VI When a public company issues shares to exchange capital contributions to a capital contributing member of a limited liability company, are the shares and the capital contributions not restricted from transfer at the time of exchange? When a public company issues shares to exchange capital contributions to a capital contributing member of a limited liability company, are the shares and the capital contributions not restricted from transfer at the time of exchange? Through today’s article, let’s find out about this issue with Pham Consult!
When a public company issues shares to exchange capital contributions to a capital contributing member of a limited liability company, are the shares and the capital contributions not restricted from transfer at the time of exchange?
Pursuant to Clause 3, Article 49 of Decree 155/2020/ND-CP, the following provisions are made:
Conditions for a public company to issue shares to exchange shares for shareholders of a non-public joint stock company, exchange capital contributions for capital contributing members of a limited liability company
1. There is a plan to issue shares for exchange approved by the General Meeting of Shareholders of the issuing organization.
2. The issued shares are restricted from transfer for at least 01 year from the date of completion of the issuance, except in cases where the transfer is made pursuant to a judgment or decision of a Court that has come into legal effect, an arbitration decision or inheritance in accordance with the provisions of law.
3. The shares and capital contributions to be exchanged are not restricted from transfer at the time of exchange in accordance with the provisions of the Company Charter and the provisions of law.
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According to regulations, the conditions for a public company to issue shares to exchange capital contributions for capital contributors of a limited liability company include that the shares and capital contributions exchanged are not subject to transfer restrictions at the time of exchange according to the provisions of the Company Charter and legal regulations.
Thus, if a public company issues shares to exchange capital contributions for capital contributors of a limited liability company, both the shares and capital contributions are not subject to transfer restrictions at the time of exchange.
Does a public company that issues shares to exchange capital contributions for capital contributors of a limited liability company need to report financial statements?
Pursuant to Clause 4, Article 49 of Decree 155/2020/ND-CP, the following provisions are made:
Conditions for a public company to issue shares to exchange shares for shareholders of a non-public joint stock company, exchange capital contributions for capital contributors of a limited liability company
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4. Have the most recent annual financial statements audited by an approved auditing organization of the company whose shares or capital contributions are exchanged. The auditor’s opinion on the financial statements is an opinion of full acceptance.
5. The issuance of shares for exchange must comply with the provisions on foreign ownership ratio as prescribed by law.
6. The exchange must ensure that it does not violate the provisions on cross-ownership of the Law on Enterprises.
7. Have the opinion of the National Competition Commission on economic concentration to be implemented or conditional economic concentration in case the exchange leads to economic concentration activities falling within the threshold of economic concentration that must be notified.
8. The interval between individual offerings and issuances must be at least 06 months from the date of completion of the most recent individual offering and issuance as prescribed in Clause 7, Article 48 of this Decree.
Accordingly, the condition for a public company to issue shares to convert capital contributions for capital contributors of a limited liability company is to have the most recent year’s financial statements audited by an approved auditing organization of the company whose shares or capital contributions are converted. The audit opinion on the financial statements is an opinion of full acceptance.
Thus, a public company issuing shares to convert capital contributions for capital contributors of a limited liability company must have the most recent year’s financial statements audited by an approved auditing organization of the capital contributions being converted.
What documents does a public company register to issue shares to convert capital contributions for capital contributors of a limited liability company include?
Accordingly, the dossier of a public company registering to issue shares to exchange capital contributions for capital contributing members of a limited liability company is stipulated in Article 50 of Decree 155/2020/ND-CP, including:
– Issuance registration form according to Form No. 11 of the Appendix issued with this Decree.
– Decision of the General Meeting of Shareholders of the issuing organization approving the issuance plan.
Which clearly states:
+ Purpose of issuance;
+ Number of shares expected to be issued;
+ List of investors;
+ Number of shares expected to be issued in exchange for each investor;
+ Method of determination and exchange rate.
People with interests related to the share issuance are not allowed to participate in voting.
– A written commitment from the organization or individual owning the converted capital contribution or a written confirmation from the legal representative of the converted capital contribution that the converted investor’s capital contribution is not subject to transfer restrictions.
– The most recent annual financial report audited by an approved auditing organization of the issuing organization or the converted capital contribution.
– A decision by the General Meeting of Shareholders or the Board of Directors (in case authorized by the General Meeting of Shareholders) approving the plan to ensure that the issuance of shares meets the regulations on foreign ownership ratio.
– A written commitment from the issuing organization to ensure that it does not violate the regulations on cross-ownership of the Enterprise Law.
– A document from the National Competition Commission on economic concentration to be implemented or conditional economic concentration in case the conversion leads to economic concentration activities falling within the threshold of economic concentration that must be notified.
– Documents providing information about the issuance to investors (if any).
– Decision of the Board of Directors approving the issuance registration dossier.
For the issuance of shares by a credit institution, the dossier must have a written approval from the State Bank of Vietnam on the proposal to increase charter capital in accordance with the provisions of the law on credit institutions.
For the issuance of shares by an insurance business organization, the dossier must have a written approval from the Ministry of Finance on the increase of charter capital in accordance with the provisions of the law on insurance business.
– The most recent annual financial report audited by an approved auditing organization of the issuing organization or the converted capital contribution.
– A decision by the General Meeting of Shareholders or the Board of Directors (in case authorized by the General Meeting of Shareholders) approving the plan to ensure that the issuance of shares meets the regulations on foreign ownership ratio.
– A written commitment from the issuing organization to ensure that it does not violate the regulations on cross-ownership of the Enterprise Law.
– A document from the National Competition Commission on economic concentration to be implemented or conditional economic concentration in case the conversion leads to economic concentration activities falling within the threshold of economic concentration that must be notified.
– Documents providing information about the issuance to investors (if any).
– Decision of the Board of Directors approving the issuance registration dossier.
For the issuance of shares by a credit institution, the dossier must have a written approval from the State Bank of Vietnam on the proposal to increase charter capital in accordance with the provisions of the law on credit institutions.
For the issuance of shares by an insurance business organization, the dossier must have a written approval from the Ministry of Finance on the increase of charter capital in accordance with the provisions of the law on insurance business.
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