Handling the Detention of a Companys Legal Representative

The Handling the Detention of a Companys Legal Representative is a critical matter, as this incident directly affects the ability to direct, operate, and establish transactions for the enterprise. This situation imposes an urgent requirement on the owner and the Board of Directors to perform procedures to appoint replacement personnel to maintain business continuity. This article analyzes the processing procedure and necessary dossiers according to current regulations.

Rights and obligations of the legal representative of a business

The legal representative plays a central role in the management organization structure. Based on Clause 1, Article 13 of the Law on Enterprises 2020, the legal representative has the following core obligations:

• Honesty and Care: Exercise delegated rights and obligations honestly, carefully, and to the best of their ability to ensure the lawful interests of the enterprise.
• Loyalty: Be loyal to the enterprise’s interests; do not abuse position, information, secrets, business opportunities, or assets for personal gain or the interests of others.
• Notification: Timely, fully, and accurately notify the enterprise about enterprises owned by them or their related persons.

Furthermore, the legal representative represents the enterprise in civil matters, as a plaintiff, defendant, or person with related rights and obligations before Arbitration and Courts. Therefore, when detained, the enterprise loses its official “legal voice” in litigation and commercial transactions.

>>> See more: Notification and Registration of Enterprise Change: Distinction Guide

What should be done if the company’s legal representative is temporarily detained?

When the legal representative is detained, the enterprise must immediately have a replacement plan. Clients need to base their actions on the Company Charter and legal regulations to elect or re-appoint a new representative.

This applies to joint-stock companies.

According to Clause 5, Article 12 of the Law on Enterprises 2020, if the company has only one legal representative and this person is detained, the Board of Directors (BOD) has the authority to appoint another person as the legal representative. This allows the JSC to react quickly without waiting to convene an Extraordinary General Meeting of Shareholders.

Process:

• Convene an emergency BOD meeting to pass a resolution on dismissing the old representative and appointing a new one.
• If the BOD Chairman acting as the legal representative is detained, the remaining members shall elect a temporary Chairman.
• In special litigation cases, the Court may designate a legal representative to ensure the enterprise’s rights.

This applies to Limited Liability Companies.

Multi-member LLC: The Chairman of the Members’ Council or a group of members shall convene a meeting. The resolution to dismiss the detained person and appoint a new one requires a specific voting ratio (usually 65% of the total capital of attending members, under Point c, Clause 2, Article 59 of the Law on Enterprises 2020).

• Note: According to Clause 6, Article 12 of the Law on Enterprises 2020, for an LLC with two members, if the member serving as the legal representative is detained, the remaining member automatically becomes the legal representative until a new decision is made.

Single-member LLC: The Company Owner issues a written decision on the change. If the individual owner (who is also the rep) is detained, guardianship or civil authorization regulations regarding assets must be followed to maintain a representative residing in Vietnam.

The obligation to register changes to the business registration details when changing the legal representative.

According to Clause 1, Article 30 of the Law on Enterprises 2020, enterprises must register changes to the enterprise registration content when there is a change in the legal representation.

Important Distinctions:

• Nature: This is a “Registration of Change” procedure (resulting in a new Enterprise Registration Certificate), not just a “Notification.”
• Deadline: Submit the dossier within 10 days from the date of the decision.

Required Dossier: Based on Clause 1, Article 43 of Decree No. 168/2025/ND-CP, the dossier includes:

1. Request for registration of change of legal representative.
2. Copy or Original Resolution/Decision of the competent authority (Owner/Members’ Council/General Meeting of Shareholders/Board of Directors).

Long Phan Consulting provides consulting and support services for registering changes to business registration details.

Long Phan Consulting Company provides comprehensive solutions to support enterprises in overcoming high-level personnel crises.

• Analysis: Analyzing the specific situation to determine authority and legal processing procedures.
• Personnel Consulting: Advising on suitable replacement plans ensuring compliance with the Charter.
• Procedure Guidance: Guiding the sequence for organizing meetings (BOD/Members’ Council) to pass valid resolutions.
• Drafting: Drafting the entire dossier for Registration of Change of Legal Representative (Requests, Resolutions, Minutes).
• Representation: Representing the Client to submit the dossier to the Business Registration Office and explaining issues to officials.
• Monitoring: Tracking the appraisal process and handing over the new Enterprise Registration Certificate.

Frequently Asked Questions

Below are some frequently asked questions about dealing with the aftermath when a company’s legal representative is temporarily detained.

If a JSC has only one legal representative who is detained, who appoints the replacement?

The Board of Directors has the authority to appoint another person to maintain operations. (Legal Basis: Clause 5, Article 12, Law on Enterprises 2020).

What happens in a 2-member LLC if the representative member is detained?

The remaining member naturally becomes the legal representative until the Members’ Council issues a new decision. (Legal Basis: Clause 6, Article 12, Law on Enterprises 2020).

Is this a “Notification” or “Registration” procedure?

It is a “Registration of Change” procedure because the representative’s information is recorded directly on the Enterprise Registration Certificate. (Legal Basis: Clause 1, Article 30 and Article 28, Law on Enterprises 2020).

What is the deadline for submission?

The enterprise must register the change within 10 days from the date of the decision. (Legal Basis: Clause 2, Article 30, Law on Enterprises 2020).

What documents are needed?

Request form; Resolution/Decision of the competent authority; and ID papers of the new representative. (Legal Basis: Clause 1, Article 43, Decree No. 168/2025/ND-CP).

Conclusion

Handling the Detention of a Company’s Legal Representative requires a deep understanding of the Law on Enterprises to ensure continuity in management. Please contact Long Phan Consulting Company via Hotline 1900636389 for immediate and professional legal support.