Conditions for conducting the General Meeting of Shareholders (GMS) in Vietnam

Conditions for conducting the General Meeting of Shareholders (GMS) in Vietnam (Internet image)

1. Who is the General Meeting of Shareholders (GMS)?

According to Clause 1, Article 138 of the Law on Enterprise 2020, the General Meeting of Shareholders (GMS) shall consist of all voting shareholders and is the supreme body of a joint stock company.

2. Rights and obligations of the GMS in Vietnam

According to Clause 2, Article 138 of the Law on Enterprise 2020, the GMS has the following rights and obligations:

- Ratify the orientation for development of the company;

- Decide the types of authorized shares and quantity of each type; decide the annual dividends of each type of shares;

- Elect, dismiss members of the Board of Directors and Controllers;

- Decide investment in or sale of assets that are worth at least 35% of the total assets written in the latest financial statement, unless another ratio or value is specified in the company's charter;

- Decide revisions to the company’s charter;

- Ratify annual financial statements;

- Decide repurchase of more than 10% of total sold shares of each type;

- Take actions against violations committed by members of the Board of Directors and Controllers that cause damage the company and its shareholders;

- Decide reorganization or dissolution of the company;

- Decide the budget or total salaries, bonuses and other benefits of the Board of Directors and the Board of Controllers;

- Approve the rules and regulations of the company, the Board of Directors and the Board of Controllers;

- Approve the list of independent audit companies; choose independent audit companies carry out audit of the company; dismiss independent audits where necessary;

- Other rights and obligations prescribed by the Law on Enterprise 2020 and the company's charter.

3. Conditions for conducting the GMS in Vietnam

Conditions for conducting the GMS according to Article 145 of the Law on Enterprise 2020 are as follows:

- The GMS shall be conducted when it is participated by a number of shareholders that represent more than 50% of the votes; the specific ratio shall be specified in the company's charter.

- In case the conditions for conducting the meeting prescribed in Clause 1 of Article 145 of the Law on Enterprise 2020 are not fulfilled, the second invitation shall be sent within 30 days from the first meeting date unless otherwise prescribed by the company's charter.

The second GMS shall be conducted when it is participated by a number of shareholders that represent at least 33% of the votes; the specific ratio shall be specified in the company's charter.

- In case the conditions for conducting the second meeting prescribed in Clause 2 of Article 145 of the Law on Enterprise 2020 are not fulfilled, the third invitation shall be sent within 20 days from the second meeting date unless otherwise prescribed by the company's charter. The third GMS shall be conducted regardless of the number of votes represented by the participants.

- Only the GMS has the right to change the agenda enclosed with the invitation prescribed in Article 142 of the Law on Enterprise 2020.

4. Regulations on the  General Meetings of Shareholders (GMS) in Vietnam

Article 139 of the Law on Enterprise 2020 stipulates General Meeting of Shareholders (GMS) is as follows:

- General Meetings of Shareholders (GMS) shall be convened annually and whenever necessary. The meeting location is the place where the chair attends and shall be within Vietnam’s territory.

- The annual GMS shall be convened within 04 months from the end of the fiscal year. Unless otherwise prescribed by the company's charter, the Board of Directors shall decide deferral of the annual GMS where necessary by up to 06 months from the end of the fiscal year.

- The following issues shall be discussed and ratified at the annual GMS:

+ The company’s annual business plan;

+ The annual financial statement;

+ The report of the Board of Directors on its performance and that of its members;

+ The report of the Board of Controllers on the company’s business performance, performance of the Board of Directors, the Director/General Director;

+ The report of the Board of Controllers on its performance and that of the controllers;

+ Dividend of each type of shares;

+ Other issues within its jurisdiction.

Quoc Dat

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