When beneficial-owner information filed with the business registration authority turns out to be wrong, the first question businesses ask is: who is liable — the director who signed the filing, or the shareholders?
Under current law: for administrative liability, the ENTERPRISE (the organization) is the primary liable party. Directors/legal representatives and shareholders carry different levels of responsibility, as analyzed below.
Allocation of liability
1. The enterprise (organization) — directly fined:
- VND 30–70 million: untruthful or inaccurate beneficial-owner declarations;
- VND 50–100 million: failure to declare beneficial owners upon establishment;
- VND 40–70 million: failure to maintain the beneficial-owner list;
- VND 50–70 million: failure to provide beneficial-owner information when requested by a competent state authority;
- Revocation of the Enterprise Registration Certificate: where declared content is determined to be forged.
Basis: Articles 43, 46, 48 of Decree 122/2021/ND-CP (amended by Decree 288/2026/ND-CP, effective 21/7/2026); Article 212 of the Law on Enterprises.
2. Director / legal representative (the signatory): bears personal responsibility for the truthfulness of the content they sign and file (Clause 1, Article 4 of Decree 168/2025/ND-CP; Article 12 of the Law on Enterprises). If the filing was wrong due to the signatory fault, the company may pursue internal liability against that individual under the charter and internal rules.
3. Shareholders (generally): NOT liable — unless they directly prepared the filing, supplied false information, or participated in fraud (Clause 1, Article 4 of Decree 168/2025/ND-CP).
The practical message: stop blaming each other
Arguing over “the director fault or the shareholder fault” does not shield the company, because administrative sanction decisions target the enterprise as an organization. The durable fix is an internal beneficial-owner verification process before signing and filing: assign someone to collect information, cross-check against the ownership chart and source documents, and keep verification records as evidence of good-faith compliance.
Note: Article 210 of the Law on Enterprises does not apply here
Article 210 governs joint liability relating to enterprise dissolution filings — not periodic beneficial-owner declarations. Businesses and counsel should avoid citing it in this context.
Is a false declaration a criminal offence?
There is currently no standalone criminal offence for false beneficial-owner declarations. Criminal liability arises only if the conduct simultaneously meets the elements of another offence — for example, forgery of documents or money laundering — depending on the evidence in each case. This remains a grey area; businesses should not assume a filing error “only attracts an administrative fine”.
Frequently asked questions
Q: For a false beneficial-owner declaration, is the director or the shareholder liable?
A: Administratively, the enterprise (organization) is fined directly (VND 30–70 million for false declarations). The director/signatory bears personal responsibility for the truthfulness of what they sign and may face internal company action. Shareholders are generally not liable unless directly involved in fraud.
Q: Can a false declaration lead to imprisonment?
A: There is currently no standalone criminal offence for false beneficial-owner declarations. Criminal prosecution requires the elements of another offence such as document forgery or money laundering.
Q: How can a false declaration be avoided?
A: Build an internal verification process before signing: collect information from shareholders/members, cross-check the ownership chart and source documents, and keep verification records.
Legal references
- Decree 168/2025/ND-CP: Clause 1 Article 4; Articles 18, 19;
- Decree 288/2026/ND-CP (amending Decree 122/2021, effective 21/7/2026): Articles 43, 44, 46, 48;
- Law 76/2025/QH15: Article 12 (duties of legal representatives); Article 212 (certificate revocation).
Contact
FLAT Law Firm advises enterprises on beneficial-owner filing compliance: building internal verification processes, reviewing filings before submission, and handling administrative sanctions. Contact: contact us.
This article is for general information only and does not replace legal advice for your specific case.
Transparency note: The legal content of this article has been reviewed by the FLAW AI Legal Council. It is not the opinion of a human lawyer who has reviewed your case; content requires owner approval before publication.
