Vietnam: How low can a public company's contributed charter capital get before it is delisted?
How low can a public company's contributed charter capital get before it is delisted?
According to Article 38 of the 2019 Law on Securities in Vietnam stipulating the delisting of a public company as follows:
- The public company shall send the State Securities Commission a notice enclosed with a list of shareholders provided by Vietnam Securities Depository and Clearing Corporation within 15 days from the day on which the contributed charter capital is found to be under 30 billion VND according to the latest audited financial statement;
Or the composition of shareholders is found to be unconformable with Point a Clause 1 Article 32 of the 2019 Law on Securities in Vietnam according to confirmation of Vietnam Securities Depository and Clearing Corporation.
- In case a public company fails to fully satisfy the requirements for listing after 01 year from the day on which it no longer fully satisfies the requirements specified in Point a Clause 1 Article 32 of the 2019 Law on Securities in Vietnam, the State Securities Commission shall consider delisting it.
- The company shall fully comply with regulations on public companies until the State Securities Commission issues a delisting notice.
- Within 07 working days from the receipt of the State Securities Commission’s notice of delisting, the company shall announce the delisting on its website and the media of the State Securities Commission and VSE, follow procedures for delisting or deregistration as prescribed by law.
- The Minister of Finance shall promulgate regulations on delisting of public companies due to reorganization, dissolution and bankruptcy.
Thus, in case the contributed charter capital is found to be under 30 billion VND according to the latest audited financial statement, the public company may be delisted according to the above provisions.
Vietnam: How low can a public company's contributed charter capital get before it is delisted?
What is the application for delisting of public company in Vietnam?
The application for delisting of public company is specified in Article 39 of the 2019 Law on Securities in Vietnam as follows:
In the case specified in Clause 2 Article 38 of the 2019 Law on Securities in Vietnam, the public company shall submit an application for delisting to the State Securities Commission. An application for delisting consists of:
- The certificate of enterprise registration;
- The notice that the public company no longer fully satisfies the requirements in Point a Clause 1 Article 32 of the 2019 Law on Securities in Vietnam;
- The list of shareholders provided by Vietnam Securities Depository and Clearing Corporation;
- The latest annual financial statement audited by an accredited audit organization. In case the company’s charter capital is increased after the end of the latest fiscal year, an audited financial statement of the latest period is required.
What are the rights and obligations of a public company in Vietnam?
According to Article 34 of the 2019 Law on Securities in Vietnam, the rights and obligations of public companies are as follows:
- After the State Securities Commission confirms the public company registration, the public company shall have the following rights and obligations:
+ Disclose information in accordance with the 2019 Law on Securities in Vietnam;
+ Comply with regulations on company administration in the 2019 Law on Securities in Vietnam;
+ Apply for share registration at Vietnam Securities Depository and Clearing Corporation as prescribed in Clause 1 Article 61 of the 2019 Law on Securities in Vietnam;
+ The public company mentioned in Point a Clause 1 Article 32 of the 2019 Law on Securities in Vietnam shall apply for trading shares on the trading system for unlisted securities within 30 days from the day on which the State Securities Commission confirms the public company registration.
After 02 years from the first day of trading on the trading system for unlisted securities, the public company may apply for listing if whenever all listing requirements are satisfied;
+ The public company mentioned in Point b Clause 1 Article 32 of the 2019 Law on Securities in Vietnam shall have its shares listed or registered within 30 days from the ending date of the public offering.
- Apart from the rights and obligations specified in Clause 1 Article 34 of the 2019 Law on Securities in Vietnam, a public company also has the rights and obligations specified in the Law on Enterprises and relevant laws.
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