Legal Representative of the Enterprise Is Determined Based on the Enterprise's Internal Agreement

age, capacity to act and in many specific fields must also satisfy the conditions of qualifications. Specifically, the individual is permitted by law to exercise rights and obligations in the specific business field, is of legal age as prescribed by law, has the capacity to perceive and perform normal behavior. For example, in the UK, a person aged 16 or older can be appointed as a director of a company [118; Article 157]. For Vietnam, the age to become a legal representative must be 18 years or older, with full civil capacity. Cases: people who have lost civil capacity, minors are not eligible to become legal representatives because when participating in business activities of a large-scale enterprise, it will require good capacity to act with the ability to bear independent legal responsibility. For some specific types of businesses such as pharmaceuticals, healthcare, securities, etc., the conditions are very strict, such as the representative must have a certificate or practice license. In a limited partnership, a general partner cannot be the owner of a private enterprise or a general partner of another general partnership, unless agreed by the remaining general partners.

In addition, the legality here is also reflected in the provisions of the law requiring the registration of information of the representative according to the provisions of the LDN. The partners of the enterprise can directly transact based on the identity of the company representative announced. This principle is stipulated in many countries such as the regulations on information registration for directors who are natural persons, regulations on information registration for directors who are legal entities in the UK Company Law 2006, amended and supplemented in 2018 [118, Article 163, Article 164], the regulation that the representative must be registered in the Commercial Register managed by the Court in the German Joint Stock Company Law 1965, amended and supplemented in 2021 [119, Article 125].

According to this characteristic, whether the registration or announcement of the representative's identity to a third party is a decisive factor in the validity of the representative relationship of the enterprise or not needs to be clarified. Clearly, the Law on Enterprises stipulates that when registering to establish an enterprise, it must meet the legal requirement: registering the representative's personal information with the competent state agency. The legal representative of the enterprise has legal value and comes into effect upon registration because this is the State's recognition of the legal existence of the enterprise.

In the case where the enterprise has registered the information of the legal representative but has not disclosed that information to a third party, the issue needs to be resolved according to the correct principle: the failure to disclose the information of the representative is not a condition for invalidating the legal representative of the enterprise. The purpose of the disclosure is to notify the third party of the person legally authorized to sign contracts on behalf of the company. In the case where the third party does not know the representative's rights, it cannot affect the validity of the established transactions. The company cannot cite the reason of lack of information disclosure to avoid liability arising from the agreements established by the legal representative of the enterprise. It is possible that the representative has entered into a transaction with the intention that he or she acts on behalf of the company, for the benefit of the company, this is considered to have established a representative role. When a representative acts on the company's premises, during business hours and for an activity corresponding to the company's purposes, he or she is deemed to be acting with the intention of representing the company.

This principle is also extremely important in how to handle cases of transactions exceeding the authority of representation or without authority of representation. Examining the provisions of Vietnamese law with this principle will show many issues that need to be resolved from the perspective of protecting the rights of third parties.

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2.2.3. The legal representative of an enterprise is determined based on the enterprise's internal agreement.

Although regulated by law, in essence, this is considered a private legal relationship, and it is necessary to respect the choice of representative according to the agreement of the capital contributors in the company.

Based on the function and close connection between the representative and the internal management structure of the company, this is an internal issue of the company. Depending on the management structure, scale and scope of the company's business, which representative regime is chosen, the right to represent is allocated to one person or many people. On the other hand, this feature is also reflected in a series of legal regulations on business establishment, in which one of the information registered with the state agency is the representative information. The change of the representative is also authorized by the internal management of the enterprise and the law only stipulates the disclosure of information to a third party through registration of the change with the state agency.

In addition, issues such as representative authority and scope of representation are stipulated in the enterprise charter, internal regulations or even the labor contract between the representative and the enterprise, which also binds the legal representative. In the UK and the US, there is also a binding of rights and interests between the two parties through the parties' trust contract [71, p28]. This is considered a self-regulating mechanism of the enterprise, so it is more or less optional and arbitrary, as long as it is not contrary to the law.

However, this discretionary choice is not absolute and still requires legal intervention. For example: the basis for the emergence and termination of the legal representative relationship of the enterprise, regulations on the standards and conditions of the representative of the enterprise, the legal consequences of transactions that do not comply with the regulations on the representative authority or the rights and obligations of the representative. These regulations must be complied with and do not depend on the internal choice of the members of the enterprise.

According to the legal theory related to the legal nature of the company and the theory of corporate governance, the level of law in intervening in the representation of the enterprise is different. If the hypothetical theory advocates the necessity and role of law in regulating the representative relationship of legal entities, the realist theory argues that the law does not create the company but only performs the recognition and adjustment based on the independent existence of the enterprise [75; p. 296]. The analysis shows that corporate law in any approach needs to regulate the legal entity due to reasons such as:

Firstly , in a legal entity, the representative and the enterprise are closely linked. The representative's actions within the representative authority are the actions of the enterprise and will bind the enterprise. The representative acts as the embodiment of the enterprise and of course, these actions are based on the rights and obligations of the enterprise. However, in the process of business activities, due to the position of accessing a lot of information and having the right to decide on transactions, the representative can see many personal benefits from it. Personal benefits are different from the interests of the company in the process of business, even conflicting with the interests of the company, so there needs to be regulations on the rights and obligations of the representative in legal documents.

Second , in practice, the legal representative of a company often has great power. The representative becomes the final approver when establishing a contract, becomes the final controller of the company's finances and is responsible for all actions of the company. Therefore, the legal representative model is stipulated in the legal document with the aim of establishing a governance mechanism in which the representative power is not absolutely concentrated on one subject and has good supervision within the company.

This characteristic affects the determination of the principle of legal intervention in the relationship of legal representatives. The law should not prescribe a unified and independent model of enterprise representation because legislators cannot know the characteristics and scale of each enterprise. Therefore, it will be rigid, not promote flexibility and waste time, increasing costs in the operation of the enterprise. Instead, enterprises must have the obligation to register and disclose information. In special cases, the law only intervenes in the general principles that the enterprise has established when the legal representative cannot be identified. It is even possible to declare agreements on the division of authority and responsibility of representatives invalid when there are signs of violating legal prohibitions, violating voluntariness and the principle of fairness. This is considered an exception and supplement to the legal autonomy of enterprises.

2.2.4. The legal representative of the enterprise protects the legitimate interests of the enterprise.

It can be affirmed that a business is created for a specific purpose, often separate from the members of the business. Therefore, the interests of the business are not the personal interests of shareholders/members. The business is considered an economic unit, pursuing legitimate goals with the scale of operations, relationships with partners, customers, employees, the community and society to ensure the prosperity and long-term development of the business. From that perspective, of course, the profits earned will belong to the business. The interests of the business must be understood as the interests of an independent entity, promoted by the business goals, economic values, social values that the business brings to the country and community, not simply

economic interests of the owner. This means that the legal representative must perform the most appropriate actions to protect the interests of the enterprise, maintain and develop the most favorable conditions for the enterprise. This is demonstrated in the provisions of the law of some countries such as the UK. The UK Company Law 2006, amended in 2018, requires: " Directors must consider and act towards (a) the long-term success of the company, (b) the interests of employees, (c) relationships with suppliers, customers and stakeholders, (d) the impact on the community and the environment, (e) the reputation of the company and (f) the fair treatment of shareholders" [118; Article 172]. This provision shows that the UK has followed the direction of prioritizing the power of the representative - directors are suggested to choose to protect the interests of the parties in order of priority, in which the interests of shareholders are placed behind the interests of the enterprise. France is not outside the above trend when it stipulates that " Any company has legitimate interests and is organized for the benefit of its members. The company must consider social interests, including social and environmental issues in its activities" [114; Article 1833].

On the other hand, not only the legal representative of the enterprise must respect the interests of the enterprise, but the judge himself when resolving cases related to the interests of shareholders/members of the company must also consider the interests of the enterprise first. In legal documents, there is no concept of the interests of the enterprise, so the determination will be abstract, depending on each specific case.

2.2.5. The legal representative of an enterprise can be an individual or a legal entity.

The legal representative of an enterprise can be an individual or a legal entity because in a representative relationship, the necessary factors to prove the existence and validity of the representative relationship include: expressing the representative will, on behalf of the represented person and for the benefit of the represented person. Both natural persons and legal entities can determine their will. However, for legal entities, the will of the legal entity is expressed externally by the collective will of all members of the legal entity for the common benefit, not the will of each owner of the legal entity. Therefore, legal entities must always have natural persons to act on their behalf.

representative rights in another enterprise of which the legal entity is a shareholder/member. In theory, this issue does not affect the operation of the enterprise when the legal representative is a legal entity and the natural person is the permanent representative. This is even very beneficial for the direction of the parent company and the subsidiary in the unified management of the enterprise's operations.

Vietnamese legislators stipulate that the legal representative of an enterprise can only be an individual in all types of enterprises, from private enterprises to LLCs, joint stock companies or partnerships. The current Enterprise Law does not have any provisions on the case where the legal representative of an enterprise is another legal entity. Perhaps Vietnamese legislators believe that if the representative is also a legal entity, the representative's will must still be determined through the will of the individual. Therefore, stipulating a natural person with clear information and the ability to perform specific acts when representing the enterprise will create trust for third parties when transacting. On the other hand, that will avoid consecutive changes to the person who actually exercises the right of representation, making the corporate governance and supervision mechanism more complicated. That, considering the actual operations and management experience of Vietnamese enterprises, has not been highly effective. Therefore, Vietnamese law chooses a natural person as the only reasonable and appropriate subject for the role of legal representative.

Compared to the regulations of some countries such as France and the UK, the representative manager can be a legal entity, which is not a new regulation. The French Commercial Code of 1807, amended and supplemented in September 2020, stipulates: In a joint stock company, the person assigned the right to manage and represent the company is the General Director - who can be a natural person or a legal entity. The Chairman can authorize one or several executive directors of the company [117, Article 225-20]. This regulation allows a legal entity to be granted the right to manage, the right to manage the company and hold the right to represent. In terms of capacity, a legal entity can carry out management activities when they have a "permanent representative" who is always present at the company's headquarters. This permanent representative must satisfy the same conditions as a representative who is a natural person. French legislators only limit the legal entity that is authorized to manage a JSC due to the size and diverse shareholders of this type of enterprise, demonstrating that the right of representation is not widely distributed to legal entities. Similar to France, the UK allows the representative of

Company - There may be many Directors, of which at least one must be a natural person. A legal entity may become a manager when a natural person represents it in carrying out administrative activities. [118, Article 225-20].

With the important position and role of the legal representative in the enterprise, the connection of the subject with the right to represent in the corporate governance structure, the regulation of the conditions for the representative is necessary. Due to the regulations of each country in connecting the manager with the right to represent, the allocation of the representative position can be an individual or a permanent representative of the legal entity that is the founding shareholder.

2.3. The role of the legal representative of the enterprise

The legal representative plays an important role in the sustainable development of the enterprise by promoting the activities and directing the operation of the enterprise in compliance with the provisions of the law. This is due to the reason that, legally, the representative must bear the ultimate responsibility for the enterprise to the third party and the State. That responsibility makes the representative, when performing the task, review the decisions and transactions of the enterprise to ensure the interests of the enterprise but not contrary to the provisions of the law and prevent legal risks, becoming a mandatory factor. On the other hand, the criteria for evaluating corporate governance are also an important factor attracting cooperation from partners. This is clearly demonstrated in public joint stock companies when periodically disclosing information according to the regulations of the State Securities Commission.

Establishing a good corporate governance model will protect the interests of shareholders contributing capital to the company. According to the agency theory from the perspective of legal economics, when there is a separation between ownership and management rights, conflicts between the representative and the owner of the business also appear. Conflicts of interest between the owner and the representative include: the representative does not make efforts because they only own a small proportion of capital or the representative wants to expand the business to ensure position and income while the shareholder wants to pay cash dividends when the company is profitable. It could also be the case that the owner wants to invest long-term capital while the manager is interested in profitable projects, areas that suit his skills and interests [76, p295]. For large companies with a long history of operation, idle cash flow

If the risk of the representative using money for his own purposes is large, it is likely to appear and control is not simple. Therefore, building a support regulation, defining responsibilities and evaluating the activities of the representative in a reasonable manner will protect the capital contributing members.

Determining the perfect model of legal entity will protect the interests of business partners, consumers and the State, collectively known as stakeholders. For stakeholders, the existence of a business is a complex organization, only through a representative as a link to create trust, creating a real, tangible image. Stakeholders need a specific person to agree on content and take responsibility for violations. According to stakeholder theory, stakeholders play an important role for businesses because they are the subjects that are easily affected by the decisions of the business. Along with the goal of business interests and the interests of capital contributors, the interests of stakeholders need to be considered as an interest that needs to be balanced. The protection of the interests of the business, of capital contributors or stakeholders needs to be established and implemented in a harmonious manner in the activities of the business representative.

Through the above analysis, from the clear understanding of the role of the legal representative, legislators increasingly realize the need for legal regulations to regulate this relationship. Because the representative is considered the foundation of a business organization - an organization established and operating on the basis of a private legal framework, the regulatory mechanism is also established based on certain standards.

2.4. The influence of legal theories on the choice of legal representative model of enterprises

Research on legal theories affecting the determination of appropriate representative models means to identify the content as well as the advantages and disadvantages of each theory in relation to corporate governance in order to choose the appropriate representative model. That model is considered from a theoretical perspective and must be consistent with the theory of modern corporate governance and the function of corporate law.

As introduced in section 1.1.1 of the overview and section 2.1.1 of the concept of corporate legal personality regarding legal theories on the nature of the company, it can be seen that the theories are divided into two main streams: hypothetical theories and theoretical theories.

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