Is it required to have a shareholder register when establishing a joint stock company?

My friend and I have established a joint-stock company. I have heard about the Shareholder register in the Joint-Stock Company and it is used to store information of the Shareholder. Is our company required to have the shareholder register? Shall our company be penalized if it doesn't have the Shareholder register? I hope that FDVN can advise me and respond to me soon.

FDVN’s opinion:

 [1]. Is the joint-stock company required to have a shareholder register?

According to Clause 1 Article 122 of the Law on Enterprises 2020:

“ 1. A joint stock company shall make and retain the shareholder register from the issuance date of the Certificate of Enterprise Registration. The shareholder register can be physical or electronic documents and contain information about the shareholders’ ownership of shares.”

So when you establish a company as the joint stock company, it is required to make and keep the shareholder register from the issuance date of the Enterprise Registration Certificate. The shareholder register may be paper documents or electronic data.

The shareholder register must contain the information under Clause 2 of this Article as follows:

• The company’s name and headquarters address;
• Total number of authorized shares, types of authorized shares and quantity of each type;
• Total number of sold shares of each type and value of share capital contributed;
• Full names, signatures, mailing addresses, nationalities and legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers and headquarters addresses of shareholders that are organizations;
• Quantity of each type of shares of each shareholder, date of share registration.

Besides, under Clause 3, 4, 5 Article 122 of the Law on Enterprises 2020, the shareholder register shall be retained at the company’s headquarters or another organization that is licensed to retain shareholder registers. Shareholders are entitled to inspect, access, extract names and addresses of the company’s shareholders from the shareholder register. In case a shareholder’s mailing address is changed, a notification shall be promptly sent to the company in order to update the shareholder register. The company is not responsible if a shareholder cannot be contacted due to the failure to notify the change of that shareholder’s mailing address. The company shall update changes of shareholders in the shareholder register as requested by relevant shareholders in accordance with company's charter.

 [2]. Administrative sanctions when the joint-stock company does not have the shareholder register

As analyzed above, if your company does not make and keep the shareholder register in accordance with the law, your company shall be administratively sanctioned with a fine of up to VND 15,000,000 as prescribed at Paragraph b, d, Clause 2, Article 34 of the Decree No. 50/2016/ND-CP on penalties for administrative violations against regulations on planning and investment, specifically:

 “Article 34. Violations against other regulations on organization and management of enterprises

2. A fine of VND 10,000,000 - VND 15,000,000 shall be imposed for any of the following violations:

b) Failure to make a member/partner/shareholder register;

…

d) Failure to retain documents at the headquarters or another location specified in the company’s charter.”

Furthermore, remedial measures shall be applied under Clause 3 Article 34 of this Decree:

“3. Remedial measures:

dd) Make a member/partner/shareholder register in case of the violation specified in Point b Clause 2 of this Article;

...

g) Regain documents in case of the violations specified in Point d Clause 2 of this Article.”

Above is FDVN Law Firm's opinion for your consulting requests based on studying the relevant legal provisions. Hopefully, FDVN's advice would be helpful to you.

Nguyen Thi Suong - FDVN Law Firm

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