Are founding shareholders regulated? Can you freely transfer your common shares to people outside the joint stock company?

How are the rights of common shareholders regulated?

Pursuant to Article 115 of the Law on Enterprises 2020, the rights of common shareholders are regulated as follows: after:

– Ordinary shareholders have the following rights:

+ Attend and speak at the General Meeting of Shareholders and exercise the right to vote directly or through an authorized representative or other forms prescribed by the company’s Charter and law. Each common share has one vote;

+ Receive dividends at the level decided by the General Meeting of Shareholders;

+ Priority to buy new shares corresponding to the ownership ratio of common shares of each shareholder in the company;

+ Freely transfer your shares to others, except for the cases specified in Clause 3, Article 120, Clause 1, Article 127 of this Law and other relevant provisions of law;

+ Review, look up and extract information about names and contact addresses in the list of shareholders with voting rights; request correction of your inaccurate information;

+ Review, look up, extract or copy the Company Charter, minutes of the General Meeting of Shareholders and resolutions of the General Meeting of Shareholders;

+ When the company dissolves or goes bankrupt, you will receive a portion of the remaining assets corresponding to your share ownership ratio in the company.

– Shareholders or groups of shareholders owning 05% or more of the total number of common shares or a smaller percentage as prescribed in the company’s Charter have the following rights:

+ Review, look up, and extract minute books and resolutions and decisions of the Board of Directors, mid-year and annual financial reports, reports of the Supervisory Board, contracts, transactions that must be approved by the Board of Directors and other documents, except documents related to commercial secrets and business secrets of the company;

+ Request to convene a meeting of the General Meeting of Shareholders in the case specified in Clause 3 of this Article;

+ Request the Supervisory Board to examine each specific issue related to the management and operation of the company when deemed necessary. The request must be in writing and must include the following contents: full name, contact address, nationality, 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 and time of share registration of each shareholder, total number of shares of the entire group of shareholders and ownership ratio of the company’s total shares; Issues to be inspected, purpose of inspection;

+ Other rights according to the provisions of this Law and the Company’s Charter.

– Shareholders or groups of shareholders specified in Clause 2 of this Article have the right to request to convene a General Meeting of Shareholders in the following cases:

+ The Board of Directors seriously violates the rights of shareholders, the obligations of managers or makes decisions beyond its assigned authority;

+ Other cases as prescribed in the company’s Charter.

– The request to convene a meeting of the General Meeting of Shareholders specified in Clause 3 of this Article must be in writing and must include the following contents: full name, contact address, nationality, 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 and time of share registration of each shareholder, total number of shares of the entire group of shareholders and ownership ratio of the company’s total shares, grounds and reasons for requesting to convene a General Meeting of Shareholders. Accompanying the request to convene a meeting must be documents and evidence of violations by the Board of Directors, the extent of violations or decisions exceeding authority.

– Shareholders or groups of shareholders owning 10% or more of the total common shares or a smaller percentage as prescribed in the Company’s Charter have the right to nominate people to the Board of Directors and Control Board. If the company charter does not have other provisions, the nomination of people to the Board of Directors and Supervisory Board shall be carried out as follows:

+ Common shareholders who form a group to nominate people to the Board of Directors and the Supervisory Board must notify the attending shareholders of the group meeting before the opening of the General Meeting of Shareholders;

+ Based on the number of members of the Board of Directors and Supervisory Board, a shareholder or group of shareholders specified in this Clause has the right to nominate one or several people according to the decision of the General Meeting of Shareholders as candidates for the Board of Directors and Supervisory Board. In case the number of candidates nominated by a shareholder or group of shareholders is lower than the number of candidates they are entitled to nominate according to the decision of the General Meeting of Shareholders, the remaining candidates will be nominated by the Board of Directors, Supervisory Board and other shareholders.

– Other rights according to the provisions of this Law and the company’s Charter.

How is the transfer of shares in a Joint Stock Company carried out?

Transfer of shares in a Joint Stock Company is carried out in accordance with Article 127 of the Law on Enterprises 2020, specifically:

– Shares are freely transferable, except for the cases specified in Clause 3, Article 120 of this Law and the company’s charter has regulations restricting the transfer of shares. In case the company charter has restrictions on the transfer of shares, these regulations are only effective when clearly stated in the shares of the corresponding shares.

– The transfer is carried out by contract or transaction on the stock market. In case of transfer by contract, the transfer documents must be signed by the transferor and transferee or their authorized representatives. In case of transactions on the stock market, the transfer order and procedures are carried out in accordance with the provisions of securities law.

– In case a shareholder who is an individual dies, the shareholder’s will or legal heir becomes a shareholder of the company.

– In case a shareholder who is an individual dies without an heir, the heir refuses to inherit or is disqualified from inheritance, the number of shares of that shareholder will be resolved according to the provisions of civil law.

– Shareholders have the right to donate part or all of their shares in the company to other individuals or organizations; Use shares to repay debt. Individuals and organizations that are gifted or receive debt repayment in the form of shares will become shareholders of the company.

– Individuals and organizations receiving shares in the cases specified in this Article only become company shareholders from the moment their information specified in Clause 2, Article 122 of this Law is fully recorded in the shareholder register.

– The company must register a change of shareholder in the shareholder register at the request of the relevant shareholder within 24 hours of receiving the request according to the provisions of the company’s Charter.

Can founding shareholders freely transfer their common shares to people outside the joint stock company?

According to Article 120 of the Law on Enterprises 2020, regulations on common shares of founding shareholders are as follows:

“Article 120. Common shares of founding shareholders

1. A newly established joint stock company must have at least 03 founding shareholders. A joint stock company converted from a state-owned enterprise or a limited liability company or divided, separated, consolidated or merged from another joint stock company does not necessarily have to have founding shareholders; In this case, the company charter in the business registration file must be signed by the legal representative or common shareholders of that company.

2. Founding shareholders must jointly register to buy at least 20% of the total number of common shares authorized to be offered when registering to establish a business.

3. Within 03 years from the date the company is granted the Business Registration Certificate, common shares of founding shareholders are freely transferable to other founding shareholders and can only be transferred to people who are not founding shareholders if approved by the General Meeting of Shareholders. In this case, the founding shareholders intending to transfer common shares do not have the right to vote on the transfer of those shares.

4. The restrictions specified in Clause 3 of this Article do not apply to the following common shares:

a) Shares that founding shareholders have additional after registering to establish the enterprise;

b) Shares that have been transferred to others other than founding shareholders.”

Accordingly, within 03 years from the date the company is granted the Business Registration Certificate, common shares of founding shareholders can be freely transferred to other founding shareholders and can only be transferred to people who are not founding shareholders if approved by the General Meeting of Shareholders. Thus, if you want to transfer the common shares that you are holding within 3 years from the date the company is granted a Business Registration Certificate to your husband, who is outside the company, you must be approved by the General Meeting of Shareholders in the Joint Stock Company.