How to Handle Shareholder Disputes in Vietnamese Companies

Shareholder disputes are among the most common and complex legal issues faced by companies in Vietnam. If not handled properly, such disputes may disrupt business operations, damage corporate governance, and lead to prolonged litigation.

1. Common Types of Shareholder Disputes in Vietnam

In practice, shareholder disputes in Vietnamese companies often arise from the following issues:

• Disagreements over capital contributions, share ownership, or profit distribution

• Conflicts between majority and minority shareholders regarding management control

• Breaches of shareholders’ agreements or company charters

• Disputes related to transfer of shares or capital contributions

• Allegations of abuse of power by directors or controlling shareholders

A joint-stock company has shareholders, while an LLC has an owner or members. Ownership and governance disputes can arise in either form, but the relevant rights, records and procedure must be assessed for that company form.

2. Legal Framework Governing Shareholder Disputes

Shareholder disputes in Vietnam are primarily governed by:

• The Law on Enterprises

• The Civil Code

• The company’s charter and shareholders’ agreements

• Relevant procedural laws on litigation and arbitration

Vietnamese law provides shareholders with various rights, including access to information, voting rights, and the right to initiate legal proceedings in certain circumstances. However, enforcing these rights in practice can be challenging without proper legal guidance.

3. Preventing Shareholder Disputes

Preventive measures play a critical role in minimizing shareholder conflicts, including:

• Drafting clear and comprehensive company charters and shareholders’ agreements

• Establishing transparent governance and decision-making processes

• Clearly defining exit mechanisms and share transfer restrictions

• Seeking legal advice when restructuring ownership or management

Effective prevention often proves far more cost-efficient than dispute resolution.

4. The Role of Jurion & Partners in Shareholder Dispute Resolution

Jurion & Partners provides comprehensive legal support to shareholders and companies in handling shareholder disputes in Vietnam. Our services include:

• Legal assessment and strategic advice at early stages of disputes

• Review and drafting of shareholders’ agreements and company charters

• Representation in negotiations, mediation, litigation, and arbitration

• Support in enforcement of court judgments and arbitral awards

>> View more: Choosing the Right Business Structure: LLC vs. Joint Stock Company

>> View more: Key Legal Considerations When Starting a Business in Vietnam