Must a Public Company Disclose the Establishment of an Investment Department?

1. How is the information disclosure obligation regulated?

Under Article 295 of Decree 155/2020/ND-CP on information disclosure obligations:

“Article 295. Information disclosure obligations

Related services

Corporate Legal Advisory

If your company needs to review governance authority, resolutions, charter documents or internal dispute risk, ANT Legal can help assess the file and suggest appropriate next steps.

Explore this service Message on Zalo Copy WeChat Send consultation request

Website information is for general reference only and does not replace legal advice for a specific matter.

1. A public company has the obligation to fully, accurately and timely disclose periodic and extraordinary information in accordance with securities law on information disclosure to shareholders and the investing public. A public company must fully, accurately and timely disclose other information where such information is likely to affect securities prices and the decisions of shareholders and investors.

2. The method of information disclosure shall follow the law and the company charter to ensure shareholders and the investing public have fair access. The language used in information disclosure must be clear, easy to understand, and avoid misleading shareholders and the investing public.”

Accordingly, a public company has the obligation to fully, accurately and timely disclose periodic and extraordinary information in accordance with securities law on information disclosure to shareholders and the investing public. A public company must fully, accurately and timely disclose other information where such information is likely to affect securities prices and the decisions of shareholders and investors.

2. Must establishing an investment department be disclosed?

Under Decree 155/2020/ND-CP, the cases requiring information disclosure include:

• Disclosure of information on the company’s management organization model and operations;
• Disclosure of information on corporate governance;
• Disclosure of information on the income of Board of Directors members and the General Director (Director).

Each case is specifically regulated as follows:

Under Article 296 of Decree 155/2020/ND-CP on reporting and disclosure of information on the company’s management organization model and operations:

A public company must report to the State Securities Commission and the Stock Exchange and disclose information on changes to its management organization model and operations within 24 hours from the time the General Meeting of Shareholders decides on the change.

Under Article 297 of Decree 155/2020/ND-CP on reporting and disclosure of information on corporate governance:

• A public company must report on its corporate governance at the annual General Meeting of Shareholders and disclose information in the company’s Annual Report in accordance with securities law on information disclosure.
• A public company has the obligation to report and disclose information on its corporate governance every 06 months in accordance with securities law on information disclosure.

Under Article 298 of Decree 155/2020/ND-CP on disclosure of information on the income of Board of Directors members and the General Director (Director):

The remuneration of each Board of Directors member and the salary of the General Director (Director) and other managers must be shown as a separate item in the company’s annual financial statements and must be reported to the General Meeting of Shareholders at the annual meeting.

From the above provisions, establishing an investment department does not change the company’s management organization model, so the establishment of your company’s investment department does not fall within the cases requiring information disclosure and is not required to go through disclosure procedures.

3. How is information disclosure organized?

Under Article 300 of Decree 155/2020/ND-CP on organizing information disclosure:

“Article 300. Organizing information disclosure

1. A public company must develop and issue its information disclosure regulation in accordance with the Law on Securities and guiding documents.

2. The legal representative or the authorized person for information disclosure of a public company has the following responsibilities:

a) Disclose the company’s information to the investing public in accordance with the law and the company charter;

b) Publicize their name and work phone number so shareholders can easily make contact.”

Accordingly, a public company must develop and issue its information disclosure regulation in accordance with the Law on Securities and guiding documents. The legal representative or the authorized person for information disclosure of a public company has the following responsibilities:

• Disclose the company’s information to the investing public in accordance with the law and the company charter;
• Publicize their name and work phone number so shareholders can easily make contact.

Notes on applying current legal provisions

This article belongs to the Enterprise Knowledge & M&A group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.

Legal provisions may change depending on timing, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying legal texts that have been amended, supplemented or replaced.
• Preparing incomplete dossiers, documents or evidence.
• Misunderstanding the applicable conditions, procedures, time limits or competent authority.
• Signing, filing or conducting transactions without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary.

For quick advice, you may contact a lawyer at 0966.475.966.

Related articles

• Is the salary of a bailiff office head deductible as a reasonable expense for CIT purposes?
• Rules on the Supervisory Board in a joint-stock company under Vietnamese law
• May one individual be registered as the owner of more than one household business?
• Cancellation of public company status under the law
• Procedure for converting a branch of a foreign law-practicing organization into a 100% foreign-owned limited liability law company in Vietnam