Conditions for a public company to issue shares to increase charter capital from equity?
Based on Article 62 of Decree 155/2020/ND-CP, the conditions are stipulated as follows:
There is a plan to issue shares to increase share capital from equity sources approved by the General Meeting of Shareholders.
The equity sources are adequate to increase share capital. To be specific:
a) The equity sources to increase share capital are based on the latest audited financial statements by an approved auditing organization, including the following sources: share premium; development investment fund; undistributed post-tax profits; other funds (if any) used to supplement charter capital as per legal regulations;
b) In case the public company is a parent company issuing shares to increase share capital from share premium, development investment fund, other funds, the source is based on the financial statements of the parent company;
c) In case the public company is a parent company issuing shares to increase share capital from undistributed post-tax profits, the decision to distribute profits must not exceed the undistributed post-tax profits on the audited consolidated financial statements. If the profit distribution decision is lower than the undistributed post-tax profits on the consolidated financial statements and higher than the undistributed post-tax profits on the parent company's separate financial statements, the company is only allowed to distribute after transferring profits from subsidiaries to the parent company.
The total value of the sources stipulated at Point a, Clause 2 of this Article must ensure that it is not lower than the total additional share capital value as per the plan approved by the General Meeting of Shareholders.
The conditions stipulated in Clauses 3 and 4 of Article 60 of this Decree.
Respectfully!
