What is offering of shares to existing shareholders? What are the regulations regarding this matter in Vietnam?

What is offering of shares to existing shareholders?

Based on the provisions of Clause 1, Article 124 of the Law on Enterprises 2020, 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.

What is offering of shares to existing shareholders? What are the regulations regarding this matter in Vietnam? (Internet image)

Regulations on offering of shares to existing shareholders in Vietnam

Pursuant to Article 124 of the Law on Enterprises 2020, regulations on offering of shares to existing shareholders in Vietnam are as follows:

(1) 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.

(2) 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.

(3) Shares are considered soled when they are fully paid for and the following information about the buyer is fully recorded in the shareholder register. From that time, the buyer is a shareholder of the company.

- The company’s name and headquarters address;

- Total number of authorized shares, types of authorized shares and quantity of each type;

- Total number of sold shares of each type and value of share capital contributed;

- Full names, signatures, mailing addresses, nationalities and legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers and headquarters addresses of shareholders that are organizations;

- Quantity of each type of shares of each shareholder, date of share registration.

(4) 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 above shall be recorded in the shareholder register to certify the shareholder’s owner of shares.

Mai Thanh Loi

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