Conditions and procedures for establishment of a public company
Question: A Company intends to convert into a public company. The company would like to know about regulations on establishing a public company.
Thank you so much for trusting and sending the mentioned-above question to Bizlawyer & Partners. We would like to present a few points on conditions for establishing a public company as follows:
I. Overview of a public company
According to Article 25 of consolidated document No. 41/VBHN-VPQH Law on securities, the public company is a joint-stock company which has either
1. Made public offering;
2. Had stocks listed at Stock Exchange or Securities Trading Center; or
3. Had stocks held by at least one hundred investors, excluding professional securities investors (such as commercial bank, financial company, financial leasing company, insurance company and securities trading organizations) and had a contributed charter capital of VND 10 billion or more.
In cases 1 and 2, the public company is established by its own initiative/side, which strictly is complied with Law on securities.
In case 3, a joint-stock company that meets the conditions of charter capital and members will automatically become a public company. However, a joint-stock company must submit a registration dossier of a public company. The company becomes a public company from the date of completion of the capital contribution and there are at least 100 investors recorded in the shareholder register. A public company shall submit the registration dossier to the State Securities Commission within 90 days day from the date of becoming a public company (according to the Article 25.2, Consolidated document No. 41/VBHN-VPQH Law on securities)
In summary, the basic distinction between a public and a non-public company is that (1) a public company has at least 100 shareholders without limitation while (2) a public company has already conducted its public offering.
In this article, Bizlawyer only mentions the procedure for registration of the public company for case 3.
II. Procedure for registration of a public company
The public company registration procedure is applicable only to case 3 in Section I as mentioned above, the remaining cases shall comply with separate regulations on Law on securities.
1) Licensing authority: State Securities Commission
2) Requisite documents
- The company charter as prescribed by enterprise law;
- The certified copy of the Certificate of Business Registration;
- Brief information about the business organization model, managerial machine and shareholder structure; and
- The financial statement of the latest year audited by an independent auditing firm.
3) Processing time-limit: 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 information port of the State Securities Commission.
4) Obligation to Announce the information on public company registration
– Within 07 days after the SSC announces the name of the public company, the public company shall announce the information through either a central newspaper publisher or a local one where the head office is registered.
– A summary of the information on the model of business organization, the management machine, and shareholding structure; the company charter and the financial statements must be published on the company’s website.Maybe you are interested in Establishment of representative office of a foreign company[/su_note]