Does the company’s business activities in the year immediately preceding the year of listing registration have to be profitable in order to list shares?

Is your joint stock company going to be a public company after being listed?

According to Article 32 of the Securities Law 2019, a public company is understood as as follows:

“Article 32. Public company

1. A public company is a joint stock company in one of the following two cases:

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

b) The Company has successfully conducted an initial public offering of shares through registration with the State Securities Commission according to the provisions of Clause 1, Article 16 of this Law.

Thus, your joint stock company will soon be called a public company after being listed on the stock market.

The company’s business activities in the year immediately preceding the year of listing registration must be profitable?

According to Clause 1, Article 109 of Decree 155/2020/ND-CP, the necessary conditions for the company to list its shares include:

“Article 109. Conditions stock listing

1. Conditions for listing shares

a) Being a joint stock company with contributed charter capital at the time of listing registration of 30 billion VND or more based on the most recent audited financial statement, and at the same time capitalization value reaching at least 30 billion VND calculated according to the weighted average of stock payment prices in the most recent public offering according to the provisions of this Decree or the reference price of stocks traded on the average Upcom trading system The latest 30 sessions before the time of submitting the listing registration application or average of the rights price and payment price in the initial share sale of the equitized enterprise;

b) The listing has been approved by the General Meeting of Shareholders; has traded on the Upcom trading system for at least 02 years, except in the case of a listing registration organization that has offered shares to the public or an equitized enterprise;

c) The ratio of after-tax profit on equity (ROE) in the year immediately preceding the year of listing registration is at least 5% and the business activities of 02 years immediately preceding the year of listing registration must be profitable; There are no debts that are overdue for more than 1 year as of the time of listing registration; There is no accumulated loss based on the most recent audited annual financial statement or reviewed semi-annual financial statement in case of listing registration after the end date of the semi-annual financial statement period;

d) Except in the case of equitized enterprises, organizations registering for listing must have at least 15% of voting shares held by at least 100 shareholders who are not major shareholders; In case the charter capital of an organization registering for listing is VND 1,000 billion or more, the minimum ratio is 10% of the shares with voting rights;

d) Shareholders are individuals or organizations whose ownership representatives are the Chairman of the Board of Directors, members of the Board of Directors, Head of the Supervisory Board and members of the Supervisory Board (Controllers), General Director (Director), Deputy General Director (Deputy Director), Chief Accountant, Chief Financial Officer and equivalent management positions elected by the General Meeting of Shareholders or appointed by the Board of Directors and major shareholders who are related to the above subjects must commit to continue holding 100% of the shares owned by you within 06 months from the first trading date of the shares on the Stock Exchange and 50% of these shares during the next 06 months, excluding the number of state-owned shares held by the above individuals on behalf of;

e) The company and the company’s legal representative have not been handled for violations within 02 years up to the time of listing registration due to prohibited acts in securities and securities market activities specified in Article 12 of the Securities Law;

g) Have a securities company advise on listing registration documents, except in cases where the organization registering for listing is a securities company.”

So to list shares on the stock exchange, your company’s business activities need to be profitable for at least 2 consecutive years, not 1 year. In addition, your company must have no losses up to the time of registration (at least break even or make a profit). Profit here is profit after completing tax obligations and compensating the previous year’s losses. Thus, by the time I register for listing, if I no longer have losses, I will meet the conditions for registration.

What does the transaction registration dossier of a public company include?

The transaction registration dossier of a public company is specified in Clauses 1 and 2, Article 134 of Decree 155/2020/ND-CP, specifically as follows:

“Article 134. Registration dossier transactions

1. Transaction registration documents of public companies specified in Point a, Clause 1, Article 32 of the Securities Law include:

a) Application for stock trading registration according to Form No. 36 Appendix issued with this Decree;

b) Documents specified in Points b, c, d, dd Clause 1 33 Securities Law;

c) Confirmation of the State Securities Commission on completion of public company registration;

d) Securities registration certificate of Vietnam Securities Depository and Clearing Corporation and written notification to Vietnam Securities Depository and Clearing Corporation on the registration of the closing date for the list of shareholders for registration of delivery translation.

2. Trading registration documents of a public company specified in Point b, Clause 1, Article 32 of the Securities Law include:

a) Documents specified in Points a, c, d, Clause 1 of this Article;

b) Prospectus attached to the Certificate of offering registration and report on results of public securities offering them;

c) Documents specified in Points b and c, Clause 1, Article 33 of the Securities Law.