Consulting services for building business charter
A business charter can be considered the most important operating things of the business which include many crucial rules such as: business lines, charter capital, organizational structure, and authority of enterprise management positions (Chairman of the Board of Members, Chairman of the Board of Directors, Director, Chief Accountant…), principles of profit distribution of owners…
According to the law, the charters is also a mandatory document when registering a business.
Therefore, creating charters is an extremely important job that businesses need to seriously execute
Relevant legal documents
Enterprise Law 2020
Enterprise adjustments must include all of the following:
- Name and address of the company’s headquarters; name and address of branch and representative office (if any).
- Business sectors.
- Charter Capital, total number of shares, types of shares and value of each type of shares (for joint stock companies);
- Full name, contact address, nationality of general partners (for partnerships); of company owners and members (for limited liability companies); of founding shareholders (for joint stock companies). Capital contribution and capital contribution value of each member (for limited liability companies and partnerships). Number of shares, types of shares, value of each type of shares of founding shareholders (for joint stock companies).
- Rights and obligations of members (for limited liability companies and partnerships); of shareholders (for joint stock companies).
- Organizational management basis.
- Number, management functions and rights and obligations of representatives according to enterprise law; division of rights and obligations of representative laws in case the company has more than one representative law.
- The ways making decisions of the company; principles of internal dispute resolution.
- Bases and methods for determining salaries, remunerations, and bonuses of managers and controllers.
- In which cases members and shareholders have the right to request the company to repurchase capital contributions (for limited liability companies or shares for joint stock companies).
- Principles for distributing profits after tax and handling losses in business.
- In case of dissolution, dissolution process and procedures for liquidation of company assets.
- Procedures for amending and supplementing the charter.
In fact, many businesses are neglecting the content of their charters. Most of businesses only use the model charter posted on the website of the Department of Planning and Investment, replacing by information of the business only. Meanwhile, contents related to the authority of company managers, principles for inviting meetings of the Board of Directors or General Meeting of Shareholders as well as conditions for approving meeting contents are often overlooked.
These are very important regulations, businesses will have to use them if there are important problems, such as: handling if the capital contributing members do not contribute enough capital, registering or investing in projects with high value, borrow capital, lend capital with large values, establish subsidiaries, increase charter capital…
Therefore, it is better for investors to find a consulting unit who have enough knowledge and experience to assist in building charters to suit investors’ needs.
In case the company did accidentally register a bad charter and desires to adjust it, the enterprise can still rebuild the charter and carry out procedures to approve the content of this new charter.
If you still have questions, or desire for assistance, please do not hesitate to contact An Luat Vietnam. Our company experienced lawyers and consultants will advise customers to complete their company’s charter.