Enterprise legal consultation services of Dragon Law Firm in Hanoi provide to Clients some information about charter capital of joint stock company.
Charter Capital of Joint Stock Company
Under Article 4 of the Law on Enterprise 2014: “Charter capital means the total face value of shares that are sold or registered when establishing a joint-stock company”.
Article 111 of the Law on Enterprise also stipulated: “Charter capital of a joint-stock company is to total face value of sold shares. Charter capital of a joint-stock company on the business registration date is total face value of registered shares of various types. Charter capital is specified in the company’s charter.”
Change in Charter Capital in Below Cases
1. According to a decision of the General Meeting of Shareholders, the company returns part of the stakes to shareholders in proportion to their holding, provided that the company has continued its business operation for more than 02 years from the business registration date, and that all debts and liabilities can be paid after the return;
2. The company repurchases issued shares as prescribed in Article 129 and Article 130 of this Law:
Article 129. Repurchase of shares at the request of shareholders
1. Any shareholder who votes against the Resolution on the company’s restructuring or changes to the shareholders’ rights and obligations prescribed in the company’s charter shall be entitled to request the company to repurchase his/her shares. The request shall be made in writing, specifying the shareholder’s name, address, amount of each type of shares, wanted prices, and reasons for requesting the repurchase. The request shall be sent to the company within 10 days from the day on which the General Meeting of Shareholders ratifies the Resolution on the issues mentioned in this Clause.
2. The company shall repurchase shares at the request of shareholders as prescribed in Clause 1 of this Article at market prices or prices determined in accordance with the company’s charter within 90 days from the day on which the request is received. If an agreement on the price is not reached, both parties may request a professional valuation organization to carry out the valuation. The company shall recommend at least 03 professional valuation organizations for shareholders to choose. The decision given by such organization shall be final.
Article 130. Repurchase of shares under the company’s decision
The company may repurchase up to 30% of total ordinary shares that are sold, part of or all of shares with preferred dividends that are sold as follows:
1. The Board of Directors may decide repurchase of up to 10% of total shares of each type that are offered within 12 months. In other cases, the repurchase of shares shall be decided by the General Meeting of Shareholders;
2. The Board of Directors shall decide repurchase prices. Repurchase price of ordinary shares must not exceed the market price at the time of repurchase, except for the case mentioned in Clause 3 of this Article. With regard to other types of shares, unless otherwise prescribed by the company’s charter or agreed between the company and relevant shareholders, the repurchase prices must not fall below the market price;
3. The company may repurchase the shares held by each shareholder in proportion to his/her holding in the company. In this case, a notification of the decision to repurchase shares must be sent by registered mail to all shareholders within 30 days from the day on which such decision is ratified. The notification must contain the name, headquarter address of the company, total amount of shares and types of shares repurchased, repurchase prices or rules for determination of repurchase prices; procedures and deadline for payment; procedures and deadline for shareholders to offer their shares to the company.
Any shareholder that agrees to resell his/her shares shall send the offering by registered mail to the company within 30 days from the notification date. The offering shall contain the full name, permanent residence, Nationality, ID/passport number if the shareholder is an individual, name, enterprise identification number or establishment decision number, headquarter address if the shareholder is an organization; the shares being held and the shares being offered; method of payment, signature of the shareholder or the shareholder’s legal representative. The company shall only repurchase shares offered by the said deadline.
3. Charter capital is not contributed fully and punctually by members as prescribed in Article 112 of this Law, detailed:
3. If a shareholder fails to pay or fails to pay completely for the ordered shares, the following regulations shall apply:
a) The shareholders that fails to pay for the registered shares is obviously no longer a shareholder of the company and must not transfer the call option to another person;
b) The shareholder that pays for part of the registered shares shall have the right to vote, receive dividends, and other rights corresponding to the paid shares; must not transfer the call option of the unpaid shares to another person;
c) The unpaid shares shall be considered unsold shares, which may be offered by the Board of Directors;
For more information, please contact to enterprise legal advice services of Dragon Law to be supported at:
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