Scenario: the general director — also the legal representative — of an FDI company “disappears” after a tax inspection: phone off, reportedly left the country. Dozens of contracts await signature, bank accounts need a signatory, and a labor lawsuit needs a court representative. Is the company frozen along with him?
No — a company is not paralyzed by one fleeing individual
The legal representative is the individual acting for the company in transactions and as plaintiff/defendant in court (Article 12, 2020 Law on Enterprises, in force as of 19/10/2026). But the company is an independent juridical person — the representative’s absence (even flight) does not strip the company of capacity. Article 14 anticipates absence: the representative must authorize another individual in writing; if the authorization expires without return and no new authorization exists, the authorized person continues until the representative returns or the board/members’ council appoints someone else.
Where the representative fled — with no authorization — the Board of Directors (joint-stock) or Members’ Council (LLC) meets and appoints a new representative. This is internal personnel authority; the fugitive’s “consent” is not required.
Replacing within 10 days
- Step 1 — Meet and resolve: the board/members’ council meets (including online/emergency sessions per the charter), resolves to remove the old representative and appoint the new one. The appointee must have full civil capacity and not fall under management prohibitions.
- Step 2 — Notify business registration: within 10 days of the change, notify the business registration authority (Article 31, 2020 Law on Enterprises, amended by Law 76/2025/QH15). Dossiers follow Decree 168/2025/ND-CP (replacing Decree 01/2021 from 01/7/2025).
- Step 3 — Notify stakeholders: banks (change account signatories), tax authorities, major partners, and courts hearing pending cases — so the new representative has standing.
- Step 4 — Review and recover: recover seals, e-signatures, and authorizations signed by the fugitive; review their transactions over the prior 6–12 months for anomalies.
Do the fugitive’s past transactions stand?
Yes — if signed while they were still the lawful representative. The company cannot plead “he fled” to dodge validly signed contracts; good-faith third parties are protected. Conversely, deals signed after the successor’s registration but still under the old name/signature risk invalidity — notification and recovery must run in parallel, not sequentially.
Two special traps
Single-member LLC whose owner is the fugitive: with no members’ council, appointing a successor deadlocks on personnel — this needs bespoke counsel, often tied to parallel criminal/civil proceedings. Charter requiring the old representative’s signature for everything: a “protective” clause becomes a shackle — amend the charter once stable, adding a backup-representative mechanism.
Frequently asked questions
Does a fleeing legal representative freeze the company?
No. The company is an independent juridical person; the board/members’ council appoints a new representative under internal authority, without the fugitive’s consent (Articles 12 and 14, 2020 Law on Enterprises).
How fast must the replacement be notified?
Within 10 days of the change, notify the business registration authority (Article 31, 2020 Law on Enterprises, amended by Law 76/2025/QH15); dossiers follow Decree 168/2025/ND-CP.
Are contracts the fugitive signed before fleeing still valid?
Yes, if signed while they were the lawful representative. The company cannot invoke the flight to avoid performance; good-faith third parties are protected.
Single-member company whose owner fled — who appoints the successor?
This deadlocks for lack of a members’ council. It needs bespoke counsel, usually linked to the criminal/civil proceedings against the fugitive.
This article has been quality-reviewed by the FLAW AI Legal Council Content prepared by the AI Legal Council of FLAT Law Firm for general reference only; it has not been reviewed by a human lawyer for your specific situation.