Offering of shares to existing shareholders is one of the effective mobilized methods of the Joint stock company. In which, pursuant to the stipulation in Clause 1, Article 124 Business Code 2020 stated: “Offering of shares to existing shareholders is an event in which the company increases the quantity and types of authorized and sell all of these shares to all shareholders in proportion to their holdings in the company”. The process of offering of shares to existing shareholders must be performed according to the procedures that the Vietnamese Business Code 2020 regulated.
- The procedures of offering of shares to existing shareholders
Pursuant to the stipulation of The Business Code 2020, the process of offering of shares to existing shareholders is performed through the following steps:
Step 1: Performing the General Meeting of Shareholders (GMS) to ratify the offering of shares to existing shareholders
The Joint Stock Company has to perform the General Meeting of Shareholders and ratify the Resolution of GMS decides to offer shares to existing shareholders. This resolution includes: content of the Meeting of Shareholders (Name, type of share, the cost of share, total amount of share, cost of offering, cost of offering according to the cost of share, method of offering); Assigning … to perform the related procedure and perform the procedure of increasing charter capital after the ending of share offering.
The Resolution of GMS which decides to offer shares to existing shareholders is ratified when it is voted for by a number of shareholders that hold more than 65% of the votes of all participants and a specific ratio shall be specified in the company’s charter.
Step 2: Perform the Meeting of the Board of Directors to decide, ratify the plan to offer shares to existing shareholders.
According to the law stipulation, in order to offer share to shareholders, the company must get the meeting of the Board of Directorss to ratify the plan of offering of shares of shareholders, including: name, type of share, cost, the total of share offering, cost of offering, method, buyer, ratio of offering, the method of handing shares were not bought by shareholders, the schedule of subscribing to buy share, the location of performing, the regulation of payment. The Board of Directorss ratify the Resolution, Decision by voting at the meeting, questionnaire survey or another method specified in the company’s charter. Each member of the Board of Directorss shall have one vote.
Step 3: Notifying about offering of shares to existing shareholders
When the Board of Directors ratified the plan of offering of shares of shareholders, the Company need to issue the written notification (attaching the share subscription form issued by the company) to the shareholders about the offering of shares of shareholders at least 15 days before the deadline for subscribing for shares. The content of notification includes: the full name, signature, mailing address, nationality and legal document number if the shareholder is an individual; names, EID numbers or legal document number and headquarters address if the shareholder is an organization; the shareholder’s current shares and holding; the total quantity of shares offered and the number of shareholders having the right to buy them; the offered price; deadline for subscribing; full name and signature of the company’s legal representative.
*Attached documents: The form of notification of offering of shares of shareholders.
Step 4: Subscribing to buy shares
After the notification is issued, the shareholders who received it fill in the notification of share subscribing according to the form and send it back to the Company before the deadline for subscribing for shares. In case the shareholders do not send the form of share subscribing back to the Company by the deadline, it will be considered that the shareholder has renounced the right to buy shares;
If the shareholders have the right to buy shares but do not have the need to buy them, they can transfer this right to others shareholders (Usually called as “right to buy shares”). The Joint Stock Companies also regulate the term of transferring the right to buy shares, it usually coincides with the term of the offering of shares of shareholders.
In case the number of expected offering shares are not fully subscribed by the shareholders and transferee of the right to buy shares, the Board of Directorss have the right to sell the remaining shares to be offered for sale to the shareholders of the company and other persons with conditions not more favorable than those offered for sale to shareholders, unless otherwise approved by the General Meeting of Shareholders or otherwise provided by the securities law.
Step 5: Meeting the Board of Directors to ratify the result of offering of shares of shareholders.
After the deadline for subscribing to buy shares, perform the Meeting of the Board of Directorss to ratify the result of the offering of shares of shareholders. In this meeting, the Board of Directorss shall statistic and synthesis the information of shareholders who buy shares, the number of shares is subscribed to buy, the amount have to be paid and ratify the result of offering of shares of shareholders.
Step 6: Paying and issuing, delivering shares
Depending on the Resolution of the Board of Directors which ratifies the result of offering of shares of shareholders, the shareholders pay the company according to the method prescribed in the notification of share offering. Until all shareholders pay enough according to the stipulation of Law (the shareholders pay enough the amount equal to the shares is subscribed to buy and fully recorded information in the shareholder register), the company shall issue and deliver shares to buyers.
Besides, the Company must update the shareholder register to be suitable to the changes after offering of shares of shareholders.
Step 7: Subscribing the change in charter capital at the business registration agency
After completing the procedure of offering of shares of shareholders, the charter capital of the Joint Stock Company is naturally changed. Therefore, the Company has to register to change the charter capital within 10 days from the date completing the period of share offering and the shareholders complete the payment. Registering the change in charter capital can be performed by online method at The Business registration website.
The lists of documents of registering the change in charter capital on the Business registration website:
(1) (Copy) The Minutes of General of Meeting Shareholders about the offering of shares of shareholders;
(2) The Resolution of General of Meeting Shareholders ratifying the offering of shares of shareholders;
(3) The Minutes of the Meeting of the Board of Directors ratifying the result of offering of shares of shareholders;
(4) The Resolution of the Board of Directors ratifying the result of offering of shares of shareholders;
(5) The notification of change the content of business registration which is signed by the legal representative of the Company (According to the Form at Appendix II-1 the Administrative Committee attached to Circular No. 01/2021/TT-BKHDT dated March 16th, 2021 of the Minister of Planning and Investment)
(6) The authorized letter of performing procedure of business registration (In case of the Company authorizes the third party to perform this procedure)
(7) (Authenticated copy) ID card of the person filing the dossier.
Note: Payment document will be filed attached to the Joint Stock Company’s document of increasing charter capital registration.
- The expected settlement time: 03 working days
*Note: In case there is a change in other contents of the business registration, the company should prepare all the necessary documents for the application for registration of changes in the content of the business registration in each specific content by relevant laws. In addition, all changes in business registration content will be summarized in 01 Notification of change of business registration contents signed by the legal representative of the enterprise.
The procedure of offering of shares of shareholders: