How to Change Founding Shareholders of a Joint-Stock Company

Short answer: A founding shareholder is a shareholder who owns at least one ordinary share and signs the list of founding shareholders when the joint-stock company is established. Within 3 years from the date the company is issued the Enterprise Registration Certificate, a founding shareholder may freely transfer ordinary shares to another founding shareholder, but a transfer to a non-founding shareholder must be approved by the General Meeting of Shareholders. After 3 years, this restriction ends. When there is a change of founding shareholders, the company registers it with the Business Registration Office under Decree 168/2025/ND-CP. Basis: Article 120 of the Law on Enterprises 2020 (as amended by Law No. 76/2025/QH15).

Legal basis

• The Law on Enterprises 2020, as amended and supplemented by Law No. 76/2025/QH15 — Article 120 (ordinary shares of founding shareholders), Article 114 (classes of shares);
• Decree 168/2025/ND-CP on enterprise registration — registration of changes of founding shareholders.

Who is a founding shareholder?

• A shareholder who owns at least one ordinary share and signs the list of founding shareholders of the joint-stock company at the time of establishment;
• Founding shareholders must together register to purchase at least 20% of the total ordinary shares authorized for offering at the time of enterprise registration;
• A founding shareholder may be an individual or an organization, domestic or foreign (foreign investors comply with investment regulations).

Transfer restrictions during the first 3 years

Within 3 years from the date the company is issued the Enterprise Registration Certificate:

• A founding shareholder may freely transfer their ordinary shares to another founding shareholder;
• A transfer to a non-founding shareholder must be approved by the General Meeting of Shareholders;
• The person intending to transfer has no voting right on the transfer of their own shares at the General Meeting of Shareholders.

After 3 years, the above restriction terminates; founding shareholders may freely transfer ordinary shares like other ordinary shareholders (except restrictions under the charter or lawful agreements).

Note: this restriction applies only to ordinary shares of founding shareholders, not to preference shares (if any).

Procedure for changing founding shareholders

Step 1. Approve the transfer

If transferring to a non-founding shareholder within the first 3 years: the General Meeting of Shareholders meets and approves the transfer (the transferor does not vote). The parties sign the share transfer agreement.

Step 2. Register the change with the Business Registration Office

Within 10 days from the date of the change, the company submits the dossier for registering the change of founding shareholders to the Business Registration Office under the Department of Finance — in person or online via the National Enterprise Registration Portal, using the current forms issued with Decree 168/2025/ND-CP.

Step 3. Update the shareholder register

The company updates the shareholder register to record the new shareholder; the transferor declares and pays income tax on the securities transfer as prescribed.

Tax obligations on share transfers

• Individual transferring shares: pays personal income tax on securities transfers;
• Organization transferring: income from the transfer is subject to corporate income tax;
• The parties should clearly agree on declaration and tax payment responsibilities in the transfer agreement.

Frequently asked questions

Can a founding shareholder transfer all their shares in the first year?

Yes, but a transfer to a non-founding shareholder must be approved by the General Meeting of Shareholders. In practice, a full transfer by a founding shareholder within the first 3 years should be carefully considered as it affects the company’s governance structure.

After 3 years, is any procedure needed to “remove” the restriction?

No separate procedure is needed; the transfer restriction under Article 120 terminates automatically when the 3-year period from the issuance of the Enterprise Registration Certificate expires.

Can the company charter impose stricter restrictions?

Yes. The charter or an agreement among shareholders may impose stricter transfer restrictions (e.g., a longer period, pre-emptive purchase rights), provided they do not contravene the law; in that case the stricter agreement applies.

Notes on applying current laws

Many people mistakenly believe founding shareholders “may not transfer shares for 3 years” — in reality, only transfers to outsiders without General Meeting of Shareholders approval are restricted; transfers among founding shareholders are free. Regarding publication fees for enterprise registration contents and dossier forms, you should check the regulations in force at the time of implementation or contact an ANT Legal lawyer at 0966.475.966 for accurate guidance.

Common risks to watch out for

• Transferring to an outsider within the first 3 years without General Meeting of Shareholders approval;
• The transferor voting on their own transaction;
• Late registration of the change of founding shareholders and late tax declaration;
• Using the old registration forms under Circular 02/2019/TT-BKHDT, which has expired.

How ANT Legal can help

ANT Legal advises on the conditions and procedures for transferring shares of founding shareholders; drafts transfer agreements; organizes General Meeting of Shareholders meetings; and registers changes at the Business Registration Office. For quick advice, please contact our lawyers at 0966.475.966.

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