Amid Vietnam’s growing startup ecosystem, many startups have ceased operations or experienced significant setbacks not because of insufficient capital or an uncompetitive product, but due to internal conflicts among founding shareholders from the very beginning. A carefully drafted Shareholders’ Agreement, a comprehensive Company Charter, and clear ownership of intellectual property rights can serve as a legal safeguard against such disputes.
In this article, LawPlus outlines several key legal solutions that help prevent and effectively resolve internal shareholder disputes in accordance with the Civil Law 2015 and the Law on Enterprises (as amended and supplemented in 2025).
Table of Contents/Mục lục
1. Execute a Founders’ / Shareholders’ Agreement
Vietnamese law does not require founding shareholders to enter into a separate shareholders’ agreement. However, pursuant to Clause 2, Article 3 of the Civil Code 2015, parties are free to voluntarily make commitments and agreements regarding the establishment, performance, and termination of civil rights and obligations, provided that such agreements do not violate prohibitions of law or social ethics.
Accordingly, founders should execute a Shareholders’ Agreement from the company’s inception to clearly define each party’s rights and obligations, profit-sharing arrangements, capital contribution mechanisms, corporate governance structure, conditions for share transfers, and procedures applicable when a shareholder decides to leave the company. Such an agreement provides an important legal foundation for minimizing disputes that are often not fully addressed in the Company’s Charter.
2. Develop a Comprehensive Company Charter
Under Article 24 of the Law on Enterprises 2020, a Company’s Charter must contain essential matters, including charter capital, shareholders’ rights and obligations, the corporate governance structure, procedures for adopting corporate resolutions, and mechanisms for resolving internal disputes.
For startups, the Charter should provide stricter voting thresholds than the statutory minimum for significant corporate decisions, such as amendments to the Charter, changes to the capital structure, or disposal of substantial assets. It should also clearly regulate quorum requirements for subsequent meetings when the first meeting fails to meet attendance requirements, voting conditions for passing resolutions, and deadlock resolution mechanisms where shareholders are unable to reach consensus.
A well-drafted Charter significantly reduces the risk of disputes arising from the company’s management and operation.
3. Clearly Establish Ownership of Intellectual Property Rights
For startups, intellectual property is often the company’s most valuable asset. If ownership is not clearly determined from the outset, disputes may arise over software, trademarks, industrial designs, or trade secrets when a founder leaves the business.
Pursuant to Article 45 of the Law on Intellectual Property 2005, copyright owners are entitled to assign their economic rights to organizations or individuals through written agreements. In addition, Article 138 of the same Law permits the transfer of industrial property rights by written contract.
Regarding capital contributions in the form of intellectual property, founders may contribute intellectual property assets that have already been created before the company’s establishment. Such contributions should be independently valued by qualified appraisal organizations in order to determine the corresponding equity ownership ratio and avoid future disputes over the value of intellectual contributions. The founders’ agreement should also clearly provide that all intellectual property rights arising from the startup project shall be assigned to the company, thereby preventing former founders from retaining control over critical technologies or proprietary assets after leaving the business.
Notably, under the latest regulations set out in Decree No. 133/2025/ND-CP, the authority to process applications relating to the registration of industrial property licensing agreements has been decentralized to the Provincial People’s Committees.
4. Clearly Regulate Share Transfers and Termination of Shareholder/Member Status
The transfer of shares or capital contributions is one of the most common causes of disputes among founding shareholders.
According to Clause 3, Article 120 of the Law on Enterprises 2020, within three years from the date on which the Enterprise Registration Certificate is issued, founding shareholders may freely transfer their ordinary shares only to other founding shareholders. Any transfer to a non-founding shareholder must be approved by the General Meeting of Shareholders.
To mitigate potential disputes, the Company’s Charter or Shareholders’ Agreement should expressly provide for:
– Existing shareholders’ or members’ right of first refusal over transferred shares or capital contributions;
– A transparent valuation method for determining the transfer price;
– Confidentiality obligations and post-termination non-compete commitments applicable to departing shareholders or members for a specified period in order to protect the company’s legitimate business interests.
5. Agree in Advance on Dispute Resolution Mechanisms
Founding shareholders should agree on dispute resolution methods in advance by incorporating relevant provisions into the Shareholders’ Agreement or the Company’s Charter.
Pursuant to Decree No. 22/2017/ND-CP, commercial disputes may be resolved through commercial mediation, which helps preserve business relationships and maintain the confidentiality of internal corporate matters.
Under Clause 1, Article 5 of the Law on Commercial Arbitration 2010, disputes may only be resolved through arbitration where the parties have entered into a valid arbitration agreement. Furthermore, Clause 5, Article 61 of the same Law provides that an arbitral award is final and takes effect on the date of its issuance.
Where disputes involve trade secrets, proprietary technologies, or investment strategies, commercial arbitration is generally a preferable option because it ensures confidentiality and often provides a faster resolution than court litigation.
6. Conclusion
Disputes among founding shareholders are foreseeable risks that can be effectively prevented if appropriate legal mechanisms are established from the outset. The five solutions outlined above—executing a Shareholders’ Agreement, developing a comprehensive Company Charter, clearly establishing intellectual property ownership, regulating share transfers, and agreeing in advance on dispute resolution mechanisms—together form a comprehensive legal framework for startup governance.
Businesses should also note that relevant legislation, including the amended Law on Enterprises 2025 and the amended Law on Intellectual Property 2025, has already taken effect or will soon become effective. Accordingly, companies are strongly advised to stay updated with the latest legal developments and seek professional legal advice to ensure full compliance with applicable laws.
