What are types of shares of joint stock companies in Vietnam? What is the minimum quantity of members of the Board of Directors of joint stock companies in Vietnam?

What are types of shares of joint stock companies in Vietnam?

Pursuant to Clauses 1 and 2, Article 114 of the Law on Enterprises in 2020 stipulating types of shares:

Types of shares

1. A joint stock company shall have ordinary shares, which are held by ordinary shareholders.

2. In addition to ordinary shares, a joint stock company may have preference shares, which are held by preference shareholders. Preference shares include:

a) Participating preference shares;

b) Redeemable preference shares;

c) Super-voting shares;

d) Other types of preference shares prescribed by the company's charter and securities laws.

3. The persons that may purchase participating preference shares, redeemable preference shares and other preference shares shall be specified in the company's charter or decided by the GMS.

4. Every share of the same type will confer upon the holder equal rights, obligations and interest.

5. Ordinary shares cannot not be converted into preference shares. preference shares may be converted into ordinary shares under a resolution of the GMS.

6. Ordinary shares used as underlying assets to issue non-voting depository receipts are called underlying ordinary shares. Non-voting depository receipts have interest and obligations proportional to the underlying ordinary shares, except voting rights.

7. The Government shall provide for non-voting depository receipts.

As regulated above, there are 02 major types of shares of joint stock companies in Vietnam including ordinary shares and preference shares. Preference shares include:

- Participating preference shares;

- Redeemable preference shares;

- Super-voting shares;

- Other types of preference shares prescribed by the company's charter and securities laws.

What are types of shares of joint stock companies in Vietnam? What is the minimum quantity of members of the Board of Directors of joint stock companies in Vietnam? - image from internet

What is the minimum quantity of members of the Board of Directors of joint stock companies in Vietnam?

Pursuant to Clauses 1 Article 154 of the Law on Enterprises in 2020 stipulating term of office and quantity of members of the Board of Directors:

Term of office and quantity of members of the Board of Directors

1. The Board of Directors shall have 03 – 11 members. The specific quantity of members shall be prescribed by the company's charter.

2. The term of office of a member of the Board of Directors shall not exceed 05 years without term limit. An individual may only be elected independent member of the Board of Directors of a company for up to 02 continuous terms.

3. In case the term of office of all members of the Board of Directors ends at the same time, they shall remain members of the Board of Directors until new members are elected and take over their jobs unless otherwise prescribed by company's charter.

4. The company's charter shall specify the quantity, rights, obligations of independent members of the Board of Directors; method for organizing and coordinating their activities.

As regulated above, the Board of Directors shall have 03 – 11 members. The specific quantity of members shall be prescribed by the company's charter.

Therefore, the Board of Directors of a joint stock company must have at least 03 members.

Is it permissible for the President of the Board of Directors of a joint stock company in Vietnam concurrently hold the position of Director/General Director?

Pursuant to Clauses 2 Article 156 of the Law on Enterprises in 2020 stipulating the President of the Board of Directors:

The President of the Board of Directors

1. The Board of Directors shall elect one of its members President of the Board of Directors; dismiss its President.

2. The President of the Board of Directors of a public company or a joint stock company prescribed in Point b Clause 1 Article 88 of this Law must not concurrently hold the position of Director/General Director.

...

As regulated above, there are two cases:

- If a joint stock company is a state-owned enterprises holding over 50% of charter capital or voting shares, the President of the Board of Directors of a joint stock company in Vietnam must not concurrently hold the position of Director/General Director.

- For other joint stock companies, the President of the Board of Directors of a joint stock company in Vietnam must not concurrently hold the position of Director/General Director.

Best regards!