The rights and obligations of shareholders holding redeemable preferred shares according to the law

1. What is redeemable preference shares?

Pursuant to Clause 1, Article 118 of the Law on Enterprises 2020, regulations on redeemable preference shares are as follows:

“Article 118. Redeemable preference shares and rights of shareholders owning redeemable preference shares

1. Redeemable preference shares are shares be refunded by the company at the request of the owner or according to the conditions recorded in the shares of redeemable preference shares and the Company’s Charter.

[…]”

Accordingly, redeemable preference shares are shares for which the company returns its contributed capital at the request of the owner or according to the conditions stated in the shares of redeemable preference shares and the Charter of the Company. ty.

2. What rights do shareholders holding redeemable preferred shares have?

Pursuant to Clauses 2 and 3, Article 118 of the Law on Enterprises 2020 stipulates as follows:

“Article 118. Redeemable preferred shares and rights of shareholders owning redeemable preferred shares

[…]

2. Shareholders owning preferred shares Redeemable preference shares have the same rights as common shareholders, except for the cases specified in Clause 3 of this Article.

3. Shareholders who own redeemable preference shares do not have the right to vote, attend the General Meeting of Shareholders, or nominate people to the Board of Directors and Supervisory Board, except for the cases specified in Clause 5, Article 114 and Clause 6, Article 148 of this Law.”

At the same time, in Article 115 of the Law on Enterprises 2020 regulates the rights of common shareholders as follows:

– Common shareholders have the following rights:

+ To attend and speak at the General Meeting of Shareholders and exercise the right to vote directly or through an authorized representative or in other forms prescribed by the Company Charter and the 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 laws;

+ Review, look up and extract information about names and contact addresses in the list of shareholders with voting rights; request to correct 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, receive a portion of the remaining assets corresponding to the percentage of shares owned in the company.

– Shareholders or A group of shareholders owning 05% or more of the total common shares or a smaller percentage as stipulated in the Company’s Charter has the following rights:

+ Review, look up, and extract minute books and resolutions, 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 trade secrets Trade 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 as prescribed by 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. decisions beyond 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 beyond 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. In cases where the Company Charter does not have other provisions, the nomination of people to the Board of Directors and the Supervisory Board shall be carried out as follows:

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

+ Based on the number of members of the Board of Directors and the Supervisory Board, shareholders A shareholder or group of shareholders specified in this Clause has the right to nominate one or more 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, Board of Supervisors and other shareholders.

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

Accordingly, shareholders owning redeemable preferred shares will have the following rights above.

3. Can shareholders who own redeemable preference shares be able to nominate people to the Supervisory Board of a Joint Stock Company?

Pursuant to Clause 3, Article 118 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 118. Redeemable preference shares and rights of shareholders owning redeemable preference shares

[…]

3. Shareholders who own redeemable preference shares do not have the right to vote, attend the General Meeting of Shareholders, or nominate people to the Board of Directors and the Control Board, except for the cases specified in Clause 5, Article 114 and Clause 6, Article 148 of this Law.”

Thus, shareholders who own redeemable preference shares are not allowed to nominate people to the Control Board of a joint stock company.