Short answer: Both are called “LLC” but the authority to appoint and dismiss the Director differs fundamentally between the two types. In a multi-member LLC, the power belongs to the Members Council (point dd, clause 2, Article 55 of the Enterprise Law 59/2020/QH14). In a single-member LLC, it belongs to the company owner (point c, clause 1, Article 76). And one critical assertion: the Chairperson of the Members Council does NOT have the power to unilaterally dismiss the Director — the most common and costly mistake in practice.
First, three often-conflated concepts: “dismissal from office” (removal before term end by the competent authority), “removal for cause” (discharge due to violations), and “labor contract termination” (the employment relationship under the Labor Code for an externally hired Director). Three different acts, three different legal bases — never mix them.
1. Multi-member LLC: the Members Council decides
The Members Council is the highest decision-making body of a multi-member LLC (Article 55.1). Point dd, clause 2, Article 55 provides that the Council decides on the appointment, dismissal, removal for cause, signing and termination of contracts with the Director or General Director. Every decision about the Director seat — from appointment to removal — must go through the Council; no one may decide alone.
Adoption ratio at Council meetings: at least 65% of the total contributed capital of attending members voting in favor (point a, clause 3, Article 59), unless the company charter prescribes a different ratio. Note: the 75% threshold applies only to certain special decisions — do not misapply 75% to Director appointments. And before meeting, check your company charter: many companies prescribe voting ratios different from the statutory 65% default.
2. The Council Chairperson cannot unilaterally dismiss the Director
Article 56.2 lists the Chairperson powers: preparing programs and operation plans; preparing, convening and chairing Council meetings; supervising implementation of Council decisions; signing decisions on behalf of the Members Council within its competence. “Signing on behalf” means signing to implement decisions already adopted by the Council — not signing dismissal decisions at personal discretion. A Chairperson who signs a Director dismissal decision without the Council acts beyond authority; such a decision risks being treated as void, leaving the company to bear the dispute.
3. Single-member LLC: the owner decides
Point c, clause 1, Article 76 provides that the company owner decides on appointing and dismissing the Director/General Director (for organizational owners this also covers deciding the management structure and appointing, dismissing or removing managers and Controllers). More specifically, Article 82.1 provides that the Members Council or the Company Chairperson appoints or hires the Director/General Director for a term not exceeding 05 years; the Director/General Director may concurrently hold other managerial positions.
An important limit in point dd, clause 2, Article 82: the Director may only appoint, dismiss or remove other managers — except positions within the competence of the Members Council or the Company Chairperson. Plainly: a Director cannot appoint himself, nor dismiss someone appointed by his own superior.
4. Director eligibility: not everyone qualifies
The Director/General Director must meet eligibility standards: not falling under prohibited categories for enterprise management under Article 17.2 of the Enterprise Law; having professional qualifications and business administration experience; and meeting other conditions prescribed by the company charter (Article 64 for multi-member LLCs; Article 82.3 for single-member LLCs). Appointing an ineligible person — e.g. someone prohibited from holding office — makes the appointment defective from the root.
5. Five-step procedure (multi-member LLC)
- Step 1 — Nomination: a Council member or the Chairperson nominates candidates and prepares dossiers (CV, degrees, eligibility confirmation);
- Step 2 — Council meeting: convene and conduct the meeting in due order; vote reaching at least 65% of attending members contributed capital (or the charter ratio);
- Step 3 — Resolution/decision: issue the Council resolution on appointment/dismissal; the Chairperson signs on behalf of the Council;
- Step 4 — Sign the labor contract/appointment decision: complete the employment relationship with the new Director; simultaneously handle termination with the former Director strictly under the Labor Code — a corporate dismissal does not automatically terminate the labor contract in compliance with labor law;
- Step 5 — Notify the change of legal representative: if the Director is also the legal representative, the company must notify the business registration authority within the statutory time limit. (The specific deadline and form number await verification against the original text — this article states no number of days or form numbers.)
New note: from 23/7/2026, Decree 296/2026/ND-CP requires mandatory electronic authentication when authorizing the legal-representative change procedure — the specific article number awaits verification and is not cited here.
6. Four costliest mistakes
- (a) The Council Chairperson unilaterally signing a Director dismissal: beyond authority as analyzed in section 2 — the decision risks invalidity and the company bears the dispute;
- (b) Forgetting to notify the legal-representative change: the former Director remains “attached” on paper as legal representative — later legal liabilities may still find their way to the former office-holder;
- (c) Dismissing without handling the labor contract: the dismissal decision (enterprise law) and labor contract termination (labor law) are two different acts — doing one and forgetting the other creates a labor dispute. The relationship between the two must be interpreted cautiously case by case;
- (d) Not checking the charter voting ratio: many charters prescribe ratios different from 65% — meeting and voting by the “statutory default” when the charter says otherwise makes the resolution defective.
FAQs
Can the Council Chairperson temporarily suspend the Director?
The law grants the Chairperson no power to unilaterally dismiss or suspend the Director — all decisions on the Director position belong collectively to the Members Council (point dd, clause 2, Article 55).
Must an externally hired Director meet the same standards as a member-Director?
Yes — the standards in Article 64 (multi-member LLC) and Article 82.3 (single-member LLC) apply to the Director/General Director position regardless of member or hired status.
What is the maximum Director term?
For single-member LLCs: not exceeding 05 years under Article 82.1 (re-appointable; concurrent positions allowed).
Does dismissing a Director automatically terminate the labor contract?
Not automatically. Dismissal is a positional decision under the Enterprise Law; labor contract termination follows the Labor Code with its own procedures, grounds and regimes. Both must be done in parallel, each under its own law.
Is citing Article 49 or Article 79 for Director appointment authority correct?
No — Article 49 governs charter capital increase/decrease; Article 79 governs the management structure of single-member LLCs. The correct authorities are point dd clause 2 Article 55 (multi-member LLC) and point c clause 1 Article 76 (single-member LLC).
Legal sources
- Enterprise Law 59/2020/QH14 (effective 01/01/2021; Articles 55, 56, 59, 63, 64, 76, 82 not amended by Law 76/2025/QH15): Article 55.1 (Members Council as highest body of multi-member LLC); point dd clause 2 Article 55 (Council decides appointment, dismissal, removal, signing/terminating Director contracts); point a clause 3 Article 59 (at least 65% ratio); Article 56.2 (Chairperson powers — excluding Director dismissal); Article 63.2 and Article 64 (Director powers, duties and standards, multi-member LLC); point c clause 1 Article 76 (single-member LLC owner decides appointment, dismissal); Article 82.1 (appointing/hiring Directors, term up to 05 years, concurrent positions); point dd clause 2 Article 82 (Director appoints/dismisses other managers except Council/Chairperson-competent positions); Article 82.3 (Director standards, single-member LLC); Article 17.2 (prohibited categories).
- Decree 168/2025/ND-CP on enterprise registration (effective 01/7/2025): legal-representative change dossier (article number, deadline and form number await verification against the original text).
- Decree 296/2026/ND-CP (effective 23/7/2026): mandatory electronic authentication when authorizing legal-representative changes (article number awaited).
Does your company need a competently-drafted resolution or decision appointing or dismissing its Director, or a charter review of voting ratios? Reach us via the Contact page of FLAT Law Firm.
The legal content of this article is reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.
For reference only, not legal advice.
