What are the types of shares and shareholders of credit institutions as joint stock companies in Vietnam under the Law on Credit Institutions 2024?
- What are the types of shares and shareholders of credit institutions as joint stock companies in Vietnam under the Law on Credit Institutions 2024?
- What are the rights of common shareholders of credit institutions as joint stock companies in Vietnam?
- Vietnam: When will the latest Law on Credit Institutions 2024 come into force?
What are the types of shares and shareholders of credit institutions as joint stock companies in Vietnam under the Law on Credit Institutions 2024?
Pursuant to the provisions of Article 60 of the Law on Credit Institutions 2024, credit institutions as joint stock companies can issue 02 types of shares: common shares and preferred shares. Specifically:
Common shares:
Credit institutions as joint stock companies must have common shares. The owners of common shares are ordinary shareholders.
Preferred shares:
Credit institutions as joint stock companies may have preferred shares. The owners of preferred shares are preferred shareholders. Preferred shares include the following types:
- Dividend preferred shares;
- Voting preferred shares.
Specifically:
For dividend preferred shares:
Dividend preferred shares are shares that receive dividends at a higher rate than the dividends of common shares or a stable annual rate. Dividends are distributed annually and consist of fixed dividends and bonus dividends. Fixed dividends are not dependent on the business results of the credit institution and are only paid when the credit institution is profitable.
In the case where the credit institution operates at a loss or has profits but not enough to distribute fixed dividends, the fixed dividends for dividend preferred shares are accumulated for the following years. The specific fixed dividend rate and the method of determining bonus dividends are decided by the Shareholders' General Meeting and recorded on the shares of dividend preferred shares. The total par value of dividend preferred shares is limited to a maximum of 20% of the charter capital of the credit institution.
Members of the Board of Directors, members of the Supervisory Board, the Director General (Director), managers, and other executives of the credit institution are not allowed to purchase dividend preferred shares issued by that credit institution. The purchase of dividend preferred shares is determined by the Statute of the credit institution or the decision of the Shareholders' General Meeting.
Shareholders who own dividend preferred shares have rights and obligations similar to ordinary shareholders, except for voting rights, attending the Shareholders' General Meeting, nominating candidates for the Board of Directors and the Supervisory Board.
For voting preferred shares:
Only organizations authorized by the Government and founding shareholders have the right to hold voting preferred shares. The voting privileges of founding shareholders are valid for a period of 03 years from the date the credit institution is granted a license. After that period, the voting preferred shares of founding shareholders are converted into common shares. Shareholders who own voting preferred shares have rights and obligations similar to ordinary shareholders, except for the right to transfer those shares to others.
Note: Common shares cannot be converted into preferred shares. Preferred shares can be converted into common shares according to the resolution of the Shareholders' General Meeting.
What are the types of shares and shareholders of credit institutions as joint stock companies in Vietnam under the Law on Credit Institutions 2024?
What are the rights of common shareholders of credit institutions as joint stock companies in Vietnam?
Pursuant to the provisions of Article 61 of the Law on Credit Institutions 2024, common shareholders of credit institutions as joint stock companies have the following rights:
- Attend and express opinions at Shareholders' General Meetings and exercise voting rights directly or through authorized representatives; each common share has one voting right.
- Receive dividends according to the resolutions of the Shareholders' General Meeting.
- Have priority in purchasing newly issued shares in proportion to their common shares in the credit institution.
- Transfer shares, exercise the right to offer shares to other shareholders of the credit institution or other organizations and individuals in accordance with the provisions of this Law and the Statute of the credit institution.
- Access, search, extract information about the name and contact address in the list of shareholders with voting rights; request the correction of their inaccurate information.
- Access, search, extract, copy the Statute of the credit institution, minutes of Shareholders' General Meetings, resolutions, and decisions of the Shareholders' General Meeting.
- Share in the remaining assets corresponding to the number of shares owned in the credit institution when the credit institution is dissolved or bankrupt.
- Delegate in writing the exercise of their rights and obligations to others; the authorized person is not allowed to stand for election on their own behalf.
- Nominate and propose individuals for the Board of Directors, the Supervisory Board as stipulated in the Statute of the credit institution or as provided by law if the Statute of the credit institution does not specify. The list of candidates must be sent to the Board of Directors within the deadline determined by the Board of Directors.
- Shareholders or a group of shareholders owning 5% or more of the total common shares or a lower proportion as stipulated in the Statute of the credit institution have the right to nominate individuals for the Board of Directors, the Supervisory Board.
Vietnam: When will the latest Law on Credit Institutions 2024 come into force?
Pursuant to the newly officially promulgated Law on Credit Institutions 2024, specifically Article 209 of the Law on Credit Institutions 2024 stipulates:
The Law on Credit Institutions 2024 comes into force from July 1, 2024, except for Clause 3, Article 200 and Clause 15, Article 210 of the Law on Credit Institutions 2024, which come into force from January 1, 2025.
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