What is a public company?

My company is a joint-stock company that mobilizes capital widely through the issuance of stocks (shares, bonds) listed at the Securities Trading Center or unlisted stocked assigned through securities brokerage institutions. My friend said that I have to register a public company but I am not sure about the conditions to become a public company and how to register it. I hope that FDVN can give me some advice soon.

FDVN’s opinion:

 [1]. Conditions for becoming a public company

According to Article 25 of the Law on Securities 2006 amended and supplemented in 2010 on public companies:

 “Article 25.Public companies

1. A public company is a joint-stock company that:

a/ Has already conducted the public offering of its stocks;

b/ Has its stocks listed at the Stock Exchange or the Securities Trading Center; or,

c/ Has its stocks owned by at least one hundred investors, excluding professional securities investors, and has a contributed charter capital of VND 10 billion or more.

2. Joint-stock companies defined at Point c, Clause 1 of this Article shall submit public company dossiers specified in Clause 1, Article 26 of this Law to the State Securities Commission within ninety days after they become public companies.”

Therefore, if a joint-stock company meets one of the above conditions, it is considered a public company.

 [2]. Public company registration

When the conditions of “Having its stocks owned by at least one hundred investors, excluding professional securities investors, and has a contributed charter capital of VND 10 billion or more” is met, your company shall submit a public company registration dossier to the State Securities Commission with the following instruction:

The dossiers:

According to Article 26 of the Law on securities 2006 amended and supplemented in 2010 and Article 33 of the Decree No.58/2012/NĐ-CP, public company dossiers include:

- The company charter as prescribed by the enterprise law

- The certified copy of the Certificate of Business Registration.

- Brief information about the business organization model, managerial machine and shareholder structure prepared under Form No.08 in the Appendix issued together with this Decree.

- The Financial statement of the nearest year audited by an independent auditing firm.

Procedure of public company registration

According to Article 34, Article 35 of the Decree No.58/2012/NĐ-CP, the procedure for registering the public company registration is as follows:

Step 1: The public company shall submit the registration dossier of the public company to the State Securities Commission within 90 days from the date of becoming a public company.

Step 2: Within 07 days after receiving the valid dossiers, the State Securities Commission shall announce the name, business content, and other information related to the public company on the media of the State Securities Commission.

Within 07 days after the Securities Commission of State announces the name of the public company under Clause 2, Article 34 of this Decree, the public company shall announce the information on a (01) central paper or a (01) local newspaper where the head office is registered.

The date of becoming a public company: It is from the date of completion of the capital contribution in full and the number of shareholders recorded in the number of shareholders with 100 or more investors.

That is the advice of FDVN Law Firm based on studying law provisions and theories. We hope that our opinions would be useful.

Legal Advisor: Nguyen Thi Suong

FDVN Law Company

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