What agency must an initial public offering joint stock company register with according to the law?

A joint stock company offering shares for the initial public offering must register with which agency according to the law?

Joint stock companies offering shares for the initial public offering must register with any agency based on the provisions of Article 16 of the Securities Law 2019, the content is as follows:

Register to offer securities to the public

1. Issuing organizations and shareholders of public companies must register with the State Securities Commission before offering securities to the public, except for the cases specified in Clause 2 of this Article.

2. The following cases are not required to register for public securities offering:

a) Offering for sale of Government debt instruments, Government-guaranteed bonds issued by policy banks, local government bonds;

b) Offering bonds of international financial institutions approved by the Government of Vietnam;

c) Offering shares to the public to convert state-owned enterprises, one-member limited liability companies with 100% charter capital held by state-owned enterprises, and public service units into joint stock companies;

d) The sale of securities under a legally effective court judgment or decision, an Arbitrator’s decision or the sale of securities by a manager or recipient of assets in case of bankruptcy or insolvency.

And based on the provisions of Clause 1, Article 4 of the Securities Law 2019, the content is as follows: “Securities are assets, including the following types: a) Stocks, bonds, fund certificates; b) Warrants, covered warrants, share purchase rights, depository certificates; c) Derivative securities; d) Other types of securities prescribed by the Government.”Thus, a joint stock company offering shares to the public for the initial public offering must register with the State Securities Commission when it is not required to register for a public offering of securities.

A joint stock company offering shares for the initial public offering needs to meet what conditions regarding the number of shares with voting rights?

A joint stock company offering shares for the initial public offering needs to meet the conditions regarding the number of shares with voting rights, based on the provisions of Clause 1, Article 15 of the 2019 Securities Law, the content is as follows:

Conditions for offering securities to the public

1. Conditions for the initial public offering of shares of a joint stock company include:

a) Contributed charter capital at the time of registration for offering is VND 30 billion or more calculated according to the value recorded in the accounting book;

b) Business activities for 02 consecutive years immediately preceding the year of registration for offering must be profitable and have no accumulated losses up to the year of registration for offering;

c) Have an issuance plan and a plan to use capital obtained from the stock offering approved by the General Meeting of Shareholders;

d) At least 15% of the voting shares of the issuing organization must be sold to at least 100 investors who are not major shareholders; In case the charter capital of the issuing organization is VND 1,000 billion or more, the minimum ratio is 10% of the voting shares of the issuing organization;

d) Major shareholders before the initial public offering of shares of the issuing organization must commit to holding at least 20% of the issuing organization’s charter capital for at least 01 year from the date of completion of the offering;

e) The issuing organization is not under criminal prosecution or has been convicted of one of the crimes of violating the economic management order but has not had its criminal record erased;

g) Have a securities company advise on the registration documents to offer shares to the public, except in cases where the issuing organization is a securities company;

h) Have a commitment and must list or register to trade shares on the stock exchange system after the end of the offering;

i) The issuing organization must open a escrow account to receive money to buy shares in the offering.

According to the above regulations, a joint stock company offering shares for the initial public offering must have at least 15% of its voting shares sold to at least 100 investors who are not major shareholders.

If the company has a charter capital of VND 1,000 billion or more, the minimum ratio is 10% of the voting shares.

If a joint stock company offers shares to the public for the initial public offering and does not meet the conditions on the number of voting shares, how should it be handled?

Joint stock companies offering shares for the initial public offering that do not meet the conditions on the number of shares with voting rights will be handled according to the provisions of Article 28 of the Securities Law 2019, the content is as follows:

Cancel the public offering of securities

1. The State Securities Commission decides to cancel the public offering of securities in the following cases:

a) At the end of the suspension period specified in Clause 1, Article 27 of this Law, the shortcomings cannot be corrected, leading to the suspension of the public offering of securities;

b) The initial public offering of shares does not meet the conditions on the minimum percentage of voting shares of the issuing organization being sold to at least 100 investors who are not major shareholders of the issuing organization as prescribed in Point d, Clause 1, Article 15 of this Law;

c) The public offering of additional shares does not meet the conditions of mobilizing enough capital to implement the project of the issuing organization as prescribed in Point d, Clause 2, Article 15 of this Law.

2. In addition to the cases specified in Clause 1 of this Article, the public securities offering is canceled according to a legally effective judgment or decision of the Court, a decision of an Arbitrator or a competent authority in accordance with the provisions of law.

3. Within 07 working days from the date the public offering of securities is cancelled, the issuing organization must announce the cancellation of the public offering of securities according to the method specified in Clause 3, Article 25 of this Law and must recall the issued securities and at the same time refund money to investors within 15 days from the date the offering is cancelled. At the end of this period, the issuer must compensate investors for damages according to the terms committed to the investor.

According to the above regulations, when a joint stock company offering shares to the public for the initial public offering does not meet the conditions on the number of shares with voting rights, it will be handled as follows:

+ The State Securities Commission decided to cancel the public securities offering.

+ Within 07 working days from the date the public securities offering is canceled, the company must announce the cancellation of the public securities offering.

+ Within 15 working days from the date the offering is cancelled, the company must withdraw the issued securities and refund money to investors.

+ After 15 working days from the date the offering is cancelled, the company must compensate investors for damages according to the terms committed to the investors.