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SHAREHOLDING COMPANIES

GROUP’S MEMBERS:

PHẠM THỊ HOÀNG TRANG

VƯƠNG THẾ BẢO

TÔ KHÁNH LINH

NGUYỄN VĨNH PHÚC

NGUYỄN VĂN THÀNH

OUTLINE 1. Shareholding company 2. Classes of shares 3. Rights and obligations of ordinary shareholders 4. Ordinary shares of founding shareholders 5. Share certificates 6. Offer [of share] for sale and assignment of shares 7. Issue of bonds 8. Payment dividends 9. Organizational & management structure of shareholding companies 10. General meeting of shareholders 11. Authority to convene general meeting of shareholders 12. Board of management 13. Chairman of the board of management 14. Director or general director of the company 15. Conditions for conducting General Meeting of Shareholders 16. Passing of resolutions of General Meeting of Shareholders 17. Redemption of shares pursuant to a resolution of the company

1. Shareholding companies

Shareholding company

Charter capital :

divide into equal

portions called shares

Shareholders: organizations/

Individual

Minimum: 3 shareholders

Debts & obligations : only capital contributed

to the enterprise

Freely assign shares to other

person, except the cases in clause 3 of article 81 & clause 5 of article 84 of Law of enterprise

2005

ARTICLE 77

1. Shareholding companies (cont.)

Have legal entity status ( tư cách pháp nhân) from the date of issuance of the business registration certificate

Issue all types of securities to raise funds

Article 77 (Law of enterprise

2005)

2. Classes of shares

shares

Ordinary shares ( cổ phần phổ thông)

Owners call oridinay shareholders

Preference shares ( cổ

phần ưu đãi)

Owners call reference shareholders

ARTICLE 78 ( LAW OF ENTERPRISE)

2. Classes of shares (cont.)

Preference shares

Voting( cổ phần ưu đãi biểu quyết)

Dividend ( cổ phần ưu đãi

cổ tức)

Redeemable ( cổ phần ưu đãi hoàn lại)

Others

Only organizations authorized by the Gov & founding shareholders can hold

Stipulate in the charter of the company or decide by the General Meeting of Shareholders ( Đại Hội Đồng Cổ Đông)

ARTICLE 78 (LAW OF ENTERPRISE)

3. Rights and obligations of ordinary shareholders

* Rights of ordinary shareholders

a. Attend& express opinions at General Meeting of Shareholders; right to

vote with one share carry one vote

b. Receive dividend

c. Priority in buying for new shares issue by the company

d. Freely exchange their shares, except cases stipulated in clause 5 of article

84 of Law of Enterprise 2005

e. Sight, look up& make an extract of information in the list of shareholders

f. Sight, look up& make an extract/ copy of the charter of company, book of

minutes of meetings and resolution of General Meeting of Shareholders

g. When company is bankrupted or dissoluted, to receive a part of remaining

assets in proportion to the number of shares contributed

h. Other rights stipulated in Law of Enterprise 2005 & charter of company

3. Rights and obligations of ordinary shareholders

(cont.) * Obligations of ordinary shareholders

obligations

Pay full for shares

subscribed within 90 days

from the date of the business registration

certificate to the company

Comply with the charter &

internal management

rules of company

Observe resolutions of

General Meeting of Shareholders

& Board of Management ( Hội Đồng Quản

Trị)

Bear personal responsibility

Perform others

obligations in Law of

Enterprise 2005 &

charter of company

•Breach the law

•Conduct business& other transactions

for personal benefit or other org & indiv

•Pay premature debts where company

like to be in financial dangers

ARTICLE 80 LAW OF ENTERPRISE

2005

4. ORDINARY SHARES OF FOUNDING SHAREHOLDERS

•Founding shareholder must : +Register to subscribe at least 20% of the number of ordinary shares. +Pay in full within 90 days from the date issuance of the business registration certificate of the company. •The company must notify the business registration body of the contribution of share capital within 90 days from the date of issuance of the registration certificate of the company.

•Where a founding shareholder fails to pay in full for the number of shares registered to subscribe, such number of shares not yet contributed in full of the founding shareholder shall be dealt with in on of the following manners: +All other founding shareholders contribute in full such number of shares

in proportion to the ratio of shares they own in the company.

+One or more founding shareholders agree to contribute in full such number of share.

+Another person who is not a founding shareholder is called on and

agree to contribute in full such number of shares shall automatically become a founding shareholder of the company.

4. ORDINARY SHARES OF FOUNDING SHAREHOLDERS (cont.)

•Where founding shareholders do not register to subscribe for all the shares offered for sale, the remaining shares must be offered for sale and sold out within a time limit of three years from the date of issuance of the business registration certificate to the company. •Within a period of 3 years from the date of issuance of the business registration certificate to the company, ordinary shares of founding shareholders may be freely assigned to other founding shareholders if approved by the General Meeting of Shareholders. •After 3 years from the date of issuance of the business registration certificate to the company, all restrictions on ordinary shares of founding shareholders shall be lifted.

4. ORDINARY SHARES OF FOUNDING SHAREHOLDERS (cont.)

(Article 84, Law on enterprises 2005)

5. SHARE CERTIFICATES Definition:

+Certificate issued by a shareholding company or book entries certifying the ownership of one or more shares of such company. +May or may not indicate names.

Errors in the content and form of a share certificate: + Not affect the rights and interests of its owner +The chairman of the Board of Management and the director or general director shall be jointly liable for any damage caused by such errors to the company. Where a share certificate is lost, torn burnt or otherwise destroyed in another form, the shareholder shall be reissued with a share certificate at the request of such shareholder


6. OFFER FOR SALE AND ASSIGNMENT OF SHARES

OFFER FOR SALE: - The Board of Management shall determine the timing and method of and the price at which shares shall be offered for sale for the number of shares which may be offered for sale. - The price at which shares shall be offered shall not be lower than the market price at the time of offering or the most recently recorded value in the books of shares.

In the case the company issued additional ordinary shares and offer such shares to all ordinary shareholders in proportion to the respective percentage of share they currently hold in the company + The company must notify shareholders in writing by a method guaranteed to reach their permanent address + Shareholders have the right to transfer their priority right in subscribing for shares to other people. ASSIGNMENT OF SHARES: Shares may be freely assigned. +Be conducted in writing by normal method or by hand delivery of share certificate. +Assignment documents must be signed by the assignor and the assignee or their authorized representative. Where only a number of shares in a share certificate indicating names are assigned, the old share certificate shall be cancelled and the company shall issue a new share certificate recording the number of shares assigned and the remaining number of shares.

6. OFFER FOR SALE AND ASSIGNMENT OF SHARES (cont.)


17. Redemption of shares pursuant to a resolution of the company A company may redeem no more than 30% of the total

nuber of ordinary shares sold, and part or all of the dividend preferencce shares sold:

• The Board of Management has the right to decide on redemption no more than 10% of the total number of shares of each class already sold within each period of 12 months.

• The Board of Management shall decide on the price for redemption of shares.

• The company may redeem shares of each shareholder in proportion to the number of shares each holds in the company.

(Aricle 91, Law on Enterprises 2005)

1. A shareholding company may issue bonds

2. The company may not issue bonds:

- Payment has not been made for the principal, interest of issued bonds and debts in three previous years.

- The average after tax profit rate of three previous years is not higher than the interest rate to pay for the bonds to be issued.


7. Issue of bonds

8. Payment of dividends

1. Dividends paid to preference shares will be in accordance with the conditions applied to each type of preference shares.

2. Dividends paid to ordinary shares are based on the net profit retained.

Article 93, Law on enterprises 2005

9. ORGANIZATIONAL & STRUCTURE

General Meeting of Shareholders

Board of Management

Chairman of the Board

General Director

Inspection Committee

- More than 11 individual

shareholders.

- Organizations owning

more than 50% of the total

share.

Based on Law on Enterprises, Article 95

10. GENERAL MEETING OF SHAREHOLDERS

The highest decision-making authority. Pass the development direction of the company Make decision on the shares and rate of annual

dividend. Determine members of the Board of Management,

Inspection Committee. Make investment decisions or decisions on sale of

assets. Make decisions on amendments of and additions to

the charter of the company. Approve annual financial statements.


11. AUTHORRITY TO CONVENE GENERAL MEETING OF SHAREHOLDERS

Must hold an annual meeting within a time-limit of 4 months from the end of financial year.

Must convene an ad-hoc meeting in many cases.

The convenor must prepare a list of shareholders entitled to attend the meeting, provide information

documents,…


12.Board of Management

• The body managing the company and shall have full authority to

make decisions in the name of the company and to exercise the rights and discharge the obligations of the company which do not fall within the authority of the General Meeting of Shareholders

- The Board of Management shall pass resolutions by way of voting at meetings, obtaining written opinions, or otherwise as stipulated in the charter of the company

Article 108, clauses 1,3– Law of Enterprises 2005

- Have at least three(3) members, and not more than eleven (11) members. The term of the BOM shall be five years.

Article 109, clause 1 – Law of Enterprises 2005

12. Board of Management (cont.)

• Right - selecting, appointing, supporting and reviewing the performance of the director or

the general director and other key managers of the company

- make decisions on development strategies, organizational structure, and on annual business plans of the company and on offering new shares within the number of shares of each class which may be offered for sale, and on investment plans and investment projects within the authority and limits stipulated in this Law and the charter of the company

- make decisions on salaries and other benefits of such managers; to appoint an authorized representative to exercise ownership rights of shares or of capital contributed to other companies

Etc…

Article 108, clause 2– Law of Enterprises 2005

12. Board of Management (cont.)

• Obligations - To submit annual final financial reports to the General Meeting of

Shareholders

- To recommend the dividend rates to be paid, to make decisions on the time-limit and procedures for payment of dividends or for dealing with losses incurred in the business operation

- To recommend re-organization or dissolution of the company, or to request bankruptcy of the company

- To approve the agenda and contents of documents for the General Meeting of Shareholders; to convene the General Meeting of Shareholders or to obtain written opinions in order for the General Meeting of Shareholders to pass resolutions

Etc…


13. Chairmen board of management • The General Meeting of Shareholders or the Board of

Management shall elect the chairman of the Board of Management. The chairman of the Board of Management may act concurrently as the director or general director of the company, unless otherwise stipulated in the charter of the company.


13. Chairmen board of management (cont.)

• rights and duties 1) To prepare working plans and programs of the Board of Management

2) To prepare, or organize the preparation of agenda, content and

documents for meetings of the Board of Management; to convene and preside over meetings of the Board of Management

3) To organize for resolutions of the Board of Management to be passed

4) To monitor the implementation of resolutions of the Board of Management

5) To chair the General Meetings of Shareholders


14. Director or general director of the company

• The Board of Management shall appoint one of its members or employ another person as the director or general director


- manage the day-to-day business operations of the company

- The term of the director or general director shall not exceed five years; with unlimited number of re-appointments.

14. Director or general director of the company (cont.) Rights and duties: - Make decisions on all issues relating to the day-to-day business operation of the company - Appoint, remove and dismiss management personnel in the company, except for those under the scope of authority of the BOM - Make decisions on salary and allowances (if any) for employees of the company and recruit employees - Organize the implementation of resolutions of the Board of Management and business plans and investment plans of the company Etc …. Article 116, clause 3– Law of Enterprises 2005

15. Conditions for conducting General Meeting of Shareholders

•The General Meeting Shareholders shall be conducted where the number of attending shareholders represents at least sixty five (65) percent of the voting shares.

•Where the first meeting cannot take place because the condition stimulated in clause 1 of this article not satisfied, the meeting may be conversed for a second time within thirty days of the intended opening of the first meeting. The General Meeting of Shareholders which is conversed for a second time shall be conducted where the number of attending shareholders represents at least fifty one percent of the voting shares.

•Where a meeting conversed for a second time cannot take place because the condition stimulated clause 2 of this article is not satisfied it may be conversed for a third time within twenty days from the date of the intended opening of the second meeting. In this case, the General Meeting of Shareholders shall be conversed irrespective of the number of attending shareholders, and irrespective of the percentage of shares with voting rights of shareholders attending the meeting.

•Only the General Meeting of Shareholders may make changes to the agenda accompanying the invitation to the meeting. (Article 102, Law on Enterpresis, 2005

15. Conditions for conducting General

Meeting of Shareholders (cont.)

16. Passing of resolutions of General Meeting of Shareholders

• The following matters must be adopted by voting at the General Meeting of Shareholders: • (a) Amendment of or addition to the charter of the company; • (b) Approval of the development direction of the company;

• (c) Decision on classes of shares and the total number of shares of each class which may be offered for sale; • (d) Appointment, discharge or removal members of the Board of Management and Inspection Committee;

• Decisions on investments or the sale of assets valued at equal to or >50% of the total value of assets recorded in the most recent financial statement of the company • (e) Approval of the annual financial statements;

• (g) Reorganization or dissolution of the company.

16. Passing of resolutions of General Meeting of Shareholders (cont.)

• A resolution shall be passed by voting or writing opinions at the meeting when the following conditions are satisfied: - >= 65% of the total voting shares of all attending shareholders, >=75% if the resolution is passed by collecting written opinions,

- >=75% if investments or sale of assets equal to or more than 50% of the total value of asset

16. Passing of resolutions of General Meeting of Shareholders (cont.)

• each shareholder shall have the right to accumulate all his votes for one or more candidates to elect members of the Board of Management and of the Inspection Committee.

• Resolutions must be notified to shareholders attend the General Meeting of Shareholders within fifteen (15) days from the date of approval thereof.

All shall be stipulated in the charter of the company

Article 104 – Law of Enterprise 2005

THE END

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