Well-prepared professional General Shareholders Meeting will help a company enhance its image and boost corporate trust and value in the eye of investors, customers and partners, and raise the quality of corporate governance - investor relations. To have a successful General Shareholders Meeting, a company must pay attention to the following issues.

Pre-meeting

Listing eligible shareholders: According to Article 8, Decree 71/2017/ND-CP, a public company must publish the information about the list of shareholders who have the right to participate in the General Shareholders Meeting at least 20 days before the record date or the deadline for registration instead of 10 days as previously specified. Thus, a company will have 35-40 days to prepare for the meeting since the official public announcement, longer than previous years. In case it fails to organize the meeting within four months from the end of the fiscal year, it is obliged to file procedures to competent authorities for permission to extend the gathering.

Sending meeting invitations: According to Clause 1, Article 137 of the Law on Enterprises, “The list of shareholders entitled to attend the General Shareholders Meeting shall be prepared no earlier than five days prior to the date of sending of the meeting invitations to the General Shareholders Meeting unless a longer period is provided in the Company Charter. This is a good corporate governance practice to make shareholders early informed of the meeting time and venue soon after the record date for making the shareholder list. Then, shareholders can prepare for attending the meeting, particularly for institutional investors and foreign investors - which are increasingly playing a big role in the Vietnamese stock market. The company is recommended to add website link to the letter to refer shareholders to all meeting documents, and have contact information for them to fulfil meeting requirements like suggesting meeting contents and agenda, nominating candidates to the Board of Directors and the Supervisory Board.

Making meeting documents:

According to good corporate governance practices, documents should be fully disclosed as soon as possible before the opening of the meeting. According to the recommended Company Charter specified in the Circular 95/2017/TT-BTC of the Ministry of Finance, documents shall be officially disclosed 15 days prior to the meeting opening (versus 10 days in the Law on Enterprises) and recommended to be displayed in both Vietnamese and English texts to ensuring equal information access rights to domestic and foreign investors. If the meeting includes elections, the company needs to publicize nomination procedures. In case candidates are available, the list of candidates and their resumes must be published at least 10 days before the meeting opening.

Meeting

Check-in and vote counting: This year, with the impressive growth of the stock market and rising investor interests in corporate meetings, this is an opportunity for shareholders to exchange and dialogue with business leaders. The company needs to get prepared to welcome delegates, check their eligibility and count their votes at the meeting. It can hire an independent entity for these activities to ensure the right order and transparency of the meeting.

Online meeting: To increase the shareholder attendance and remove geographical barriers, the company should boldly information technology and apply good global practices to the organization of the General Shareholders Meeting such as online meeting, live stream and live reportage of the meeting for shareholders to keep track of the meeting progress from anyplace they are.

Voting

According to Decree 71/2017/ND-CP, effective from August 1, 2017, and Circular 95/2017/TT-BTC on Company Charter - the model of governance regulations, which stipulates “internal regulations on corporate governance adopted by the Board of Directors and submitted to the General Shareholders Meeting for approval”, companies need to amend their Charter and Regulations from 2018.

Related party transactions: The company should regularly review transactions with related parties as per Article 162 of the Law on Enterprises and Article 26 of the Decree 71/2017/ND-CP to submit to the General Shareholders Meeting and to avoid possible legal risks.

New governance model selection: In case the company has no Supervisory Board as per Article 134 of the Law on Enterprises, it should pay attention to criteria of independent board members, organizational structure and personnel of the internal audit subcommittee under the Board of Directors.

The company needs the approval of the General Shareholders Meeting for these changes.

The time for convening an Annual General Meeting of Shareholders is specified in Clause 2, Article 136 of the Law on Enterprises - Competence to convene the General Meeting of Shareholders: “The General Meeting of Shareholders shall hold an annual meeting within four months from the end of the financial year. At the request of the Board of Directors, the business registration agency may extend that time limit, but not beyond six months from the end of the financial year.”

The company shall send the request for extension to the Department of Planning and Investment for approval.

In case the Annual General Meeting of Shareholders is not convened in time, the company may face the following fines:

- According to Point a, Clause 1 and Point a, Clause 3 of Article 34, Decree 50/2016/ND-CP on penalties for administrative violations against regulations on planning and investment.

  + A fine of VND5,000,000 - VND10,000,000 shall be imposed for failure to hold the annual General meeting of shareholders by the deadline:

  + Remedial measures: Hold the annual the Annual General Meeting of Shareholders in case of the violation specified in Point a Clause 1 of this Article.

- According to Clause 12, Article 1, Decree 145/2016/ND-CP on amendments to the government’s Decree No. 108/2013/ND-CP on penalties for administrative violations against regulations on securities and securities market

“A fine of from VND70,000,000 to VND100,000,000 shall be imposed for any of the violations against regulations of the law on company management with respect to rights of shareholders, standing for election, nomination, voting and dismissal of members of Board of Directors, and members of Control Board, the composition of the Board of Directors, convening and holding meetings, and approval for decisions made at the General Meeting of Shareholders, decisions of the Board of Directors and those of the Control Board, transactions made with relevant persons or with shareholders, members of Board of Directors, members of Control Board, Director or General Director, other managers and persons related to them.”

What contents are subject to the convention of a physical General Shareholders Meeting, not a postal ballot?

According to the Article 143, Law on Enterprises 2014 - Forms of passing resolutions of the General Meeting of Shareholders:

1. The General Meeting of Shareholders shall pass resolutions which fall within its power by voting in the meeting or collecting written opinions.

2. Unless otherwise provided by the Company Charter, a resolution of the General Meeting of Shareholders on the following matters shall be adopted by voting at the General Meeting of Shareholders:

a) Amendment and supplement to the company charter;

b) The development orientation of the company;

c) Types of shares and the total number of shares of each type;

d) Appointment, discharge or removal from office of members of the Board of Directors and Supervisory Board;

dd) Decisions on investments or sale of assets valued at equal to or more than 35% of the total value of assets recorded in the latest financial statement of the company, unless a smaller percentage or value is provided in the company charter;

e) Approval of annual financial statements;

g) Reorganization or dissolution of the company.

Our company will elect the new Board of Directors and the Supervisory Board. Shareholder A authorized to present 10% of stake and he uses this ground to declare his candidacy to the new Board of Directors. Is he lawful to do so?

According to Article 140, the Law on Enterprises 2014 - Exercise of the right to attend the General Meeting of Shareholders. A shareholder may attend in person or authorize in writing another person to attend the General Meeting of Shareholders by one of the methods provided in Clause 2 of this Article.

Thus, Shareholder A can only receive authorization to attend the meeting, not base on it to declare candidacy to the Board of Directors.

He can run a candidacy to the Board of Directors if he fulfils conditions specified in Clause 4, Article 114 of the Law on Enterprises 2014 - Rights of ordinary shareholders and the Company Charter:

“Unless otherwise provided in the company charter, the nomination of candidates to the Board of Directors and the Supervisory Board provided at Point a, Clause 2 of this Article shall be carried out as follows:

a) Ordinary shareholders who form a group to nominate candidates to the Board of Directors and the Supervisory Board shall notify the group formation to attending shareholders before the opening of the General Meeting of Shareholders;

b) Based on the number of members of the Board of Directors and the Supervisory Board, the shareholders or group of shareholders provided in Clause 2 of this Article have the right to nominate one or more candidates to the Board of Directors and the Supervisory Board as decided by the General Meeting of Shareholders.

If the number of candidates nominated by shareholders or group of shareholders is lower than the number of candidates they are entitled to nominate as decided by the General Meeting of Shareholders, the remaining candidates shall be nominated by the Board of Directors, the Supervisory Board and other shareholders.”

Besides, a candidate needs to submit a number of required papers: 

- Candidacy application form; 

- Resume; 

- Meeting minutes of shareholder group

- Stock certificate; 

- Personal identity papers

- Qualification papers (if any). 

A shareholder or a group of shareholders have the right to convene an extraordinary shareholder meeting to elect or dismiss the Board of Directors and the Supervisory Board. Does such shareholder or group of shareholders need evidence of violation of the Board of Directors/Supervisory Board?

According to Clause 3, Article 114 of the Law on Enterprises 2014 - Rights of ordinary shareholders “A shareholder or a group of shareholders holding 10 % of the total ordinary shares for a consecutive period of at least 6 months or more, or holding a smaller percentage provided in the Company Charter has the right to request convening of a General Meeting of Shareholders in the following cases:

a) The Board of Directors commits a serious breach of the rights of shareholders or obligations of managers or issues a decision which falls outside its assigned competence;

b) The term of the Board of Directors has expired for more than 6 months and no new Board of Directors has been elected to replace it;

c) Other cases as provided in the Company Charter.

The request shall be made in writing, containing full name, permanent residence address, citizenship, serial number of citizen or people’s identity card or passport or another valid personal identification paper, for an individual shareholder; name, enterprise identification number or serial number of establishment decision and head office address, for an institutional shareholder; number of shares and time of registration of shares of each shareholder, total number of shares of the group of shareholders and the percentage of ownership in the total number of shares of the company; and grounds and reasons for the request. The request shall be accompanied by documents and evidence on the violation of the Board of Directors and its seriousness, or on the decision which falls outside its competence.”

Besides, according to the Article 136 of the Law on Enterprises - Competence to convene the General Meeting of Shareholders, after the shareholder or the group of shareholders hold the right to request the extraordinary assembly of shareholders and above documents to the Board of Directors, the Supervisory Board and relevant parties, the Board of Directors shall convene the General Meeting of Shareholders within 30 days.

If the Board of Directors fails to convene this meeting, within the following 30 days, the Supervisory Board shall replace the Board of Directors in convening the meeting. If the Supervisory Board fails to convene this meeting as well, the requesting shareholder or group of shareholders has the right to represent the company to convene this extraordinary meeting.

In this case, the law does not specify whether the shareholder/group of shareholders needs to send meeting notice or documents or not.

From the deadline for shareholders to send postal votes, how long does it take to count votes and make public the Resolution and Minutes of the General Meeting of Shareholders?

The Article 145 of the Law on Enterprises specifies competence and procedures for collecting written opinions in postal ballot in order to pass resolutions of the General Meeting of Shareholders but does not stipulate the deadline for this activity.

Unless otherwise provided by the Company Charter, the competence and procedures for collecting written opinions in order to pass the Resolution of the General Meeting of Shareholders shall be implemented in accordance with the following provisions.

The Board of Directors may collect written opinions in order to pass the Resolution of the General Meeting of Shareholders at any time if considered necessary in the interests of the company.

On vote counting, Clause 8, Article 145 of the Law on Enterprises specifies that “The minutes of results of counting of votes shall be sent to shareholders within 15 days from the date the counting of votes ends. For a company that has a website, the sending of minutes of results of vote counts may be replaced by posting them on the website of the company.”

On the disclosure of vote counting, Point c, Clause 1, Article 9 of Circular 155/2015/TT-BTC states that a public company must make an extraordinary disclosure of information within 24 hours of the occurrence of the event: Passing of a decision of the General Meeting of Shareholders (including a resolution of the General Meeting of Shareholders, meeting minutes or minutes of vote counting (in the case of obtaining written opinions of shareholders via postal ballot.”

Understanding concerns of listed companies about hosting a successful General Meeting of Shareholders with the fact that shareholders live across the country, FPT Securities Joint Stock Company (FPTS) launched an advisory package for General Meeting of Shareholders with the modern technology solution, EzGSM - Online General Meeting of Shareholders.

The solution, launched in early 2016, promises to bring many practical benefits to companies during the shareholder meeting season.

During the meeting season, many businesses are worried by difficulties and obstacles in organizing their meetings. Individual shareholders will find it hard to attend the meeting and raise the opinions on corporate decisions.

Without enough quorum, their first meetings will fail. The cost for meetings will be therefore increased.

And, they will make mistakes and omissions in spite of spending much time and personnel on this work, e.g. sending letters to shareholders, authorization, and cumulative vote counting.

In addition, they may face the risk that the resolution of the General Meeting of Shareholders will be canceled by the court due to errors in the order and procedures of the meeting.

And, they will make mistakes and omissions in spite of spending much time and personnel on this work, e.g. sending letters to shareholders, authorization, and cumulative vote counting although businesses spend a lot of time and manpower to organize the meeting, there may still be many errors and mistakes in sending letters to shareholders, authorizing, counting votes and voting (cumulative votes).

An online meeting of shareholders will be a new solution to this matter. This is also a good management practice that has been widely applied in the world. Grasping this trend, FPT Securities Joint Stock Company (FPTS) launched a consulting service for Online General Meeting of Shareholders powered by leading-edge technological solution called EzGSM. EzGSM brings many practical benefits to the company:

Firstly, EzGSM enables shareholders anywhere to log in and register for attendance before the meeting is held and the company to know in advance the number of attendants to prepare appropriate facilities for the event.

In case of absence, with EzGSM, they can cast their vote and ballot online or authorize others to represent them to exercise their rights at the meeting. This special feature will help increase the percentage of attending shareholders and the chance of success of the meeting.

Secondly, using the EzGSM solution in combination with the EzSearch Online Portal, shareholders can exchange (via the Internet) with the company on voting-related and other issues raised at the meeting before they make voting decisions. This utility helps the company answer its shareholders completely and keep shareholders from getting upset in exchanging with the company given limited meeting timeframe.

Thirdly, EzGSM supports the Organizing Board to register the meeting attendance for shareholders, always control attendance registrations and meeting authorizations.

EzGSM can update voting issues, candidates to the Board of Directors/Supervisory Board. This feature is especially effective when there are more issues to be voted than initially expected. EzGSM automatically checks the validity of votes to get rid of errors and omissions in vote counting and quickly and accurately produces reports on vote counting results to ensure the most accurate ratios for the company.

Fourthly, professional consultants will be present in the course of meeting to provide necessary supports such as answering issues relating to the legal order and procedures of the meeting, making and reviewing meeting documents, supporting information disclosure procedures following the meeting.

FPTS is the first Vietnamese company to research and develop the EzGSM solution - Online General Meeting of Shareholders, staffed by a strong force professional consultants knowledgeable about corporate governance who will help the company organize the successful General Meeting of Shareholders in the most effective, professional and economical manner.

FPTS has successfully advised on general shareholder meetings for various listed companies or large-scale public companies like VPBank, Bao Minh Corporation, Agribank Jewelry JSC, Sabeco, Tien Phong Plastic JSC, Becamex IJC and Casumina among many others.

An online shareholder meeting will help shareholders and the company save a lot of time and costs. To be able to apply this innovative method, the company needs to prepare the following things:

This form of gathering is essentially provided in the Company Charter, corporate governance regulations, organizational regulations, voting and election rules of online shareholder meeting.

If the company lacks facilities for an online meeting, it may hire an entity to provide online voting and proxy system and may use advice from consultants for a more effective and professional shareholder meeting.

U.S. laws allow companies to hold general meetings of shareholders by direct physical gathering and mixed use of internet and other forms for remote meeting/voting.

And, the Tokyo Stock Exchange has an online voting system, which allows domestic and foreign investors to vote online at Japanese companies. Currently, over 2,000 listed companies have joined this system of the Tokyo Stock Exchange.

In Vietnam, Clause 2, Article 140 of the 2014 Law on Enterprises provides:

Shareholders shall be considered attending and voting at the General Meeting of Shareholders in the following cases:

a/ Attending in person and directly voting at the meeting;

b/ Authorizing another to attend and vote at the meeting;

c/ Attending and voting by video conferencing or another electronic forms of meeting;

d/ Sending the vote to the meeting by mail, fax or e-mail.

No laws require companies to provide financial support (travelling, accommodation, etc.) for shareholders to attend the General Meeting of Shareholders. Therefore, shareholders cover these expenses themselves.

In order to ensure shareholders' rights and ensure meeting success, especially for companies with a lot of shareholders living in different places, they are recommended to open the meeting in a place where a majority of shareholders can attend or organize in different places as per Clause 1, Article 136 of the Law on Enterprises 2014 - Competence to convene the General Meeting of Shareholders:

“The annual General Meeting of Shareholders must take place at least once a year. In addition to the annual meeting, the General Meeting of Shareholders may meet on an extraordinary basis. The venue of a meeting of the General Meeting of Shareholders must be within the territory of Vietnam. If a meeting of the General Meeting of Shareholders is organized at various locations at the same time, the venue of the meeting of the General Meeting of Shareholders shall be determined as the venue where the chairperson attends.”

In addition, according to good corporate governance practices, they can apply information technology to open the General Meeting of Shareholders (online gathering, electronic voting) to reduce costs, increase convenience for shareholders, raise the chance of meeting success right from the first organization. This content has been specified in Clause 2, Article 140 - Exercise of the right to attend the General Meeting of Shareholders - of the 2014 Law on Enterprises:

“Shareholders shall be considered attending and voting at the General Meeting of Shareholders in the following cases:

a/ Attending in person and directly voting at the meeting;

b/ Authorizing another to attend and vote at the meeting;

c/ Attending and voting by video conferencing or another electronic forms of meeting;

d/ Sending the vote to the meeting by mail, fax or e-mail.”

According to Article 11, Decree 71/2017/ND-CP on guidelines on corporate governance of public companies - Nomination of members for the Board of Directors:

“When the candidates for the Board of Directors have been identified, the information related to them must be published at least 10 days before the opening day of the General Meeting of Shareholders on the website of the company so that shareholders can find out about the candidates before voting. The candidates of the Board of Directors must have written commitments to provide truthful, accurate and reasonable information and to perform the tasks honestly, faithfully, cautiously and in the best interest of the company if elected as members of the Board of Directors. Information related to the candidates of the board of directors to be published must include at least:

a) Name, date of birth

b) Professional qualifications;

c) Work experience;

d) Other information (if any) specified in the Company Charter.

A public company must ensure that shareholders can access the information about the companies in which the candidates are members of the Board of Directors or managers and other interests related to the companies of the candidates (if any)

Regulations on nomination of members of the Supervisory Board are similar.

Therefore, in the Invitation to the Meeting sent by a registered mail to shareholders, the company should specify the address path/link to meeting documents plus resumes of candidates to the Board of Directors/Supervisory Board (if available).

Our company wants to save the cost of sending invitations to the shareholder meeting, is it legal to send an emailed invitation to a shareholder meeting?

According to Clauses 2, 3, 4, Article 139 of the Law on Enterprises 2014 - Invitation to the General Meeting of Shareholders

“2. The invitation shall be sent by a method guaranteeing it to reach the contact address of shareholders; and at the same time posted on the website of the company and published on a central or local daily, if it is deemed necessary as provided in the Company Charter.

3. The invitation shall be enclosed with the following documents:

a/ Meeting agenda, documents used in the meeting and draft resolutions on each of the items on the agenda;

b/ Voting slip;

c/ Form of appointment of an authorized representative to attend the meeting.

4. If the company has its website, the sending of meeting documents in accordance with Clause 3 of this Article may be substituted by posting on its website. In such case, the meeting invitation must clearly indicate where and how to download the documents and the company shall send the meeting documents to shareholders if so requested.

As such, it is not legal to only send the invitation to the shareholder meeting by email and publish the invitation on the website of the company.

To reduce the cost, the company can upload meeting documents on its website and provide accurate paths to such documents in the invitation letter sent by registered mail to its shareholders.

According to Clause 1 and Clause 3, Article 137 of the Law on Enterprises 2014, the list of shareholders entitled to attend the General Meeting of Shareholders shall be prepared based on the register of shareholders of the company. Shareholders have the right to inspect, look up, extract and copy the list of shareholders entitled to attend the General Meeting of Shareholders; to request correction of wrong information or addition of necessary information about themselves in this list.

The managers of the company shall provide timely information on the register of shareholders, amend and supplement the erroneous information at the request of the shareholders; at the same time shall compensate for the damages incurred due to the failure to provide or to provide untimely or inaccurate information on the register of shareholders as requested. The order and procedures for requesting provision of information on the register of shareholders must comply with the provisions in the Company Charter.

According to Clause 18, Article 4 of the Law on Enterprises 2014, managers of the company include chairperson of the Board of Directors, member of the Board of Directors, director or general director and persons holding other managerial positions who are competent to enter into the company’s transactions on its behalf in accordance with the Company Charter.

However, the order of procedures for information provision is regulated in the Company Charter.

Therefore, to help shareholders to exercise their rights and avoid dispute risks, the Company Charter necessarily has specific provisions on whether shareholders can perform the right to inspect, search, extract and copy the list of shareholders entitled to attend the General Meeting of Shareholders in specific cases.

The Law on Enterprises 2014 does not specify this case. In case the Meeting resolution which includes the election result of the new Board of Directors, is annulled, in our opinion, the outgoing Board of Directors should convene the new Meeting. If the Board of Directors does not convene, the Supervisory Board will do this. If the Supervisory Board does not convene, the shareholders will do it. According to Clause 2, Article 114 of the Law on Enterprises 2014, a shareholder or a group of shareholders holding 10% of the total ordinary shares for a consecutive period of at least 6 months or more, or holding a smaller percentage provided in the Company Charter can request convening the Meeting.

As the Law does not specify in detail, the Company Charter should cover possible cases that may appear.

And, how will the company legally treat a shareholder who authorized other persons to represent his/her rights at the Meeting but comes to the Meeting under the authorization of other persons?

According to Article 140, the Law on Enterprises 2014, a shareholder may attend in person or authorize in writing another person to attend the Meeting but it does not restrict the presence of such shareholder to attend the meeting on other behalf. Thus, the Company should conduct Meeting procedures for him/her.

According to Article 139, Law on Enterprises 2014, the invitation shall be sent by a method guaranteeing it to reach the contact address of shareholders and at the same time posted on the website of the company and published on a central or local daily, if it is deemed necessary as provided in the Company Charter.

The invitation shall be enclosed with the following documents:

a) Meeting agenda, documents used in the meeting and draft resolutions on each of the items on the agenda;

b) Voting slip;

c) Form of appointment of an authorized representative to attend the meeting.

If the company has its website, the sending of meeting documents may be substituted by posting on its website. In such case, the meeting invitation must clearly indicate where and how to download the documents and the company shall send the meeting documents to shareholders if so requested.

- Article 140 of the Law on Enterprises 2014 stipulates the exercise of shareholder rights to attend the meeting and online voting via web-conference, electronic voting or other electronic forms. Thus, the company can choose online shareholder meeting (authorization, voting, online election) but the law does not have specific instructions to apply this form. Hence, the company needs to prepare the following:

+ Specify this content in the Company Charter, corporate governance regulations, regulations on organization of the General Meeting of Shareholders, online election/voting regulations (authorization, voting, online election)

+ Hire a professional consultant to provide online authorization and voting/election system and consult on online meeting procedures.

The current Board of Directors is outgoing. May disagreements and conflicts among shareholders (groups of shareholders) lead to the case that the General Meeting of Shareholders cannot elect the new Board of Directors? In such a case, will the outgoing Board continue to be in office? When will the duty of this Board be over?

In fact, many cases may lead to this reality, for example, internal conflicts within the company and conflicts of interests among (groups of) shareholders, no convention of the General Meeting of Shareholders; insufficient quorum, the postponement or suspension of the General Meeting of Shareholders according to Article 142 of the Law on Enterprises 2014, etc.

According to Clause 3, Article 150 of the Law on Enterprises 2014, “3. If all members of the Board of Directors terminate their term of office at the same time, they shall continue to act as members of the Board of Directors until new members are elected and take over their work, unless otherwise provided in the Company Charter.” As such, the outgoing Board of Directors (whose term has expired) will have to convene a General Meeting of Shareholders to elect a new Board of Directors.

In case the Board of Directors does not convene the General Meeting of Shareholders, the Supervisory Board shall replace the Board of Directors to convene the meeting. In case the Supervisory Board fails to convene the General Meeting of Shareholders, shareholders or groups of shareholders as stipulated in Clause 2, Article 114 of the Law on Enterprises 2014 shall do this (A shareholder or a group of shareholders holding 10% of the total ordinary shares for a consecutive period of at least 6 months or more, or holding a smaller percentage provided in the Company Charter has the right to request the convening of a General Meeting of Shareholders.

The Law on Enterprises cannot specify in detail every possible situation that arises in reality. Thus, the company should give specific provisions on the responsibility of the Board of Directors in the Company Charter or Corporate Governance Regulations to have solutions to deal with such situations in reality.

The Company Charter of my insurance company that stipulates that some voting contents at the General Meeting of Shareholders will be adopted only when at least 80% of shares with voting rights is in favor? Is it contrary to the law?

According to Clauses 1 and 2, Article 144 of the Law on Enterprises 2014 - Conditions for the approval of resolutions: A resolution on the following contents shall be adopted when approved by a number of shareholders representing at least 65% of the total votes of all attending shareholders; the specific percentage shall be provided in the Company Charter:

For that reason, your company’s provision on 80% of voting shares is under the law.

We spend almost two hours to count votes at the General Meeting of Shareholders last year. Is there any automated vote counting system on the market? How does it work and how much does it cost? In the event that a big company has many shareholders with complex relations and conflicts and they usually send their representatives to count every vote cast at the meeting, will this system face any difficulty in deployment?

Currently, there are some machines/systems that perform attendance registration, vote casting, vote counting, and vote statement. They function quickly and accurately at a relatively reasonable cost.

To have the best meeting outcome, your company should choose the product delivered by a professional unit which can also provide valuable support and advice during the meeting such as the order and procedure of the meeting, reporting materials, settlement of emerging issues in situ, advice for changes of the Company Charter, information disclosure, stock dividend payment or stock offering, stock depository and listing, etc.

If your company has complicated, divided shareholders who often send their own representatives to check every ballot at each meeting, this system (software plus an expert support team) not only helps your company save time and ensure accuracy in vote counting but also increases transparency and publicity of vote counting conducted by a third party or intermediary, ensure the order and procedure of the meeting, thus minimizing the risk of emerging disputes and having a successful assembly.

How is the voting ratio counted at the General Meeting of Shareholders (on the votes counted or on the voters counted)? Who does the company contact for a meeting delay?

Many shareholders leave the meeting before the voting time. How is the voting ratio counted (on the latest votes counted or on the original votes registered)?

According to Clause 1 and Clause 2, Article 144 of the Law on Enterprises 2014 - Conditions for the approval of resolutions: A resolution of the General Meeting of Shareholders shall be adopted when approved by a number of shareholders representing at least 65% or 51% of the total votes of all attending shareholders.

Thus, the voting ratio is calculated on the number of all the votes of all attending shareholders (votes for + votes against + blank votes + invalid votes + uncast votes).

Clause 3, Article 136 of the Law on Enterprises 2014 - Competence to convene the General Meeting of Shareholders says “The General Meeting of Shareholders shall hold an annual meeting within four months from the end of the financial year. At the request of the Board of Directors, the business registration agency may extend that time limit, but not beyond six months from the end of the financial year.

Clause 8, Article 142 of the Law on Enterprises 2014 - Procedures for conducting and voting at the General Meeting of Shareholders says “The meeting chairperson may adjourn to another time the General Meeting of Shareholders for which sufficient attendees have registered under regulations or to change the venue of the meeting in the following cases:

a) The venue of the meeting does not have sufficient comfortable seating for all the attendees;

b) Means of communication at the venue fail to ensure the participation, discussion, and voting by all attending shareholders;

c) An attendee obstructs the meeting or disrupts order, with a risk that the meeting might not be conducted fairly and legally.

The maximum time for any adjournment of a meeting is three days from the date of the intended opening of the meeting;

Besides, the company should conduct information disclosure (to SSC, VSD and Exchanges if it is listed or on its website) about changing, extending or delaying the General Meeting of Shareholders as well as the schedule for the meeting.

Does a newly listed company have to ask shareholders for approval if the Chairman of the Board of Directors is also the General Director? Does the Board need to have an independent member? What are the criteria for this title?

1. According to Clause 1, Article 153 of the Law on Enterprises 2014, the chairperson of the Board of Directors may concurrently be the director or director general of the company unless the company is a joint stock company in which the State owns 51% or more of the total number of voting shares or otherwise specified in the Company Charter and other law on securities.

According to Article 12 of the Decree 71/2017/ND-CP“The Chairperson of the Board of Directors must not take over the position as the Director of the same public company.” This rule takes effect on August 1, 2020.

Thus, the Chairperson of the Board of Directors must not take over the position as the Director of the same public company from August 1, 2020.

2. According to Clause 1, Article 134 of the Law on Enterprises 2014, a joint stock company is entitled to choose to organize its management and operations after one of the two following models: Have the Supervisory Board or not have the Supervisory Board. If there is no Supervisory Board, at least 20% of the members of the Board of Directors must be independent members.

The Law on Enterprises 2014 does not specify that, in case the company chooses a model that has the Supervisory Board, whether it needs independent members of the Board of Directors or not. However, according to Article 13, Decree No. 71/2017/ND-CP, the composition of the Board of Directors must be balanced between executive members and non-executive members. At least a third of the members of Board of Directors are non-executive members. At least a third of the members of the Board of Directors of a listed company are independent members.

The current law does not provide for the content and form of voting cards at the General Meeting of Shareholders. However, according to Clause 5, Article 142 of the Law on Enterprises 2014 - Procedures for conducting and voting at the General Meeting of Shareholders, unless otherwise specified by the Company Charter, the General Meeting of Shareholders shall discuss and vote on each issue in the agenda of the meeting.

Voting shall be conducted by collecting voting cards which agree with the resolution, then collecting voting cards which disagree, and finally counting the numbers of votes which agree, which disagree, and abstentions.

Thus, the company should have specific provisions in the Company Charter and regulations on meeting, voting and ballot form. In addition, the company should publish its voting form on the website (as per Clauses 3 and 4, Article 139 - Invitation to the General Meeting of Shareholders of the Law on Enterprises 2014) for shareholders to consult and contribute ideas prior to the opening of the meeting. Voting cards should have three voting options: aye, nay and not voting.

According to Article 138 of the Law on Enterprises 2014 - Agenda and contents of the General Meeting of Shareholders, if the major shareholder or group of shareholders recommends items to be included in the agenda of the General Meeting of Shareholders. The recommendation shall be made in writing and sent to the company no later than three working days prior to the date of opening, unless the company charter stipulates another time limit. The chairperson should accept and prepare the ballot form according to the opinions of shareholders.

In the event that these shareholders recommend this matter right at the venue of the General Meeting of Shareholders, according to Clause 4, Article 142 of the Law on Enterprises 2014 - Procedures for conducting and voting at the General Meeting of Shareholders, the meeting chairperson has the right to take necessary and reasonable measures to direct the conduct of the meeting in an orderly manner, complying with the approved agenda and reflecting the wishes of the majority of attendees.

Therefore, the chairman will consider recommendations from shareholders based on the Company Charter, organizational rules, and voting rules approved by the General Meeting of Shareholders for a more successful, productive meeting.

According to Clause 1, Article 140 of the Law on Enterprises 2014 - Exercise the right to attend the General Meeting of Shareholders, a shareholder may attend in person or authorize in writing another person to attend the General Meeting of Shareholders by one of the methods provided in Clause 2 of this Article. An institutional shareholder which has not yet had an authorized representative pursuant to Clause 4, Article 15 of this Law shall authorize another person to attend the General Meeting of Shareholders.

The authorization for a representative to attend the General Meeting of Shareholders shall be made in writing according to the form issued by the company. Any person authorized to attend a General Meeting of Shareholders shall submit his/her authorization letter when making registration before entering the meeting room.

Therefore,

- An individual shareholder may make an authorization in the form issued by the company when he/she authorizes another person to represent him/her at the General Meeting of Shareholders.

- In case an institutional shareholder has already appointed a proxy to represent at the meeting as per Article 15 of the Law on Enterprises 2014, the proxy does not have to have an authorization.

- In case the institutional shareholder has not appointed a proxy as per Article 15 of the Law on Enterprises 2014, it may authorize a person to attend the General Meeting of Shareholders using the form provided by the company.

The authorization of an institutional shareholder must have the full name and signature of the legal representative or the authorized representative of such entity as per Clause 3, Article 86 of the Civil Code 2005 - Civil legal capacity of a legal entity.

To avoid disputes arising from invalid authorization, the Company Charter necessarily specifies form of authorization, cases of invalid authorization. In addition, the company should utilize modern technologies for shareholder meetings such as online conferencing, authorization, electronic voting or other electronic forms to facilitate its shareholders to exercise the right and cast vote at the shareholder meeting.

The current Law on Enterprises only stipulates that “General Meeting of Shareholders elects one or several persons into the Vote Counting Board at the request of the chairperson of the meeting”, not specifying the composition of the Vote Counting Board. Many joint stock companies thus do not know how to select qualified personnel for the Vote Counting Board when they open the General Meeting of Shareholders.

According to Point d, Clause 2, Article 142 of the Law on Enterprises 2014 - Procedures for conducting and voting at the General Meeting of Shareholders, “The General Meeting of Shareholders shall elect one or a number of persons to the vote counting committee at the proposal of the meeting chairperson.”

The law does not have specific provisions on the number, conditions and criteria of members of the Vote Counting Board. Therefore, before conducting the General Meeting of Shareholders, the Organizing Committee needs to make an estimate of personnel for the Vote Counting Board to have a successful meeting.

The Company Charter and internal company regulations necessarily specify conditions and methods for voting members of the Vote Counting Board as well as rights and procedures of the Vote Counting Board. The identity of members of the Vote Counting Board should be disclosed at the General Meeting of Shareholders and recorded in the minutes of the General Meeting of Shareholders.

The company should encourage the election of independent members to the Vote Counting Board such as representatives of minority shareholders. In some necessary cases, the company should appoint an independent organization (lawyers, auditors and professional providers of AGM services) to collect and oversee votes. Having an independent member in the Vote Counting Board will make shareholders feel confident that the Vote Counting Board will perform its duties fairly and transparently. In order to ensure that the Vote Counting Board will performs its functions independently of the Director/General Director, the Board of Directors and the Board of Management, the following persons should not be installed into the Vote Counting Board:

+ Member of the Board of Directors and candidates to the Board of Directors;

+ Members of the Board of Management;

+ People who are related to the above persons.

Mr. A is a shareholder of Company B. He makes a petition to Company B for not being delivered the Invitation Letter to the Annual General Meeting of Shareholders (AGM) of the Company and does not accept its express delivery note as an evidence of sending the Invitation Letter and other documents of the meeting on fears of forged signatures, insufficiently detailed contents and no charges stated. Therefore, he files a lawsuit, requesting the court to cancel the Resolution of the Annual General Meeting of Shareholders. Is his lawsuit lawful?

According to Clause 2, Article 139 of the Law on Enterprises 2014 - Invitation to the General Meeting of Shareholders, “The invitation shall be sent by a method guaranteeing it to reach the contact address of shareholders; and at the same time posted on the website of the company and published on a central or local daily, if it is deemed necessary as provided in the Company Charter.

Therefore, Mr. A can file a complaint or sue the company for failing to ensure his shareholder rights, failing to comply with the order and procedures of organizing the General Meeting of Shareholders.

Some recommendations for the sending of the invitation to the General Meeting of Shareholders:

In addition to directly sending invitations to its shareholders, the company should:

- Announce the Meeting invitation and documents on its website;

- Send email and SMS messages to inform shareholders of the invitation to the Meeting;

- Check feedbacks on whether its shareholders have received the Meeting invitation and documents or not;

- Retain the evidence certified by the courier that the shareholder has received the Meeting invitation.

According to Article 140 of the Law on Enterprises 2014 - Exercise of the right to attend the General Meeting of Shareholders, “a shareholder may attend in person or authorize in writing another person to attend the General Meeting of Shareholders by one of the methods provided in Clause 2 of this Article. An institutional shareholder which has not yet had an authorized representative pursuant to Clause 4, Article 15 of this Law shall authorize another person to attend the General Meeting of Shareholders.

The authorization for a representative to attend the General Meeting of Shareholders shall be made in writing according to the form issued by the company. Any person authorized to attend a General Meeting of Shareholders shall submit his/her authorization letter when making registration before entering the meeting room.”

Therefore, to avoid the above case, the Organizing Committee of the General Meeting of Shareholders should pay attention to the following issues:

- Include attendance requirements in the Meeting Invitation (identification card, invitation letter, authorization, etc.) and solutions to cases of ineligibility;

- Clearly state proxy duties

- Use electronic means such as software to support electronic voting for physically absent shareholders to cast their vote and give their opinions on important corporate issues.

In its regulations on the order and procedures for convening and voting at the General Meeting of Shareholders, the company should specify the maximum time for attendance registration so as to make a public announcement on meeting failure because there are not enough shareholders representing enough voting shares to make the proceedings of the meeting valid.

The company should follow some suggestions below in the first gathering:

- Update shareholder information

- Contact major shareholders to invite to them to attend the meeting.

- Use electronic mediums such as software to support electronic voting to enable physically absent shareholders to exercise their rights and cast vote.

- Support shareholders to authorize the Board of Directors to exercise their rights in case they cannot attend the meeting.

- In case of unsuccessful first meeting, the company necessarily informs its shareholders of the agenda and time for the next meeting, with the same procedures as in the first attempt.

Is it obligatory that the company discloses the list of shareholders at the venue of the meeting? If yes, what information should be included in the list?

The current law does not require the disclosure of the list of shareholders at the venue of the meeting and the company is not obliged to do this. According to Article 137 of the Law on Enterprises 2014, the company should pay attention to comply with the order and procedures below:

1. The list of shareholders entitled to attend the General Meeting of Shareholders shall be prepared based on the register of shareholders of the company. The list of shareholders entitled to attend the General Meeting of Shareholders shall be prepared no earlier than five days prior to the sending of the meeting invitation to the General Meeting of Shareholders, unless a longer period is provided in the Company Charter.
2. The list of shareholders entitled to attend the General Meeting of Shareholders must include the full name and permanent residence address, citizenship and serial number of citizen or people’s identity card or passport or another valid personal identification paper, of each individual shareholder, and the name, enterprise identification number or serial number of establishment decision and head office address of each institutional shareholder; and the number of shares of each type, and the number and date of registration of each shareholder.
3. Shareholders have the right to inspect, look up, extract and copy the list of shareholders entitled to attend the General Meeting of Shareholders; to request correction of wrong information or addition of necessary information about themselves in this list. The managers of the company shall provide timely information on the register of shareholders, amend and supplement the erroneous information at the request of the shareholders; at the same time shall compensate for the damages incurred due to the failure to provide or to provide untimely or inaccurate information on the register of shareholders as requested. The order and procedures for requesting provision of information on the register of shareholders must comply with the provisions in the Company Charter.

At a meeting, at the discussion time, the chairperson asks shareholders if they have questions and recommendations after listening to reports represented. Questions must be registered in advance and sent to the Secretariat. However, shareholders disagree with this and want to raise questions directly at the meeting. Is this request reasonable?

According to Point a, Clause 1, Article 114 of the Law on Enterprises 2014 - Rights of ordinary shareholders, “An ordinary shareholder has the right to attend and express opinions at the General Meeting of Shareholders and to exercise the right to vote directly or through an authorized representative or in other forms provided by law or the company charter. Each ordinary share must carry one vote."

Therefore, their request to this effect is reasonable.

Therefore, when compiling the agenda of the General Meeting of Shareholders, the convener of the General Meeting of Shareholders - the Board of Directors - should arrange sufficient time for shareholders to speak, exchange and raise ask questions as well as have sufficient time for people concerned (Board of Directors, Supervisory Board, Executive Board, independent auditor, etc.) to answer and provide information to shareholders.

In March 2016, a listed company announced its plan for organizing the Annual General Meeting of Shareholders (AGM) at the end of April 2016. In mid-April 2016, the Board of Directors sent a dispatch to the Department of Planning and Investment, the State Securities Commission, and the Stock Exchange on extending the time of organizing the meeting because a group of shareholders holding more than 35% of total voting shares announced that they could not attend the meeting in the given date. The Board of Directors announced to convene a new meeting with its date and venue later.

Is this extension consistent with the law?

According to Clause 2, Article 136 of the Law on Enterprises 2014 - Competence to convene the General Meeting of Shareholders:

“The General Meeting of Shareholders shall hold an annual meeting within four months from the end of the financial year. At the request of the Board of Directors, the business registration agency may extend that time limit, but not beyond six months from the end of the fiscal year.”

Thus, in the above case, the Board of Directors is right to send a written request for extension of the meeting to the business registration agency, namely the Department of Planning and Investment.

In the above situation, it is reasonable for the Board of Directors to extend the General Meeting of Shareholders because it has already received a notice of failure of attendance by a group of major shareholders who own more than 35% of voting shares.

The first, second or third convention of the General Meeting of Shareholders depends on conditions for conducting the meeting. According to Article 141 of Law on Enterprises - Conditions for conducting the General Meeting of Shareholders, “The General Meeting of Shareholders shall be conducted if the number of attending shareholders represents at least 51% of the total votes; the specific percentage shall be provided in the Company Charter.”

After being extended, the meeting will fail again if it cannot gather 51% or more of the total shares with voting rights.

In the world, there are two types of online shareholder meeting in practice:

- Complete online: The meeting takes place entirely in cyberspace. No physical partners are needed (no face-to-face meetings between shareholders). This form is also known as Virtual Shareholder Meeting where shareholders and business leaders use advanced information technology and the Internet to attend the meeting wherever they are. Shareholders listen and watch company leaders’ presentations and ask questions online (via chat tools), cast vote online in real time (via shareholder identification and password system granted to each shareholder).

- Partial online: The General Meeting of Shareholders is held at a specific location, attended by shareholders and entitled to cast vote online (using the shareholder identification and password granted to each shareholder) and track the meeting (via live web-conferencing).

In Vietnam, FPTS, a pioneer in providing online meeting solutions, hosts partially online annual shareholder meetings, held at a specific location, combined with online voting. However, watching the real-time meeting is not available for the time being. For that reason, no company has ever held a truly online shareholder.

The Law on Enterprises 2014 allows companies to apply information technology to open online shareholder meetings, using electronic voting and elections.

How is an individual entitled to authorize a proxy to the General Meeting of Shareholders? Can he/she authorize more than one person?

According to Clause 1, Article 140 of the Law on Enterprises 2014 - Exercise of the right to attend the General Meeting of Shareholders:

“A shareholder may attend in person or authorize in writing another person to attend the General Meeting of Shareholders by one of the methods provided in Clause 2 of this Article.”

An institutional shareholder which has not yet had an authorized representative pursuant to Clause 4, Article 15 of this Law shall authorize another person to attend the General Meeting of Shareholders.

The authorization for a representative to attend the General Meeting of Shareholders shall be made in writing according to the form issued by the company.

Any person authorized to attend a General Meeting of Shareholders shall submit his/her authorization letter when making registration before entering the meeting room.”

Thus, an individual is entitled to authorize only one person to attend the meeting.

According to Point a, Clause 1, Article 114 of the Law on Enterprises 2014 - Rights of ordinary shareholders, an ordinary shareholder has the rights to attend and express opinions at the General Meeting of Shareholders and to exercise the right to vote directly or through a proxy or in other forms provided by law or the Company Charter. Each ordinary share must carry one vote.

Clause 2, Article 4 of the Law on Enterprises 2014, says that a shareholder means an individual or organization that holds at least one share of a joint stock company.

Thus, a shareholder, even owning only one share, has the right to attend and vote at the General Meeting of Shareholders.

Shareholders are protected by the law. If their rights are infringed, they can completely claim their rights. On the day of the General Meeting of Shareholders, they have the right to come, request the attendance and voting to the organizing committee under the law. If they are prevented from exercising their rights, they can muster together to discuss and send a request to the Board of Directors.

They can join together to file a lawsuit against the Board of Directors as per Article 161 of the Law on Enterprises 2014 - Right to initiate lawsuits against members of the Board of Directors, Director or Director General

They can also file a request to the court or arbitration, demanding revision and revocation of the whole or a part of the resolution of the General Meeting of Shareholders under the order and procedures of convening a meeting and making decisions of the General Meeting of Shareholders according to Clause 1, Article 147, Law on Enterprises 2014.

According to Point m, Clause 2, Article 149 of the Law on Enterprises 2014, the Board of Directors has the right to approve the agenda and contents of documents for the General Meeting of Shareholders; to convene the General Meeting of Shareholders or to solicit written opinions for the General Meeting of Shareholders to pass decisions.

If the Board of Directors failed to reach a consensus and could not elect its chair, in case the deadline for convening the General Meeting of Shareholders is over (Clause 2, Article 136 of the Law on Enterprises 2014 - Competence to convene the General Meeting of Shareholders, the General Meeting of Shareholders shall hold an annual meeting within 4 months from the end of the financial year. At the request of the Board of Directors, the business registration agency may extend that time limit, but not beyond 6 months from the end of the financial year), the Supervisory Board may convene on behalf of the Board of Directors. In case the Supervisory Board does not convene the Meeting, the shareholder who owns 10% of the company’s shares upwards for six consecutive months or other ratios provided by the Company Charter will stand out to convene the Meeting as per Clause 5 and Clause 6, Article 136 of the Law on Enterprises 2014.

According to Clause 1, Article 140 of the Law on Enterprises 2014 - Exercise the right to attend the General Meeting of Shareholders, a shareholder may attend in person or authorize in writing another person to attend the General Meeting of Shareholders by one of the methods provided in Clause 4 of this Article. An institutional shareholder which has not yet had an authorized representative pursuant to Clause 4, Article 15 of this Law shall authorize another person to attend the General Meeting of Shareholders. Any person authorized to attend a General Meeting of Shareholders shall submit his/her authorization letter when making registration before entering the meeting room.

According to Clause 1, Article 140 of the Law on Enterprises 2014, there are two types of authorization: Regular authorization (authorization of capital representation) and case-specific authorization.

Regular authorization is prescribed in Article 15 of the Law on Enterprises 2014:

1. The authorized representative of an institutional owner, member or shareholder must be an individual authorized in writing by such owner, member or shareholder to exercise or perform in the latter’s name the rights or obligations prescribed by this Law.

2. Unless otherwise provided by the Company Charter, the appointment of an authorized representative must comply with the following provisions:

• An organization that is a member of a limited liability company with two or more members holding at least 35% of its registered capital may authorize a maximum of three representatives;
• An organization that is a shareholder of a joint stock company holding at least 10% of the total number of ordinary shares may authorize a maximum of three representatives.

3. In case an institutional owner, member or shareholder appoints more than one authorized representative, the specific contributed capital amount or number of shares represented by each representative shall be specified. In case an owner or a member or shareholder does not specify the contributed capital amount or number of shares represented by each authorized representative, the contributed capital amount or number of shares shall be evenly distributed to the number of appointed authorized representatives.

The appointment of an authorized representative shall be made in writing, notified to the company and only be effective to the company from the date the company receives the notice.

Thus, an institutional shareholder which owns more than 10% of the total ordinary shares is entitled to authorize up to three proxies to the General Meeting of Shareholders. However, the law does not specify the number of proxies in case it holds less than 10% of the total number of ordinary shares of the company. Therefore, to be clear, the Company Charter should specify the number of proxies allowed in case its institutional shareholder owns less than 10% of the total ordinary shares of the company.

The second type is case-specific authorization. Where an institutional shareholder has no proxy that meet the above regulations, it can appoint another person to attend the meeting or cast vote at the General Meeting of Shareholders as per Clause 1, Article 140 of the Law on Enterprises 2014.

Given the indifference of the majority of shareholders (not attending the General Meeting of Shareholders), a group of shareholders are able to intervene deeply in the company’s operations.

At this year's General Meeting of Shareholders, three reports are not ratified by the shareholders, namely Audited Annual Financial Statements, Reports by the Board of Directors and the Supervisory Board, and Business Plan.

This has happened because this is the third convention of the Meeting, attended by shareholders holding nearly 10% of voting shares in total. A group of shareholders owning 5% of voting shares vote “no opinion”, resulting in this failure.

After the meeting, the Board of Directors must prepare documents of the General Meeting of Shareholders and re-convene the General Meeting of Shareholders to ratify key issues that decide business operations and development orientation of the company.

Thus, with only 5% of the voting shares plus the unconcern of a majority of shareholders (not attending the General Meeting of Shareholders), a group of shareholders is able to intervene deeply in the company’s business activities. In order to address this reality, the company needs to pay attention to the following issues to facilitate other shareholders to attend the meeting:

- Update information of all shareholders.

- Contact major shareholders to invite them to the General Meeting of Shareholders.

- Use electronic methods such as software to support online voting so that shareholders who cannot attend the meeting can still vote.

- Support shareholders to authorize the Board of Directors in case shareholders cannot attend the General Meeting of Shareholders in person.

According to Clause 2, Article 140 of the Law on Enterprises 2014 - Exercise of the right to attend the General Meeting of Shareholders, shareholders shall be considered attending and voting at a meeting of the General Meeting of Shareholders in the following cases:

a) Attend and directly vote at the meeting;

b) Authorize another to attend and vote at the meeting;

c) Attend and vote by video conferencing or another form of meeting;

d) Send the vote to the meeting by mail, fax or e-mail.

As such, companies can organize online shareholder meeting and conduct electronic voting.

Shareholders are provided with username and password to access the website to download documents, exercise the right to vote, send questions, exchange opinions with the Board of Directors and company leadership (before and during the General Meeting of Shareholders) or view meeting outcomes as well as meeting progress.

Online shareholder meeting and electronic voting is a good corporate governance practice in the world as it helps save cost and time for shareholders and companies, increase attendance and ensure the shareholder rights.

The information disclosure of listed companies and large-scale public companies is clearly defined in Chapter 2 and Chapter 3 of Circular 155/2015/TT-BTC on information disclosure on securities market, effective from January 1, 2016.

- Quarterly financial statements: A listing organization or a large-scale public company must, within 20 days from expiry of a quarter, make a disclosure of its quarterly financial statements. A delay in the disclosure of financial statements shall be approved by the State Securities Commission of Vietnam (SSC) but the time limit cannot be more than 30 days from the end of the reported quarter.

- Semi-annual financial statements: A listing organization or a large-scale public company must disclose the reviewed semi-annual financial statements within five days from the date on which the auditing organization signs on such statements but the disclosure timing may not exceed 45 days from the end of the reported period. A deadline extension for making consolidated financial statements shall be approved by the State Securities Commission of Vietnam (SSC) but the time limit cannot be more than 60 days from the end of the reported quarter.

- Annual financial statements: Public companies, including listed companies, must disclose the audited annual financial statements within 10 days from the date on which the auditor signs on such statements but the disclosure timing may not exceed 45 days from the end of the reported period. A deadline extension for making consolidated financial statements shall be approved by the SSC but the time limit cannot be more than 10 days from the end of the reported fiscal year.

In order to facilitate companies to consolidate their financial statements, the SSC will consider allowing them to send a one-time dispatch and request an extension for all financial statements announced in the year.

- Annual report: A public company must prepare an annual report according to Appendix No. 04 issued together with Circular 155/2015/TT-BTC and disclose such report within 20 days from the date of disclosing the audited annual financial statements but the final deadline cannot exceed 120 days from the end of the reported fiscal year. Financial information in the annual report must be consistent with audited annual financial statements.

The new annual report form stated Circular 155/2015/TT-BTC includes sustainability reporting to enhance corporate responsibility to the social environment and match with international practices.

Before the company discloses its quarterly financial statements, some of its executives estimates good earnings in a given period on its website and/or in the media (when they are interviewed). However, this realized profit in the financial statements is much lower than the estimate and even negative, causing stock prices to decline and investors to suffer investment loss. Is this a behavior of stock price manipulation or is information disclosure or corporate governance problematic?

The current law does not specify the act of manipulating stock price and the definition of “pricing” practices depends on competent authorities.

In this regard, the official information of the company must be disclosed via the following means:

+ According to the Article 5 of the Circular 155/2015/TT-BTC on information disclosure on the stock market, the means include:

- Company website,

- Information disclosure system of the State Securities Commission;

- Website of the Stock Exchange;

- Other mass media according to the law (printed newspaper, electronic newspaper, etc.)

+ CBT implementers (in accordance with Article 4 of Circular 155/2015 / TT-BTC - CBT implementers): the organization must fulfill its CBTT obligations through 01 legal representative or 01 individual authorized by the CB of that organization.

Therefore, the information disclosed from the media, who are not under the authority, investors should consider when making investment decisions.

In the aspect of Enterprises, Enterprises should develop regulations and procedures of Information Security which ensure that shareholders have the right to equal access to information, transparency, and a plan to deal with Information Security situations. rumors, bad information affecting stock prices ...) and especially there are instructions, paying attention to the speech of influential leaders.

+ Person in charge of information disclosure: An organizational entity must perform the obligation to disclose information via one legal representative or one individual acting as the person authorized to disclose information about such organization (Article 4, Circular 155/2015/TT-BTC).

Thus, investors should be careful with information disclosed via other channels.

What is regulation on information disclosure and what does it include? Does the company have to submit it to the General Meeting of Shareholders for approval?

According to Clause 1, Article 33 of Decree No. 71/2017/ND-CP on information disclosure, “A public company must formulate and issue regulations on publishing information of the company in compliance with the Law on Securities and guiding documents.”

The information disclosure regulation is the company’s internal document consisting of principles, regulations and processes for information disclosure on the stock market as per the Law on Enterprises, the Law on Securities and their guiding documents (e.g. Circular No. 155/2015/TT-BTC on guidelines for information disclosure on the stock market).

At present, there is no document specifying what is included in the information disclosure regulation.

The information disclosure regulation shall be built and issued by the Board of Directors as per Point l, Clause 2, Article 149 of the Law on Enterprises 2014 - Authority of the Board of Directors: Decide on the organizational structure and internal management regulations of the company, to decide on the establishment of subsidiaries, the establishment of branches and representative offices and the capital contribution to or purchase of shares from other enterprises.

According to Clause 3, Article 158 of the Law on Enterprises 2014 - Remuneration, wages and other benefits of members of the Board of Directors, the Director or Director General, and Article 31 of Decree 71/2017/ND-CP - Information Disclosure on the Income of the Director (General Director): The salary of the Director (General Director) and other company executives must be shown separately in the annual financial statements of the company and reported at the Annual General Meeting of Shareholders.

According to Clause 18, Article 4 of the Law on Enterprises 2014, “Managers of a company mean managers of a company and managers of a private enterprise, including owner of a private enterprise, general partner, chairperson of the Members’ Council, member of the Members’ Council, president of a company, chairperson of the Board of Directors, member of the Board of Directors, Director or General Director and persons holding other managerial positions who are competent to enter into the company’s transactions on its behalf in accordance with the Company Charter.”

Thus, in addition to reporting operating expenses and other benefits of the Board of Directors, the Supervisory Board, the company needs to report the salary of the Director (General Director) and other executives in annual financial statements and at the Annual General Meeting of Shareholders.

A joint stock company must comply with procedures for conducting the General Meeting of Shareholders and disclose information under the Law on Enterprises.

- Under the Article 139 of the Law on Enterprises 2014 - Invitation to the General Meeting of Shareholders:

1. The convener of the General Meeting of Shareholders shall send a meeting invitation to all shareholders on the list of shareholders entitled to attend the meeting no later than 10 days prior to the date of opening, unless a longer time limit is provided in the company charter. The meeting invitation must include name, head office address, enterprise identification number; name, permanent residence address of shareholder, time and venue of the meeting, and other requirements of participants.

2. The invitation shall be sent by a method guaranteeing it to reach the contact address of shareholders; and at the same time posted on the website of the company and published on a central or local daily, if it is deemed necessary as provided in the Company Charter.

3. The invitation shall be enclosed with the following documents:

a. Meeting agenda, documents used in the meeting and draft resolutions on each of the items on the agenda;

b. Voting slip;

c. Form of appointment of an authorized representative to attend the meeting.

4. If the company has its website, the sending of meeting documents in accordance with Clause 3 of this Article may be substituted by posting on its website. In such case, the meeting invitation must clearly indicate where and how to download the documents and the company shall send the meeting documents to shareholders if so requested.

- According to Clause 2, Article 171 of the Law on Enterprises 2014 - Disclosure of information of a joint stock company:

The joint stock company shall disclose on its website (if any) the following information:

a. Company charter;

b. Curriculum vitae, educational qualifications and working experience of members of the Board of Directors, supervisors and director or director general of the company;

c. Annual financial statements approved by the General Meeting of Shareholders;

d. Annual operation evaluation reports of the Board of Directors and the Supervisory Board.

Thus, a joint stock company still has to disclose the above information to its shareholders on its website although it is not a public company.

If the shareholder does not receive the invitation to the meeting and the company’s website does not disclose concerned information, he/she can contact the company to request information. In addition, he/she can actively refer to websites of intermediary financial institutions to update more information if necessary.

According to Point n, Clause 1, Article 9 of the Circular 155/2015/TT-BTC - Disclosure of extraordinary information, a public company must disclose extraordinary information within 24 hours from which it changes, appoints, reappoints or dismisses an insider.

Within three working days from the date of disclosure of information about such change, appointment, reappointment or dismissal, the company shall send to the State Securities Commission or the Stock Exchange in the place where it conducts listing or registration of trading a curriculum vita of the new insider (if applicable) in accordance with Appendix 3 of this Circular.

In addition, the company should pay attention to the deadline and forms of information disclosure on insider change according to relevant regulations imposed by the Stock Exchange where it lists registers its shares for trading.

The company needs to state insider changes to tax authorities within ten days from the date of such change as per Article 8 of Decree No. 83/2013/ND-CP on information changes and additions to tax registration. At the same time, it registers changes of its legal representative in the Business Registration Certificate with the Department of Planning and Investment where the company is headquartered.

In case the insider of a public company (e.g. the general director) registers a purchase of shares but he/she resigns during the registered transaction time and he/she is no longer an insider (e.g. resigning as the general director), does he/she have to report on the transaction result?

According to Clause 3, Article 28 of Circular 155/2015/TT-BTC, if after registering a transaction, the entity which conducted registration of the transaction is no longer an insider of a public company, an insider of a public fund or an affiliated person of such entities, such entity must still make a report and disclosure of information under the law.

Thus, the General Director has to report on his/her share trading result within three days from the date of completing the transaction.

Company A has just been equitized and become a public company. It does not print material stock certificates for shareholders but it wants to manage its shareholder register electronically. Is it lawful?

According to Clause 1, Article 120 of the Law on Enterprises 2014, a share certificate means a certificate issued by a joint stock company, a book entry or electronic data certifying the ownership of one or more shares of such company. Article 121 of this law also stipulates that a joint stock company shall make and maintain a register of shareholders from the date it is granted the enterprise registration certificate. The register of shareholders may be in the form of a document or an electronic file, or both.

Thus, the law allows Company A to manage the shareholder register electronically. This is also a good practice for the company to manage its shareholder register easily, the share custody with the Vietnam Securities Depository (VSD).

According to Clauses 2c and 2d, Article 5 - Information Disclosure of the Circular 155/2015/TT-BTC, organizations being entities disclosing information must set up an electronic information site in accordance with the following provisions:

Electronic information sites must have the contents regarding business lines and the contents required to be publicly announced on the national enterprise registration information portal in accordance with the Law on Enterprises and any changes relating to such contents, and have a separate shareholder relationship column (investors) which must disclose the Company Charter, internal administration rules (if any), prospectus (if any) and information to be disclosed on a periodical or extraordinary basis or on request in accordance with this Circular. Electronic information sites must display the time of publication of information, and concurrently must ensure that it is easy for investors to search and access data on such sites.

In addition, as per Clause 3, Article 3 - Principles of information disclosure of the Circular 155/2015/TT-BTC, the entity subject to information disclosure is responsible to preserve and archive reported and disclosed information in accordance with the following provisions:

- Periodically disclosed information must be archived in document [written] form (if applicable) and in the form of electronic data for at least ten (10) years. Such information must be archived on the electronic information site of the entity disclosing information for at least five years;

- Extraordinarily disclosed information or requested information must be archived on the electronic information site of the entity disclosing information for at least five years.

Therefore, if shareholders cannot look up information on the company’s website and have evidence for this matter, they can file a complaint to the SSC at their wish.

In this case, the company will be imposed penalties as per Article 33 - Violation of regulations on information disclosure - Part 13 of Decree 108/2013/ND-CP on administrative sanctions in securities and securities market, ranging from a warning to a fine of VND 10-100 million, in addition to remedy measures.

To avoid being fined for breach of information disclosure regulations that may frustrate shareholders, take a dear price, affect its prestige and image, the company may consider hiring an intermediary company to do this on its behalf or it should seriously invest in technical infrastructure, network and website and personnel to do this work.

Where a court judgment or verdict has been made on a dispute of members of the Board of Directors concerning the company's operations, the company must disclose an extraordinary information within 24 hours after receiving such judgement or verdict as per Point p, Clause 1, Article 9 of the Circular 155/2015/TT-BTC on information disclosure on securities markets.

- Where there is a decision on prosecution, detainment and criminal liability of an insider.

- Where there are other events that greatly affect the company’s business operations or management.

According to Clause 4, Article 11, Circular 155/2015/TT-BTC, when a listing organization or a large-scale public company discloses information about the financial statements stated in Clauses 1, 2 and 3 of this Article, it must also explain the reason(s) upon occurrence of one of the following cases:

a. The profit after corporate income tax stated in the report on business performances in the reporting period fluctuates by 10% or more in comparison with the report in the same reporting period of the previous year;

b. The after-tax profit in the reporting period suffers a loss; or profit is carried forward from the previous reporting period to the current reporting period or vice versa;

c. The accumulated data and results of business activities from the beginning of the year in the report on results of business activities in the financial statements for the second quarter already disclosed in comparison with the verified semi-annual financial statements; or in the financial statements for the fourth quarter already disclosed in comparison with the audited annual financial statements show a difference of 5% or more; or loss is changed into profit or vice versa;

d. Data and results of business activities in the report on results of business activities in the reporting period show a difference of 5% or more between before and after auditing or verification.

The law does not specify how specific the company’s explanations are.

Investors and shareholders, to ensure their rights, can directly contact the company (e.g. information disclosure officer, legal representative and Board of Directors) to request a more detailed explanation.

The explanation for the financial statements is specified in Circular No. 155/2015/TT-BTC on information disclosure on the stock market and regulations on information disclosure at the stock exchanges.

1. Notes by the auditor:

Pursuant to Point g, Clause 1, Article 9 of Circular 155: The public company must disclose information, within 24 hours, concerning opinions which are not fully accepted by the auditor for the financial statements;

Pursuant to Point b, Clause 1, Article 8 of Circular 155: The public company must publish annual financial statements and auditing reports together with its written explanations in case the auditor does not accept the whole text of the financial statements.

Pursuant to Clauses 2 and 3, Article 11 of Circular 155: A listing organization or a large-scale public company must disclose reviewed semi-annual financial statements and quarterly financial statements (if audited) together with written explanations in case the notes by the auditor are unsatisfactory.

2. Explanations on business results stated in financial statements:

Pursuant to Clause 4, Article 11 of Circular 155: When disclosing the financial statements (quarterly, semi-annual and annual), a listing organization or a large-scale public company must also explain the reason(s) upon occurrence of one of the following cases:

• The company’s profit after tax in the income statement of the reporting period changes from 10% or more over the same period of the preceding year;
• Profit after tax in the reporting period suffered a loss; or profit transferred from the previous period is at a loss in this period or vice versa;
• Accumulated figures and business results from the beginning of the year in the business results report in the announced second-quarter financial statements compared with the reviewed semi-annual financial statements; or in the published fourth quarter financial report compared to the audited annual financial statements with the difference of 5% or more; or transfer from loss to profit or vice versa;
• The figures and results of business activities in the report on business results in the reporting period have differences before and after the audit or review of 5% or more.

In addition, pursuant to Clause 2, Article 7 of the Regulation on Information Disclosure at the Hochiminh Stock Exchange (HOSE) and Point a, Clause 1, Article 11 of the Regulation on Information Disclosure at the Hanoi Stock Exchange (HNX), a large-scale public company shall list and explain business data and performance results according to Points c and d, Clause 4, Article 11 of Circular 155/2015/TT-BTC based on earnings and revenue targets in the income statement.

Currently, according to the law, executives of listed companies (Board members, executives, etc.) must disclose information about share trading results. As per Article 28 of the Circular 155/2015/TT-BTC - Disclosure of information on transactions of insiders of public companies, insiders of public funds and affiliated persons of insiders, at least three working days prior to trading, any insider of a public company, any insider of a public fund or an affiliated person of such entities must make an information disclosure and a report to the State Securities Commission (SSC) and the Stock Exchange. Within three working days of completion of the transaction (if the transaction is completed prior to the time-limit for registration) or from expiry of the proposed trading period, they must make a report to the SSC and the Stock Exchange.

Disclosed information includes the number of shares expected to be traded, the method and purpose of transaction (Appendix 10 - Circular 155/2015/TT- BTC). There is no provision on disclosure of expected bid prices. Therefore, when making transactions, they do not have to disclose this information.

Thus, the act of the company’s executives is lawful.

- The Board of Directors is elected by the General Meeting of Shareholders and acts on behalf of the shareholders to run the company. Its rights and obligations are stipulated in the Law on Enterprises and the Company Charter as well. The board is not only responsible to the company and its shareholders but is also obliged to work for the best interests of its shareholders. Therefore, the Board must be responsible for stock price fluctuations in the market and ensure that the stock is properly valued in the long term.

- The Board of Management or the Executive Board, appointed by the Board of Directors, is responsible to the Board of Directors and to the Law for executing its rights, tasks and obligations. The main task of the management is running day-to-day business of the company, carrying out business plans as per resolutions of the Board of Directors and the General Meeting of Shareholders. To do this work well, the Executive Board necessarily ensures shareholder interests and hold responsibility to stock price fluctuations to build up shareholder trust and investor community.

Good corporate governance is a matter that concerns many companies because a good practice will improve business performance, expand access to capital market, reduce capital costs, improve the company's reputation.

According to Clause 1, Article 7 of the Decree 71/2017/ND-CP on corporate governance applicable to public companies - Internal regulations on corporate governance, internal regulations on corporate governance must be drafted by the board of directors and submitted to the general assembly of shareholders for approval. Internal regulations on corporate governance must not violate the regulations of law and Company Charter.

In case the company does not formulate mandatory internal regulations, it will be subject to administrative penalty as per Article 11 of the Decree 108/2013/ND-CP dated September 23, 2013 and Clause 12 Article 1 of the Decree No. 145/2016/ND-CP dated November 1, 2016 on amendments and supplements to the Decree 108/2013/ND-CP on fines on administrative violations in the field of securities and securities market.

Thus, in addition to the Company Charter, public companies are responsible for issuing corporate governance regulations to ensure its compliance with the law.

According to Article 7 of Decree No. 71/2017/ND-CP on corporate governance applicable to public companies - Internal regulations on corporate governance:

1. The internal regulation on corporate governance must be drafted by the Board of Directors and submitted to the General Meeting of Shareholders for approval. The regulation must not infringe on the law and the Company Charter.

2. The Ministry of Finance must provide a model of the internal regulation on corporate governance on which public companies can base to formulate their own ones

Thus, the internal regulation on corporate governance is mandatory for public companies. Specifically, according to Clause 4, Article 15 of the Decree No. 71/2017/ND-CP - Responsibility and obligations of the Board of Directors, making the internal regulation on corporate governance and submit to the General Meeting of Shareholders for approval as specified in the Article 7 of this Decree.

Does the joint stock company have to adapt to the new corporate governance model under the Law on Enterprises 2014? What models are applied?

Article 134 of the Law on Enterprises 2014 provides for the organizational and managerial structure of a joint stock company

A joint stock company is entitled to choose to organize its management and operations after one of the two following models unless otherwise prescribed by the law on securities:

1. The General Meeting of Shareholders, the Board of Directors, the Supervisory Board and Director or Director General. If a joint stock company has fewer than 11 shareholders and the institutional shareholders own less than 50% of the total number of shares of the company, the Supervisory Board is not compulsory;
2. The General Meeting of Shareholders, the Board of Directors and Director or Director General. In this case at least 20% of the members of the Board of Directors must be independent members and an Independent Auditing Board shall be required in the Board of Directors. The independent members shall supervise and control over the management and administration of the company.

The Law on Enterprises 2014 adds a new governance model and organizational structure for joint stock companies, enabling them to choose a model without a Supervisory Board (as prescribed in Point b).

According to Clause 1, Article 2 of the Decree 71/2017/ND-CP on corporate governance applicable to public companies:

1. Corporate governance is a system of rules that consists of:

- Ensuring proper organizational structure;

- Ensuring the effective operation of the board of directors and board of controllers

- Ensuring the interests for shareholders and related persons;

- Ensuring that all shareholders are treated fairly

- Making the information about the entire company’s operations publicly available

2. According to Article 7 of the Decree 71/2017/ND-CP:

- Internal regulations on corporate governance must be drafted by the Board of Directors and submitted to the General Meeting of Shareholders for approval. Internal regulations on corporate governance must not violate the law and the Company Charter.

- The Ministry of Finance must provide a model of internal regulations on corporate governance on which public companies can base to formulate their own ones

3. Internal regulations on corporate governance are the internal documents issued by the company, which provide rules on how to run and administer the company. The Ministry of Finance has not yet issued a guided model for internal regulations on corporate governance. However, based on the above principles, internal regulations on corporate governance may include the following main contents:

- Order and procedures for convening and voting at the General Meeting of Shareholders;

- Order and procedures for nominating, electing, and dismissing members of the Board of Directors;

- Order and procedures for organizing a meeting of the Board of Directors;

- Order and procedures for selecting, appointing and dismissing managers;

- Order and procedures for coordination of the Board of Directors, the Supervisory Board and the Executive Director (General Director);

- Regulations on annual evaluation of activities, commendation and discipline of members of the Board of Directors, members of the Supervisory Board, the Executive Director (General Director) and other managers;

- Procedures and procedures for the establishment and operation of subcommittees under the Board of Directors.

Unlike the internal regulation on corporate governance, the Company Charter is considered a “separate law” of a company established upon its business registration. The content of the Company Charter is stipulated in Article 25 of the Law on Enterprises 2014: Name and head office address and branches of the company; rights and obligations of members/shareholders; management and organizational structure; legal representative; procedures for adoption of company decisions; principles for settlement of internal disputes; principles of distribution of after-tax profits and handling of losses in business; cases of dissolution, procedures for dissolution and procedures for liquidation of company assets; etc.

The internal regulation on corporate governance thus specifies provisions of the Company Charter.

What are regulations of the Audit Committee? Is it necessary for an independent Board member to lead this committee?

According to Point b, Clause 1, Article 134 of the Law on Enterprises 2014 - Organizational and managerial structure of joint stock company: The joint stock company adopts the model of “The General Meeting of Shareholders, the Board of Directors and Director/Director General”. In this case at least 20 percent of the members of the Board of Directors must be independent members and an Independent Auditing Board shall be required in the Board of Directors. The independent members shall supervise and control over the management and administration of the company.

In addition, the Decree 71/2017/ND-CP on corporate governance applied to public companies also encourages companies, especially listed companies, to establish subcommittees to support the Board of Directors. Article 17 of this Decree says:

1. The Board of Directors of a listed company can establish teams to assist its operations including personnel and payroll management teams and other teams. The board needs to nominate one independent member among its members as the head of personnel and payroll management teams; the establishment of these teams must be approved by the General Meeting of Shareholders.

2. If the personnel and payroll management teams are not established, the Board of Directors can assign the independent members to assist it in the human resources, and payroll management activities.

3. The Board of Directors must specify in details the establishment of the teams and the duties of each of them, their members or the independent members in charge of human resources and payroll management.

Therefore, in case the company chooses the model with the Supervisory Board, the Board of Directors is not required to set up a subordinated Internal Audit Committee. Listed companies are recommended to adopt this good popular practice in the world. Accordingly, the Chairman of the Audit Committee should be an independent member of the Board of Directors and ideally this committee should consist of independent members of the Board of Directors.

The Audit Committee is responsible for accounting and policy issues, review of financial information, risk management, internal control and audit process, independent audit, and audit reports.

According to Clause 3, Article 86 of the Civil Code 2005 - The civil legal capacity of legal persons: The representative at law or the authorized representative of a legal person shall act in the name of the legal person in civil relations

According to Article 91 of the Civil Code 2005 - The representative of a legal person: The representative at law of a legal person shall be provided in the legal person’s charter or the decision on the establishment of the legal person.

As such, the legal representative or authorized representative is allowed to sign the contract on behalf of the company. However, the authority to sign a contract complies with the Law on Enterprises, the Company Charter, administrative regulations or legal documents of the Company.

In case the company has many legal representatives, those persons are allowed to sign contracts on behalf of the company. Therefore, the Company Charter should specify the quantity, title, rights and obligations of each legal representative under Clause 2, Article 13 of the Law on Enterprises 2014 - Legal representative of the enterprise.

According to the Clause 1, Article 25, Law on Enterprises 2014, the Company Charter must include the following key contents:

a) Name and head office address of the company; name(s) and address(es) of branch(es) and representative office(s), if any;

b) Business line;

c) Charter capital; total number of shares, types of shares and par value of shares of each type, for joint stock companies;

d) Full names, addresses, citizenships and other basic characteristics of all general partners, for partnerships; of the company owner or members, for limited liability companies; of founding shareholders, for joint stock companies; contributed capital amount and its value of each member, for limited liability companies or partnerships; number of shares, types of shares, par value of shares of each type of founding shareholders;

dd) Rights and obligations of members, for limited liability companies and partnerships; of shareholders, for joint stock companies;

e) Management and organizational structure;

g) At-law representative, for limited liability companies or joint stock companies;

h) Procedures for adoption of company decisions; principles for settlement of internal disputes;

i) Bases and method of determining remuneration, wages and bonuses for managers and supervisors;

k) Circumstances in which a member may request the company to redeem his/her/its contributed capital amount, for limited liability companies, or his/her/its shares, for joint stock companies;

l) Principles of distribution of after-tax profits and handling of losses in business;

m) Cases of dissolution, procedures for dissolution and procedures for liquidation of company assets;

n) Procedures for revision of the company charter.

According to Clause 3, Circular 95/2017/TT-BTC, public companies should refer to the standard form Charter set out in Appendix 1 to this Circular when formulating their own charter, ensuring compliance with the provisions of the Law on Enterprises, the Law on Securities, Decree 71/2017/ND/CP dated June 6, 2017 referred to above, and other current provisions of law.

The Company Charter is seen as a law of the company, which regulates all matters concerning organizational structure, administration and operation of the company, rights and obligations of shareholders, and internal dispute resolution among others.

The charter of a joint stock company is basically built on basic legal documents as the Law on Enterprises, the Law on Securities, the Law on Accounting, the Law on Investment and the Civil Code to avoid being conflicted with the current laws.