Can shareholders withdraw capital from a joint stock company in the form of a company buying back shares?

Pursuant to Clause 2, Article 119 of the 2020 Enterprise Law, it is stipulated as follows:

Obligations of shareholders

1. Pay in full and on time for the number of shares committed to purchase.

2. It is not allowed to withdraw capital contributed by common shares from the company in any form, except in the case of the company or another person buying back the shares. In case a shareholder withdraws part or all of the contributed share capital contrary to the provisions of this Clause, that shareholder and people with related interests in the company must be jointly responsible for the debts and other property obligations of the company within the value of the withdrawn shares and the damages caused.

3. Comply with the Company Charter and internal management regulations of the company.

4. Comply with resolutions and decisions of the General Meeting of Shareholders and the Board of Directors.

5. Confidentiality of information provided by the company according to the provisions of the Company Charter and the law; Only use the information provided to exercise and protect your legitimate rights and interests; It is strictly forbidden to distribute, copy or send information provided by the company to other organizations or individuals.

6. Other obligations according to the provisions of this Law and the Company’s Charter.

According to the above regulations, shareholders are not allowed to withdraw capital contributed in common shares from the company in any form, except in cases where the shares are bought back by the company or another person.

Therefore, shareholders can withdraw capital from the joint stock company in the form of the company buying back shares.

What value does a joint stock company buy back shares at the request of shareholders?

Pursuant to Article 132 of the Law on Enterprises 2020 has the following provisions:

Repurchasing shares at the request of shareholders

1. Shareholders who voted not to pass a resolution on reorganizing the company or changing the rights and obligations of shareholders stipulated in the company charter have the right to request the company to buy back their shares. The request must be in writing, clearly stating the name and address of the shareholder, number of shares of each type, intended selling price, and reason for requesting the company to buy back. The request must be sent to the company within 10 days from the date the General Meeting of Shareholders passed the resolution on the issues specified in this clause.

2. The company must buy back shares at the request of shareholders specified in Clause 1 of this Article at the market price or price calculated according to the principles stipulated in the company charter within 90 days from the date of receipt of the request. In case a price cannot be agreed upon, the parties can request a valuation organization to determine the price. The company introduces at least 03 valuation organizations for shareholders to choose from and that choice is the final decision.

Thus, according to the above regulations, the joint stock company repurchases shares at the request of shareholders at the market value or price calculated according to the principles stipulated in the company charter within 90 days from the date of receipt of the request.

In case a price cannot be agreed upon, the parties can request a valuation organization to determine the price.

The company introduces at least 03 valuation organizations for shareholders to choose from and that choice is the final decision.

Can shares of a joint stock company be freely transferred?

Pursuant to Clause 1, Article 127 of the Law on Enterprises 2020 has the following provisions:

Share transfer

1. 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 corresponding shares.

2. 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.

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

4. 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.

5. 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.

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

7. The company must register a change of shareholders in the shareholder register at the request of the relevant shareholder within 24 hours of receiving the request as prescribed in the company’s Charter.

Thus, according to the above regulations, shares of a joint stock company are freely transferable, except for the following cases:

– 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.

– And the company 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.