Can a company solicit written opinions from shareholders regarding the addition of business sectors?

September 12, 2023

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The process of expanding a company’s business operations is a significant decision, often requiring careful consideration and input from stakeholders. One way companies seek approval and insights for such changes is by soliciting written opinions from shareholders. This approach fosters transparency, accountability, and shareholder involvement in critical decisions. In this discussion, we will delve into the practice of soliciting written opinions from shareholders when contemplating on additional of new business sectors, exploring its significance, legal implications, and how it can impact a company’s growth and direction.

Question:

My company is currently undergoing the procedures to add additional business sectors to our business registration. According to regulations, the addition of business sectors requires the approval of the Board of Directors or the General Meeting of Shareholders through meeting minutes. Instead of organizing a meeting and voting by majority, can the company seek opinions from shareholders through written communication regarding the addition of business sectors?

Answer:

– Based on Clause 1, Article 147 of the 2020 Enterprise Law. The General Meeting of Shareholders may pass resolutions within its jurisdiction through voting at the meeting. Alternatively, it can do so through written opinions.

– Based on Clause 1, Article 148 of the 2020 Enterprise Law, it is stipulated that:
“1. Resolutions on the following matters shall be passed if they are approved by shareholders representing 65% or more of the total votes of all attending shareholders, except as provided in Clauses 3, 4, and 6 of this Article; the specific ratio shall be determined by the company’s charter:

a) Types of shares and total shares of each type;

b) Change in business sectors, occupations, and business fields;

c) Change in the organizational structure of the company;

d) Investment projects or sale of assets with a value of 35% or more of the total value of assets recorded in the most recent financial statements of the company, unless the company’s charter specifies a different ratio or value;

e) Restructuring or dissolution of the company; f) Other matters specified in the company’s charter.”

– Based on Article 149 of the 2020 Enterprise Law.It regulates the authority and means of soliciting written opinions from shareholders. These are used to approve resolutions of the General Meeting of Shareholders.

– The enterprise should study and implement the provisions of Article 56 of Decree 01/2021/NĐ-CP on enterprise registration. These provisions outline the documentation, procedures, and sequence for changing business sectors.”