The resignation of a legal representative not only affects the individual concerned but may also have significant implications for the enterprise itself. Accordingly, understanding the applicable legal framework has become an essential need for many individuals and organizations. In response, NPLaw provides an overview of the current legal regulations governing the resignation of legal representatives in the following article.

I. Impact of the resignation of legal representatives on enterprises

A legal representative of an enterprise is the individual who represents the enterprise in exercising rights and performing obligations arising from its transactions, as well as representing the enterprise in legal proceedings. Therefore, when such an individual resigns, the enterprise may face considerable impacts.

In practice, the most common consequences include:

  • Disruption in the execution of contracts and ongoing transactions between the enterprise and its partners or third parties;
  • Adverse effects on the day-to-day management and operation of the enterprise;
  • Legal risks if changes are not promptly registered with the business registration authority.

In summary, without proper preparation, the resignation of a legal representative may expose the enterprise to multiple negative consequences.

II. Overview of the resignation of legal representatives

1. How does the resignation of a legal representative affect corporate governance?

As analyzed above, the legal representative is the individual who acts on behalf of the enterprise in exercising rights and obligations arising from transactions, participates in proceedings as petitioner, plaintiff, defendant, or related party before arbitration tribunals and courts, and performs other rights and obligations as prescribed by law (Clause 1, Article 12 of the Law on Enterprises 2020, as amended in 2025).

Accordingly, the resignation of a legal representative may significantly affect corporate governance, including:

  • Alteration of the enterprise’s governance structure, requiring dismissal of the existing representative and appointment of a new one;
  • Delays in making critical decisions relating to business operations, such as amendments to enterprise registration;
  • Difficulties in conducting transactions with partners and customers.

Thus, without adequate preparation, enterprises may encounter substantial governance challenges upon such resignation.

2. What are the typical procedures for notification upon the resignation of a legal representative?

Based on the Law on Enterprise 2020 (as amended in 2025), Article 43 of Decree No. 168/2025/ND-CP, and current practice, the notification procedure generally includes:

  • Dismissal of the existing legal representative;
  • Appointment of a new legal representative;
  • Registration of the change with the business registration authority at the enterprise’s head office;
  • Notification to relevant parties such as banks, tax authorities, social insurance agencies, and business partners.

These are the common procedural steps that enterprises should follow to ensure compliance with legal requirements.

3. Is a lawful reason or approval required for a legal representative to resign? Why?

A legal representative must have a legitimate reason or obtain approval from shareholders or the board of directors in order to resign.

It may be divided into two cases:

  • Where the legal representative is an employee: The individual must notify the enterprise in accordance with the notice period prescribed under Article 35 of the Labor Code 2019.
  • Where the legal representative is a member or shareholder: The resignation must be approved by the Members’ Council or the General Meeting of Shareholders.

Therefore, the legal representative must notify the enterprise in advance to facilitate proper handling of arising issues.

4. Can a legal representative continue to represent the company in ongoing transactions after resignation?

From the effective date of the dismissal decision or the termination of the employment contract and notification to the business registration authority, the individual’s representative authority ceases.

Accordingly, the enterprise must re-execute contracts or continue transactions under the name of the newly appointed legal representative.

III. Legal regulations governing legal representative resignation

1. What are the procedures for registration upon resignation under the Law on Enterprise?

The Law on Enterprise governs corporate matters and provides specific procedures for registering changes when a legal representative resigns.

Pursuant to Article 30 of the Law on Enterprise 2020 (as amended in 2025), the procedure includes:

  • Preparation of a complete dossier for changing the legal representative in accordance with Article 43 of Decree No. 168/2025/ND-CP;
  • Submission of the dossier to the business registration authority within 10 days from the date of resignation and appointment of a new representative;
  • Within 03 working days from receipt of a valid dossier, the authority shall review and issue a new Enterprise Registration Certificate. If the dossier is invalid, the authority must notify the enterprise in writing of required amendments; if refused, reasons must be clearly stated.

In essence, the registration must be initiated within 10 days and completed within 03 working days if the dossier is valid.

2. What legal documents must be submitted to confirm the resignation of a legal representative?

To ensure a smooth registration process for appointing a new representative, proper preparation of the required documents is essential.

Under Article 43 of Decree No. 168/2025/ND-CP, the dossier includes:

  • Application for registration of change of legal representative (Form No. 13 under Circular 68/2025/TT-BTC);
  • Original and copy of resolution or decision on the change of legal representative issued by the company owner (for single-member LLC), Members’ Council (for multi-member LLC), or General Meeting of Shareholders/Board of Directors (as applicable);
  • Power of attorney authorizing a representative to implement the registration procedure (if applicable).

These documents form the basis for acceptance by the business registration authority.

3. What are the rules on compensation liability if a legal representative resigns without proper handover causing damage?

Therefore, where failure to hand over duties causes damage, liability shall be governed by Articles 584 and 585 of the Civil Code 2015.

  • Actual damage must be fully and promptly compensated. The parties may agree on the level, form, and method of compensation, unless otherwise provided by law;
  • The liable party may have compensation reduced if the damage is unintentional and disproportionate to their financial capacity.

Accordingly, compensation is generally determined based on agreement and actual damages suffered by the enterprise.

IV. Questions regarding legal representative resignation

1. What violations occur if a former legal representative continues signing contracts after resignation, and what are the consequences?

Such conduct constitutes a breach of authority to execute contracts and may result in the contract being declared invalid under Clause 1, Article 407 and Article 122 of the Civil Code 2015.

2. Is a resigning legal representative still liable for obligations arising before 

The legal representative remains liable for obligations incurred prior to resignation, as they held representative authority at that time (Article 13 of the Law on Enterprise 2020, as amended in 2025).

3. What is the deadline for notifying the business registration authority upon resignation?

Under Clause 2, Article 30 of the Law on Enterprise 2020 (as amended in 2025), the enterprise must notify the authority within 10 days from the date of change.

4. What are the legal consequences if a legal representative falsifies a board resolution to legitimize resignation?

Such conduct may lead to multiple liabilities:

  • Administrative liability: Fines ranging from 20,000,000 VND to 30,000,000 VND for false declarations in registration dossiers (Article 43 of Decree No. 122/2021/ND-CP);
  • Civil liability: Obligation to compensate for damages caused to the enterprise due to falsifying a board resolution to legitimize resignation (Articles 584 and 585 of the Civil Code 2015);
  • Criminal liability: Possible prosecution for falsifying  organizational documents, punishable by fines, non-custodial reform, or imprisonment depending on severity (Article 314 of the Penal Code 2015, as amended in 2017).

Thus, such actions may result in serious legal consequences.

5. What should a company do if a resigning legal representative fails to hand over the company seal and main documents?

Currently, company seals are not required to be registered with State authorities. Therefore, the enterprise may formally request the individual to return the seal and documents.

If the request is not complied with, the enterprise may create a new seal and notify customers and partners to mitigate potential legal risks.

V. Looking for a reliable legal expert to handle issues related to legal representative resignation?

To effectively address issues arising from the resignation of a legal representative, enterprises must have a thorough understanding of the Law on Enterprises and relevant legal instruments. As a result, many businesses seek reputable legal experts to save time and resources.

NPLaw, a leading legal service provider with extensive experience in corporate law and matters relating to legal representative resignation, has become a trusted partner for many enterprises.

The above information is for reference purposes only. For detailed advice tailored to specific circumstances, please contact NPLaw for prompt legal assistance.