HTLaw

CASES OF CAPITAL INCREASE OF JOINT-STOCK COMPANIES

A joint-stock company is an enterprise in which:

– Charter capital is divided into equal value called shares;

– Shareholders can be organizations or individuals; The minimum number of shareholders is 03 and there is no limit to the maximum number of shareholders;

– Shareholders are only responsible for debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise

– Shareholders have the right to freely transfer their shares to others. However, within 3 years from the date the company is granted the enterprise registration certificate, ordinary shares of founding shareholders are freely transferred to other founding shareholders and can only be transferred to non-founding shareholders if approved by the General Meeting of Shareholders and they do not have the right to vote on transfer of such shares.

In addition, shareholders have the right to freely transfer their shares to others, however, it will be limited as above and if in the company’s charter there are specific provisions on the transfer of shares.

CASES OF CAPITAL INCREASE OF JOINT-STOCK COMPANIES - HTLaw

II. Cases of capital increase of a joint stock company

Because the charter capital of a joint-stock company is the total par value of shares of all kinds sold. The charter capital of a joint-stock company when registering for business establishment is the total par value of shares of all kinds registered for purchase and stated in the company’s charter.

Cases of capital increase of joint-stock companies (non-public companies)

In accordance with the provisions of law, a joint-stock company will increase its charter capital in the following forms:

– Offering shares to existing shareholders.

– Private placement of shares.

– Public offering of shares.

A public offering of shares is a form for a joint-stock company listed on the stock market (public company).

Accordingly, a joint-stock company must register a change of charter capital within 10 days from the date of completion of the share sale.

– Offering shares to effective shareholders is a case where the company increases the number of shares, types of shares entitled to offer and sells all such shares to all shareholders in proportion to their existing share ownership in the company.
The company must give written notice to shareholders in such a manner as to ensure that it reaches their contact address no later than 15 days before the end of the share registration period.

– Private placement of shares of a joint-stock company must satisfy the following conditions:

+ Not offered for sale through mass media;

+ Offering for sale to less than 100 investors, excluding professional securities investors or only offering for sale to professional securities investors.

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