Do shareholders who own dividend preference shares of a joint stock company have the right to vote and attend the General Meeting of Shareholders?

What are dividend preference shares?

Dividend preference shares are specified in Clause 1, Article 117 of the 2020 Enterprise Law as follows: following:

Dividend preference shares and rights of shareholders who own dividend preference shares

1. Dividend preference shares are shares that pay dividends at a higher rate than the dividend rate of common shares or a stable annual rate. Annual dividends include fixed dividends and bonus dividends. Fixed dividends do not depend on the company’s business results. The specific fixed dividend level and the method of determining bonus dividends are clearly stated in the shares of dividend preference shares.

2. Shareholders who own dividend preference shares have the following rights:

a) Receive dividends according to the provisions of Clause 1 of this Article;

b) Receive the remaining assets corresponding to the percentage of shares owned in the company after the company has paid all debts, preference shares are refundable when the company is dissolved or bankrupt;

c) Other rights as common shareholders, except for the cases specified in Clause 3 of this Article.

Thus, according to regulations, dividend preference shares are understood as shares that are paid dividends at a higher rate than the dividend rate of common shares or a stable annual rate.

Annual dividends include fixed dividends and bonus dividends.

Fixed dividends do not depend on the company’s business results. The specific fixed dividend level and method of determining bonus dividends are clearly stated in the shares of dividend preference shares.

Do shareholders who own dividend preference shares of a joint stock company have the right to vote and attend the General Meeting of Shareholders?

Shareholders who own dividend preference shares are specified in Clause 3, Article 117 of the 2020 Enterprise Law as follows:

Dividend preference shares and the rights of shareholders who own shares dividend incentives

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3. Shareholders who own dividend preference shares do not have the right to vote, attend the General Meeting of Shareholders, or nominate people to the Board of Directors and Supervisory Board, except for the cases specified in Clause 6, Article 148 of this Law.

At the same time, based on Clause 6, Article 148 of the 2020 Enterprise Law, it is stipulated:

Conditions for a resolution of the General Meeting of Shareholders to be passed

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5. The resolution of the General Meeting of Shareholders must be notified to shareholders with the right to attend the General Meeting of Shareholders within 15 days from the date of approval; In case the company has a website, sending the resolution can be replaced by posting it on the company’s website.

6. A resolution of the General Meeting of Shareholders on content that adversely changes the rights and obligations of shareholders owning preferred shares may only be passed if it is approved by the number of preferred shareholders of the same type attending the meeting who own 75% or more of the total number of preferred shares of that type or approved by preferred shareholders of the same type owning 75% or more of the total number of preferred shares of that type in the case of passing a resolution in the form of soliciting written opinions. ban.

Thus, according to regulations, shareholders who own dividend preference shares of a joint stock company do not have the right to vote or attend the General Meeting of Shareholders.

Except in cases where the resolution of the General Meeting of Shareholders contains content that adversely changes the rights and obligations of shareholders owning preferred shares.

In this case, the resolution of the General Meeting of Shareholders will only be passed if it is approved by the number of preferred shareholders of the same type attending the meeting owning 75% or more of the total number of preferred shares of that type or approved by the preferred shareholders of the same type owning 75% of the total number of preferred shares of that type or more in the form of written opinions.

Who decides who is entitled to buy dividend preference shares of a joint stock company?

Who is entitled to buy dividend preference shares of a joint stock company are specified in Clause 3, Article 114 of the 2020 Enterprise Law as follows:

Types of shares

1. A joint stock company must have common shares. The owner of common shares is a common shareholder.

2. In addition to common shares, a joint stock company may have preference shares. Owners of preference shares are called preference shareholders. Preference shares include the following types:

a) Dividend preference shares;

b) Redeemable preference shares;

c) Voting preference shares;

d) Other preference shares as prescribed in the company’s charter and the law on securities.

3. Persons with the right to buy dividend preference shares, redeemable preference shares and other preference shares as prescribed by the company charter or decided by the General Meeting of Shareholders.

4. Each share of the same type gives the owner of that share equal rights, obligations and benefits.

5. Common shares cannot be converted into preferred shares. Preferred shares can be converted into common shares according to the resolution of the General Meeting of Shareholders.

Thus, according to regulations, the person entitled to buy dividend preference shares of a joint stock company is prescribed by the company’s charter or decided by the General Meeting of Shareholders.