Can the Chairman of the Board of Directors run the company if he is detained?
The Chairman of the Board of Directors of a joint stock company has just been prosecuted and detained to serve the investigation. In this case, can this person still run the company?. The issue of concern of Mr. NHB (Thanh Vinh ward, Nghe An).
Reply:According to Clause 4, Article 156 of the 2020 Enterprise Law:
“In case the Chairman of the Board of Directors is absent or unable to perform his/her duties, he/she must authorize in writing another member to exercise the rights and obligations of the Chairman of the Board of Directors according to the principles prescribed in the Company Charter. In case there is no authorized person or the Chairman of the Board of Directors dies, goes missing, is detained, is serving a prison sentence, is serving an administrative penalty at a compulsory drug rehabilitation facility, a compulsory education facility, has fled his/her place of residence, has limited or lost civil capacity, has difficulty in cognition, controlling his/her behavior, is prohibited by the Court from holding a position, practicing a profession or doing certain work, the remaining members shall elect one of the members to hold the position of Chairman of the Board of Directors according to the principle of majority approval of the remaining members until a new decision of the Board of Directors is made.”
From the above provisions it can be seen that,When the Chairman of the Board of Directors is detained, he or she will no longer be able to run the company, but the remaining members of the Board of Directors will elect someone to temporarily hold the position of Chairman until a new decision is made.
Clauses 5 and 6, Article 156 of the 2020 Enterprise Law clearly state: The Chairman of the Board of Directors or the person convening the meeting must send a meeting invitation to all members, at least 3 working days before the meeting date (unless otherwise provided in the Company Charter). The notice can be sent by invitation, phone, fax, email or other means, ensuring it reaches the contact address registered with the company.
Thus, the detained person remains a legal member of the Board of Directors until he is dismissed, removed or disqualified according to the law or the Company Charter. Therefore, sending a meeting invitation to this person is still mandatory to ensure the legality of the procedure and avoid the risk of the resolution being invalidated later.
