Procedure for dismissing the Supervisory Board of a joint stock company

The procedure for dismissing the Supervisory Board of a joint stock company is a process that businesses need to pay attention to in corporate governance. Correct implementation of this process ensures legality and transparency in the company’s operations. The following article will analyze in detail the steps in the process of dismissing the Supervisory Board, from legal basis to specific procedures, helping businesses comply with the law.

Rights and obligations of the Supervisory Board in a joint stock company

The Supervisory Board in a joint stock company plays an important role in supervising the management and operation of the enterprise. According to Article 170 of the Law on Enterprises 2020, the Supervisory Board has the following main rights and obligations:

• Supervise the Board of Directors and Board of Directors in the management and operation of the company. The Supervisory Board checks the reasonableness, legality, honesty and prudence in the management and operation of business activities. At the same time, check the systematicity and consistency of accounting work and financial reporting.
• The Supervisory Board has the right to appraise financial statements, business status reports and reports evaluating the management work of the Board of Directors. They presented the appraisal report at the Annual General Meeting of Shareholders. In addition, the Supervisory Board reviews contracts and transactions with related persons and makes recommendations on transactions that need approval.
• The right to review accounting books and other documents of the company when necessary or at the request of shareholders. The Supervisory Board has the right to access records and documents at the company’s headquarters, branches and other locations. They also have the right to visit the workplace of managers and employees during working hours.
• The Supervisory Board has the right to request the Board of Directors, Board members, Directors and other managers to provide complete, accurate and timely information and documents on management, administration and company’s business activities.
• When detecting violations by members of the Board of Directors or Board of Directors, the Supervisory Board must notify the Board of Directors in writing, request to stop the violation and have solutions to overcome the consequences. The Supervisory Board has the right to attend and participate in discussions at the General Meeting of Shareholders, the Board of Directors and other meetings of the company.

Standards and conditions to become a Controller

Controllers in joint stock companies must meet the standards and conditions according to Article 169 of the Law on Enterprises 2020:

• Not subject to being banned from establishing and managing businesses in Vietnam according to Clause 2, Article 17 of the Law on Enterprises 2020. Controllers must be trained in one of the following majors in economics, finance, accounting, and auditing, law, business administration or major suitable to the company’s business activities.
• Controllers must not be family members of members of the Board of Directors, Director or General Director and other managers. They are not managers of the company and are not necessarily shareholders or employees of the company, unless otherwise stipulated in the company charter.
• For public companies and state-owned enterprises, according to the provisions of Point b, Clause 1, Article 88 of the Law on Enterprises 2020, the controller must not be a person related to the family of the company’s business manager. and the parent company, the representative of the enterprise’s capital or the representative of the state capital at the parent company and at the company.

Procedures for dismissing the Supervisory Board of a joint stock company

According to the provisions of Clause 1, Article 174 of the Law on Enterprises 2020, the General Meeting of Shareholders dismisses members of the Supervisory Board in the following cases:

• No longer meets the standards and conditions to be a member of the Supervisory Board as prescribed in Article 169 of this Law;
• There was a resignation letter and it was accepted;
• Other cases prescribed by the company charter.

The process of dismissing the Supervisory Board of a joint stock company follows these steps:

Step 1: Convene a meeting of the Board of Shareholders

The Board of Directors convenes the annual and extraordinary General Meeting of Shareholders.

The person convening the General Meeting of Shareholders must perform the following tasks:

• Prepare a list of shareholders with the right to attend the meeting;
• Providing information and resolving complaints related to the list of shareholders;
• Prepare meeting agenda and content;
• Prepare documents for meetings;
• Draft resolution of the General Meeting of Shareholders according to the expected content of the meeting; list and detailed information of candidates in case of election of members of the Board of Directors and Controllers;
• Determine meeting time and location;
• Send a meeting invitation to each shareholder with the right to attend the meeting according to the provisions of this Law;
• Other work for meetings.

Step 2: Invitation to the General Meeting of Shareholders

The person convening the General Meeting of Shareholders must send a meeting invitation to all shareholders in the list of shareholders entitled to attend the meeting at least 21 days before the opening date if the Company Charter does not stipulate a longer period.

Step 3: Conduct the General Meeting of Shareholders

• The General Meeting of Shareholders is conducted when the number of shareholders attending the meeting represents more than 50% of the total votes; The specific rate is prescribed by the company charter.
• In case the first meeting does not meet the conditions to proceed according to the above regulations, the notice inviting the second meeting must be sent within 30 days from the intended date of the first meeting, if the company charter does not stipulate different determination. The second General Meeting of Shareholders is conducted when the number of shareholders attending the meeting represents 33% or more of the total votes; The specific rate is prescribed by the company charter.
• In case the second meeting does not meet the conditions to proceed, the notice inviting the third meeting must be sent within 20 days from the intended date of the second meeting, if the company charter does not stipulate otherwise. The third General Meeting of Shareholders is conducted regardless of the total number of votes of shareholders attending the meeting.

Step 4: Approving the Decision to dismiss the Supervisory Board

In case the company charter does not have other provisions, the Resolution of the General Meeting of Shareholders on dismissal of the Supervisory Board shall be approved by voting at the General Meeting of Shareholders.

Consulting services on joint stock company structure

Long Phan provides consulting services on joint stock company structure and professional support in business organization and management. These services include:

• Consulting on building organizational structure: helping businesses design an organizational structure suitable to their scale, industry and business strategy. At the same time, make proposals on management models, division of departments and determination of responsibilities of each position.
• Support in building governance regulations: develop internal governance regulations and processes that comply with the law and ensure operational efficiency.
• Consulting on risk management: building a risk management system, including identifying, evaluating and handling potential risks in business activities.
• Support in developing development strategies: determine long-term goals, analyze the market and competitors, thereby proposing appropriate development strategies.
• Consulting on legal compliance: providing information and guidance on legal regulations related to joint stock company operations, ensuring businesses always comply with legal requirements.
• Support in the restructuring process: including mergers, purchases, splits or business conversions.
• Consulting on shareholder relations: building and maintaining good relationships with shareholders, including organizing the General Meeting of Shareholders, disclosing information and handling issues related to shareholder rights.

The process of dismissing the Supervisory Board of a joint stock company is an important process that requires strict compliance with legal regulations. To ensure proper implementation of the process, customers can contact us via hotline 0906735386 for detailed advice. We will assist customers in preparing documents, organizing meetings and completing procedures related to dismissal of the Supervisory Board.