Guidelines for Organizing Meetings and Issuing Resolutions in Enterprises under the Enterprise Law

During their operations, all enterprises must make many important decisions such as increasing charter capital, appointing management personnel, investing in projects, distributing dividends, or approving financial reports. However, not all enterprises organize meetings or issue resolutions in the correct legal order.

In reality, many resolutions are invalidated or lead to disputes simply because meetings are convened improperly, lack the necessary conditions to proceed, or have incomplete documentation.

The article below will help enterprises understand the process of organizing meetings and issuing resolutions by the General Meeting of Shareholders (GMS) and the Board of Directors (BOD) according to the provisions of the Enterprise Law 2020.

1. What are the forms for approving Resolutions?

According to the Enterprise Law, resolutions of the GMS and BOD can be approved in two forms:

(i) Approval at a meeting

This is the most common form.

Members or shareholders will be convened to attend the meeting in the correct order stipulated in the company's Charter and the Enterprise Law.

After discussion, issues will be voted on to issue a resolution.

This form is usually applied to:

• Financial reports;
• Dividend distribution;
• Election or dismissal of BOD members;
• Approval of business plans;
• Investment decisions;
• Issues requiring direct discussion among members.

(ii) Written opinions

This form does not require organizing a meeting.

The authorized person will send an Opinion Collection Form along with relevant documents for shareholders or members to vote in writing within the specified period.

After the opinion collection period ends, the enterprise will count the votes and issue a Resolution if the approval ratio is met.

This form helps to:

• save time;
• reduce organizational costs;
• be suitable when members are in different localities or countries.

However, not all matters are allowed to be decided by written opinion. Enterprises need to check the Enterprise Law and their Charter to determine cases where a meeting is mandatory.

Note: The company's Charter may specify the scope of matters that can or cannot be decided by written opinion. Therefore, before proceeding, enterprises need to review their Charter to ensure proper authority and procedure.

2. What types of meetings are there?

For the General Meeting of Shareholders

Annual General Meeting of Shareholders

The Annual GMS is held once a year.

Typically, the meeting will consider matters such as:

• BOD report;
• Financial report;
• Profit distribution plan;
• Business plan for the next year;
• Selection of audit firm;
• Other matters within the authority of the GMS.

This is a mandatory meeting according to the Enterprise Law.

Extraordinary General Meeting of Shareholders

An Extraordinary GMS is convened when issues arise that require immediate decision and cannot wait until the annual meeting.

For example:

• increase or decrease in charter capital;
• issuance of shares;
• amendment of the Charter;
• merger;
• division;
• dissolution;
• major transactions within the GMS's authority;
• other cases as per the Charter.

For the Board of Directors

Regular meetings

The Enterprise Law stipulates that the BOD meets at least once every quarter.

Content usually includes:

• evaluation of business operations;
• investment decisions;
• personnel appointments;
• approval of regulations;
• other matters within the BOD's authority.

Extraordinary meetings

Extraordinary meetings are held when issues arise that require immediate decision.

For example:

• project investment;
• asset purchase or sale;
• transaction approval;
• appointment or dismissal of management positions;
• handling urgent matters.

3. Meeting organization process

Although each enterprise has its own Charter, the general process will include the following steps:

Step 1. Content preparation

Determine:

• content requiring opinion;
• legal basis;
• decision-making authority.

Step 2. Convening the meeting

Prepare:

• Meeting invitation notice;
• Meeting agenda;
• Meeting documents;
• Voting slips;
• Proxy forms (if any).

The notice must be sent correctly in terms of:

• deadline;
• form;
• recipients

according to the Enterprise Law and the Charter.

Step 3. Checking meeting conditions

Before opening, check:

• number of attending members;
• percentage of voting shares;
• conditions for holding the meeting.

If conditions are not met, action must be taken according to regulations.

Step 4. Conducting the meeting

• opening;
• approval of agenda;
• presentation of content;
• discussion;
• voting.

Step 5. Documentation

After voting, prepare:

• Meeting minutes;
• Resolution.

These are two mandatory documents proving that the decision was duly adopted.

4. Written Opinion Solicitation Process

Typically includes:

• Preparation of the Submission;
• Opinion Ballot;
• Draft Resolution;
• Submission of documents;
• Collection of ballots;
• Vote counting;
• Preparation of the Vote Counting Minutes;
• Issuance of the Resolution.

Unlike in-person meetings, businesses do not prepare Meeting Minutes because no actual meeting takes place.

5. What if the meeting does not meet the conditions for proceeding?

This is one of the common situations businesses encounter.

For the General Meeting of Shareholders

According to the Enterprise Law:

First Convocation

The meeting shall be conducted when the attending shareholders represent more than 50% of the total voting shares, unless the Charter stipulates a higher percentage.

If conditions are not met

The business must convene a second meeting.

Second Convocation

The meeting shall be conducted if the attending shareholders represent 33% or more of the total voting shares, unless the Charter stipulates otherwise.

If still not met

Continue to convene for the third time.

Third Convocation

The meeting shall be conducted regardless of the number of attending shareholders, unless the Charter stipulates otherwise.

Note: Many businesses still mistakenly apply the 75% and 50% ratios. In reality, the 2020 Enterprise Law stipulates that the condition for conducting the first meeting is more than 50%, while the company's Charter may stipulate a higher percentage. Therefore, businesses should prioritize checking their Charter before organizing a meeting.

6. How do meeting organization documents and written opinion solicitation documents differ?

Meeting Organization	Written Opinion Solicitation
Meeting Invitation Notice	Opinion Solicitation Notice
Meeting Agenda	Opinion Ballot
Meeting Documents	Documents for Opinion Solicitation
Attendance List	List of Individuals Solicited for Opinion
Meeting Minutes	Vote Counting Minutes
Resolution	Resolution

The biggest difference is:

• Meeting organization requires Meeting Minutes.
• Written opinion solicitation requires Vote Counting Minutes.

Both types of documents must issue a Resolution to record the voting results.

OPLAW Insight

The issuance of a resolution depends not only on the content adopted but also on the procedure, formalities, and legal documents. An error in the convocation, determination of meeting conditions, or minute-taking can lead to internal disputes, affecting the validity of the resolution and transactions conducted based on that resolution.

Therefore, businesses should establish standard procedures for organizing meetings and soliciting written opinions, and regularly review their company Charter to ensure that all resolutions are issued with proper authority and in accordance with legal provisions. This is also an important foundation for improving corporate governance quality and minimizing legal risks during operations.

Frequently Asked Questions

What should readers know about Guidelines for Organizing Meetings and Issuing Resolutions in Enterprises under the Enterprise Law?

During their operations, all enterprises must make many important decisions such as increasing charter capital, appointing management personnel, investing in projects, distributing dividends, or approving financial reports. However, not all enterprises organize meetings or issue resolutions in the correct legal order.