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Transfer Of Shares In Vietnam

Enterprise 25/09/2023

Whether you are a shareholder looking to sell your equity or an investor seeking to acquire shares, understanding the intricacies of share transfer is essential. In this article, we will delve into the key aspects of share transfer in enterprises, shedding light on the procedures, legal considerations, and implications involved. Please feel free to contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for legal advice and support.

Transfer Of Shares In Vietnam

Whether you are a shareholder looking to sell your equity or an investor seeking to acquire shares, understanding the intricacies of share transfer is essential. In this article, we will delve into the key aspects of share transfer in enterprises, shedding light on the procedures, legal considerations, and implications involved. Please feel free to contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline 0903.419.479 for legal advice and support.

1. Principles of share transfer

According to Point d, Clause 1, Article 111 of the Enterprise Law 2020, shareholders have the right to freely transfer their shares to others, except for the cases specified in Clause 3, Article 120 and Clause 1, Article 127 of the Enterprise Law 2020.

And in Clause 1, Article 127 of the Enterprise Law 2020, shares are freely transferable, except for the case specified in Clause 3, Article 120 of the Enterprise Law 2020 and the company charter that restricts the transfer of shares.

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2. Restrictions on transferring shares

Pursuant to Clause 1, Article 127 of the Enterprise Law 2020, cases where the transfer of shares is restricted include:

  • Within 03 years from the date the company is granted the Certificate of Business Registration, the common shares of founding shareholders are freely transferable to other founding shareholders and can only be transferred to persons who are not is a founding shareholder if approved by the General Meeting of Shareholders. In this case, the founding shareholders who intend to transfer ordinary shares do not have the right to vote on the transfer of such shares.
  • The company charter has provisions restricting the transfer of sharesWhere the company charter contains restrictions on the transfer of shares, these provisions will only take effect when clearly stated in the shares of the respective shares.

3. Methods of transferring shares

The transfer of shares in a joint-stock company according to the provisions of Clause 2, Article 127 of the Enterprise Law 2020 shall be done by contract or by trading on the stock market.

  • In case of transfer by contract, the transfer papers must be signed by the transferor and the transferee or their authorized representatives.
  • In case of transactions on the stock market, the order and procedures for transfer shall comply with the provisions of the law on securities.

4. Time to become a shareholder of the company after receiving the transfer of shares

Clause 6, Article 127 of the Enterprise Law 2020 stipulates that individuals and organizations that receive shares in the cases specified in Article 127 of the Enterprise Law 2020 will only become shareholders of the company from the time their information is specified in Clause 6 of this Article. 2 Article 122 of the Enterprise Law 2020 is fully recorded in the register of shareholders.

The company must register the change of shareholders in the shareholder register at the request of the relevant shareholder within 24 hours from the date of receipt of the request as prescribed in the company charter.

5. Regulations on inheritance and donation of shares

Pursuant to Clauses 3, 4, 5, Article 127 of the Enterprise Law 2020, then:

  • In case a shareholder being an individual dies, the heir under the will or law of such shareholder becomes a shareholder of the company.
  • In case an individual shareholder dies without an heir, the heir refuses to receive the inheritance or is deprived of the right to inherit, the shares of such shareholder shall be settled according to the provisions of civil law.
  • Shareholders have the right to donate part or all of their shares in the company to other individuals or organizations; use shares to pay off debt.
  • Individuals and organizations that are given or received debt repayment by shares will become shareholders of the company.
  • Share transfers are a fundamental aspect of the modern business landscape, enabling ownership changes in companies and shaping their destiny. Whether through market transactions, off-market deals, or inheritance, share transfers influence corporate governance, shareholder wealth, and overall market dynamics. Understanding the intricacies of share transfers is crucial for investors, businesses, and stakeholders seeking to navigate the complexities of the financial world.

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The world of finance and business is a complex ecosystem where ownership of companies can change hands through a process known as share transfer. This critical mechanism allows individuals, institutions, and entities to buy, sell, or exchange ownership stakes in a company, influencing its governance, profitability, and overall direction. This article serves as a comprehensive guide to share transfers, shedding light on their significance, methods, and implications. Please feel free to contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for legal advice and support.

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