Regulations on shareholder registration under Vietnamese law

Is the shareholder registration book of a joint stock company required to be a paper document? Can shareholders check this book?

1. Is the shareholder registration book of a joint stock company required to be a paper document? Can shareholders check this book?

Regulations on the shareholder registration book of joint stock companies in Article 122 of the 2020 Enterprise Law are as follows:

Shareholder registration book

1. Joint stock companies must establish and maintain a shareholder registration book from the time they are granted the Business Registration Certificate. The shareholder register can be a paper document or an electronic data set that records information about share ownership of company shareholders.

2. The shareholder registration book must include the following main contents:

a) Name and address of the company’s headquarters;

b) Total number of shares authorized to be offered for sale, types of shares authorized to be offered for sale and number of shares authorized to be offered for sale of each type;

c) Total number of shares sold of each type and value of equity capital contribution;

d) Full name, contact address, nationality, legal document number of individual for individual shareholders; name, business code or legal document number of the organization, head office address for institutional shareholders;

d) Number of shares of each type of each shareholder, date of share registration.

3. The shareholder register is kept at the company’s headquarters or other organizations with the function of keeping the shareholder register. Shareholders have the right to check, look up, extract, and copy the names and contact addresses of company shareholders in the shareholder register.

4. In case shareholders change their contact address, they must promptly notify the company to update the shareholder register. The company is not responsible for not being able to contact shareholders due to not being notified of changes in shareholders’ contact addresses.

5. The company must promptly update changes in shareholders in the shareholder register at the request of relevant shareholders according to the provisions of the company’s charter.

According to the above regulations, the Shareholder Register of a joint stock company can be a paper document or an electronic data set that records information about the share ownership of the company’s shareholders.

Therefore, the shareholder register of a joint stock company does not have to be a paper document but can be an electronic data set.

Company shareholders have the right to check, look up, extract and copy the names and contact addresses of company shareholders in the shareholder register.

2. Is the list of shareholders with the right to attend the General Meeting of Shareholders based on the shareholder registration book?

The preparation of a list of shareholders with the right to attend the General Meeting of Shareholders is stipulated inArticle 141 Law on Enterprises 2020 as follows:

List of shareholders with the right to attend the General Meeting of Shareholders

1. The list of shareholders with the right to attend the General Meeting of Shareholders is prepared based on the company’s shareholder registration book. The list of shareholders with the right to attend the General Meeting of Shareholders is drawn up no more than 10 days before the date of sending the invitation to the General Meeting of Shareholders if the Company Charter does not stipulate a shorter time limit.

2. The list of shareholders with the right to attend the General Meeting of Shareholders must include full name, contact address, nationality, and legal document number of the individual for individual shareholders; name, business code or legal document number of the organization, head office address for institutional shareholders; number of shares of each type, number and shareholder registration date of each shareholder.

3. Shareholders have the right to check, look up, extract and copy the names and contact addresses of shareholders in the list of shareholders with the right to attend the General Meeting of Shareholders; request to correct incorrect information or supplement necessary information about yourself in the list of shareholders with the right to attend the General Meeting of Shareholders. Company managers must promptly provide information in the shareholder register, amend and supplement incorrect information at the request of shareholders; shall be responsible for compensating for damages arising from failure to provide or providing untimely or inaccurate shareholder registration information as requested. The order and procedures for requesting information in the shareholder register comply with the provisions of the company’s charter.

Accordingly, the preparation of the list of shareholders with the right to attend the General Meeting of Shareholders will be based on the company’s shareholder registration book.

This list is made no more than 10 days before the date of sending the invitation to the General Meeting of Shareholders if the Company Charter does not stipulate a shorter time limit.

3. How will joint stock companies be punished if they do not establish a register of shareholders to issue shares?

The level of administrative sanctions for a joint stock company that does not establish a register of shareholders to issue shares is specified in Point b, Clause 2, Point d, Clause 3, Article 52 Decree 122/2021/ND-CP as follows:

Other related violations related to business organization and management

…

2. Fine from 30,000,000 VND to 50,000,000 VND for one of the following acts:

…

b) Failure to prepare a member registration book or shareholder registration book to issue shares;

…

3. Remedial measures:

…

d) Force the creation of a member registration book and shareholder registration book according to regulations for violations specified in Point b, Clause 2 of this Article;

At the same time, according to Clause 2, Article 4 of Decree 122/2021/ND-CP stipulating the fine level as follows following:

Fine level

…

2. The fines specified in this Decree are the fines applicable to organizations (except the fines specified in Point c, Clause 2, Article 28; Points a and b, Clause 2, Article 38; Articles 62 and Article 63 of this Decree are the fines applicable to individuals). For the same administrative violation, the fine for an individual is equal to 1/2 (one-half) of the fine for an organization.

Thus, a joint stock company that does not establish a shareholder registration book to issue shares may be subject to an administrative penalty with a fine from 30,000,000 VND to 50,000,000 VND and forced to establish a shareholder registration book according to regulations.