Can a single member limited liability company in Vietnam issue bonds? What are the procedures for making private placement of bonds?
What are bonds under the law?
Pursuant to Clauses 1 and 3, Article 4 of the 2019 Law on Securities in Vietnam stipulating:
- “securities” include the following assets:
+ Shares, bonds, fund certificates;
+ Warrants, secured warrants, pull options, depository receipts;
+ Derivatives;
+ Other kinds of securities defined by the Government.
- Bonds are securities that certify their holders’ lawful rights and interests to part of the debt of the issuer.
Thus, it can be understood that bonds are a kind of securities that are also traded on the stock market.
Can a single member limited liability company in Vietnam issue bonds? What are the procedures for making private placement of bonds?
Can a single member limited liability company in Vietnam issue bonds?
Pursuant to Clause 4, Article 74 of the 2020 Law on Enterprises in Vietnam on the single member limited liability company as follows:
Single member limited liability companies
1. A single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.
2. A single-member limited liability company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
3. A single-member limited liability company must not issue shares except for equitization.
4. Single-member limited liability companies may issue bonds in accordance with this Law and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of this Law.
Thus, single member limited liability companies may issue bonds in accordance with this Law and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of the 2020 Law on Enterprises in Vietnam.
What are the procedures for making private placement of bonds of a single member limited liability company in Vietnam?
Pursuant to Clause 4, Article 74 of the 2020 Law on Enterprises in Vietnam and Article 129 of the 2020 Law on Enterprises in Vietnam stipulating as follows:
Procedures for making private placement of bonds and transfer of privately placed bonds
1. The company shall decide the plan for private placement of bonds in accordance with this Law;
2. The company shall disclose information to the investors before each placement and send a notification to the stock exchange at least 01 day before the intended date of offering.
3. The company shall disclose information about the result of the offering to the investors before each placement and send a notification to the stock exchange within 10 days from the completion date of the offering.
4. Privately placed bonds may be transferred among eligible investors specified in Clause 2 Article 128 of this Law, except transfer under an effective court decision or arbitration award or inheritance as prescribed by law.
5. Pursuant to this Law and the Law on Securities, the Government shall provide for the types of bonds, procedures for private placement of bonds; information disclosure; international issuance of bonds.
Thus, the procedures for making private placement of bonds are as follows:
(1) The company shall decide the plan for private placement of bonds;
(2) The company shall disclose information to the investors before each placement and send a notification to the stock exchange at least 01 day before the intended date of offering.
(3) The company shall disclose information about the result of the offering to the investors before each placement and send a notification to the stock exchange within 10 days from the completion date of the offering.
(4) Privately placed bonds may be transferred among eligible investors specified in Clause 2 Article 128 of the 2020 Law on Enterprises in Vietnam, except transfer under an effective court decision or arbitration award or inheritance as prescribed by law.
(5) Pursuant to the 2020 Law on Enterprises in Vietnam and the Law on Securities, the Government shall provide for the types of bonds, procedures for private placement of bonds; information disclosure; international issuance of bonds.
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