The time limit for appointing the representative of State capital, State-owned enterprise capital in a joint-stock company must not exceed 5 years, the specific period must be based on the charter of the joint-stock company.

According to Ms. Thu Ha (in Ho Chi Minh City), Article 47 of the 2014 Law on the management and use of State capital to invest in production and business in an enterprise stipulates: "The time limit for appointing a representative of the State capital share, a representative of the capital portion of the enterprise is determined not to exceed the term of the Members' Council or the Board of Directors ".

However, the Law on Enterprises 2014 does not stipulate the term of the Board of Directors, but only regulates the term of the members of the Board of Directors.

Ms. Ha would like to ask, how to determine the deadline for appointing a representative of the state capital share in case the enterprise charter does not stipulate the term of the Board of Directors but there is also a change of members of the continuous board. Of Director?

Regarding this issue, Article 47 of the Law on management and use of State capital invested in production and business in enterprises states:

“Article 47. Appointing a representative of the State capital share, a representative of the capital share of the enterprise:

1. Based on the criteria prescribed in Article 46 of this Law, the owner's representative agency and enterprises, in which 100% charter capital is held by the State shall be selected, and shall appoint a representative of the State capital share, a representative capital share of the business. The appointment of a representative must be made in writing, specifying the rights and responsibilities of a representative.

2. The time limit for appointing the representative of the State capital share or the representative of the capital share of an enterprise shall not exceed the term of the Members' Council or the Managing Board ".

The Law on Enterprises 2014 stipulates:

“Article 150. Term of office and numbers of members of Board of Management

1. The Board of Directors consists of 03 to 11 members. The company’s charter shall specify the number of Members of the Board of Directors.

2. Each Member of the Board of Directors and independent member of the Board of Directors has a term of office of up to 05 years without term limit. The number of terms, specific term period, number of Members of the Board of Directors required to reside in Vietnam shall be specified in the company’s charter.

3. In case the term of office of all Members of the Board of Directors expires at the same time, they are still Members of the Board of Directors until new members are elected and take over the office, unless otherwise prescribed by the company’s charter.

Article 156. Dismissal, discharge from duty and addition of Members of the Board of Directors

1. A member of the Board of Directors shall be dismissed if he or she:

a) Fails to satisfy the standards and conditions prescribed in Article 151 of this Law;

B) fails to participate in activities of the Board of Directors for 06 consecutive months, except for force majeure events;

C) Tenders a resignation;

d) Other cases prescribed by the company’s charter.

2. Members of the Board of Directors may be discharged from duty under Resolutions of the General Meeting of Shareholders.

3. The Board of Directors shall convene the General Meeting of Shareholders to elect additional members of the Board of Directors in the following cases:

a) The number of Members of the Board of Directors is reduced by more than one third of the number prescribed by the company’s charter. In this case, the Board of Directors shall convene a General Meeting of Shareholders within 60 days from the day on which the number of Members of the Board of Directors is reduced by more than one third;

b) The number of independent members of the Board of Directors falls below the ratio prescribed in Clause 1 Article 134 of this Law.

In other cases, the nearest General Meeting of Shareholders shall elect new members to replace those who have been dismissed or discharged from duty.

According to the above provisions, the time limit for appointing the representative of State capital, State-owned enterprise capital in a joint-stock company shall not exceed 5 years, the specific time limit must be based on the joint-stock company charter.

In case a joint-stock company does not specify a specific term of the Board of Directors' term, the time limit for appointing a representative of state capital at a joint-stock company shall not exceed 5 years according to the provisions of the Enterprise Law.

The change of members of the Board of Directors of a joint stock company with the conditions specified in Article 156 of the Law on Enterprises above is not related to the time limit for appointing the representative of the State capital share or the representative of the capital share of the joint stock company, State-owned enterprises in joint-stock companies.

Particularly, in the case of appointing a representative of the State capital share in a joint-stock company where more than 50% of the charter capital is held by the State, the appointment, re-appointment, dismissal, commendation, reward and discipline of the representative shall comply with regulations. in Decree No. 106/2015 / ND-CP dated October 23, 2015 of the Government on the management of the representative of State capital holding managerial positions in enterprises where the State holds more than 50% of charter capital.