Can all shares of public companies be transferred in Vietnam?
What are regulations on transfer of shares in public companies in Vietnam? What are regulations on withdrawal of shares upon enterprise registration in public companies in Vietnam?
What are regulations on transfer of shares in public companies in Vietnam? Hello, my name is Xuan Thanh. I am learning the provisions of the law related to corporate governance activities applicable to public companies. I have a question that I need to advise. May I ask, can all shares of public companies be transferred in Vietnam? In which legal documents can I find information? Looking forward to hearing from you. Thank you!
1. Can all shares of public companies be transferred in Vietnam?
According to the provisions of Article 9 of Appendix 1 issued together with Circular 116/2020/TT-BTC stipulating the transfer of shares of public companies is specified as follows:
1. All shares may be transferred freely unless otherwise prescribed by this Charter and the law. Shares that are listed and registered on Stock Exchanges may be transferred in accordance with regulations of law on securities and the securities market.
2. Shares that are not fully paid for must not be transferred and shall not receive relevant rights such as right to dividends, right to receive shares additionally issued to increase share capital from equity, right to buy new shares and other benefits prescribed by law.
According to this Article, if the Charter and other laws do not provide for the transfer of shares of a public company, all shares may be transferred freely in Vietnam. Above is the content of advice on transferring shares of a public company. For more detailed information, you should refer to Circular 116/2020/TT-BTC.
2. What are regulations on withdrawal of shares upon enterprise registration in public companies in Vietnam?
According to the provisions of Article 10 of Appendix No. 01 issued together with Circular 116/2020/TT-BTC, stipulating withdrawal of shares upon enterprise registration in public companies as follows:
1. In case a shareholder fails to fully and punctually pay for the shares, the Board of Directors shall send a notice and is entitled to request the shareholder to pay the remaining amount and take liability in proportion to the total face value of the subscribed shares to the Company for the damage caused by the failure to fully pay for the shares.
2. The notice shall specify the new deadline (at least [07 days] from the noticing date), payment location and that the unpaid shares will be withdrawn if they are not paid for as requested.
3. The Board of Directors is entitled to withdraw the shares that are not fully and punctually paid for if such a request is not fulfilled.
4. Withdrawn shares shall be considered authorized shares as prescribed in Clause 3 Article 112 of the Law on Enterprises. The Board of Directors may, directly or through a third party, sell or redistribute these shares under the conditions and methods considered appropriate by the Board of Directors.
5. The shareholder holding the withdrawn shares will no longer be shareholder of these shares but still has the liability in proportion to the total nominal value of the subscribed shares upon withdrawal under the decision of the Board of Directors for the period from the date of withdrawal to the date of payment. The Board of Directors has the full authority to enforce payment for the entire value of the share certificate at the time of withdrawal.
6. The withdrawal notice shall be sent to the holder of withdrawn shares before the withdrawal time. The withdrawal shall be still carried out if the notice is erroneous or the notice is not successfully sent.
Thus, shares will be withdrawn in case shareholder fails to fully and punctually pay for the shares in accordance with the above provisions in Vietnam.
Best Regards!
