Can a shareholder holding 0.1% of the total ordinary shares convene a general meeting of shareholders in Vietnam?

Can a shareholder holding 0.1% of the total ordinary shares convene a general meeting of shareholders in Vietnam?

Pursuant to Clause 2 Article 115 of the Law on Enterprises in 2020 stipulating rights of ordinary shareholders as follows:

2. The shareholder or group of shareholders that holds at least 5% of the ordinary shares (or a smaller ratio specified in the company's charter) shall have the rights to:

a) Access, extract the minutes of meetings, resolutions and decisions of the Board of Directors, mid-year 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 those that involve the company’s business secrets;

b) Demand that a GMS be convened in the cases specified in Clause 3 of this Article;

c) Request the Board of Controllers to investigate into specific matters relevant to the company’s administration where necessary. The request shall be made in writing and contain the full names, mailing addresses, nationalities, legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers, headquarters addresses of shareholders that are organizations; quantities of shares and time of shares registration of each shareholder, total quantity of shares of the group and their holdings in the company; the matter that needs investigating and the purposes of investigation;

dd) Other rights prescribed by this Law and the company's charter.

3. The shareholder or group of shareholders specified in Clause 2 of this Article is entitled to demand a GMS be convened in the following cases:

a) The Board of Directors seriously violates the shareholders’ rights, obligations of executives or issues decisions ultra vires;

b) Other cases prescribed by the company's charter.

Therefore, if the company's charter stipulates a different percentage that allows shareholders holding 0.1% of the total ordinary shares to convene a general meeting of shareholders, you will be convened. Conversely, if your company's charter does not stipulate that shareholders from below 0.1% are allowed to convene a general meeting of shareholders, you will not be convened to the general meeting of shareholders.

Can a shareholder holding 0.1% of the total ordinary shares convene a general meeting of shareholders in Vietnam? - Source: Internet

What are rights and obligations of founding shareholders regarding ordinary shares in Vietnam?

Pursuant to Article 120 of the Law on Enterprises in 2020 stipulating ordinary shares of founding shareholders as follows:

1. A new joint stock company shall have at least 03 founding shareholders. A joint stock company converted from a state-owned enterprise or limited liability company or after division, consolidation, acquisition of another joint stock company is not required to have founding shareholders. Instead, the company's charter in the enterprise registration application shall contain signatures of the company’s legal representatives or ordinary shareholders.

2. The founding shareholders shall subscribe for at least 20% of the total authorized ordinary shares upon enterprise registration.

3. Within 03 years from the issuance date of the Certificate of Enterprise Registration, the ordinary shares of founding shareholders may be transferred to other founding shareholders and may only be transferred to a person that is not a founding shareholder if the transfer is accepted by the GMS. In this case, the transferor does not have the right to vote on this transfer.

4. The limitations specified in Clause 3 of this Article do not apply to the following ordinary shares:

a) Additional shares acquired by founding shareholders after the enterprise is registered;

b) Shares that have been transferred to other persons that are not founding shareholders.

As regulations above, founding shareholders have the right to freely transfer shares to other founding shareholders. In terms of obligations, founding shareholders must jointly register to purchase at least 20% of the total ordinary shares available for sale when registering to establish a business and may only be transferred to non-founding shareholders if approved by the general meeting of shareholders.

They do not have the right to vote on the transfer of those shares (not applicable to founding shareholders who have been added after the registration of the business or Shares have been transferred to someone other than the founding shareholder).

Best regards!