Business Law 2020 allows Shareholders have the right to ask the company to buy back their shares. So when do shareholders have the right to request the company to repurchase their shares in Vietnam? Is the company required to repurchase shares at the request of shareholders in Vietnam?
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When do shareholders have the right to request the company to repurchase their shares in Vietnam? (Illustration)
1. When do shareholders have the right to request the company to repurchase their shares in Vietnam?
Clause 1, Article 132 of the Law on Enterprises 2020 provides for the repurchase of shares at the request of shareholders as follows:
- The shareholders that have voted against the resolution on reorganization of the company or change of shareholders’ rights and obligations in the company's charter are entitled to request the company to repurchase their shares.
- The request shall be made in writing and specify:
+ The shareholder’s name and address;
+ quantity of shares of each type;
+ Offered prices;
+ Reasons for requesting the repurchase.
The request shall be sent to the company within 10 days from the day on which the previously mentioned resolution is ratified by the GMS specified in Article 2 of this Law.
Thus, shareholders have the right to request the company to repurchase their shares when the shareholders have voted not to pass a resolution on the reorganization of the company or change of rights and obligations of shareholders as stipulated in the company's charter in Vietnam.
2. Is the company required to repurchase shares at the request of shareholders in Vietnam?
According to Clause 2, Article 132 of the Law on Enterprises 2020, The company shall repurchase shares at the request of its shareholders in accordance with Clause 1 at market prices or at the prices calculated in accordance with the rules in the company's charter within 90 days from the receipt of the request.
Regarding share repurchase price: The company must repurchase shares at the request of shareholders at the market price or the price calculated according to the principles specified in the company's charter.
In case an agreement on the prices cannot be reached, the parties may hire a valuation organization to determine the price. The company shall introduce at least 03 valuation organizations for the shareholders to make the final decision.
Bao Ngoc
