Circular No. 116/2020/TT-BTC guiding on public company governance

Shares of a public company that have not been fully paid for shall not be transferable

On December 31, 2020, the Ministry of Finance promulgates the Circular No. 116/2020/TT-BTC guiding a number of articles on public company governance as prescribed in the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020, on detailing and guiding the implementation of a number of articles of the Law on Securities.

In the charter of a joint-stock company, its shareholders shall be granted certificates of stocks in proportion to their number of shares and types of stocks. All shares shall be freely transferred except other regulations prescribed in charter of the public company and other law regulations. Transfer of listed stocks or stocks registered for trading in Stock Exchange shall comply with law on securities and securities market.

Shares that have not been fully paid for shall not be transferable and not be entitled to the relevant rights such as the right to receive the dividend, the right to receive issued stocks to increase equity capital from own capital, the right to buy new offered shares and other rights in accordance with law.

If the payment for buying stocks has not been paid up fully and on time by shareholders, the Board of Directors shall notify and have the right to require them to pay the rest and be liable in proportion to the total par value of shares registered to be purchased for financial obligations of the company arising due to such payment. The number of shares that are not paid for will be withdrawn.

The Circular takes effect on February 15, 2021.

For further details of the Circular 116/2020/TT-BTC, Click here