When transferring shares in Vietnam, is the enterprise required to register to change the enterprise registration information due to the addition of shareholders?
- Can shareholders of a joint stock company transfer the right to purchase the unpaid shares in case of failing to fully pay for the subscribed shares?
- When transferring shares in Vietnam, is the enterprise required to register to change the enterprise registration information due to the addition of shareholders?
- Are shares freely transferred?
Can shareholders of a joint stock company transfer the right to purchase the unpaid shares in case of failing to fully pay for the subscribed shares?
Pursuant to Article 113 of the 2020 Law on Enterprises in Vietnam, the payment for shares registered for purchase upon registration of business establishment is as follows:
Paying for subscribed shares upon enterprise registration
1. Shareholders shall fully pay for the subscribed shares within 90 days from issuance date of the Certificate of Enterprise Registration unless shorter time limit is specified by the company's charter or the shares registration contract. In case of capital contribution by assets, the time needed to transport or import the contributed assets and for completing ownership transfer procedures shall be added to this time limit. The Board of Directors shall supervise the shareholders fully and punctually paying for the subscribed shares.
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3. In case a shareholder fails to pay or to fully pay for the subscribed shares by the deadline specified in Clause of this Article:
a) The shareholder that fails to pay for the subscribed shares is no longer a shareholder of the company and must not transfer the right to purchase the shares to another person;
b) The shareholder that only pays for part of the subscribed shares will be entitled to a number of votes, dividends and benefits that are proportional to the paid shares and must not transfer the right to purchase the unpaid shares to another person;
c) The shares that are not paid for shall be considered unsold shares and may be sold by the Board of Directors;
d) Within 30 days from the deadline for paying for the subscribed shares mentioned in Clause 1 of this Article, the company shall register the change in charter capital, which shall be equal to the total face values of paid shares unless the unpaid shares are sold out during this period; and register the change of founding shareholders.
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Thus, shareholders shall fully pay for the subscribed shares within 90 days from issuance date of the Certificate of Enterprise Registration.
In case shareholders fail to fully pay for the subscribed shares, they must not transfer the right to purchase the unpaid shares to another person.
When transferring shares in Vietnam, is the enterprise required to register to change the enterprise registration information due to the addition of shareholders?
When transferring shares in Vietnam, is the enterprise required to register to change the enterprise registration information due to the addition of shareholders?
Pursuant to Clause 1, Article 31 of the 2020 Law on Enterprises in Vietnam on the notification of changes to enterprise registration information as follows:
Notification of changes to enterprise registration information
1. The enterprise shall notify the business registration authority of any change to:
a) The enterprise’s business lines;
b) The founding shareholders and foreign shareholders (for joint stock companies, except listed companies);
c) Other content of the enterprise registration application.
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According to the provisions of Clause 5, Article 122 of the 2020 Law on Enterprises in Vietnam on the shareholder register as follows:
Shareholder register
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5. The company shall update changes of shareholders in the shareholder register as requested by relevant shareholders in accordance with company's charter.
Thus, according to the above provisions, the enterprise shall notify the business registration authority of any change to the founding shareholders and foreign shareholders (for joint stock companies, except listed companies).
However, a joint stock company shall update changes of shareholders in the shareholder register as requested by relevant shareholders in accordance with company's charter.
Are shares freely transferred?
Pursuant to Article 127 of the 2020 Law on Enterprises in Vietnam on the transfer of shares in Vietnam as follows:
Transfer of shares in Vietnam
1. Shares may be transferred freely except the cases specified in Clause 3 Article 120 of this Law and other cases of restriction specified in the company's charter. The restrictions on transfer of shares specified in the company's charter are only applicable if they are written in the certificates of the shares subject to restriction.
2. The transfer shall be made into a contract or carried out on the securities market. In case of transfer under a contract, the documents shall bear the signatures of the transferor and the transferee or their authorized representatives. In case shares are transferred on the securities market, the transfer procedures prescribed by securities laws shall apply.
3. In case of the death of a shareholder that is an individual, his/her heir at law or designated by a will shall become a shareholder of the company.
4. In case a shareholder that is an individual dies without an heir or the heir refuses the inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.
5. A shareholder may donate all or part of their shares to other organizations and individuals; use the shares to pay debts. The organization or individual that receives the donation or debt payment will become a shareholder of the company.
6. The organizations and individuals that receive shares in the cases specified in this Article will only become shareholders when the information specified in Clause 2 Article 122 of this Law is fully recorded in the shareholder register.
7. The company shall register the changes of shareholders in the shareholder register as requested by relevant shareholders within 24 hours after the request is received.
According to the above provisions, shares may be transferred freely except the cases specified in Clause 3 Article 120 of this Law and other cases of restriction specified in the company's charter
The restrictions on transfer of shares specified in the company's charter are only applicable if they are written in the certificates of the shares subject to restriction.
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