The formation and legal significance of internal corporate documents

In the course of business operations, enterprises shall give due consideration to internal corporate documents to ensure that corporate administration and business operations comply with applicable laws and are conducted in a transparent manner. Accordingly, Lexsol identifies the following five (05) categories of internal corporate documents that shall be carefully reviewed by business owners.

1. Company Charter

The Company Charter is not merely a document prepared for the purpose of completing the enterprise establishment dossier submitted to the competent authority, but also serves as a fundamental legal instrument for safeguarding the lawful rights and interests of the company. The legal basis for the formulation of the Company Charter includes, inter alia, corporate law, taxation, accounting, and labor regulations. The Charter is established upon the consensus of the company’s owner(s) and may be amended or supplemented by the Board of Members or the General Meeting of Shareholders. It sets out the internal governance framework of the company by prescribing the rules governing corporate operation, ownership of shares or capital contributions, the rights and obligations of the legal representative and members, internal dispute resolution mechanisms, and procedures relating to the dissolution of the company. In practice, where internal disputes arise, the Company Charter serves as a primary legal basis for resolution. Accordingly, any provision of the Charter that is contrary to applicable law shall be deemed invalid and shall not afford protection of the lawful rights and interests of the relevant parties within the company.

2. Internal management regulations

In addition to the “governance framework” established by the company charter, internal management regulations constitute a comprehensive set of documents governing specific internal matters of the enterprise, including management structure, personnel recruitment, senior leadership, salary and bonus schemes, disciplinary measures, and internal regulations applicable to individual departments. 

To prevent inconsistent interpretations, overlapping authority, and internal conflicts during business operations, enterprises are required to promulgate detailed internal management regulations governing the aforementioned matters.

3. Internal labor regulations

Pursuant to Clause 1, Article 118 of the Labor Code 2019, employers are required to promulgate Internal Labor Regulations. Where an employer employs ten (10) or more employees, such regulations must be made in writing, communicated to employees, and publicly posted at the workplace. In cases where fewer than ten (10) employees are employed, provisions concerning material liability and labor discipline must be expressly stipulated in the labor contracts. 

Internal Labor Regulations shall include, inter alia, the following specific contents:

a) Working hours and rest periods;

b) Order at the workplace;

c) Occupational safety and health;

d) Actions against sexual harassment in the workplace;

dd) Protection of the assets and technological and business secrets and intellectual property of the employer;

e) Cases in which reassignment of employees are permitted;

g) Violations against labor regulations and disciplinary measures;

h) Material responsibility;

i) The person having the competence to take disciplinary measures

This document is mandatory for the purpose of completing the enterprise establishment dossier or, in the case of enterprises employing fewer than ten (10) employees, for recruitment and labor management. Although classified as an internal corporate document, the formulation of internal labor regulations must ensure compliance with applicable laws and regulations. Such regulations serve as an essential legal basis for the resolution of issues prone to dispute, including labor discipline, remuneration, bonuses, and other employment-related matters.

4. Trade secrets and business confidential information

In the information age, data constitutes a vital asset and a strategic resource that enables enterprises to maintain and enhance their competitive position in the market. Such information may include, inter alia, data generated or obtained in the course of investment activities, business operations, cooperation with partners, internal research and development, as well as information relating to partners and customers relationships. Disclosure of such information – whether to the public or, in certain cases, internally – may result in the loss of the enterprise’s competitive advantage.

Accordingly, enterprises are required to establish and maintain a comprehensive system for the storage, management, and protection of business secrets and trade secrets. This is not merely a procedural requirement, but also a long-term strategy contributing to the sustainable development of the enterprise.

5. Accounting books, accounting vouchers, and annual financial statements

Accounting books, accounting vouchers, and annual financial statements are required to be prepared, presented, and retained in a transparent and accurate manner in order to fulfill reporting obligations to the tax authorities. At the same time, these documents provide a concrete reflection of the enterprise’s operational efficiency, financial performance, and growth over the relevant financial periods. Such financial data constitutes an essential basis for the owner(s), the Board of Members, or the General Meeting of Shareholders in determining the company’s development strategies and business plans in subsequent periods.

Accordingly, the establishment and issuance of internal corporate documents are not solely intended to satisfy the procedural requirements of competent state authorities during the establishment and operation of an enterprise, but also to effectively safeguard the lawful rights and interests of the enterprise itself. For professional advice on the formulation, review, and implementation of comprehensive, accurate, and legally compliant internal corporate documents, contact Lexsol for detailed consultation:

• Website: https://lexsolasia.com/en/
• Email: info@lexsolasia.com
• Hotline: +84 35 981 9008