Conditions for Public Company Shareholders to Offer Shares to the Public

What conditions must shareholders of a public company meet to offer shares to the public? What does the share offering registration dossier include in this case?

1. What is a public company?

Under Clause 1, Article 32 of the Securities Law 2019 (as amended and supplemented by Law No. 56/2024/QH15), a public company is a joint stock company falling into one of the following two cases:

– A company with contributed charter capital of VND 30 billion or more and with at least 10% of voting shares held by at least 100 investors who are not major shareholders;

– A company that has successfully conducted an initial public offering of shares through registration with the State Securities Commission.

2. In which cases may shareholders of a public company offer shares to the public?

Under Article 13 of Decree No. 155/2020/ND-CP, for a public offering of shares, shareholders of a public company must meet the following conditions:

– The shares offered must be shares of an enterprise meeting the following conditions:

• Contributed charter capital at the time of offering registration of VND 30 billion or more as recorded in the accounting books;
• Business operations in the year immediately preceding the offering registration year must be profitable, with no accumulated losses as of the offering registration year.

– Where the shareholder registering the offering is an organization, the share offering plan must be approved by the competent authority of the offering-registered organization.

– The shares offered must be owned by the offering-registered shareholder and be freely transferable shares.

– There must be a securities company advising on the public share offering registration dossier, except where the offering-registered shareholder is itself a securities company.

– The offering-registered shareholder must open a blocked account to receive proceeds from the share offering.

– The share offering must comply with regulations on foreign ownership ratios in the public company whose shares are offered.

– There must be approval of the State Bank of Vietnam and the Ministry of Finance on the shareholder’s transfer of shares of a credit institution or insurance business organization, where such approval is required under the law on credit institutions and the law on insurance business.

3. What documents must shareholders of a public company prepare to offer shares to the public?

The registration dossier for a public share offering by shareholders of a public company is regulated in Article 14 of Decree No. 155/2020/ND-CP and includes:

– The offering registration form;

– The prospectus;

– The decision of the competent authority of the offering-registered shareholder (where an organization) approving the offering plan, including:

• The class of shares offered;
• The number of shares offered;
• The offering price or the principles for determining the offering price, or the authorization to determine the offering price.

– The shareholder register or confirmation of the Vietnam Securities Depository and Clearing Corporation or of a depository member, or the share ownership certificate.

– Financial reports of the last 02 years of the organization whose shares are offered; where the offering-registered shareholder completes the dossier more than 90 days after the end of the fiscal year, the offering-registered shareholder must supplement the audited financial report of the most recent year of the organization whose shares are offered.

– The advisory contract for the public share offering registration dossier with a securities company, except where the offering-registered shareholder is a securities company.

– A written confirmation from a bank or foreign bank branch that the offering-registered shareholder has opened a blocked account to receive proceeds from the share offering.

– The decision of the competent authority of the offering-registered shareholder (where an organization) approving the plan to ensure that the share offering complies with regulations on foreign ownership ratios in the public company whose shares are offered.

– Written approval of the State Bank of Vietnam and the Ministry of Finance on the shareholder’s transfer of shares (if any).

Accordingly, to conduct a public offering of shares, shareholders of a public company must meet the above offering conditions. Once the conditions are met, shareholders of a public company must prepare the full set of dossier documents mentioned above to carry out the offering.