Cases of delisting of a public company under Vietnamese law

Cases of delisting of a public company under Vietnamese law (Internet image)

Regarding this issue, LawNet responded as follows:

1. What is a public company?

According to Clause 1, Article 32 of the Law on Securities 2019, a joint-stock company will become a public company in one of the following cases:

- The company has a contributed charter capital of at least 30 billion VND and at least 10% of the voting shares are being held by at least 100 non-major shareholders;

- The company has successfully made its IPO by registration with SSC as prescribed in Clause 1 Article 16 of the Law on Securities 2019.

2. Cases of delisting of a public company under Vietnamese law

Cases of delisting of a public company in case of reorganization, dissolution or bankruptcy in Vietnam are specified in Article 8 of Circular 118/2020/TT-TT-BTC, specifically as follows:

(1) Delisting of a public company due to full division, consolidation, merger (the public company is an acquired company), dissolution or bankruptcy:

- The public company shall submit reports and disclose information about the reorganization, dissolution or bankruptcy in accordance with regulations on disclosure of information on securities market;

- After the legal status of the public company is updated on the national enterprise registration database or the court issues a decision to declare bankruptcy, SSC shall consider and announce the delisting of the public company on its media.

(2) Delisting of a public company in case of revocation of enterprise registration certificate:

- The public company whose enterprise registration certificate is revoked shall submit reports and disclose information in accordance with regulations on disclosure of information on securities market;

- SSC shall consider delisting the public company within 180 days from the receipt of the report on the revocation of the enterprise registration certificate;

- Upon the end of the time limit specified in Point b of Clause 2 of Article 8 of Circular 118/2020/TT-TT-BTC, SSC shall announce the delisting of the public company on its media.

(3) Delisting of a public company due to partial division or merger (the public company is the acquiring company):

- Procedures and application for delisting of a public company in case of partial division or merger (the public company is the acquiring company) shall comply with Article 38 and Article 39 of the Law on Securities 2019;

- SSC shall notify the public company of its delisting within 15 days from the receipt of its adequate and valid application, and also announce the delisting on its media.

(4) Delisting of a public company due to conversion of a joint-stock company into a limited liability company:

- The public company that is issued with an enterprise registration certificate due to conversion of business type shall submit reports and disclose information in accordance with regulations on disclosure of information on securities market;

- After receiving reports and information disclosed as prescribed in Point a of Clause 4 of Article 8 of Circular 118/2020/TT-TT-BTC, SSC shall consider and announce the delisting of the public company on its media.

3. Rights and obligations of public companies in Vietnam

Specifically, Article 34 of the Law on Securities 2019 stipulates rights and obligations of public companies as follows:

(1)After SSC confirms the public company registration, the public company shall have the following rights and obligations:

- Disclose information in accordance with the Law on Securities 2019;

- Comply with regulations on company administration in the Law on Securities 2019;

- Apply for share registration at VSDCC  as prescribed in Clause 1 Article 61 of the Law on Securities 2019;

- The public company mentioned in Point a Clause 1 Article 32 of the Law on Securities 2019 shall apply for trading shares on the trading system for unlisted securities within 30 days from the day on which SSC confirms the public company registration.

After 02 years from the first day of trading on the trading system for unlisted securities, the public company may apply for listing if whenever all listing requirements are satisfied;

dd) The public company mentioned in Point b Clause 1 Article 32 of the Law on Securities 2019 shall have its shares listed or registered within 30 days from the ending date of the public offering.

(2) Apart from the rights and obligations specified in (1), a public company also has the rights and obligations specified in the Law on Enterprises and relevant laws.

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