) the enterprise's liability to a third party is determined according to specific criteria (iii) request disclosure of the representative's identity 11 Chapter 3: THE ACTUAL LEGISLATION AND LAW ENFORCEMENT ON THE LEGAL REPRESENTATIVE OF AN ENTERPRISE 3.1 The actual legislation of the legal representative of an enterprise 3.1.1 The concept of legal representative of an enterprise The legal representative of an enterprise "is the individual that exercises the rights and fulfills the obligations on when making transactions on behalf of the enterprise, represents the enterprise as the plaintiff, defendant, and person with relevant interests and duties before the arbitral tribunal, the court, exercises other rights and fulfills other obligations as prescribed by law" The concept also has limitations such as: Firstly, maintaining the concept of an independent representative creates an overlap in the representative's authority and the manager's authority specified in the LOE Secondly, it can be determined from the above concept that the LOE only allows an individual to be a single entity to become a legal representative, while according to the Civil Code 2015 in Article 134, the representative can be a natural or juridical person (legal entity) if having legal personality and/or legal capacity suitable for the transaction 3.1.2 Chức danh đại diện theo pháp luật doanh nghiệp luật doanh nghiệp Việt Nam 3.1.2 The title of the legal representative of an enterprise in Vietnam law on enterprise The title of the enterprise's legal representative is specified in the LOE in 2020 for each type of enterprise It can have one or more legal representatives depending on the kind of company The quantity, management titles, rights, and obligations of legal representatives are specified in the company's Charter Compared with the representative models of enterprises in the UK, France and Germany, it can be seen that the representative model in Vietnam's LOE has different characteristics The system of representation appointed the two regulations separately: the representative and the manager, which is not beneficial for the company governance in specific areas of expertise (finance, human resources, business ), creating the lack of adaptability and competitiveness, inconvenient to carry out regular transactions and other activities 12 A legal entity can become a legal representative or business manager The LOE does not allow a legal entity to become a legal representative or business manager 3.1.3 The legislation on conditions for appointment and dismissal of the legal representative of an enterprise a The legal provisions on the conditions for the legal representative of an enterprise The current LOE has regulations on appointment conditions for legal representatives, but it still has limitations and does not guarantee the rights and interests of the representative Specifically, conditions for legal representatives are regulated separately in legal documents such as the Civil Code, the Bankruptcy Law, some specialized laws such as the Law on Credit Institutions, the Law on Insurance, etc These conditions include: (i) legal representative must be a person with fulfills legal capacity (ii) the representative must not be subject to a restriction of management rights as prescribed by law if the representative is concurrently the manager (iii) the representative must have capacity and experience suitable for specific business lines prescribed by specialized legal documents b, The legal provisions on the effective time of the decision to change the legal representative of an enterprise Based on researching the corporate law regarding this issue, it can be seen that there are still some limitations as follows: (i) While the Law on Enterprises of Vietnam requires the representative to disclose the identity and authority to a third party, it lacks additional provisions The current law lacks provisions guiding the handling of cases where there is a defect in disclosing the identity of the legal representative (ii) The effective date of the decision to change the legal representative has easily caused misleading for the enterprise (iii) The case of appointment of legal representatives according to court decisions when dealing with bankruptcy procedures still has got hitched c, Legal provisions on the agreement to terminate the legal representation relationship The current corporate law does not have explicit provisions on the termination of the agency relationship in an enterprise based on the provisions of the Charter or by agreement Specifically, the LOE does not have any regulations to limit illegal termination of the legal representative status 13 The Law on Enterprises does not have any regulation to protect legal representatives if being forced to terminate their representative status due to violations by the representative It is difficult to assess the unsuitable factor to consider the responsibility of the enterprise due to the separation of titles 3.1.4 The authority of the legal representative of an enterprise a The basis for arising the legal representation authority of an enterprise is based on two primary sources: according to the legislation and the company's Charter * The authority of the legal representative of the enterprise as prescribed in legal documents Firstly, the LOE in 2014 and the LOE in 2020 lacks provisions related to the competence of legal representatives independently but only provided for the obligations of legal representatives in Article 13 The Law stipulates the competence of senior managers in the enterprise according to each specific type Secondly, the LOE lacks a clear and transparent provision on the representative's rights, such as the right to receive information The Law does not provide for the right to be exempt from liability for representatives if having violations Thirdly, the LOE in 2020, the LOE in 2014, and the Civil Code in 2015 not establish regulations limiting the representative's authority in secured enterprise transactions * The authority of the legal representative of the enterprise is stipulated in the Charter of the enterprise The provisions in Clause 1, Article 141 of the 2015 Civil Code on Scope of representation of legal entity as determined in accordance with the enterprise's Charter are risky when the Civil Code does not introduce sanctions for violations of the obligation to notify the content of assigned authority in the Charter to a third party b Determining the scope of representative authority in case having more than one legal representative * In case the Charter does not stipulate the division of jurisdiction of legal representatives The delimitation of the authority of legal representatives after the 2014 LOE came into effect still has some problems to be solved: two co-representatives expressing the opposite on an issue and the principles and procedures to choose the representative, 14 * In case the Charter stipulates the division of authority between corepresentatives clearly and transparently These regulations show that Vietnam's LOE is not uniform On the one hand, they maintain an independent legal representative with independent rights and obligations On the other hand, they guide the diversity of representatives and attach representative authority with managers in the enterprise, even though these are limited titles The law on enterprises needs to follow the principle: it is impossible to any internal provisions restricting the rights of the legal representative to a third party in order to absolve the enterprise of liability to the third party * In case the Charter has provisions on the authority between the corepresentatives, there is an overlap, leading to a conflict of representative authority The law does not provide for the settlement of the representative's authority in this case c Handling civil transactions established by the representative beyond the authority, without the authority to represent Vietnamese law is not reasonable when it lacks provisions on the principle of thoroughly protecting third parties against the limitations on the competence of legal representatives specified in the Charter In the current Civil Code, in the provisions on civil transactions beyond the scope of representation, there is no authority to represent and still limitations, as follows: Firstly, the responsibility for the transaction beyond the authority belongs to the representative who has not protected a bona fide third party Secondly, the burden belongs to the third party, which must prove that the enterprise must be at fault that makes the third party not know the limit of the scope of authority to bind the responsibility of the enterprise For transactions without representative authority, the burden of proof is on a third party to bind the responsibility of the enterprise d Handling civil transactions established by legal representatives based on invalid internal decisions The Law on Enterprises has not stipulated the validity of contracts signed between the enterprise and a third party that the enterprise's internal decisions are invalidated 3.1.5 Obligations of the legal representative to the enterprise Obligations of the legal representative of an enterprise include: The legal representative's obligations to the State include the obligations on disclosing information and representing the enterprise to carry 15 out registration procedures related to changes in content on the enterprise's registration certificate Specifically: The legal representative's obligations to the enterprise include the obligations to perform the work honestly, carefully, in the best interest of the enterprise; the obligation to be loyal to the interests of the enterprise and to keep the information confidential, to avoid conflicts of interest; be responsible for compensation for damage to the enterprise due to the violation of its obligations 3.1.6 Mechanism to supervise the representative of the enterprise The monitoring mechanism is considered from three aspects: the subject of supervision, the supervision content, and the supervision method Accordingly, the LOE in 2020 stipulates the authority of the Supervisory Board and the Supervisor very clearly and in detail However, it lacks regulations on the authority of the Supervisory Board on representing the company to the outside in some cases of controlling the legal representative's activities Vietnamese law has not provided for the compensation responsibility of the Supervisor in the performance of supervision On the other hand, the supervision content is at controlling self-interest transactions according to the subject, not establishing a control mechanism based on the nature of the contract, the order, and the authority to approve the agreement The method of supervision by legal provisions is prescribed in legal documents: The Vietnam LOE does not have regulations on handling the responsibility of enterprises when covering up legal representatives to carry out illegal activities Method of civil supervision by agreements within the internal enterprise through the Charter: through considering the procedures for changing the company's legal representative according to the LOE, however, there is a distinction between the procedures for replacing voluntarily and being dismissed legal representatives as an enterprise sanction In case of the representative flees his/her residence and being deprived of the right to practice by the Court due to smuggling, counterfeiting, illegal business, tax evasion, or deceiving customers according to the provisions of the Penal Code, if the representatives disagreed with the dismiss of the representative position, it leads to the delay and deadlock in the change of the enterprise' legal representative 16 3.1.7 The liability of the legal representative of an enterprise The responsibilities of legal representatives are recognized under the following responsibilities: Civil liability, administrative and criminal liability The enterprise determining the civil liability of representatives via making collective decisions by the majority of votes is challenging when they not agree to decide, even in the case of silence without objections at the meeting Administrative liability applied to legal representatives is very rare but mainly aimed at businesses that commit violations In some specific cases, the company's legal representative may be subject to fines and administrative sanctions related to tax evasion, stock market, and bankruptcy The criminal liability of the enterprise's legal representative when performing the act of representation is only applied in cases the representative personally commits a crime That is when the representative participates in the crime and is directly responsible for the criminal offense The independent criminal liability of a legal representative is specified in great detail in the Vietnam Penal Code 2015 (amended and supplemented in 2017), focusing on crimes in the economic field Suppose Vietnam's enterprise law is determined according to the organizational theory, in that case, it will be convenient to explain the theoretical basis for applying the criminal liability of the enterprise, as well as the criminal liability of the legal representative if having violations 3.2 The actual law enforcement on the legal representative of an enterprise Studying the actual law enforcement related to the enterprise's legal representative illustrates that there are still many limitations and inadequacies - Up to now, the LOE regulates to expand the number of representatives, but in reality, businesses are not aware of the advantages that this model brings but afraid that there is no effective mechanism to control representatives - There are still many conflicts related to the enterprise's legal representative, especially the authority to represent Currently, the LOE stipulates the authority of the representative However, it is based on the division of management rights by a rate of the total value of the enterprise's assets or self-seeking transactions, not based on the legal nature of transactions and the possibility of affecting company members' legitimate rights and interests, such as security transactions - The charter has not played an essential role in protecting the legitimate rights and interests of shareholders It is a fact that, due to the lack of awareness of enterprises about the company's charter, the charter was drafted according to 17 the general form and keep the guiding provisions of the LOE on the governance structure and members' rights and obligations - The practice of resolving disputes related to the enterprise's representative shows that there is no effective corporate governance mechanism monitoring the activities of the legal representative - Legal responsibilities of the enterprise's legal representative should be explained more clearly in protecting the legitimate interests of third parties Applying the general principle in the agency relationship to safeguard the bona fide third party's legitimate rights and interests according to the current civil law leads to many difficulties in practice In many cases, third parties are not preserved because it is more difficult to find evidence to prove the limitation of the legal representative's right to represent an enterprise when entering into a contract - Disputes related to legal representatives are often lengthy, time-consuming, and involve many procedures, causing disadvantages to enterprises in operation Still, those who commit acts of such damage are rarely responsible for compensation to the business In fact, claiming compensation from the representative is very difficult because the deterioration of the enterprise is of great value compared to the assets and ability of the individual representative - Considering the responsibility of the enterprise's representative when the enterprise goes bankrupt shows many shortcomings Although the law has provisions on administrative liability for breach of obligations: failure to file a bankruptcy petition, failure to provide necessary documents to carry out bankruptcy proceedings, etc., the application is challenging because the responsible individual is no longer working at the enterprise 3.3 The evaluation of the advantages and disadvantages of the law on enterprises and its actual law enforcement The LOE has made progress in legal thought related to the enterprise's legal representative The unique representative model is changed to bring convenience to the business in the process of operation This new regulation emphasizes the right to self-determination in building a corporate governance model suitable to the characteristics and size of enterprises Besides, there are still limitations: a unified legal representation model has not been built in accordance with the corporate governance structure and the actual status of production and business activities, and the legal system on competence has not yet been established the multi-representative model, leading to a situation where many representatives have contradictions in 18 expressing their will to the outside In addition, regulations to protect honest third parties in transactions with legal representatives of enterprises have not been thorough Operational supervision mechanisms and regulations on prohibiting competition of representatives with enterprises are not complete and not detailed The reasons to explain it are: (i) Vietnam's corporate law does not have a dominant theory on the nature of enterprises recognized and governs the drafting of relevant legal regulations (ii) The socio-economic context of Vietnam, which was previously under a centrally planned economy, is more or less influential (iii) the law enforcement by the judicial staff of the Court is still uneven Chapter 4: ORIENTATIONS AND SOLUTIONS TO PERFECT THE LAW AND ENHANCE THE EFFICIENCY OF LAW ENFORCEMENT ON THE LEGAL REPRESENTATIVE OF AN ENTERPRISE 4.1 Orientation to perfect the law on the enterprise's legal representative 4.1.1 Establishing principles and guiding criteria for the agency relationship of enterprises The legislation on the enterprise's legal representative should be adjusted as following orientations: - It must ensure the enterprise's legitimate interests, particularly the freedom to conduct a business, the right to self-determination, and create optimization in the corporate governance mechanism - It must ensure the legitimate rights and interests of partners participating in transactions - It should ensure the harmonization of the enterprise's rights and interests and for the third party and other stakeholders The benefits of third parties and stakeholders here are understood as advantages/values businesses can bring to society 4.1.2 Perfecting the legislation must be based on law enforcement's effectiveness on enterprises' legal representatives One of the criteria to evaluate the level of completeness of the law in general and the legal provisions on representation, in particular, is to ensure the effectiveness and suitability of the legal regulations Relevancy here is understood as the compatibility of regulations on representative in enterprise law in accordance with the conditions and level of economic development of 19 society as well as legal policies in this field The enterprise's legal representation legislation should be developed with high legislative, technical standards to facilitate society's legal perception The corporate law establishes norms, including guiding enterprises to design an appropriate and effective corporate governance model, emphasizing the role of the representative through the Charter 4.2 Legal solutions for the enterprise's legal representative The recommendation to amend and perfect the law on the enterprise's legal representative is focused on: a Choosing the title of the legal representative of the enterprise based on the legal basis and theory of corporate governance In the Vietnam Corporate Law, the title of the enterprise's legal representative should be selected to not maintain the existence of the title of independent representative Still, it should only accurately stipulate the company manager, who has the authority to represent the enterprise It stems from the following reasons: (i) The authority to represent the enterprise is difficult to separate from the authority manager (ii) Regulations on office managers with authority to represent in the direction of empowering representatives for business managers are close to the regulations of some other countries on this position (iii) The theoretical basis of this proposal is based on the Realistic Theory and the OrganizationTheory, which the managers' authority is on behalf of the enterprise to perform activities within the scope of business operations and their assigned tasks b Proposing to supplement several legal provisions in order to determine the competence of the legal representative of an enterprise From the perspective of the author, the LOE should be amended provisions on the manager who has the authority to represent, as follows: "In the case of transactions established on behalf of the enterprise by the representative having authority, the objection of the remaining corepresentative shall not be effective against the third party, unless the third party already knew about the representative authority This is consistent with the case of a division of authority within the enterprise The limitation in the authority of a representative cannot eliminate the responsibility of the enterprise to a bona fide third party If the Charter does not stipulate the division of authority, the representative's authority here is fulfilled Hence, the 20 enterprise cannot reverse a legally established transaction with a bona fide third party It is necessary to develop orientation in the Model Charter to help enterprises better understand this issue through the business's handling principles when representatives have different opinions on the transaction C - Proposing additional content in the legislation on the limitation of the authority of the legal representative Firstly, the Law on Enterprises needs to supplement the provisions in Article 12 of the LDN 2020: "Transactions established by the representative without the authority specified in the company's Charter still give rise to the company's responsibilities: transactions that protect the legitimate rights and interests of enterprises These transactions are interpreted as transactions intended to prevent the loss or maintain the opportunity to gain an advantage for the enterprise For example, sending a bill of lading; registration of creditor rights for bankrupt enterprises; pay property insurance premiums on time, etc Secondly, supplementing Article 92, Article 153 of the LOE 2020 on the authority of the Board of Members/Board of Directors with the content: “Transactions established and performed by the legal representative related to the enterprise need the consent of the Board of Directors/Board of members, that includes: borrowing assets (Issuing bonds), securing the performance of obligations, and transactions related to activities on the stock market’ d Proposing amendments to the legal provisions related to the protection of rights of the bona fide third parties As a result of researching solutions to handle transactions established by legal representatives without internal ensuring the legitimate authority to sign this transaction, the author proposes to supplement the content of the law in the LDN in 2020 in the direction: "In case the enterprise's Charter has limitations on the representative's authority, the representative is obliged to comply with this provision In any event, the limitations of authority contained in the Charter shall not affect a bona fide third party The enterprise is responsible for dealings with third parties and has the right to demand that the representative be liable to compensate the enterprise” e Proposing additional legal provisions related to the rights and obligations of the legal representative Firstly, supplement regulations on the mandatory condition that legal representatives need to be notified about the meeting of the Board of Directors/Board of Members regarding the dismissal of their positions 21 Secondly, the LOE in 2020 should add some obligations of the representative, such as the obligation to not compete along with the obligation of loyalty, honesty, prudence, and acting in the interests of the business Thirdly, determine the principle of defining the joint or separate obligations of the legal representatives of the enterprise in the liability to compensate for damage Fourthly, supplement the content of the Template of Charter to suggest that enterprises need to recognize the method of assessing the quality of information are obliged to inform periodically and the responsibility to disclose information in the course of performing their duties period and crosssupervision mechanism between co-representatives Fifthly, it is necessary to supplement regulations related to the obligations of legal representatives during the period of bankruptcy in order to preserve the capital of the enterprise and protect employees, shareholders and creditors g Mechanism to control the rights of the legal representative Firstly, the controlling role of the Supervisory Board and the Supervisors in the enterprise must be supplemented with the right of representation in some particular cases Specifically, amending and supplementing Article 105, Article 170 of the LOE in 2020 on the rights and obligations of the Supervisory Board in the form of limited liability company and joint-stock company with two contents: “- The Supervisory Board has the authority to represent the company in establishing a transaction to hire a professional consultant on the list proposed by the Board of Directors/General Meeting of Shareholders to serve the inspection and supervision of internal financial records When voting on a decision of the Supervisory Board, members of the Supervisory Board with related interests are not allowed to vote - The Supervisory Board has the authority to represent the enterprise to exercise the right to sue the representative before the Court for violations of obligations Secondly, it is necessary to supplement regulations on the responsibility to publicize the organization and operation of companies, including differentiation of representative authority in case an enterprise has many representatives, business information, and business lines for all types of businesses on the Business Portal The new LOE in 2020 only focuses on the responsibility of information disclosure of state-owned enterprises organized 22 in various types of companies, public joint-stock companies, investment funds, and securities funds, but have not yet paid attention to the principle of transparency in joint-stock companies, limited liability companies, and Partnership h Legal responsibilities of the legal representative of the enterprise The author proposes the Decree guiding the LDN in 2020, providing information on the sanction of administrative violations for representatives and enterprises on the Enterprise Portal Especially in tax violations, violations of the Law on Food Safety and Hygiene, and the Law on Consumer Protection To civil liability, it is very difficult to prosecute enterprises for indemnification responsibility if having violations a third party Legislators should consider purchasing professional liability insurance for representatives The law does not provide for sanctions to be applied when the Board of Directors does not take measures to handle legal representatives who commit violations The current Law on Enterprises does not stipulate that the Supervisory Board has the authority to represent enterprises on lawsuits the legal representatives to Court to ensure the interests of enterprises Hence, it is necessary to suggest in the template of the Charter on cases of violations and applicable sanctions, including termination of violations, compensation for damage, resignation, or dismissal of the position of legal counsel 4.3 Solutions to hence the efficiency of law enforcement on the legal representative of enterprises Solutions that need to be implemented include: - Enhance the effectiveness of propaganda and dissemination of corporate law, including regulations on the enterprise's legal representative - Guide and support enterprises to perfect an effective corporate governance model that is convenient for the activities of representatives and stakeholders in designing and developing the Charter Ensure the disclosure of information to ensure the interests of the parties involved in the activities of the enterprise's legal representative It is necessary to add more functions to the Business Portal to create more favorable conditions for business operations and promote a healthy business environment with reputable businesses - Improve the efficiency of applying corporate law concerning the legal representation of enterprises from competent state agencies Determine the authority of the business registration authority in more detail with the order of 23 administrative control for violations that increase according to the seriousness of the legal representative CONCLUSION Corporate law is one of the elements of the legal environment that directly affects the operations of enterprises In particular, regulations on the model of legal representatives have always occupied an influential position However, the current LOE still has unclear and unreasonable regulations related to the Charter, leading to the result that the law enforcement in real life has not met the requirements The practice demands clear and detailed regulations on the position, rights, and obligations of the person in the enterprise's Charter With that in mind, the dissertation focuses on proposing some solutions to amend and supplement the enterprise law, concentrate on aspects such as: Choosing the charter model of the enterprise in combination with the management in the enterprise in order to maximize the initiative, flexibility, and responsibility in corporate governance and administration The mechanism to protect third parties participating in transactions with enterprises is proposed to amend and supplement more thorough protection The limitations of the enterprise's authority in the Charter not affect transactions with other persons unless the third person knows or is required by law to know Along with clearly explaining the rights and obligations of the parties in the agency relationship, clarifying the legal responsibility when there is a breach of the obligation, it is necessary to develop an effective monitoring mechanism for the representative 24 ... the transaction 3.1.2 Chức danh đại diện theo pháp luật doanh nghiệp luật doanh nghiệp Việt Nam 3.1.2 The title of the legal representative of an enterprise in Vietnam law on enterprise The title... of corporate law Theories are divided into two main lines: Fiction Theory, which has similarities with Conclusion Theory, Purpose Theory, and Symbol Theory, while Realistic Theory is similar... power in the name of a legal entity The other theory is the Realistic Theory with the support of the Organization Theory affecting the representative model of the business These theories hold