Although the Law does not have a specific definition of the concept “Shares” but through the provisions of Article 111 of the Enterprise Law 2020 can understand “Shares” are small and equal shares from the company’s charter capital. So, are these shares classified into different groups? How are the nature and meaning of each type of share expressed? 

1. Types of shares 

Pursuant to the provisions of Article 114 of the Law on Enterprises 2020, “Shares” includes the following types:

– Common shares

– Preference shares

• Dividend preference shares;
• Redeemable preference shares;
• Voting preference shares;
• Preference shares other as prescribed in the company charter and securities laws.

2. Common shares

– Common shares are required shares in a joint stock company. Owners of common shares are called common shareholders.

– Common shares inconvertible into preference shares.

– Rights of common shareholders:

• To attend and speak at the General Meeting of Shareholders and exercise voting rights 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 for purchasing new shares corresponds to the ownership ratio of common shares of each shareholder in the company.
• Freely transfer their shares to others, except that within 03 years from the date the company is granted the Business Registration Certificate, founding shareholders have the right to freely transfer their shares to other founding shareholders and can only transfer their common shares to people who are not founding shareholders if approved by the General Meeting of Shareholders and the Company Charter has limited provisions on the conditions for transferring shares. section.
• 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.

3. Dividend preference shares

– Dividend preference shares are shares that pay dividends at a higher rate than the dividend rate of common shares or a stable annual rate. Annual dividends include fixed dividends and bonus dividends. Fixed dividends do not depend on the company’s business results. The specific fixed dividend level and the method of determining bonus dividends are clearly stated in the shares of dividend preference shares.

– Shareholders who own dividend preference shares have the following rights:

• Receive dividends according to regulations.
• Receive the remaining assets corresponding to the percentage of shares owned in the company after the company has paid all debts. Debt, preferred shares refundable when the company dissolves or goes bankrupt.
• Other rights as common shareholders, but do not have the right to vote, attend the General Meeting of Shareholders, nominate people to the Board of Directors and Supervisory Board unless the General Meeting of Shareholders’ Resolution on content adversely changes the rights and obligations of shareholders owning preferred shares.

4. Redeemable preferred dividends

– Refundable preferred shares are shares whose capital contribution is returned by the company at the request of the owner or according to the conditions stated in the shares of redeemable preferred shares and the company’s Charter.

– Shareholders who own redeemable preferred shares have the same rights as common shareholders but 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 following 02 cases:

+ Preferred shares can be converted into common shares according to the resolution of the General Meeting of Shareholders.

+ Resolution General Meeting of Shareholders on content that adversely changes the rights and obligations of shareholders owning preferred shares.

5. Voting preference shares

– Voting preference shares are common shares that have more votes than other common shares; The number of votes per voting preference share is prescribed by the company’s charter. Only organizations authorized by the Government and founding shareholders are entitled to hold voting preference shares.

The voting incentives of founding shareholders are valid for 03 years from the date the company is granted a Business Registration Certificate.

Voting rights and voting preference period for voting preference shares held by organizations authorized by the Government are specified in the company’s Charter.

After the voting preference period, voting preference shares are converted into common shares.

– Shareholders who own voting preference shares have the following rights:

+ To vote on issues under the authority of the General Meeting of Shareholders with the number of votes according to regulations.

+ Other rights as shareholders common stock, but those shares cannot be transferred to others (except in cases of transfer under a legally effective Court judgment or decision or inheritance).