| ENHANCED REGULATIONS FOR ENTERPRISE HAVE MULTIPLE LEGAL REPRESENTATIVES | 

The process of implementing regulations regarding the enterprise may have multiple legal representatives according to the Law on Enterprises 2014 shows certain legal shortcomings and risks such as: risks for parties to transactions, risk in the event of disagreement among the legal representatives of the enterprise,... For example, an enterprise has 02 or 03 legal representatives; however, the enterprise's charter has no regulation on specifying the rights and obligations of each representative or the regulations in the charter are not clear. Therefore, it is very difficult to determine who the legal representative has the authority to sign a specific contract or transaction.

To overcome the above shortcomings, the Law on Enterprise 2020 was issued with innovative regulations for the legal representatives institution. Specifically, Clause 2, Article 12 of the Law on Enterprises 2020 stipulated as follows: “In case the enterprise’s charter does not specify rights and obligations of each legal representative, each of legal representatives have authorised representative toward a third party. All legal representatives must be taken joint responsibility for any damage to the enterprise in accordance with the civil law and other relevant legal documents.”

With these regulations, it is required that each enterprise and the legal representatives themselves when building a mechanism of multiple legal representatives necessary to clearly define the scale of rights and obligations of each representative to avoid legal risks arising later.