In what ways can state capital invested in unlisted joint stock companies be transferred?

In what ways is state capital invested in unlisted joint stock companies transferred?

The transfer of capital in unlisted joint stock companies is regulated in Clause 2, Article 39 of the Law on Management and Use of Capital State investment in production and business at enterprises in 2014 as follows:

Transfer of state capital invested in joint stock companies, limited liability companies with two or more members

1. Transfer principles:

a) Comply with business classification criteria according to the provisions of law;

b) Ensure market principles, publicity and transparency;

c) Transfer of capital related to land use rights must comply with the provisions of land law.

2. Transfer method:

a) The transfer of capital in a limited liability company with two or more members is carried out in accordance with the provisions of law on enterprises;

b) The transfer of capital in a joint stock company listed or registered for trading on the stock market is carried out in accordance with the provisions of law on securities;

c) The transfer of capital in a joint stock company Parts that are not listed or not registered for trading on the stock market will be auctioned publicly. In case the public auction is not successful, a competitive offering will be made. In case the competitive offering is not successful, it will be carried out by agreement.

Thus, according to regulations, state capital invested in unlisted joint stock companies is transferred by public auction method.

In case the public auction is not successful, a competitive offering will be made.

In case the competitive offering is not successful, it will be carried out by agreement.

Who has the right to decide on the transfer of state capital invested in joint stock companies?

The right to decide on the transfer of state capital invested in joint stock companies is specified in Clause 2, Article 38 of Decree 91/2015/ND-CP (amended by Clause 15, Article 1 of the Decree). 32/2018/ND-CP) as follows:

Transfer of state capital invested in joint stock companies, limited liability companies with two or more members

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2. Authority to decide on state capital transfer:

a) The Prime Minister decides on the list of enterprises with state capital to transfer in each period.

b) The owner’s representative agency develops a roadmap, decides on plans and organizes the transfer of state capital at joint stock companies, limited liability companies with two or more members according to the list of enterprises with state capital to transfer has been decided by the Prime Minister.

In case of transferring state capital at an enterprise that is not in the list of enterprises with transferred state capital that has been decided by the Prime Minister, the owner’s representative agency must report to the Prime Minister for decision before developing a plan and organizing the transfer of state capital at this enterprise.

Accordingly, the Prime Minister is the one who decides on the list of state-owned enterprises to be transferred in each period.

Thus, the Prime Minister has the right to decide on the transfer of state capital invested in joint stock companies.

The owner’s representative agency is responsible for developing a roadmap, deciding on plans and organizing the transfer of state capital at joint stock companies according to the list of enterprises with state capital for transfer decided by the Prime Minister.

Is transferring state capital invested in a joint stock company a form of restructuring state capital at an enterprise?

The form of restructuring state capital at an enterprise is specified in Clause 5, Article 36 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014, as follows: following:

Restructuring state capital at enterprises

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2. Enterprises that are not subject to 100% charter capital held by the State must restructure state capital in the enterprise according to the provisions of Articles 37, 38 and 39 of this Law.

3. Recovery of state capital in enterprises to reinvest and improve operational efficiency of enterprises with 100% charter capital held by the State.

4. Attract domestic and foreign investors to participate in production and business activities of the enterprise when restructuring the enterprise.

5. Restructuring state capital at enterprises is carried out in the following forms:

a) Transferring ownership and rearranging the enterprise;

b) Transferring the right to represent the owner of state capital at the enterprise;

c) Transferring state capital invested in joint stock companies and limited liability companies with two or more members up.

Thus, according to regulations, transferring state capital invested in joint stock companies is one of the forms of restructuring state capital in enterprises.