Regulations on offering of shares to existing shareholders in joint stock companies in Vietnam

Regulations on offering of shares to existing shareholders in joint stock companies in Vietnam (Internet image) 

1. Regulations on offering of shares to existing shareholders in joint stock companies in Vietnam

Regulations on offering of shares to existing shareholders in joint stock companies in Vietnam according to Article 124 of the Law on Enterprise 2020 are as follows:

- Offering of shares to existing shareholders is an event in which the company increases the quantity and types of authorized and sell all of these shares to all shareholders in proportion to their holdings in the company.

- The offering of shares to existing shareholders by a non-public joint stock company shall be carried out as follows:

+ The company shall send a written notification by express mail to the shareholders’ mailing addresses written in the shareholder register at least 15 days before the deadline for subscribing for shares;

+ The notification shall contain the full name, signature, mailing address, nationality and legal document number if the shareholder is an individual; names, EID numbers or legal document number and headquarters address if the shareholder is an organization; the shareholder’s current shares and holding; the total quantity of shares offered and the number of shareholders having the right to buy them; the offered price; deadline for subscribing; full name and signature of the company’s legal representative. The notification shall be enclosed with the share subscription form issued by the company. If the share subscription form is not sent to the company by the deadline, it will be considered that the shareholder has renounced the right to buy shares;

+ Shareholders may transfer their right to buy shares to other persons.

- If the offered shares are undersubscribed, the Board of Directors is entitled to sell the remaining number of authorized shares to the company’s shareholders and other persons under conditions that are not more favorable than those offered to the shareholders, unless otherwise accepted by the GMS or prescribed by securities laws.

- Shares are considered soled when they are fully paid for and information about the buyer specified in Clause 2 Article 122 of the Law on Enterprise 2020 is fully recorded in the shareholder register. From that time, the buyer is a shareholder of the company.

- After the shares are fully paid for, the company shall issue and deliver the share certificate to the buyer. In case a share certificate is not delivered, information about the shareholder specified in Clause 2 Article 122 of the Law on Enterprise 2020 shall be recorded in the shareholder register to certify the shareholder’s owner of shares.

2. Regulations on transfer of shares in joint stock companies in Vietnam

Regulations on transfer of shares in joint stock companies in Vietnam according to Article 127 of the Law on Enterprise 2020 are as follows:

- Shares may be transferred freely except the cases specified in Clause 3 Article 120 of the Law on Enterprise 2020 and other cases of restriction specified in the company's charter. The restrictions on transfer of shares specified in the company's charter are only applicable if they are written in the certificates of the shares subject to restriction.

- The transfer shall be made into a contract or carried out on the securities market. In case of transfer under a contract, the documents shall bear the signatures of the transferor and the transferee or their authorized representatives. In case shares are transferred on the securities market, the transfer procedures prescribed by securities laws shall apply.

- In case of the death of a shareholder that is an individual, his/her heir at law or designated by a will shall become a shareholder of the company.

- In case a shareholder that is an individual dies without an heir or the heir refuses the inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.

- A shareholder may donate all or part of their shares to other organizations and individuals; use the shares to pay debts. The organization or individual that receives the donation or debt payment will become a shareholder of the company.

- The organizations and individuals that receive shares in the cases specified in this Article will only become shareholders when the information specified in Clause 2 Article 122 of the Law on Enterprise 2020 is fully recorded in the shareholder register.

- The company shall register the changes of shareholders in the shareholder register as requested by relevant shareholders within 24 hours after the request is received.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE