The legal representative of a company plays a critical role, representing the company in fulfilling its legal rights and obligations to third parties. Therefore, understanding information about the company's legal representative is a mandatory requirement for parties doing business with the company. Because of its importance, information about the legal representative is considered key information about the company, recorded in detail in the Enterprise Registration Certificate.
Throughout its operations, a company may change its legal representative or the personal information of the current legal representative. When such changes occur, the company must perform procedures to register or report the change in the Enterprise Registration Certificates to update the information about its legal representative to the relevant parties in a timely manner. This article discusses the scenarios in which a company needs to register or report changes in business registration content related to the legal representative.
1. When must the information of the Legal Representative be registered or updated?
1.1 Change of Legal Representative
The who hold managerial positions within the company. However, for operational purposes, the legal representative may change over time, such as when a company becomes a target in an M&A transaction. In such cases, one of the important tasks for the buyer is to change the legal representative of the target company. In addition, if the legal representative of the company is no longer able or suitable to hold the position, the legal representative must also be replaced. This change triggers the legal obligation to register the change in the company's business registration information1.
Specifically, companies must file documents to register the change of legal representative as provided for in Article 50 of Decree 01/2021/ND-CP.
1.2 Change in the information of the legal representative
This scenario occurs when the legal representative remains the same, but his or her information (as listed on the Enterprise Registration Certificate) changes. Currently, the Enterprise Registration Certificate records details of the legal representative, including name, gender, position, date of birth, ethnicity, nationality, type of legal document held by the individual, document number, date of issue, place of issue, permanent address, and contact address. Many of these details are subject to change, such as information about the individual's legal documents or addresses. Any change in this information may make it difficult for parties doing business with the company to identify the legal representative.
Therefore, in cases where the information of the legal representative changes, companies must still carry out procedures to update this information, as provided for in point a, paragraph 2, Article 63 of Decree 01/2021/ND-CP. In this case, companies must submit a request to update or submit additional business registration information (in particular, update information about the company's legal representative) to receive an updated business registration certificate. 
In recent years, as the State actively implements the policy of transitioning from old ID cards or old citizen ID cards to chip-based citizen ID cards for all Vietnamese citizens, this also affects enterprises when the legal document information of legal representatives who are Vietnamese individuals' changes. For example, Masan Group Joint Stock Company registered the 31st amendment to its business registration certificate on April 15, 2024 to adjust the legal documents of its two legal representatives2.
2. Consequences of failure to perform adjustment procedures for the information of the Legal Representative
According to Article 30.2 and Article 31.2 of the Law on Enterprises, enterprises are obliged to register or notify changes in the content of the business registration at the business registration office where the enterprise is located within ten days from the date of the change. If these procedures are not carried out within the specified period, the company may be subject to administrative penalties as provided for in Article 44 of Decree 122/2021/ND-CP on Administrative Penalties in the Field of Planning and Investment. The form and amount of the penalties depend on the company's delay in carrying out the procedures. Specifically, enterprises may be warned for delays of 1 to 10 days in registering changes in the business registration certificate. If the delay extends beyond this period, the company may have to pay fines ranging from VND 3,000,000 to VND 5,000,000 for delays of 11 to 30 days, from VND 5,000,000 to VND 10,000,000 for delays of 31 to 90 days, and from VND 10,000,000 to VND 20,000,000 for delays of 91 days or more. Finally, a fine of VND 20,000,000 to VND 30,000,000 for failure to register or notify changes in the content of the information of the legal representative. In addition, companies must also take measures to remedy the consequences by registering or notifying changes in content as required by law.
In addition to the risk of administrative sanctions mentioned above, the failure to carry out business registration procedures when there are changes in the information about the legal representative shows, to some extent, a lack of strict compliance with legal regulations in the company's operations. This affects the level of trust that partners and customers have in the company, since the information about the legal representative is one of the important details that partners and customers look for when conducting business with the company.
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[1] https://dpm.vn/cong-bo-thong-tin/thong-bao-thay-doi-giay-chung-nhan-dang-ky-doanh-nghiep-3/, last visited August 16, 2024.
[2] https://masangroup-cms-production.s3-ap-southeast-1.amazonaws.com/iblock/a16/a16b2df1db63fda8d795a6b4d06ece40/7b6d684e4ccac1212ddde697f7f269fe.pdf, last visited August 16, 2024.
