Summary of Doctoral thesis: Laws on protecting minority shareholders of joint stock company in Vietnam - A comparative study with Japan and the United States of America

VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES

PHAN HOANG NGOC

LAWS ON PROTECTING MINORITY SHAREHOLDERS
OF JOINT STOCK COMPANY IN VIETNAM: A COMPARATIVE STUDY WITH
JAPAN AND THE UNITED STATES OF AMERICA

Major: Economic Law
Code: 9 38 01 07

SUMMARY OF DOCTORAL THESIS

Hanoi, 2018


THE THESIS IS COMPLETED AT
GRADUATE ACADEMY OF SOCIAL SCIENCES

Supervisor: Prof. PhD. Hoang The Lien

Reviewer 1: Assoc. Prof. PhD. Nguyen Duc Minh ..............
.................................................................................................
Reviewer 2: Assoc. Prof. PhD. Duong Dang Hue ................
.................................................................................................
Reviewer 3: Assoc. Prof. PhD. Le Thi Thu Thuy ..................

The thesis was defended at the Council level of thesis assessment of
the Graduate Academy of Social Sciences
At:…. hours…. , Dated .... months .... 2018

the dissertation is publicly in:
- National Library
- Library of the Academy of Social Sciences under the Vietnam
Academy of Social Sciences


INTRODUCTION
1. The necessity of the topic
Regarding the practice of law enforcement, the violation of rights of minority
shareholders (MIS) is relatively common, large shareholders often have conditions to
violate the rights of MIS.
MIS often have less opportunity to participate in management, deciding
important issues of the company. The rights of MS on property, corporate governance,
access to information have not been fully enforced by managers or violated, treated
unfairly by large shareholders.
In terms of meeting the requirements of integration, compared with the laws
of many countries, especially developed countries such as Japan, the United States, the
provisions on the protecting minority shareholders (PMIS) of the joint stock company
(JSC) in our country - Vietnam are still incompatible.The protection mechanism is also
not effective, especially, the dealing of violations of the rights of investors - minority
shareholders.
The above-mentioned practices show that it is necessary to further improving
the laws and mechanism on protecting the interests of MS in Vietnam, and comparing,
referencing the lesson, practice of foreign laws, including Japan and the United States.
2. Purposes and research tasks of the thesis
Purpose of the study. The dissertation reviews and evaluates the results of
research on theory and law on the protection of Vietnamese archeology with reference
to the law of Japan and the United States. Through that proposal to improve the law of
protection.

Research tasks, the dissertation will deploy the following tasks: Firstly, the
dissertation clarifies the fundamental theoretical issues on protecting MIS (PMIS);
Secondly, the dissertation conducted on the analysis and evaluation of minority
shareholders' rights in Vietnam, comparing with the laws of Japan and the US; clarifies
similarities and differences; Thirdly, the thesis proposes to improve the law on PMIS
Vietnam.
3. Scope and subjects of research
Scope of the study: The research scope of the dissertation within the scope of
LOE 2014 and other relevant legal documents has a comparative comparison with
some regulations of Japan and the United States on the rights of MIS, the responsibility
of the manager of JSC.
Research subjects: The dissertation focuses on studying the legal norms on the
protection of MIS' rights; internal governance structure; the role of the joint stock
company and the responsibility of the managers of the company to ensure the rights of
shareholders, compare with similar provisions of Japan, the United States.

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4. Research Methodology
The thesis uses the following research methods: Analytical methods;
comparative research methods; Secondary data methods.... At the same time, the thesis
is based on the methodology of Marxism - Leninist doctrine; Ho Chi Minh's thoughts
on state and law; Other theories such as: Agency theory, shareholder benefit theory,
and some other related theories in term of laws and economics.
5. New contributions of the thesis
Thesis contributes to determine and clarify the concepts and characteristics of
minority shareholder and protections; compare those of Vietnam and the US and Japan;
systematize company directors’ role, liability and power in the relationship with
shareholders in the countries’ laws. From the US, Japan and Vietnam’s laws, compare

and clarify the similarities and differences on legal mechanism for protecting minority
shareholders.
6. Scientific significance
The dissertation examines the overall law of Vietnam regarding the protection of
minority shareholders' rights in order to present their views and solutions to improve the
law protecting minority shareholders in Vietnam.
The research results of the thesis are scientific research documents for reference,
teaching on PMIS and corporate governance in Vietnam. Research results are also useful
for management agencies, corporate executives, shareholders and other stakeholders to
improve corporate governance and governance, and contribute to Theoretical views on
the protection of MIS in Vietnam.
7. The structure of the thesis
Apart from the Introduction, Conclusion and List of References, the list of scientific
works, the thesis is divided into 03 chapters and General Conclusion and
Recommendations (having the conclusion in each chapter).

CHAPTER 1
SUMMARY OF RESEARCH
1.1. Overview of research related to thesis topics
This section provides an overview of the international and Vietnamese
research in relation to the topic: "Laws on protecting minority shareholders
of joint stock company in Vietnam: a comparative study with Japan and the
United States of America”, Including the systematization of works, research
articles directly related to the topic for analysis and comparison.
1.1.1. Situation of international research
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Theoretical and practical research on the protection of MIS is one of topics
of the greatest interest to scientists around the world, and many studies have

highlighted the important role of law in protecting shareholders of JSC.
Scientific studies focus on aspects such as ownership of the company,
the legal mechanism of the PMIS and the relationship between the trust of the
shareholders and the management of the company. The United Kingdom, the
United States developed the theory of Representation, determine the
relationship of MIS with managers and major shareholders.
The separation between shareholder ownership and the management;
and administration of the company by the board members, directors and
other representatives is central issues of corporate governance. It is
imperative to have supervision by the rules and governance standards of the
representative so that they can fulfill their responsibilities with due
diligence, loyalty and obligation entrusted by the shareholders.
1.1.2. Research situation in Vietnam
To systematize researches in Vietnam on theoretical and practical
aspects of the law on protection of MIS, the mechanism of protection of
shareholders, the results showed that:
On measures to protect shareholders, the study put forward a number of
groups of measures: protection of shareholders by law, law enforcement;
protection by the internal mechanism - self-regulation by the company charter,
by the rules of ethics, professional ... In addition, other measures: shareholders
themselves to exercise their rights, litigation manager; request the association
of shareholders to represent and protect their interests.
Regarding the fundamental rights of shareholders, on the basis of the
Law on Enterprises (LOE), the categorized studies consisted of four main
groups of rights: rights of property, corporate governance, and right of
access to information and rights. In lawsuit – or the right to restore the
interests of shareholders.
1.2. Results of research on PMIS The thesis inherits and continues
research
Comparative studies (especially in the United States and Europe) have

addressed and analyzed the rationale for protecting minority shareholders
on the basis of Agency theory. The results of the comparative study on
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mechanism for dealing with the company's conflict of interest and
shareholders' protection suggest that: there is a significant narrowing of the
gap, the difference in terms of protecting shareholders in the law. British American compared to Germany, Italy, France and Japan. (Harvard
University Press, The Anatomy of Corporate Law: A Comparative and
Functional Approach).
Specifically, countries in the common law system and countries in the
civil law system have issued mandatory standards and requirements for
companies and investors - shareholders to enter and exit the market.
(transparency criteria, information control, stock trading standards,
corporate governance standards).
Another difference is that countries in these two jurisdictions have
focused much on investing resources in the management and enforcement
of the law on investor protection. If the United States intensifies the role of
law enforcement, serious and timely treatment of damages caused by the
managers (MAN) is not the same as the State actively pursued the criminal
case. Meanwhile, Germany, Italy, France and Japan have also concentrated
their resources similarly to the United States to strengthen their
accountability and enforcement of criminal justice.
Studies in Vietnam have also made comparative studies with Japanese
and American laws; Analyze some specific cases of disputes and conflicts
among shareholders and propose solutions to protect some TSI's rights.
Overseas studies (mainly Japan, the United States and Europe) have
provided a systematic and approaching methods to the concept of minority
shareholder protection (PMIS) of company in the law and this concept from
a comparative perspective.

1.3. Issues that have not been studied or clarified will be considered
by the thesis
- Minority shareholders' perception of joint stock companies in
Vietnam and other countries despite of some researches had done however,
there is no comparative and systematic comparison with Japan, the United
States.
- The relationship between the shareholder and the manager of the
company, in terms of the relationship between the owner and the manager,
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the representatives have the role of protecting the rights of shareholders,
minority shareholders; The benefits of minority shareholders are easily
violated by the major shareholders as well as the management of the
company and other entities.
- The responsibility of the company and its managers for the interests
of MIS; fiduciary relationship, representation between the Board of
Directors, the director and the managers with MIS are regulated by law,
supplemented by the charter, internal company regulations.
- The law protecting minority shareholders in Vietnam has not been
systematically studied (about the relationship between shareholders and
managers of the company, in terms of the relationship between the owner
and the manager, represent).
1.4.1. Theoretical background: The dissertation is based on the
Marxist-Leninist doctrine and Ho Chi Minh's thought on state and law. In
addition, research theories are considered for reference use such as: Agency
theory, the theory of interests of shareholders, the theory of interests of
stakeholders and some other theoretical point of view. Directly to the issue
of protecting the rights of minority shareholders in JSCs.
1.42. Research Methods

The dissertation uses the following research methods:
In Chapters 1 and 2 of the thesis use mainly synthesis and analysis
methods; indirect methodology - synthesis of documents.
Chapter 3 of the thesis focuses on comparative research methods, in
addition to other traditional research methods such as analysis, statistics and
synthesis. By comparing and contrasting the laws of Vietnam with those of
Japan and the United States, the author conducts research on the scope of
comparative criteria developed in accordance with the principles of
corporate governance provided by the OECD.
The Criteria for studying of the mechanism of protecting MIS between
Vietnam and Japan, and the United States: This is done in accordance with
OECD Principles of Corporate Governance, with two principles for
ensuring the fundamental rights of shareholders and the responsibilities of
the OECD. The Board is used as the main comparison criterion of the thesis.
Firstly, MIS's rights, violations of MIS's rights in the company. Second, the
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responsibilities of the MAN in securing the rights of MIS. Considering
regulations on loyalty, prudence of managers of the company; The duty to
protect the rights of shareholders - to ensure equity in the treatment of
shareholders.
Apart from the above mentioned criteria, the thesis considers other
additional factors such as the structure of corporate governance structure;
Mechanism of monitoring and evaluating the performance of managers in
the company.
Conclusion of Chapter 1
Throughout the review of Chapter 1, the findings on the protection of
MIS’rights, including theoretical and legal studies, have been presented.
The results of the study have stated the inadequacies of Vietnamese laws

and practices, although there is no systematic and comparative study with
Japanese and the US laws and practices. It does not specify the similarities
and differences between Vietnamese PMIS and other countries’.
Based on the results of the research on the results of national and
international research, the dissertation continues to analyze and compare
systematically in practice, laws of Japan and the United States, to clarify the
similarities. and differences between Vietnam and other countries
mentioned above and proposals to improve the law of our country.

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CHAPTER 2
THEORYTICAL ISSUES ON LAWS PROTECTECTING OF
MINORITY SHAREHOLDERS OF JOINT STOCK COMPANY
IN VIETNAM
2.1. Overview of minority shareholder protection
2.1.1. Conception of minority shareholders
Based on the conception of minority shareholders in Vietnam, Japan and
the United States, the thesis broadly characterizes the relationship of majority
shareholders to minority shareholders with fewer shares, voting rights. It is
unlikely to affect the price of shares or the company's operations.
MIS has the nature of: (i) Minority voting power, representing the weak
point of the MIS, while the majority voting and dominant is the right of major
shareholders. (ii) The election of the Board of Directors, with minor voting
rights, of course, MIS can not vote to reflect their will unless they make a link
and vote cumulatively. (3) The management of the company, MIS is not
important position, the decisive role of the management of the work of the
company that is decided by the managers or the MAS.
2.1.2. The need to protect the rights of minority shareholders

The rights of MISs are largely dependent on the security
responsibilities of managers and major shareholders in the implementation
of the Corporate Governance regime (CGR). Laws, regulations and
regulations of corporate governance are not complied, synchronized in
terms of the mechanism for ensuring the implementation as well as rules
binding obligations of major shareholders and managers of the company.
Subjects have the possibility of violating the right of the MISs (First, the
acts of the Supreme People's Court violate the interests of TSIs, such as voting
on the rate of dividends, nominating members of the Board of Directors, the
Board of Supervisors, Second, behaviors abused by MAN, violating loyalty,
prudence). The above is the basis for the legal mechanism of the PMIS,
establishing the protection mechanism associated with MIS' relationship with
major shareholders and management companies.
2.1.3. The purpose of the company and the theory of protecting the
interests of shareholders
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Shareholders are the best interests of the company, and the company
is also responsible for protecting the interests of stakeholders such as
customers, banks and partners. you.
The company and its managers must have the responsibility and duty
to give priority to ensuring the maximum benefit of any subject, to take
measures to ensure the benefit of whom? shareholders or those with related
interests. Considering the purpose of the company, the shareholder value
theory, the company has only one purpose is to maximize shareholder
benefits. In contrast, stakeholder value theory determines that a company is
established for the benefit of all stakeholders, not just for the sake of
shareholders.
In terms of protecting the interests of shareholders, especially vulnerable

MIS and large shareholders, or managers, the law should protect shareholders
through mechanisms that ensure the best interests of shareholders.
2.2. Amending the law on the protection of the rights of minority
shareholders
Legislation is that the state relies on the law, using specific legal means
(such as normative documents, applicable documents, acts of exercising
rights and obligations) to regulate social relationships, impact, direction of
the relationship according to specific objectives set.
2.2.1. Revision of the law on minority shareholders' rights
In the legal relationship to protect the rights of MIS before the major
shareholders and company management, the documents LOE 2014, the
Securities Law 2006 and related documents set out the principles of the
framework, Internal rules specify.
The issue is that the law has "hard" rules to apply, defining rights to
protect, especially protection of MIS due to weaknesses from violations of
major shareholders and abusive behavior. The power of the MAN.
In order to protect its shareholders, Japan issued the principle of
"accepting or explaining", under which the company fails to have the right
to explain the reasons. In the United States, a mandatory mechanism is
required for companies to be transparent and accountable for the best
interests of their stakeholders.
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2.2.2. Amending the law on minority shareholders' rights in relation
to major shareholders and managers in the company
The mechanism that LOE 2014 (Totally, 43 Articles, clauses of 61
articles regulating on joint stock companies) empowers the shareholders to
select and decide internal issues, protection measures and shareholder
rights; LOE has been no specific regulation that defines the rights of

minority shareholders to be protected from the acts of major shareholders
and acts of abuse of power by the management of the company.
To protect MIS before major shareholders and MAN, the law on the
one hand adjust the rights and measures to protect the MIS. On the other
hand, there must be consistent regulations from the law to the rules of
internal management, responsibilities and obligations of the MAN to ensure
the interests of the MIS.
2.2.3. Classification of rights of minority shareholders
The nature of the MIS is the right to vote minority, in addition to MIS
have the same rights as other corporations in the company.
Based on the nature of rights of shareholders, divided into two groups: the
right to prevent and the right to overcome (group of rights to prevent:
supervision of managers, attend the General Meeting of Shareholders, access to
information... the right to overcome includes inspection check the company, sue
the violation). Based on ownership and security, there are groups of property
rights; access rights to information; the right to conduct the General Meeting of
Shareholders; the right to request a resolution of the dispute.
2.3. Responsibility to protect the rights of shareholders of the
manager in corporate governance
2.3.1. The Position and role of Board of Director (BOD)
The establishment of the Board of Directors according to the different
models, methods and objectives of the company still ensures the best
interests of shareholders. First, the board has a role, a controlling role for
managers; Executive Directors are well-versed in the company. Second:
Some researchers assert that the BOD has the role of minimizing
representation costs through the structural form of the BOD, requiring
independent external members to carry out supervisory oversight. The Limit
the difference in benefits between managers and shareholders.
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2.3.2. Role and responsibilities of the Board of director’s members
and non-executive members
The board of directors with multiple non-executive members is
consolidated and referred to in the Representation Theory and Corporate
Governance Principles. Accordingly, an effective management board
should consist of a majority of non-executive members, with the role of
creating good performance, the reason for which is independent of the
management of the company. On the other hand, BOD executives play the
role of carrying out daily operations of the company.
2.3.3. The responsibility of the manager of the company in the
internal management mechanism to protect the MIS
The management of the company includes the relationships between
the heads of the company, the management of the company (board members,
directors), managers with the shareholders own the company. The manager
is therefore responsible for representing, receiving trustees operating the
company to secure the ownership of the company of the shareholders.
The shareholders hire or authorize the manager to be a representative in
the company's activities. Shareholders always expect loyal representatives to
act in the interests of shareholders - this is the ultimate goal. The problem arises
in the relationship: the conflict of interest between shareholders - owners and
managers of the company. Therefore, the law, corporate governance principles
and corporate rules and regulations have a role to play in establishing conflict
resolution measures.
Arguments for representation are one of the cornerstones of the
development of corporate governance principles and have been adopted by many
countries, in addition to regulatory requirements and internal governance
mechanisms in many countries. including the United States, Japan, Vietnam.
2.4. Methods of protecting the rights of minority shareholders
According to the definition of protection (protection), the protection

means the following: (i) to keep from spoiling; (ii) safe keeping of an organ
or character; (iii) Advocate with reasonable cause. Thus, the law on
protection of MIS is protection, protection by law; self-defense, or advocacy
by reason.
2.4.1. Protecting minority shareholders according to the functions of
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management agencies, supervisors and the handling of violations
Authorities that govern and enforce the law: administrative bodies,
tribunals and other independent organizations (auditors, lawyers,
associations protecting investors). It is a positional institution, a role
independent of the company, protects the MIS when required or when there
is a legal event. Considering the independent position of each of these
organizations outside the company, also known as the "external protection
mechanism" of the company.
In terms of strengths, the functional protection mechanism of noncompany institutions is more objective and independent, and is trusted by
shareholders and other stakeholders. On the limitation, the external mechanism
will only deal with the request or when the violation has been detected, the
consequences of damage to the interests of MIS will be dealt with.
2.4.2. Protect minority shareholders by proactively protecting their
shareholders' interests
MISs actively protect the rights and interests themself, protect the
rights of MIS also known as the self-protection rights - by the shareholders
exercise the rights that the law allows.
Under the current situation in Vietnam, the law should provide more
supportive measures to help shareholders implement the mechanism of
proactive self-protection and participate in the activities of The General
Meeting of Shareholders or the management of the company to ensure that
its interests do not necessarily look to the regulators or the external court.

2.4.3. Protect minority shareholders by management mechanism
and the responsibility of company managers
* Corporate governance mechanisms include statutory regulations
issued by the state, rules and internal governance rules established by the
company in accordance with law and internal governance requirements, and
the shareholders themselves. of the company through. That is the legal basis
to ensure the operation of the company, protect the rights of MIS by the
management of the company.
The system of norms of corporate governance is focused on regulating
the roles of managers, the functions of the General Meeting of Shareholders,
the Board of Directors, the Board of Directors and the Board of Supervisors;
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The relationship between the management subjects in ensuring the interests of
shareholders. In particular, MIS as well as other stakeholders are considered
as one of the key issues facing corporate governance.
* The operation of corporate governance: aims to ensure the interests
of shareholders - the company owner, especially the rights of MIS. The
important goal that CGR’s rules have to regulate is the relationship between
minority shareholders and the company's control of the company, the
relationship with the representatives, the management of the company.
Conclusion of Chapter 2
The central research task presented in Chapter 2 is the general
theoretical issues on the protection of MIS' rights, which define objectives
as well as two comparative criteria. (I) rights the MIS in the company; (ii)
the responsibilities of the MAN in ensuring the interests of MIS.
The research results of Chapter 2 serve as the basis for assessing the
strengths and limitations of the mechanism on PMIS. Chapter 3 will review
and identify the actual situation of PMIS in the scope of laws on

organization, management and administration of the company. In particular,
the contents of Chapter 3 are aimed at comparing not only the law and
internal management but also the role of the company issuing the regulation
on the apparatus and functions of the shareholder meeting, Board of
Directors, Supervisory Board, duties of Director and the MAN to ensure the
MIS’ interests.
CHAPTER 3
LAWS ON PROTECTECTING MINORITY SHAREHOLDERS OF
JOINT STOCK COMPANY IN VIETNAM IN COMPARING WITH
JAPAN AND THE UNITED STATES OF AMERICA
3.1. The role of the laws and the company charter in the protection
of minority shareholders
3.1.1. The role of law
Shareholders of joint stock companies have been protected by the Law
on Securities 2006, the Law on Enterprises 2014 (LOE 2014, from Article
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110 to Article 171) on the protection of interests of shareholders and
companies.
LOE 2014 regulates the management and administration mechanism
of the company in two specific directions: (i) Laws provide the principle of
compulsory general regulations; (ii) Give the company the choice, selfdetermination of many issues under its autonomy (a total of 43 articles, the
LOE empowerd companies in order to choose the corporate governance’s
measure and model); The company has issued internal regulations to
different regulations of the LOE. The role of the laws in Vietnam is to set
the framework standard that the companies choose and apply the corporate
governance model; other side, the rights of the shareholders, the
responsibility of the company and the management regulated by charter and
internal regulations. Laws is the basic legal framework for MIS to use as a

basis for protection their interests.
3.1.2. The role of the company's charter, internal rules and regulations
The laws of Vietnam, Japan and the United States also have regulations
that facilitate the management and administration of the company, when the
registration of the establishment requires the establishment of a company with
a number of internal compulsory.
In Vietnam, in addition to the law, the charter of the company also
plays an important role in protecting the rights of shareholders, the content
of the company charter must clearly define the rights and obligations of the
company's shareholders. share the profit;
In the United States - Delaware requires the establishment of a
Compulsory Register: the name of the company, the number of shares allowed
to be issued, the name and address of the representative, of each of the founders.
In addition to the required information, the rules may also include other
information. The founding charter is usually not detailed, detailing the
organization of activities as defined in the internal regulations (Bylaws).
3.1.3. Measures to protect minority shareholders
In general, the state applies the law in combination with the corporate
governance standards to protect shareholders through three main aspects: (i)
Regulations on shareholders' rights, especially MIS, are entitled to
Compensation for damages and the possibility of initiating lawsuits to protect
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interests; (ii) Regulations on the obligations of related entities, such as the
obligations of the company, the management of the company, especially the
harmony of the relationship and interests between major shareholders and
MIS. (iii) It is required to create conditions for shareholders to exercise their
rights and request the court to protect their rights and interests.
Laws that relate to investors are in many jurisdictions of a country,

such as corporate law, securities law, bankruptcy laws, etc. However, in all
legal aspects, Laws relating to the protection of shareholders, the law on
companies and securities plays the leading role.
In the United States and Japan, and in Vietnam, the law sets
requirements and penalties for the protection of investors with transparent
disclosure obligations; Control of insider trading within the company and
regulations on obligations of managers of the company.
3.2. Characteristics of laws on minority shareholder Protection in
Japan
3.2.1. Overview of the legal framework and law enforcement agencies
The responsibilities of the Board of Directors are regulated by the
following regulations: Corporate Law, Charter of a company. Listed
companies are also regulated by the Law on Trading and Financial
Instruments; Securities listing regulations issued by stock exchanges
(including the Code of Corporate Governance).
Group of shareholders, institutional investors also play an important
role in monitoring and enforcing corporate governance issues. A number of
institutional shareholders and investors also have a great influence on
corporate governance in Japan, for example, ISS is an institutional investor,
proxy adviser to shareholders.
3.2.2. About corporate governance and reforms in Japan
On May 1, 2015, the revised provisions of the Company Law of Japan
have come into force. This amendment covers the following:
(i) A new model of corporate governance: Companies can now choose
to become a company with a supervisory board (Kansatouiinkai-sechikaisha). Accordingly, the company has a supervisory board of its board
members (most of whom must be independent board members - outsiders),
having a role similar to that of an auditor in a company that does not. An
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independent board member, a longtime traditional model for a joint stock
company in Japan (kabushiki kaisha) KK
(ii) Amendments those are not required to follow: Listed companies
must have at least 01 independent member - outside. For specific types of
companies (companies must submit annual reports and companies without
outside directors), it is obliged to explain the reasons for the application of
the " managers outside the board of directors "will not be suitable for the
company's own conditions (the compliance or explanation rule).
According to revised regulations in 2015, listed companies and
companies that are required to submit annual reports must select one of the
two governance models: One, at least one member of the Board of Directors
outside; Second, there is no one board member from outside, but must
explain the reason - if nominating a member of the board will not match the
conditions of the company.
3.2.3. Popular model and corporate governance structure in Japan
* Joint Stock Company (Kabushiki Kaisha) KK
A joint stock model is the most common, most common model of a
company in practice in Japan. Classification of the shareholding company:
(i) Close company (kausa kabushiki): The company is characterized, in
accordance with the charter of the company, which requires any merger or
consolidation. company or transfer of company stock must be approved by
the company. (ii) Open Company: These companies are not modeled as
closed company. Overall, only the securities issued by the open company
may be listed as a stock exchange in Japan.
* Corporate governance structure
- Closed company does not have Board (Board): Closed company
selected model can choose not to set up board. Consequently, with the
majority of Administrators (not the role of the Board / Board) is competent
to pass decisions, policies governing the company.
- The Open Company (KK) must have a Board (Board), and the Closed

Company may set up a Management Board if the Company Charter
provides, (the law does not mandate).
With the corporate model, there is a board of directors and a supervisory
subcommittee. A company with a management board can set up one
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supervisory subcommittee. Companies with this type of commission are
widely accepted in Japan. About 240 listed companies have chosen the
corporate governance model with the BOD and subcommittee (up to 2015).
3.3. Characteristics of minority shareholders in the United States
3.3.1. General legal framework of a joint stock company
Laws governing corporate relationship management, including the
Commonwealth Act, federal and state law, securities laws, the Sarbanes Oxley Act 2002, and statutes. issued by the Securities and Exchange
Commission (SEC). In addition, the listed companies must comply with the
corporate standards issued by the Exchange.
Each state in the United States has a separate governing law on
corporations that is categorized into two main groups of states: the State
Legislation Group of Companies. The rest of the states have enacted their
own law firm for use in the state, which is incorporated by many companies
into the United States, Delaware. A joint stock company, in accordance with
US law, is a legal entity established and recognized under the laws of each
state.
3.3.2. About the internal governance structure of the company
The corporate governance structure is governed by the laws of the
United States, the enterprise (Vietnam), the issues covered by the division
of functions, duties Of corporate governance structures such as the General
Meeting of Shareholders, the Board of Directors and the Supervisory Board.
Some key points are the division of power in governance, corporate
governance, the relationship between shareholders and executives

(directors, board members).
* About the structure of the management, generally in one of two
popular models is the Unitary Board and the multi-board (Dual Board).
Typical US company law for single-board organizational model. In
Vietnam, 2014 stipulates that the company has the right to choose one of the
two single or multi-assembly models.
In the United States - Dalaware has a good corporate law, which
attracts more than half the total of the top 500 US companies and
corporations selected for business registration. Delaware is considered to
have the best corporate law for tissue. Board - authority of the company
16


manager is centralized operating company
* Company Executives: Company executives, including CEOs,
company presidents, vice presidents, and CFOs, are people who direct the
company's day-to-day operations in specialized areas. assigned subjects.
The CEO, the chairman of the company is the person in charge of the
general affairs and the highest authority of the company. Company
executives mainly operate on the individual nature and are representative of
the company. The Board of Directors appoints or employs executives to
supervise the operations of the Board. The activities of the supervisor are
supervised by the board.
* Representation and roles of representative:
In terms of investing and protecting the best interests of shareholders,
representative companies and representative agencies are reflected in
Agency Theory explaining the sector. The nature of the relationship between
the shareholder and the manager.
3.3.3. About the rights of shareholders and the liability of the
company manager

In the United States, the nature of the relationship between the
company and the shareholder is the relationship between the trustee and the
beneficiary. The shareholder's right arises from the right to receive
legitimate interests from assets deposited in the company without having to
directly exercise the property rights.
From the legal point of view, the rights of MIS are the ways of
behaviors of the subjects recognized by law, the ability of shareholders to
handle as prescribed. According to some views, the rights of shareholders
are derived from contract (The classical theory).
Basic rights of shareholders: The rights of shareholders are similar to
the basic rights of citizens that the State must guarantee. Basic rights of
shareholders include property rights, dividends in addition to the rights of
management and administration. Some important rights of shareholders, TS
is the right to vote (electing or dismissing members of the Board of
Directors, through the amendment of the charter, the merger of the
company); the right of access to information of the company and in
particular the right to initiate derivative proceedings;
The right to initiate derivative proceedings in accordance with the law
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provides that when a company's interests are infringed or threatened by a
third party, the board of directors shall represent the company, or the
shareholder may act on behalf of the company to sue the third party.
Regarding the obligations of major shareholders, US law requires
major shareholders to be obliged to entrust small shareholders. This is a
regulation that has important and effective implications for protecting the
rights and interests of minority shareholders. The mandate requires large
shareholders to benefit the company and small shareholders.
About the role of the responsibility of the manager of the company

US courts have access to the relationship between company executives
(including board members and executives) with the company and the
shareholders as trustees. The company and the shareholder are the trustees
and the trustee is the trustee. Thus the manager of the company is obliged to
take trust with the company and the shareholder, together with the two
fundamental obligations of duty and duty.
About Delaware: Delaware law requires that board members be
careful to the extent that a moderately attentive person will perform in the
same situation and must review all information. Reasonable when making
decisions.
Board members have a supervisory function so members are obliged
to supervise the conduct of their supervisors and employees with care. Such
a cautious duty requires the Board member to work diligently for the best
interests of the company.
3.4. Vietnamese laws on protecting minority shareholders in
comparing with Japan and the United States
3.4.1. Provisions on minority shareholders’ rights in Vietnam
The protection of the interests of investors in Vietnam in the spirit of
the Enterprise Law 2014, there are some additional provisions to shape the
mechanism to protect the rights of shareholders, including minority
shareholders; There are additional methods to facilitate shareholders to
exercise the right to sue the manager when necessary; The procedure and
procedures of the lawsuit have been simplified and the costs to the
shareholders - plaintiffs have been overcome.
Overall, the LOE 2014 has a number of progressive guidelines, which
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are initially consistent with some of the OECD corporate governance
principles; There are additional regulations to shape the mechanism for

protecting minority shareholders.
3.4.2. Minority rights of Vietnam in comparison with other countries
In line with OECD principles and corporate governance. Rights of minority
shareholders need protection measures, including three groups: Group 1 on
access to information; Group 2 on rights related to shareholder meeting; Group
3 on the right to nominate and nominate members of the Board of Directors.
Thus, some of the provisions on MIS' rights in Vietnam are compared with Japan
and the United States under these three groups of rights.
3.4.3. Responsibilities of managers of Vietnamese companies (MAN)
compared with other countries
LOE 2014 also provides regulations allowing the company to appoint
one or more representatives. On the responsibility of the representative, the
manager, Article 14 of the Law requires: a) To exercise the rights and
obligations assigned in an honest, careful and best manner in order to
ensure the legitimate interests of the enterprise; b) Being loyal to the
interests of the enterprise; Not use information, know-how, business
opportunities of enterprises, not abuse ... use the property of the enterprise
for personal benefit; c / To promptly, fully and accurately notify enterprises
of their ownership or affiliated persons ownership or shareholding, capital
contribution at other enterprises.
On the Obligations of Board Members and Company Managers:
OECD Principles VI.A states that: A board member should act on a wellinformed basis, with integrity, caution and It is in the best interests of the
company and its shareholders. Vietnam has a number of prudential
regulations that are fulfilled by companies like the United States and Japan.
In addition, some countries also require board members to be cautious,
direct loyalty to the shareholders of the company. With LOE 2014, only
mandates duties for the company without requiring the NQs to be cautious
with their shareholders. In Japan, the responsibility for the company, MAN
must also consider the interests of stakeholders such as banks, creditors ....
Regarding the loyalty obligation of a major shareholder (controlling

and controlling the company) for the minority shareholders in the company:
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In Japan, Vietnam does not stipulate obligations and liabilities to
shareholders. Minorities on such matters. In the United States, major
shareholders controlling the company are obliged to minority shareholders
in the event of transfer of control of the company to a third party. However,
this theory is interpreted to apply very narrowly and unpopular.
3.4.4. The similarities between Vietnam and Japan and the United States
LOE 2014 has some similarities with Japan and the United States in
the general rule of law: protection of archaeological rights; To amend and
supplement the responsibilities and obligations of the management board of
the company; the obligation to disclose information; on derivative litigation;
On control of self-interested transactions.
In addition to basic rights (property rights, governance, access to
information), LOE 2014 has added: complete information disclosure and
transparency; At the same time, there are some similarities between Japan
and the United States regarding administrative and criminal sanctions for
insider trading and securities manipulation.
The responsibility and obligation to protect the rights of shareholders
of managers and companies: Vietnamese law has some similarities in
principle with the United States in making regulations on responsibilities and
obligations of people. company management. The basic duties of a US
company's manager, such as loyalty, honesty and duty of care, have been
recognized in some of the regulations of Vietnam. (Article 160, LOE 2014).
Vietnam has similarities with other countries in the rules: (i)
Regulations on disclosure obligations of companies and managers of
companies; (ii) To exercise the rights and duties assigned in accordance with
the law, the charter of the company, the decision of the General Meeting of

Shareholders); (iii) MAN on behalf of individuals or other persons
performing work in any form within the scope of work of the company must
be explained to the Board of Directors and the Board and only be carried out
when approved by the majority of the Board;
The above regulations are intended to prevent the self-interest of the
company's management, so that shareholders and stakeholders can supervise
the management and administration of the company's management. That is
also the basic obligations of the company manager often found in the laws of
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Japan, or England, the United States.
3.4.5. The differences between Vietnam and the United States and Japan
3.4.5.1. The differences between the United States and Vietnam
Rights of Minority Shareholders: Based on the US Commercial
Companies Code - more than 30 states compiled; Louisiana Company Law
(LBCA) is similar, revised in 2015, the LBCA opens a new phase, enhances
TS protection. By analogy with the Federal Modeling Company Act, LBCA
established one of the most notable regulations, the increased number of
protections for minority shareholders (especially closed ones). corporations).
Specifically, the most noteworthy are: (i) Legal solutions for
shareholders who are treated unfairly, unfairly from the company; (ii) Friendly
modifications to shareholders with simplified procedures for the exercise of
shareholder rights requiring the company to repurchase shares. (iii) The right
to agree on the establishment of a new governance mechanism within the
company. This provision allows shareholders to stick to, voluntarily commit
to establish a new, non-traditional corporate structure.
Responsibility to assure shareholder rights of managers: Vietnam has
some general principles, there are no applicable interpretations, or case law
of the company management, especially the role of the regulator. The court's

preference for duty of loyalty, prudence, protect the interests of
shareholders.
In the United States, the interpretation of MAN's obligations, the
courts approach the relationship of board members (BOD), executives and
shareholders is the trust relationship. Therefore, MAN is obliged to take on
trust with the company and the shareholders, together with the two basic
obligations of loyalty and duty; Give priority to the interests of the company
and the shareholders before the individual MAN.
Internal Governance Mechanism of the United States: One of the key
objectives of the governance mechanism, supervision of the management of
the company protects the interests of shareholders, against fraud in the
financial statements. The United States has enacted the Sarbanes-Oxley Act
requiring public companies to (i) ensure greater transparency over financial
reporting; (ii) supplements the liability of the chief executive officer and
CFO for the reliability of the report; (iii) there must be changes in internal
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controls, accounting work to be more reliable.
3.4.5.2. Japan differences from Vietnam
Securing the rights of shareholders: is stipulated on the basis of the
principles of the Code of Corporate Governance. Companies should
implement and take appropriate measures to ensure adequate rights of
shareholders, including the right to vote and vote at the General Meeting of
Shareholders.
Accountability, careful implementation of the management
responsibilities of the BOD in Japan: the Board of Directors is empowered
and effectively enforces shareholder responsibility to promote sustainable
corporate value development. and increase the quality of value in the
medium and long term, effective capital and development.

Firstly, the Board needs to consider the urgency of dialogue and
measures to deal with if the majority of shareholders override the company's
important issues. Second, careful consideration should be given to special
rights - the right to be admitted to arbitrators, executives (including the right
to require a court order to terminate unlawful conduct or the right to initiate
a lawsuit).
Selection mechanism for applying corporate governance rules: In
Vietnam, although there are corporate governance rules in Decree No.
71/2017 / ND-CP dated 06/06/2017 of the Government on guidelines
Corporate governance applies to public companies; however, Vietnam does
not have "adherence or accountability" principles in corporate governance
such as Japan.
Conclusion of Chapter 3
Chapter 3 The thesis has considered the study of regulations and
measures to protect the interests of MIS in Vietnam in accordance with The
Law on Enterprise 2014 and related regulations, comparing with Japan and
US law. Chapter 3 contains four main issues: (i) the role of the laws and the
charter of the company in the protection of minority shareholders; (ii)
Characteristics of minority shareholder laws in Japan; (iii) Characteristics
of minority shareholders legislation in the United States; (iv) Laws on
protecting minority shareholders in Vietnam to compare with Japan and the
United States.
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In addition to reviewing and evaluating the characteristics of the laws
on the minority shareholder protections in Japan and the United States,
Chapter 3 has some comparative focusing and analyzing the provisions on
Vietnamese MIS’ rights and its managers’ responsibilities in each company.
The results of Chapter 3 have reached the goal of clarifying the similarities

and differences between Vietnam and Japan and the United States.

GENERAL CONCLUSION
AND RECOMMENDATIONS
Based on the literature review of the dissertation, we have shown some
general points about the protection of MIS, including from theoretical basis,
actual laws to recommand solutions of legal improvement on MIS protections.
The results of the study have presented the inadequacies of Vietnamese laws
and practices, but there has not yet been systematic comparative study,
which does not clearly indicate the similarities and differences between
Vietnam and other countries.
The dissertation analyzes the regulations and measures to protect the
interests of MIS in Vietnam in accordance with the law of enterprises and
relevant regulations. Chapters 2 and 3 examine theoretical foundations and
systems of views, compare analysis and clarify the reality of Vietnam law,
compare with the legal framework, regulations on protection of rights of
minority shareholders of Japan, USA.
The research results of the dissertation show that the law of Vietnam
has recognized fairly the rights of MIS, to receive the principle of corporate
governance in accordance with international practices and standards.
Besides, there are some shortcomings of the law on the feasibility and
limitation of the law, which affects the rights of TSIs such as access to
information and transparency; shareholders' rights; Some regulations are not
as feasible as controlling the manager's transactions; The Board of Directors
and the Board of Supervisors have not ensured their independence and
efficiency.
Some solutions to improve the legal provisions on minority
shareholders protection in joint stock companies in Vietnam:
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