Disputes between members, and between members and the company, are conflicts and disagreements that arise throughout the entire process from the establishment, operation, and reorganisation of the business to its dissolution or bankruptcy. As society progresses, disputes between members, and between members and the company, become increasingly common, reflecting an inevitable law of development. In this article, TNTP will analyse some basic content about this type of dispute.
1. Legal regulations on disputes between members, and between members and the company
According to the provisions of Clause 5, Article 6 of Resolution No. 03/2012/NQ-HDTP dated December 3, 2012, by the Council of Judges of the Supreme People’s Court, disputes between members, and between members and the company are regulated as follows:
● A dispute among members of a company is a dispute between members of a company regarding value of their contributions to the company; regarding the transfer of capital holdings in the company between members of the company or the transfer of capital holding in the company of a member of the company to a person who is not a member of the company; regarding the transfer of bearer shares and registered shares; regarding face value of stocks, issued stocks and bonds of the joint stock company or regarding the right to ownership of the property in proportion to the shares of each member of the company; regarding the right to receive profits or the obligation to bear the losses and to settle loans of the company; regarding the disposal of property and the sharing of loans of members of the company in case the company is dissolved; or regarding other matters between members of the company related to the establishment, operation, dissolution, merger, amalgamation, division or organizational transformation of the company.
● A dispute between a company and its members is a dispute regarding the capital holding of each member in the company (usually, such capital holding is calculated by money or by objects or the value of the right to ownership of industrial property); regarding the face value of stocks and the issued stocks (applicable to joint stock companies); regarding the right to ownership to a part of asset of the company in proportion to the contribution to the company; regarding the right to receive prohibits or obligation to bear the losses in proportion to the contribution to the company; regarding the petitions to the company for transform or settlement of loans of the company, disposal of asset and of contracts that the company has concluded when conducting the dissolution of the company; or regarding other matters related to the establishment, operation, dissolution, merger, amalgamation, division or organizational transformation of the company.
2. Methods for resolving disputes between members, and between members and the company under Vietnamese law
Disputes between members within the company, and between members and the company related to the establishment, operation, dissolution, merger, consolidation, division, transfer of company assets, and conversion of the company’s organizational form are determined as commercial business disputes (Article 30 of the Civil Procedure Code 2015 and Article 6 of Resolution 03/2012/NQ-HDTP). Therefore, when disputes arise, parties can apply methods for resolving commercial business disputes. Accordingly, the methods for resolving disputes between members, and between members and the company include:
● Negotiation;
● Mediation;
● Arbitration;
● Court proceedings
Each method has its advantages and disadvantages. The application of which method to resolve disputes will be agreed upon by the parties. However, in complex cases, where parties are not in good faith and cannot reach an agreement, parties often choose arbitration or court proceedings to resolve disputes.
Above is the content of the article “Disputes between members, and between members and the company under Vietnamese law” that TNTP presents to readers. We hope the above shares are useful to those interested in this issue.
Sincerely,
