Rights of ordinary shareholders in joint-stock companies in Vietnam

Rights of ordinary shareholders in joint-stock companies in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Rights of ordinary shareholders in joint-stock companies in Vietnam

Rights of ordinary shareholders in joint-stock companies in Vietnam under Article 115 of the Law on Enterprises 2020 are as follows:

- Ordinary shareholders have the right to:

+ Participate in and make comments at the General Meeting of Shareholders; exercise the right to vote directly or through authorized representatives or another method prescribed by law or the company's charter. Each ordinary share equals one vote;

+ Receives dividends at the rate decided by the GMS;

+ Be given priority to buy additional shares in proportion to their holding of ordinary shares in the company;

+ Transfer their shares to other persons except for the cases specified in Clause 3 Article 120 and Clause 1 Article 127 of the Law on Enterprises 2020 and relevant laws;

+ Access names and addresses on the list of voting shareholders; request rectification of incorrect information about themselves;

+ Access, extract, make copies of the company's charter, minutes and resolutions of the GMS;

+ Receive part of the remaining assets in proportion to their holdings in the company when the company is dissolved or goes bankrupt.

- The shareholder or group of shareholders that holds at least 5% of the ordinary shares (or a smaller ratio specified in the company's charter) shall have the rights to:

+ Access, extract the minutes of meetings, resolutions and decisions of the Board of Directors, mid-year and annual financial statements, reports of the Board of Controllers, contracts and transactions subject to approval by the Board of Directors and other documents except those that involve the company’s business secrets;

+ Demand that a GMS be convened in the cases specified in Clause 3 of Article 115 of the Law on Enterprises 2020;

+ Request the Board of Controllers to investigate into specific matters relevant to the company’s administration where necessary.

The request shall be made in writing and contain the full names, mailing addresses, nationalities, legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers, headquarters addresses of shareholders that are organizations; quantities of shares and time of shares registration of each shareholder, total quantity of shares of the group and their holdings in the company; the matter that needs investigating and the purposes of investigation;

+ Other rights prescribed by this Law and the company's charter.

- The shareholder or group of shareholders specified in Clause 2 of Article 115 of the Law on Enterprises 2020 is entitled to demand a GMS be convened in the following cases:

+ The Board of Directors seriously violates the shareholders’ rights, obligations of executives or issues decisions ultra vires;

+ Other cases prescribed by the company's charter.

- A request mentioned in Clause 3 of Article 115 of the Law on Enterprises 2020 shall be made in writing and contain the full names, mailing addresses, nationalities, legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers, headquarters addresses of shareholders that are organizations;

Quantities of shares and time of shares registration of each shareholder, total quantity of shares of the group and their holdings in the company; the reasons for convening the GMS. The request shall be enclosed with documentary evidence of the violations committed by the Board of Directors or the decision issued ultra vires.

- Unless otherwise prescribed by the company's charter, the shareholder or group of shareholders that holds at least 10% of the ordinary shares (or a smaller ratio specified in the company's charter) is entitled to nominate candidates for the Board of Directors and the Board of Controllers as follows:

+ The ordinary shareholders shall hold a meeting to nominate candidates for the Board of Directors and the Board of Controllers and inform the participating shareholders before the opening of the GMS;

+ The number of candidates depends on the quantity of members of the Board of Directors and the Board of Controllers and shall be decided by the GMS. In case the number of candidates nominated is smaller than the permissible number, the remaining candidates shall be nominated by the Board of Directors, the Board of Controllers and other shareholders.

- Other rights prescribed by this Law and the company's charter.

2. Obligations of shareholders in Vietnam

Obligations of shareholders in Vietnam under Article 119 of the Law on Enterprises 2020 are as follows:

- Fully and punctually pay for their subscribed shares.

- Do not withdraw contributed capital in the form of ordinary shares in any shape or form, unless the shares are purchased by the company or other persons.

The shareholder that withdraws all or part of the share capital against regulations of Clause 2 of Article 119 of the Law on Enterprises 2020 and persons with related interests in the company shall have a liability for the company’s debts and other liabilities which is equal to the value of the shares withdrawn and the damage caused by this action.

- Comply with the company's charter, rules and regulations.

- Comply with resolutions and decisions of the Board of Directors and the GMS.

- Protect the confidentiality of information provided by the company in accordance with the company's charter and the law; only use the provided information to perform and protect their lawful rights and interests; do not spread or share information provided by the company to any other organization or individual.

- Other obligations prescribed by Law and the company's charter.

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