Question:
I would like to inquire about the procedures for increasing capital through private placement of shares and offering shares to existing shareholders.
– Can private placement and offering shares to existing shareholders be carried out simultaneously? If so, how should I proceed?
– When increasing capital through offering shares to existing shareholders, can I offer shares to only one shareholder?
Answer:
1/ A company can increase its charter capital through the method of private placement of shares to new shareholders and offering shares to existing shareholders.
– In the case of private placement to new shareholders to increase capital for a non-public company, the company must complete the private placement procedure before proceeding with the capital increase registration. After completing the private placement, the company can refer to the forms and procedures for capital increase on the website: “www.dangkykinhdoanh.gov.vn/ News/ Latest News/ Reference forms” for enterprise registration according to the provisions of Law on Enterprises No. 59/2020/QH14. If the company is a public company, the capital increase dossier should include documents certified by the Securities Commission.
– In the case of offering shares to existing shareholders to increase capital, the company can refer to the forms and procedures on the website: “www.dangkykinhdoanh.gov.vn/ News/ Latest News/ Reference forms” for enterprise registration according to the provisions of Law on Enterprises No. 59/2020/QH14. (as stipulated in Article 51 of Decree No. 01/2021/NĐ-CP regarding enterprise registration).
2/ According to clause 1 and 2 of Article 124 of Law on Enterprises 2020: “1. Offering of shares to existing shareholders is an event in which the company increases the quantity and types of authorized and sell all of these shares to all shareholders in proportion to their holdings in the company.
2. The offering of shares to existing shareholders by a non-public joint stock company shall be carried out as follows:
a) The company shall send a written notification by express mail to the shareholders’ mailing addresses written in the shareholder register at least 15 days before the deadline for subscribing for shares;
b) The notification shall contain the full name, signature, mailing address, nationality and legal document number if the shareholder is an individual; names, EID numbers or legal document number and headquarters address if the shareholder is an organization; the shareholder’s current shares and holding; the total quantity of shares offered and the number of shareholders having the right to buy them; the offered price; deadline for subscribing; full name and signature of the company’s legal representative. The notification shall be enclosed with the share subscription form issued by the company. If the share subscription form is not sent to the company by the deadline, it will be considered that the shareholder has renounced the right to buy shares;
c) Shareholders may transfer their right to buy shares to other persons.”
