Can the legal representative cum general director re-authorise another person to sign an agreement approved by the Board if he/she is authorised by the Board to sign this agreement?

Though there remain some counter arguments (as discussed below), subject to the provisions of the charter of the relevant company (e.g. there is no specific provision of the charter which prohibits the legal representative from re-authorising his authority to other person), it is arguable that the legal representative can re-authorise his/her signing authority to another person to sign the agreement. This is because:

• Under Article 138.1 of the Civil Code 2015, an individual or legal entity can authorise other individual and legal entity to establish and perform the civil transaction.

• Under Article 12.3 of the Enterprise Law 2020, the legal representative must authorise the other person to carry out his/her authorities if he/she is absent from Vietnam. This suggests that the legal representative can re-authority any other person to perform his/her authorities.

• The representation authority is a default right of the legal representative (Article 12.1 of the Enterprise Law 2020). Therefore, while the Board can approve the agreement, the right to represent the company to sign such agreement should belong to the legal representative.

Regardless the above reasonable arguments, one can still argue that the legal representative cannot sub-delegate his signing authority because:

• Article 153.2(k) of the Enterprise Law 2020 grants the Board with the right to direct the general director in their duty of conducting the day-to-day business of the company. Accordingly, the Board resolution may be interpreted as a direction to the general director to personally sign the agreement; and

• Article 162.2, 162.3(b), and Article 162.4 of the Enterprise Law 2020 requires the general director of the company to comply with the Board resolution. Thus, the general director might be bound by the Board resolution to sign the agreement by himself.

However, since (i) the legal representative concurrently holds two positions (i.e. legal representative and general director) and (ii) the signing authority belongs to the legal representative (not the general director nor the Board), one can argue that the above interpretation should not impact the representation right of the legal representative. Therefore, as long as the legal representative complies with the Board resolution (i.e. the only agreement which is approved by the Board will be signed), he/she is still able to re-authorise other person to sign the approved agreement on the basis of Article 138.1 of the Civil Code 2015 and Article 12.3 of the Enterprise Law 2020.

Written by Hoang Thi Thanh Thuy.