PUBLIC OFFERING OF SHARES BY LIMITED LIABILITY COMPANY, NOTES ABOUT DOSSIERS?

Public offering of shares is an important step for limited liability companies in the process of expanding business operations and changing organizational structure. However, to be successful, the preparation for public offering of shares documents of limited liability company must be performed carefully and fully comply with laws. Then, what should be paid attention when preparing documents to make the procedure go smoothly?

Decision on approval of the plan to convert limited liability company into joint stock company

The plan to convert limited liability company into joint stock company must be approved by the Board of Members or the company owner and recorded by the corresponding Decision. In there:

Must specify the conversion method

The conversion plan must specify the conversion method: with or without raising of additional capital or combination of raising additional capital and sale of stakes of the company’s owner and members.

Must specify the composition of the company’s charter capital after conversion

The conversion plan must specify :

– The quantity of shares of the company’s members/owner;

– The quantity of shared publicly offered (including: quantity of shares offered to raise additional capital for the issuer, quantity of shares sold as stakes by the company’s owner/members);

– The quantity of shares offered to other entities (if any).

Decision to approve the issuance plan, the plan for use of revenue generated by the offering

The issuance plan, plan for using capital obtained from the offering (except in cases where the offering does not increase charter capital) and the listing or registration of stock trading on the stock exchange system must be approved and recorded by Decision of the Board of members or company owner.

Issuance plan

The issuance plan must clearly state:

– Offering price or principles for determining the offering price (except in cases where the offering does not increase charter capital). The offering price is the price approved by the Board of members or company owner or determined on the basis of price determination principles approved by the Board of members or company owner;

– Quantity of shares offered.

Capital use plan

Capital use plan is the plan to use the additional capital mobilized for the issuance organization. In case the offering is intended to mobilize capital to implement the project, the capital use plan must include content on the plan to compensate for the shortage of capital expected to be mobilized from the offering to implement the project.

Note

In case of combining the offering to mobilize additional capital for the issuance organization and offering to sell the capital owned by members or owners of the company, the issuance plan must clearly state the principle of priority distribution of shares.

Commitment to hold shares of a capital contributing member or company owner

In particular, capital contributing members (for multiple-member limited liability company) or company owners (for single-member limited liability company) must commit to jointly holding at least at least 20% of the charter capital of the issuance organization.

The minimum holding period is 01 year from the date of offering completion.

Decision of approval on the plan to ensure that the shares offering satisfies regulations on foreign ownership ratio

The plan must be approved by the Board of Members or company owners and recorded by Decision.

Written agreement between the members whose capital are offered and the company on the offering plan and offering price (if any)

This document is required in the case of multiple-member limited liability company offering to sell members’ capital contributions.

Decision on approval of the registration documents to offer shares to the public

The decision of the Board of Members or the company owner to approve the registration documents to offer shares to the public is one of the required documents according to regulations.

Note, for the public offering of shares by a credit institution, the application must contain written approval from the State Bank of Vietnam on the request to increase charter capital and transfer in accordance with the provisions of law on credit institutions. For the public offering of shares by an insurance business organization, the application must contain a written approval from the Ministry of Finance regarding the increase in charter capital and transfer according to the provisions of law on insurance business.

Application for registration of public offering of shares

Including:

– Registration certificate for public offering of shares;

– Prospectus;

– Financial statements of the issuance organization for the most recent 02 years;

– Charter of the issuance organization;

– Consulting contract on public offering of shares registration documents with a securities company, unless the issuance organization is a securities company;

– Underwriting commitment (if any);

– Written commitment to list or register for stock trading on the stock exchange system;

– Written commitment to meet regulations on the number of participating investors and the criminal record status of the issuance organization;

– Written confirmation from the bank or foreign bank branch on opening a blockaded account to receive money to buy shares in the offering.

>> REGISTRATION OF SECURITIES TRADING IN EQUITIZED ENTERPRISES https://linconlaw.vn/registration-of-securities-trading-in-equitized-enterprises/

>> 04 SECURITIES VIOLATIONS CAN INCUR CRIMINAL LIABILITY? https://linconlaw.vn/04-securities-violations-can-incur-criminal-liability/