Legal Representative

Who is the legal representative?

Under Article 12 of the Enterprise Law 2020, the company’s legal representative is the individual representing the company in exercising rights and obligations arising from the company’s transactions; representing the company as civil matter petitioner, plaintiff, defendant, or person with related rights and obligations before arbitration, courts, and other rights and obligations prescribed by law.

Practically speaking: a contract signed by the legal representative within authority binds the company, even when members or shareholders did not directly join negotiations. Conversely, a transaction signed by an unauthorized person may face validity disputes — the origin of not a few commercial lawsuits we handle.

The legal representative is often concurrently the company manager (Chair of the Members’ Council, Company Chair, Director/General Director…), but the law does not require the two roles to coincide. The company charter specifies which managerial title concurrently serves as legal representative.

How many legal representatives can a company have?

The Enterprise Law 2020 does not fix a specific number: LLCs and JSCs may have one or more legal representatives. The number, managerial titles, and each person’s rights and obligations are set by the company charter.

The point companies must note with special care: if a company has more than one legal representative while the charter does not clearly allocate each person’s rights and obligations, each representative is deemed fully authorized to represent the company before third parties — and all are jointly liable for damage caused to the company. In practice, many company charters copied from ready-made templates leave this content blank, inadvertently creating joint liability risk for people who are merely nominal representatives.

One person may concurrently act as legal representative for many companies — current law does not prohibit it. However, the more companies one nominally represents, the wider the personal liability scope becomes, especially since Law No. 76/2025/QH15 took effect (see the liability section below).

Powers of the legal representative

• Signing and performing transactions: signing contracts, commitment letters, and dossiers with state authorities on the company’s behalf within the authority granted by the charter and the law.
• Representation in proceedings: participating as plaintiff, defendant, or person with related rights and obligations before courts and arbitration; requesting resolution of civil matters.
• Day-to-day management: within the concurrent managerial title (Director, General Director…), organizing the implementation of resolutions and decisions of the owner, Members’ Council, or General Meeting of Shareholders.
• Re-authorization: where the Vietnam-residency requirement applies (see below), the legal representative authorizes in writing another individual to exercise rights and obligations — but remains responsible for the authorized acts.

The specific scope of each representative’s powers (where the company has several) depends on the company charter and each case. Counterparties should check the charter and the Enterprise Registration Certificate to confirm authority before high-value transactions.

Personal legal liability attached to the legal representative

This is the most important change of the last two years. Under Article 13 of the Enterprise Law 2020, the legal representative has three groups of duties: exercising assigned rights and obligations honestly, carefully, and to the best standard to safeguard the company’s lawful interests; being loyal to the company’s interests, not abusing position to seek personal gain; and promptly, fully, and accurately notifying the company about other companies in which they or related persons own or hold shares or capital portions.

From 01/7/2025, clause 4, Article 1 of Law No. 76/2025/QH15 amends clause 2, Article 13 to read: the legal representative “bears personal liability in accordance with law” for damage to the company caused by breaching the above duties. The phrase “in accordance with law” extends liability beyond the company’s internal relations — including civil liability (damage compensation), administrative liability (administrative sanctions in tax, investment, labor…), and, where criminal signs exist, criminal liability under the Penal Code.

Beyond Enterprise Law liability, the legal representative is the “address” specialized laws turn to when the company breaches:

• Tax: an individual who is the legal representative of a company subject to enforced execution of a tax administration decision may face temporary exit restriction if tax obligations are not completed per Government-set thresholds — currently tax debts of VND 500 million or more overdue for more than 120 days (clause 5, Article 17 of the 2025 Tax Administration Law (108/2025/QH15, effective from 01/7/2026, replacing the 2019 Tax Administration Law); threshold at point b, clause 1, Article 28 of Decree 252/2026/NĐ-CP). See Tax Advisory for FDI Companies.
• “Abandoning” the company: when the company stops operating without completing dissolution, the legal representative remains tied to outstanding obligations — tax debts, late-payment penalties, liability when opening a new company. See Company Dissolution & Investment Project Termination.
• Labor, insurance: the legal representative signs and is responsible for the accuracy of the company’s labor and social insurance dossiers.

Obligation to maintain a legal representative residing in Vietnam

The company must ensure there is always at least one legal representative residing in Vietnam (clause 3, Article 12 of the Enterprise Law 2020). When only one Vietnam-residing legal representative remains and this person exits Vietnam, they must authorize in writing another individual residing in Vietnam to exercise the legal representative’s rights and obligations — and the authorizing person remains responsible for the exercise of the authorized rights and obligations.

This rule is especially important for FDI companies whose legal representatives are all foreigners not residing in Vietnam. The common solution is adding a legal representative who is Vietnamese (or a foreigner residing in Vietnam) — accompanied by the problem of allocating authority in the charter so the resident nominal representative does not bear risks beyond their actual role.

Common risks and prevention

1. Lending your name as legal representative. This is the biggest real-world risk: the nominal representative bears all legal liability attached to the status — signing, tax, litigation — despite not actually managing or benefiting. When the company incurs tax debts, disputes, or is investigated, state authorities come to the person named on the Enterprise Registration Certificate first. The only prevention is never lending your name; if already named, complete legal representative change procedures promptly.

2. The legal representative is a foreigner not residing in Vietnam. Besides the residency obligation above, the company faces practical difficulties: signing dossiers, dealing with state authorities, and opening bank accounts all require direct signatures or valid authorization. Design from the start a two-representative structure (one foreigner handling strategy, one in Vietnam handling operations) with clear authority allocation in the charter.

3. Several representatives but the charter allocates no authority. As noted, when the charter is blank, each person is fully authorized before third parties and jointly liable. Prevent this by reviewing and amending the charter: specify who may sign which transaction types, value limits, and coordination mechanisms (single or joint signatures).

4. Changing the representative but registering late. The former representative still appears on the Enterprise Registration Certificate until the change registration is complete — transactions during the “gap” period are prone to authority disputes. The registration deadline is 10 days from the change date; details at Enterprise Registration Changes.

5. The former representative does not cooperate in handover. Where the former legal representative refuses to sign change dossiers or hand over the seal and documents, the company must act through internal mechanisms (owner/Members’ Council/General Meeting of Shareholders decisions) and the law — each case needs its own plan, so talk to a lawyer before acting.

When does the legal representative need to change?

• Dismissing or replacing a manager concurrently serving as legal representative (term expiry, resignation, removal).
• Governance restructuring: adding a representative to meet the Vietnam residency obligation or splitting operational roles.
• Ownership or investor changes leading to senior personnel changes.
• The current representative no longer meets conditions or does not cooperate — replacement needed to avoid legacy risks.

Changing the legal representative is a case of registering changes to Enterprise Registration Certificate content, to be done within 10 days from the change date. The dossier includes the change notice, the owner/Members’ Council/General Meeting of Shareholders’ decision and meeting minutes, and the new representative’s personal legal papers. The full process, forms, and notes are at Enterprise Registration Changes.

What does FLAT LAW FIRM do?

• Advising on legal representative structure design: one or several persons, authority allocation in the charter, plans to meet the Vietnam residency obligation for FDI companies.
• Reviewing and amending the company charter: adding clear authority-allocation clauses among representatives, avoiding unintended joint liability.
• Assessing personal risks for nominees: tax liability, temporary exit restriction, liability when the company is “abandoned” — before accepting the role.
• Drafting authorization documents and internal agreements among representatives and with the company owner.
• Handling the complete legal representative change procedure: drafting dossiers, filing, and tracking until the new Enterprise Registration Certificate is issued — see Enterprise Registration Changes.
• Handling difficult situations: uncooperative former representatives in handover, internal disputes over signing authority — coordinated with Corporate Legal Services.

Implementation process

1. Receiving information: company type, current number of representatives, company charter, need to change or design anew.
2. Legal assessment: reviewing the charter on authority allocation among representatives; determining the Vietnam residency obligation; assessing the nominee’s personal risks.
3. Plan design: proposing a representative structure, drafting charter amendment clauses (if any), and the change dossier checklist.
4. Dossier drafting: decisions, meeting minutes, change notices, personal legal papers, authorization documents (if needed).
5. Filing and tracking: filing the change registration dossier at the Business Registration Authority, handling supplementation requests until results are obtained.
6. Handover and next-step guidance: new Enterprise Registration Certificate, checklist for updating banks, tax, partners, and post-change governance notes.

Documents clients should prepare

• Current Enterprise Registration Certificate (copy).
• Current company charter.
• Owner/Members’ Council/General Meeting of Shareholders’ decision and meeting minutes on changing the legal representative.
• New representative’s personal legal papers (citizen ID card/passport).
• Documents proving residential address in Vietnam (if the new representative meets the residency obligation).
• Power of attorney for FLAT LAW FIRM to carry out procedures (we will draft the template).

Special notes for foreign investors

• Don’t keep all representatives abroad: the common plan is maintaining at least one representative residing in Vietnam, combined with clear authority allocation in the charter to control risk for the on-the-ground nominal representative. See FDI Company Formation in Vietnam.
• Secondees from the parent company: foreign experts coming to Vietnam as representatives need to synchronize work permits, visas, and residency obligations — talk to a lawyer early to design the roadmap.
• Remote signature control: for investors managing from abroad, the charter and internal regulations should specify limits, transaction types, and pre-approval mechanisms before the representative in Vietnam signs.
• When withdrawing capital or exiting the market: changing or terminating the representative status must accompany the divestment roadmap, avoiding leaving the representative “stuck” with legacy obligations — see Company Dissolution & Investment Project Termination.

Legal updates through September 2026

Law No. 76/2025/QH15 amends and supplements several articles of the Enterprise Law 2020, effective from 01/7/2025. The new point directly related to the legal representative: clause 4, Article 1 amends clause 2, Article 13, adding the phrase “in accordance with law” — the legal representative bears personal liability in accordance with law (not only internal liability) for damage to the company caused by breaching duties. Additionally, Law 76/2025/QH15 also amends Article 12 on the legal representative — details should be cross-checked against the consolidated text when applying to each case.

Temporary exit restriction for tax debts: under clause 5, Article 17 of the 2025 Tax Administration Law (108/2025/QH15, effective from 01/7/2026, replacing the 2019 Tax Administration Law) and point b, clause 1, Article 28 of Decree 252/2026/NĐ-CP, an individual who is the legal representative of a tax-enforced company may face temporary exit restriction when tax debts reach VND 500 million or more and are overdue for more than 120 days. Detailed thresholds and conditions are Government-regulated — cross-check the instruments in force at implementation time.

Full texts of the above instruments can be found at the Government’s legal normative documents system. Page content should be cross-checked against the instruments in force at the time of the procedure.

Why choose FLAT LAW FIRM?

The legal representative is the “frontline” position: every legal risk of the company — from contracts and tax to litigation — can reach the named individual. FLAT LAW FIRM approaches the issue from both sides: protecting the company with a tight representative structure and charter, while protecting the individual representative with an honest risk assessment before they sign. We regularly work with foreign investors needing to place representatives in Vietnam, handle urgent changes when former representatives do not cooperate, and synchronize related tax, IRC, and work permit obligations. Our team works in Vietnamese, Chinese, and English. See Corporate Legal Services and Enterprise Registration Changes.

Frequently Asked Questions

Useful links

You should talk to a lawyer if:

• You are about to establish a company and need to design the legal representative structure (one or several, how to allocate authority).
• Your FDI company has no representative residing in Vietnam.
• Your current company charter does not clearly allocate rights and obligations among representatives.
• You are invited to be named legal representative and want to assess personal risks before accepting.
• You need to change the legal representative, especially when the former does not cooperate in handover.
• The legal representative faces tax, exit-restriction, or signing-authority dispute risks.