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Differences in Time and Place of Meeting Convening


232 paragraph 3). Copies of accounting documents and audit reports shall be attached to the notice of convening the Annual General Meeting of Shareholders (Article 283 paragraph 2).

The 2005 Law on Enterprises of Vietnam stipulates that the notice must be sent at least 7 days before the meeting takes place, but it only provides general regulations on the documents that must be sent with the summons. In addition, the notice of the meeting is also published on the website (if the company has one), but the notice of the meeting must still be sent to the shareholders (Article 100). Thus, it is clear that we are also applying electronic technology in handling company affairs, but it is not really open like the regulations in Japanese law, partly because the level of information technology of companies in our country is still not uniform.

1.3. Differences in time and place of conference convening

The period specified in the Commercial Code of Japan 2002 is not to exceed 3 months from the end of the fiscal year until the General Meeting of Shareholders is held. The General Meeting of Shareholders, unless otherwise provided in the Articles of Incorporation, shall be held at the company's head office or a nearby location (Article 233, Article 498, Clause 1.17).

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According to the 2005 Law on Enterprises of Vietnam, the annual general meeting of shareholders must be held within 4 months from the end of the fiscal year. The meeting location is not clearly specified but is only required to be within the territory of Vietnam.

1.4. Operator differences

Differences in Time and Place of Meeting Convening

According to the Japanese Commercial Code, the General Meeting of Shareholders is chaired by the Chairman. The Chairman of the meeting shall be elected at the meeting unless otherwise provided in the Articles of Incorporation. Most Japanese companies stipulate in their Articles of Incorporation that the Representative Director of the company shall be the Chairman of the meeting (Article 237-4). The Chairman shall maintain order at the meeting and arrange the motions. Procedure of the General Meeting of Shareholders


must be recorded in writing (Article 244, paragraph 1). The documents must include the main content of the meeting and its results. The attending Directors as well as the Chairman must sign the minutes of the meeting (Article 244, paragraph 3). The Directors must keep these documents for 10 years at the head office and a copy (for 5 years) at each branch of the company (Article 244, paragraph 5).

According to the 2005 Law on Enterprises of Vietnam, the chairman of the meeting is the Chairman of the Board of Directors if the meeting is convened by the Board of Directors. In case the Chairman is absent or temporarily unable to work, the remaining members shall elect one of them to chair the meeting. In case there is no one who can chair the meeting, the member of the Board of Directors with the highest position shall preside over the General Meeting of Shareholders electing the chairman of the meeting from among the attendees and the person with the highest number of votes shall preside over the meeting. However, in case the Board of Directors does not convene the General Meeting of Shareholders, the person who signs the summons for the General Meeting of Shareholders shall preside over the General Meeting of Shareholders electing the chairman of the meeting and the person with the highest number of votes shall preside over the meeting (Article 103). It can be said that this is an improvement of the 2005 Law on Enterprises of Vietnam because instead of the Chairman of the Board of Directors always chairing the meeting, now other members, in addition to having the right to convene a meeting when necessary, also have the right to chair the meeting to speak for themselves and the group they represent. Regarding the minutes of the General Meeting of Shareholders, Article 106 stipulates that it must be made in Vietnamese (and possibly in a foreign language) with equal legal effect, must have 8 main contents and must be kept at the company's headquarters but does not specify the storage period.

1.5. Differences in the issues decided and the method of decision at the Shareholders' Meeting


Regarding the issues decided at the General Meeting of Shareholders, according to the Japanese Commercial Code, we can divide them into the following types of decisions:

Ordinary decisions: such as appointing Directors and Auditors; appointing and dismissing payers; deciding on remuneration for Directors, Auditors or payers; approving accounting documents... An ordinary decision is passed by a majority vote of the shareholders present (Article 239, paragraph 1). Shareholders can exercise their voting rights through a representative provided that this representation must be notified to the company by the said shareholder (Article 239, paragraph 2). It should also be noted that shareholders can vote in writing or electronically in some cases with the permission of the Board of Directors and must be decided by the competent authority, which is the court (Articles 293-2, 293-3). This may be a somewhat bold method but it is also good and we should consider applying it in Vietnam. The number of delegates required can be changed by regulation in the company's charter. Therefore, many Japanese companies stipulate in their articles of incorporation that a quorum is not required for passing a decision, and that a decision can normally be passed by a majority vote of the shareholders present. However, the quorum cannot be reduced to less than 1/3 of the total number of shares by stipulating in the articles of incorporation for the decision to appoint a Director and Auditor.

Special decisions: such as amending the Charter; transferring all or a significant part of the company's business; entering into an amendment to the lease of the entire business; acts that will change or terminate contracts on entrusting the company's business to another party or offering to share profits and losses with another party (including similar contracts); contracts made within 2 years from the company's establishment to achieve continued use in the business


the company's assets existing before the company's establishment and having a value of 5% or more of the total capital; the removal with or without cause of a Director or a Statutory Auditor before the end of his term of office; the issuance of new shares (or bonds with the right to pre-purchase new shares or convertible bonds) at a price advantageous to others who are not shareholders of the company; the dissolution of the company; the approval of a merger of the company... A special decision is passed when more than 2/3 of the votes of the shareholders present who are holding more than 1/2 of the total number of shares issued at that time are approved. The number of delegates required for this decision cannot be reduced as prescribed in the Charter.

Other exceptional decisions: decisions requiring the votes of shareholders holding at least 2/3 of the total number of shares, including the exemption of a Director from liability for losses caused to the company due to a transaction conducted by a Director with the company on his own behalf or on behalf of a third party; decisions requiring the votes of more than 1/2 of shareholders who hold at least 2/3 of the total number of issued and outstanding shares on a) Amending the Articles of Association to restrict the transfer of shares and b) Reorganizing or converting the company into a limited liability company; if it is a decision to exempt a Director from liability other than the above, it must have the consent of all shareholders including shareholders without votes.

The powers of the General Meeting of Shareholders have been expanded in the 2005 Law on Enterprises of Vietnam but are still not as specific as in the Japanese Commercial Code. However, the 2005 Law on Enterprises of Vietnam stipulates that if the first convening of the General Meeting of Shareholders cannot be held, it can be convened for the second and third times. The approval of decisions by the General Meeting of Shareholders is divided into 3 types: for normal decisions requiring at least


At least 65% of the total number of votes approved by the shareholders attending the meeting. For special decisions (decisions on types of shares and total number of shares of each type that are allowed to be offered for sale; amendments and supplements to the Company Charter; reorganization and dissolution of the company...), this rate is 75% unless otherwise provided in the Company Charter. Voting to elect members of the Board of Directors and the Board of Supervisors must be carried out by cumulative voting.

The decisions of the General Meeting of Shareholders have an important impact on many related issues, so the Japanese Commercial Code 2002 as well as the Vietnamese Enterprise Law 2005 stipulate that, depending on the level of violation, there are reasons to request the Court or Arbitration to review and cancel the decision of the General Meeting of Shareholders and the time limit for implementation is 90 days. Only shareholders, Directors or General Directors, Supervisory Board and members of the Board of Directors (for joint stock companies in Vietnam) have this right.

2. Differences in regulations related to the Board of Directors

2.1. Status and authority of the Board of Directors

Instead of having a Board of Directors like in Vietnam, in Japan, the Board of Directors (including all Directors) are the ones who will manage the company's affairs and at the same time supervise the performance of the Directors' duties. The Board of Directors will handle the company's administrative affairs, matters other than those decided at the General Meeting of Shareholders, according to the Commercial Law or the Company's Charter.

The Board of Directors has the authority to resolve the following matters under the Commercial Code of Japan 2002: Deciding on the division of shares (Article 218, paragraph 1); Converting between registered shares and non-registered shares (Article 213, paragraph 1); Appointing a representative director (Article 261, paragraph 1); Deciding on the convening of a general meeting of shareholders (Article 231); Approving a competitive transaction by a director (Article 264, paragraph 1); Approving a transaction that conflicts with the interests of the company (Article 265, paragraph 1); Issuing new shares (Article 261, paragraph 1);


280); Approval of accounting books (Article 281, paragraph 1); Creation of reserve funds from existing capital (Article 293, paragraph 3); Issuance of bonds, convertible bonds or bonds with the right to subscribe for new shares (Article 296, Article 341, paragraph 2.2 and Article 341, paragraph 8.2). The Board of Directors cannot allow a Director to decide on the following matters without the Board of Directors' decision (Article 260): Sale and takeover of important assets; Borrowing large sums of money; Appointing or dismissing important employees such as managers; Establishing, changing and dissolving important bodies of the company such as a branch; Other important administrative tasks.

The Board of Directors shall supervise the performance of the duties of the Directors (Article 260-2). This right of the Board of Directors shall not only supervise the legality and legitimacy but also the adequacy and appropriateness. In order to carry out supervision effectively, the Directors shall report to the Board of Directors on important operations at least once every three months or more frequently. The Board of Directors shall deal with matters specified in the Commercial Code, and matters other than those specified in the Commercial Code and the Articles of Association that are not decided at the General Meeting of Shareholders.


2.2. Board of Directors Meeting

A meeting of the Board of Directors may be convened by any Director, unless the Board of Directors has designated a Director to do so (Article 259). However, even in the case provided for above, another Director may request the convening of the Board of Directors by submitting a document stating the matters subject to the meeting (Article 259). The Controller may request the convening of the Board of Directors in specific cases as provided for in the Commercial Code (Article 259). Regarding the convening of a meeting of the Board of Directors, the notice of convening must be


sent to each Director and each Auditor at least one week before the meeting. However, this period may be shortened by the provisions of the Articles of Incorporation (Article 259-2). With the consent of all Directors and Auditors, a meeting of the Board of Directors may be held without following the usual procedures for convening (Article 259-2).

The Board of Directors' decisions are made by a majority vote of the Directors present, whose number constitutes a majority (Article 260). However, these conditions may be more stringently stipulated in the Articles of Incorporation (Article 260). Unlike decisions at the General Meeting of Shareholders, decisions of the Board of Directors cannot be voted on by proxy. A Director with a special interest related to the decision of the Board of Directors shall not participate in the decision (Article 260). The number of Directors who are not allowed to participate in the decision shall not be counted towards the number of Directors required to decide the matter (Article 260). When the Board of Directors decides on matters such as " competitive transactions " or " transactions that conflict with the interests of the company ", such Director is considered to have special interests. The proceedings of the Board of Directors' meetings must be recorded in writing (Article 260-4). The minutes must include the basic content of the meeting proceedings and the results of the meeting. The attending Directors and Supervisors must sign the minutes (Article 260-4). The Directors shall keep the minutes for 10 years at the company's head office (Article 260-4). Unlike the General Meeting of Shareholders, errors in the decisions of the Board of Directors will invalidate those decisions.

2.3. Director

Appointment of Directors: Directors shall be appointed or removed by decision of the General Meeting of Shareholders (Article 254, Clause 1, Article 257, Clauses 1 and 2). A company shall have at least 3 directors (Article 255). The names of the Directors shall be registered (Article 188, Clause 2.7). Unless otherwise provided in Article


In accordance with the Articles of Association, a shareholder may request that the election of two or more directors be conducted by cumulative voting (Article 256-3). When such a request is made, each shareholder shall receive votes equal to the number of directors to be elected. In this case, a shareholder may aggregate all his or her votes for one person or may vote for two or more candidates (Article 256-3). This request must be made in writing at least five days before the date of the General Meeting of Shareholders (Article 256-3). In general, most Japanese companies exclude this cumulative voting by a provision in the Articles of Association.

According to the 2005 Law on Enterprises of Vietnam, the Director or General Director is appointed by the Board of Directors or hired by another person. The Director is the legal representative of the company (if the Company Charter does not stipulate that the Chairman of the Board of Directors is the legal representative of the company). The Director or General Director is the person who runs the daily business of the company, is supervised by the Board of Directors and is responsible to the Board of Directors and before the law for the implementation of assigned rights and duties.

Qualifications: According to the Japanese Commercial Code, a director of a company is not required to be a shareholder, but a Controller cannot concurrently serve as a director of a company or its subsidiary. The following persons cannot become directors of a company: a person who is unqualified or has little or no qualifications; a person who has been declared bankrupt but has not been rehabilitated; a person who has been convicted of a crime prescribed in the Commercial Code, the law on special exceptions to the Commercial Code on joint-stock company control, the LLC law for which the term of 2 years has not expired from the date of execution of the sentence or it is proven that it is not required to be executed; a person who has been convicted of a sentence heavier than imprisonment for a crime other than the crime prescribed in the preceding item for which the execution of the sentence has not been completed or it is proven that the sentence has not been completed;

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