04 regulations on dividend payment in joint stock company in Vietnam

“Dividend” means a net profit on each share in cash or other assets. Below are 04 regulation on dividend payment in joint stock company in Vietnam

04 regulations on dividend payment in joint stock company in Vietnam (illutration)

1. Criteria for paying dividends in joint stock company in Vietnam

- Dividends of preference shares shall be paid under the conditions applied thereto.

- Dividends of ordinary shares shall be determined according to the realized net profit and the dividend payment from the company’s retained earnings. The joint stock company may only pay dividend of ordinary shares when the following conditions are fully satisfied:

+ The company has fully its tax liabilities and other liabilities as prescribed by law;

+ The company’s funds are contributed to and the previous losses are made up for as prescribed by law and the company's charter;

+ After dividends are fully paid, the company is still able to fully pay its debts and other liabilities when they are due.

2. In what ways can dividends be distributed in Vietnam?

Dividends may be paid in cash, in shares of the company or by other assets specified in the company's charter.

- Dividends can be paid in cash, the company’s shares or other assets specified in the company's charter.

- In case dividends are paid in shares, the company is not required to follow the procedures for offering shares prescribed in Articles 123, 124 and 125 of this Law and is only required to register the charter capital increase, which is equal to the total face value of shares paid as dividends, within 10 days from the completion date of dividend payment.

3. The period of dividend payment in Vietnam

- Dividends shall be fully paid within 06 months form the ending date of the annual GMS.

- The Board of Directors shall compile a list of shareholders that receive dividends, dividend of each share, time and method of payment at least 30 days before each payment of dividends. 

4. The notification of dividend payment in Vietnam

The notification of dividend payment shall be sent by express mail to the shareholders’ registered addresses at least 15 days before the dividend payment date.

Such a notification shall contain the following information:

- The company’s name and headquarters address;

- Full name, mailing address, nationality and legal document number if the shareholder is an individual;

- Name, EID number or legal document number and headquarters address if the shareholder is an organization;

- Quantity of each type of shares; dividend of each share and the total dividends receivable by the shareholder;

- Time and method of dividend payment;

- Full names and signatures of the company’s legal representatives and the President of the Board of Directors.

Diem My

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