What Should Be Done to Reissue Lost, Destroyed, or Damaged Share Certificates?

What contents does a share certificate include?

Under Clause 1, Article 121 of the Law on Enterprises 2020, share certificates include the following contents:

– A share certificate is a certificate issued by a joint stock company, a book-entry record, or electronic data confirming ownership of one or more shares of that company. A share certificate must include the following principal contents:

+ The company’s name, enterprise code, and head office address;

+ The number and type of shares;

+ The par value of each share and the total par value of the shares stated on the share certificate;

+ For individual shareholders: full name, contact address, nationality, and legal document number of the individual; for organizational shareholders: the organization’s name, enterprise code or legal document number, and head office address;

+ The signature of the company’s legal representative;

+ The registration number in the company’s shareholder register and the share certificate issuance date;

+ Other contents prescribed in Articles 116, 117, and 118 of this Law for preference share certificates.

How are old share certificates that are damaged or lost handled?

Clause 3, Article 121 of the Law on Enterprises 2020 addresses this:

“Article 121. Share certificates

…

3. Where a share certificate is lost, damaged, or destroyed in another form, the shareholder shall be reissued a share certificate by the company at the request of such shareholder. The shareholder’s request must include the following contents:

a) Information on the share certificate that was lost, damaged, or destroyed in another form;

b) A commitment to bear responsibility for disputes arising from the reissuance of the new share certificate.”

Thus, any shareholder whose share certificate is damaged or lost makes a request for reissuance, and the company reissues it under the above provisions.

How are shares sold to current shareholders?

Under Article 123 of the Law on Enterprises 2020, share offerings are regulated as follows:

“Article 123. Share offerings

1. A share offering means the company increases the number and types of shares entitled to be offered to increase charter capital.

2. Share offerings may be conducted in the following forms:

a) Offering shares to existing shareholders;

b) Private placement of shares;

c) Public offering of shares.

3. Public offerings of shares and share offerings of public companies and other organizations are conducted under securities laws.

4. The company registers changes to charter capital within 10 days from the completion of the share sale.”

In addition, under Article 124 of the Law on Enterprises 2020 as follows:

“Article 124. Offering shares to existing shareholders

1. Offering shares to existing shareholders means the company increases the number and types of shares entitled to be offered and sells all such shares to all shareholders in proportion to their existing share ownership in the company.

2. Offering shares to existing shareholders of a joint stock company that is not a public company is conducted as follows:

a) The company must notify shareholders in writing by a method ensuring delivery to their contact addresses in the shareholder register no later than 15 days before the expiry of the share purchase registration period;

b) The notice must include the full name, contact address, nationality, and legal document number of the individual for individual shareholders; the organization’s name, enterprise code or legal document number, and head office address for organizational shareholders; the number of shares and the shareholder’s current share ownership ratio in the company; the total number of shares expected to be offered and the number of shares the shareholder is entitled to purchase; the share offering price; the purchase registration period; and the full name and signature of the company’s legal representative. The notice must be accompanied by a share purchase registration form issued by the company. Where the share purchase registration form is not sent back to the company on time as notified, such shareholder is deemed to have waived the preemptive purchase right;

c) Shareholders have the right to transfer their preemptive share purchase rights to others.

3. Where the number of shares expected to be offered is not fully registered for purchase by shareholders and transferees of preemptive purchase rights, the Board of Directors may sell the remaining shares entitled to be offered to the company’s shareholders and others on terms no more favorable than those offered to shareholders, except where the General Meeting of Shareholders approves otherwise or securities laws provide otherwise.

4. Shares are deemed sold when fully paid for and the buyer information prescribed in Clause 2, Article 122 of this Law is fully recorded in the shareholder register; from that point, the share buyer becomes a shareholder of the company.

5. After shares are fully paid for, the company issues and delivers share certificates to buyers; where share certificates are not delivered, the shareholder information prescribed in Clause 2, Article 122 of this Law is recorded in the shareholder register to certify such shareholder’s share ownership in the company.”

Thus, in your case, you conduct the share offering and share certificate issuance under this Article 124.