What is organizational structure, administration and control in a public company in Vietnam?

1. What is organizational structure, administration and control in a public company in Vietnam?

Pursuant to Article 11 Section V Appendix I promulgated together with Circular 116/2020/TT-BTC, organizational structure, administration and control applicable to public companies are as follows:

Organizational structure, administration and control of the Company include:

1. The GMS.

2. [The Board of Directors, Board of Controllers (unless the Company applies the model specified in Point a Clause 1 Article 137 of the Law on Enterprises)].

3. [The Board of Directors, Audit Committee (unless the Company applies the model specified in Point b Clause 1 Article 137 of the Law on Enterprises)].

4. The Director/General Director.

2. What are rights of shareholders in a public company in Vietnam? 

Pursuant to the provisions of Article 12, Section VI, Appendix I issued together with Circular 116/2020/TT-BTC, rights of shareholders in a public company are as follows:

1. Ordinary shareholders have the right to:

a) Participate, comment in the GMS; exercise the right to vote directly or through authorized representatives or another method prescribed by the Company’s Charter and the law. Each ordinary share has one vote;

b) Receive dividends at the rate decided by the GMS;

c) Priority when buying new shares in proportion to each shareholder’s holding of ordinary shares;

d) Freely transfer shares to other persons, except in the cases specified in Clause 3 Article 120, Clause 1 Article 127 of the Law on Enterprises and relevant laws;

dd) Access, examine and extract information about names and addresses of voting shareholders; request rectification of incorrect information about themselves;

e) Access, examine and extract or copy the Company’s Charter, minutes of meeting and resolutions of the GMS;

g) When the Company is dissolved or goes bankrupt, receive part of the remaining assets in proportion to their holdings in the Company;

h) Request the Company to repurchase shares in the cases specified in Article 132 of the Law on Enterprises;

i) Equal treatment. Each share of the same type bestows its holder equal rights, obligations and interests. If the Company has preference shares, rights and obligations associated with these preference shares must be approved by the GMS and informed to the shareholders;

k) Access to periodic and extraordinary information disclosed by the Company as prescribed by law;

l) Have their lawful rights and interests protected; demand suspension, cancellation or resolutions and decisions of the GMS and the Board of Directors in accordance with the Law on Enterprises;

m) Other rights prescribed by law and the Company’s Charter.

[Rights associated with other types of shares]

2. The shareholder or group of shareholders that holds at least [05%] of total ordinary shares [or a smaller amount specified in the Company’s Charter] has the rights to:

a) Request the Board of Directors to convene the GMS in accordance with Clause 3 Article 115 and Article 140 of the Law on Enterprises;

b) Examine, extract the minutes, resolutions and decisions of the Board of Directors, biannual and annual financial statements, reports of the Board of Controllers, contracts and transactions subject to approval by the Board of Directors and other documents, except documents relevant to the Company’s trade secrets;

c) Request the Board of Controllers to inspect specific issues relevant to the management and operation of the Company where necessary. The request must be made in writing and contain: full names, mailing addresses, nationalities, ID numbers of shareholders that are individuals; names, enterprise/organization ID numbers and headquarters addresses of shareholders that are organizations; quantity of shares and share subscription time of each shareholder, total shares of the group of shareholders and their holdings; the issues that need inspecting and purposes of inspection;

d) Propose inclusion of the issues in the agenda of the GMS. The proposal must be made in writing and sent to the Company at least [03 working days] before the opening date, [unless another time limit is prescribed by the Company’s Charter]. The proposal shall specify the shareholder’s name, quantity of each type of shares being held by the  shareholder and the proposed issues;

dd) Other rights prescribed by law and the Company’s Charter.

3. The shareholder or group of shareholders that holds at least [10%] of total ordinary shares or [a smaller amount specified in the Company’s Charter] is entitled to nominate candidates to the Board of Directors and the Board of Controllers. [Unless otherwise prescribed by the Company’s Charter], candidates shall be nominated as follows:

a) The group of shareholders that nominate candidates to the Board of Directors and the Board of Controllers must inform the participating shareholders before the opening of the GMS;

b) Depending on the quantity of members of the Board of Directors and the Board of Controllers, the shareholders or groups of shareholders prescribed I this Clause may nominate one or some candidates according to the decision of the GMS to the Board of Directors and the Board of Controllers. In case the number of nominated candidates is smaller than the maximum permissible number of candidates specified in the decision of the GMS, the remaining candidates shall be nominated by Board of Directors, the Board of Controllers and other shareholders.

Best Regards!