A manufacturing joint venture in Vietnam has a foreign shareholder holding 67 percent and a domestic partner holding 33 percent, while the domestic partner is also a distributor linked to a competing brand. The foreign side wants to bring new technology into the venture but fears the minority shareholder will access formulas through shareholder rights and pass them outside. The question posed: how far may a minority shareholder look under the law, and may the company require a separate confidentiality agreement from them?
Direct legal basis
An ordinary shareholder has the right to review, search and extract information from company books and reports under Article 115 of the Enterprise Law 59/2020/QH14 as amended — a statutory right attached to ownership status that neither the company nor other shareholders may remove by private will. But a right to view governance information does not equal unlimited access to technology secrets: a trade secret under Article 84 of the IP Law is protected only where the owner applies necessary measures, and tiering information inside the company — which information shareholders may view under law and the charter, and which technology information goes only to executives with a work need — is an accepted operating method. A shareholder representative on the board also bears confidentiality and loyalty duties under the Enterprise Law when exercising governance rights.
Applying the rules in practice
A separate confidentiality agreement with the minority shareholder is a valid and advisable tool, if designed correctly: it does not cut statutory shareholder rights, but establishes duties over sensitive information the shareholder accesses through governance channels — no use beyond monitoring the investment in the venture, no transfer to another business in which the shareholder has a competing interest, and consequences on breach. The strongest enforcement channel usually lies not in a standalone NDA, but in a triad of consistent documents: the company charter tiering information and setting confidentiality duties for those with access; a shareholders agreement recording confidentiality undertakings with sanctions and share-transfer consequences for grave breaches; and the technology licence from the foreign side into the venture, under which the venture alone is the licensee and shareholders are not direct licensees.
When a minority shareholder discloses secrets outside, the company acts on three parallel fronts: the corporate front — requiring the venture and its governance bodies to correct access rights, recording the breach in meeting minutes and applying consequences stated in the charter and shareholders agreement; the secret front — the technology owner demanding cessation and damages under Article 127 of the IP Law for use of the secret for a competitor; and the personal front — where the leaker is a board representative, considering removal and the representative personal liability under the Enterprise Law. The decisive factor remains the file: the company must prove the information sat in a controlled-access secret tier, the leaker undertook the duty, and the outward transfer left traces.
Safe-handling checklist
- Tier information in the charter and internal rules: the statutory shareholder tier, the executive tier, and the access-controlled technology-secret tier.
- Sign a separate confidentiality agreement with the minority shareholder for sensitive information accessed via governance channels, aligned with the shareholders agreement.
- Licence technology into the venture by a dedicated written agreement, establishing the venture as the sole licensee.
- On a leak: record it in governance minutes, narrow access rights, and activate the corporate and secret tracks simultaneously.
FAQs
May a minority shareholder in a joint venture view technology secrets?
They may view within statutory limits, not everything. Article 115 of the Enterprise Law 59/2020/QH14 gives ordinary shareholders the right to review and search company books, financial reports and governance documents — a right that cannot be removed. But formulas and technology secrets are not ordinary governance documents: the company may organise tiered access, granting technology secrets only to executives with a work need, provided the tiering is written in the charter and internal rules and applied consistently. A shareholder wishing to monitor technology value can act through reports, audits and governance bodies instead of holding the formula directly.
Can they be required to sign a separate confidentiality agreement?
Yes, and it should be done, provided the agreement does not cut statutory shareholder rights. A separate confidentiality agreement establishes duties over sensitive information the shareholder accesses through governance channels: use only for monitoring the investment, no transfer to a competing business in which the shareholder has an interest, and sanctions on breach. Practical force is highest where this agreement meshes with the company charter and the shareholders agreement, which pre-record consequences for grave breaches, including mechanisms relating to share transfer as agreed by the parties.
If they disclose, how is it handled?
Act on three fronts at once: the company records the breach in governance files, narrows access to sensitive information and applies consequences in the charter and shareholders agreement; the technology owner demands cessation of the secret use for a competitor and damages under Article 127 of the IP Law; and the removal and personal liability of the shareholder board representative are considered where that person was the leak channel. The decisive elements are evidence of the information tier disclosed, the signed confidentiality undertaking, and traces of the transfer act.
This article has been quality-reviewed by the FLAW AI Legal Council