VI How many organizational founding shareholders must a securities company have? How many years must an organization operate profitably? What documents must a securities company provide of its organizational shareholders in its application for a license to establish and operate? Through today’s article, let’s learn about this issue with Pham Consult!
How many organizational founding shareholders must a securities company have?
Conditions on shareholder structure are stipulated in Clause 3, Article 74 of the 2019 Securities Law as follows:
Conditions for granting a License to establish and operate securities business of a securities company
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3. Conditions on shareholder structure, capital contributing members include:
a) There must be at least 02 founding shareholders, capital contributing members who are organizations. In case the securities company is organized in the form of a single-member limited liability company, the owner must be an insurance company or a commercial bank or a foreign organization that meets the provisions in Clause 2, Article 77 of this Law;
b) The total capital contribution ratio of organizations is at least 65% of the charter capital, in which organizations that are insurance companies and commercial banks own at least 30% of the charter capital.
Thus, according to the above provisions, a securities company must have at least 02 founding shareholders who are organizations.
How many years must a shareholder of a securities company be an organization that has profitable business operations?
According to Clause 2, Article 74 of the 2019 Securities Law, it is stipulated as follows:
Conditions for granting a License to establish and operate securities business of a securities company
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2. Conditions for shareholders and capital contributors include:
a) Shareholders and capital contributors are individuals who are not prohibited from establishing and managing enterprises in Vietnam according to the provisions of the Enterprise Law;
b) Shareholders and capital contributors are organizations that must have legal status and be operating legally; have profitable business operations for 02 consecutive years prior to the year of application for a license; the most recent financial statements must be audited with an unqualified opinion;
c) Shareholders and capital contributors owning 10% or more of the charter capital of a securities company and related persons of such shareholders and capital contributors (if any) do not own more than 5% of the charter capital of another securities company;
d) Shareholders and capital contributors who are foreign investors must satisfy the conditions specified in Article 77 of this Law.
Therefore, shareholders of a securities company that are organizations must have profitable business operations for 2 consecutive years prior to the year of application for a license; the most recent financial statements must be audited with an overall acceptance opinion.
What documents must a securities company provide of its organizational shareholders in its application for a license to establish and operate?
Pursuant to Article 176 of Decree 155/2020/ND-CP, the following provisions apply:
Documents for requesting the issuance or reissuance of a License to establish and operate securities business of a securities company or a securities investment fund management company
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5. List of shareholders and capital contributors according to Form No. 68 of the Appendix issued with this Decree, together with the following documents:
a) For individuals: personal information sheet according to Form No. 67 of the Appendix issued with this Decree; judicial records issued within 06 months from the date of submission of the dossier of founding shareholders and members who are individuals contributing more than 5% of the charter capital;
b) For organizations: Certificate of business registration or equivalent documents; Company charter; decision of the competent authority according to the Company charter on capital contribution to establish and appoint an authorized representative; personal information sheet of the authorized representative according to Form No. 67 of the Appendix issued with this Decree; Audited financial statements of the two consecutive years preceding the year of application for a license of the capital contributing organization. The capital contributing organization being the parent company must supplement the audited consolidated financial statements; the approval document of the State Bank of Vietnam for commercial banks, of the Ministry of Finance for insurance enterprises on capital contribution for establishment (if any);
c) Commitment document of the organization or individual on compliance with the provisions at Point c, Clause 2, Article 74 and Point c, Clause 2, Article 75 of the Law on Securities.
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Thus, for shareholders being organizations, securities companies must submit the following documents:
– List of shareholders according to Form No. 68 of the Appendix issued with Decree 155/2020/ND-CP
– Certificate of business registration or equivalent document; Company charter; decision of the competent authority according to the Company charter on capital contribution for establishment and appointment of authorized representative; Personal information of the authorized representative according to Form No. 67 of the Appendix issued with Decree 155/2020/ND-CP
– Audited financial statements of the 2 consecutive years preceding the year of the license application of the capital contributing organization.
Note: The capital contributing organization is the parent company must supplement the audited consolidated financial statements; the approval document of the State Bank of Vietnam for commercial banks, of the Ministry of Finance for insurance enterprises on capital contribution for establishment (if any).
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