General Meetings of Shareholders are important events of Joint Stock Companies, where shareholders discuss and decide matters of the company. Viet Nam Law on Enterprises has regulations on General Meetings of Shareholders. Let’s find out this issue with Lawyer X through the following cases: “Dear Lawyer! I want to ask how shall General Meetings of Shareholders (GMS) be convened? What are the main contents of these meetings? Shall all shareholders be entitled to participate in the GMS? Thanks for answering me!
Legal grounds
Law on Enterprises
General Meetings of Shareholders
– General Meetings of Shareholders (GMS) shall be convened annually and whenever necessary. The meeting location is the place where the chair attends and shall be within Vietnam’s territory.
– The annual GMS shall be convened within 04 months from the end of the fiscal year. Unless otherwise prescribed by the company’s charter, the Board of Directors shall decide deferral of the annual GMS where necessary by up to 06 months from the end of the fiscal year.
– The following issues shall be discussed and ratified at the annual GMS:
+ The company’s annual business plan;
+ The annual financial statement;
+ The report of the Board of Directors on its performance and that of its members;
+ The report of the Board of Controllers on the company’s business performance, performance of the Board of Directors, the Director/General Director;
+ The report of the Board of Controllers on its performance and that of the controllers;
+ Dividend of each type of shares;
+ Other issues within its jurisdiction.
Convening GMS
– Board of Directors shall convene annual and ad hoc GMS. An ad hoc GMS shall be convened in the following cases:
+ The meeting is necessary for the company’s interests;
+ The quantity of remaining members of the Board of Directors and Board of Controllers is smaller than the minimum quantity prescribed by law;
+ The meeting is requested by the shareholder or group of shareholders mentioned in Clause 2 Article 115 of Law on Enterprises;
+ The meeting is requested by the Board of Controllers;
+ Other cases prescribed by law and the company’s charter.
– Unless otherwise prescribed by the company’s charter, the Board of Directors shall convene the GMS within 30 days from the date of occurrence of the event mentioned in Point b Clause 1 of Article 140 Law on Enterprises or the day on which the request for holding the meeting mentioned in Point c and Point d Clause 1 of Article 140 Law on Enterprises is received. If the Board of Directors fails to convene such GMS, the President and members of the Board of Directors shall pay compensation for the damage incurred by the company.
– In case the Board of Directors fails to convene a GMS as prescribed in Clause 2 of Article 140 Law on Enterprises, the Board of Controllers shall convene a GMS within the next 30 days in accordance with regulations of Law on Enterprises. If the Board of Controllers fails to convene the GMS, it shall pay compensation for the damage incurred by the company
– In case the Board of Controllers fails to convene a GMS as prescribed in Clause 3 of Article 140 Law on Enterprises, the shareholder or group of shareholders prescribed in Clause 2 Article 115 of Law on Enterprises may convene the GMS on behalf of the company in accordance with Law on Enterprises.
– The person who convenes the GMS shall:
+ Prepare a list of shareholders entitled to participate in the GMS;
+ Provide information and settle complaints relevant to the aforementioned list;
+ Draw up the meeting agenda;
+ Prepare documents for the meeting;
+ Draft the resolution of the GMS according to the meeting agenda; prepare a list and detailed information about the candidates for members of the Board of Directors and Controllers (in case of election);
+ Determine the meeting time and location;
+ Send the invitation to each and every shareholder on the list mentioned in (+;
+ Perform other tasks serving the meeting.
– The cost of convening and conduct the GMS as prescribed in Clauses 2, 3 and 4 of Article 140 Law on Enterprises shall be reimbursed by the company.
List of shareholders entitled to participate in the GMS
– The list of shareholders entitled to participate in the GMS shall be compiled according to the company’s shareholder register numbers. The list shall be compiled not more than 10 days before dan on which the invitations to participate in the GMS are sent if a shorter period is not specified in the company’s charter.
– The list shall contain full names, mailing addresses, nationalities, legal document numbers of shareholders that are individuals; names, EID numbers or legal document numbers, headquarters addresses of shareholders that are organizations; quantities of shares of each type and each shareholder registration date and number of each shareholder.
– Shareholders are entitled to access and make copies of names and mailing addresses of shareholders on the list; request correction of errors or addition of information about themselves on the list. The company’s executives shall promptly provide information in the shareholder register, revise and add information as requested by the shareholders; pay compensation for damage caused by the failure to provide or to accurately and promptly provide shareholder registration numbers as requested. The procedures for requesting provision of information in the shareholder register shall be specified in the company’s charter.
Agenda of the GMS
– The person who convenes the GMS shall prepare the agenda.
– The shareholder or group of shareholders specified in Clause 2 Article 115 of Law on Enterprises is entitled to propose additional issues to the GMS agenda. The proposal shall be made in writing and sent to the company at least 03 working days before the opening date unless another period is specified in the company’s charter. The proposal shall contain the names of shareholders and the proposed issues.
– In case the proposal mentioned in Clause 2 of Article 142 Law on Enterprises is rejected by the person who convenes the GMS, a written response and explanation must be provided at least 02 days before the opening day. A proposal may only be rejected in the following cases:
+ The proposal is sent against the regulations of Clause 2 of Article 142 Law on Enterprises;
+ The issue exceeds the jurisdiction of the GMS;
+ Other cases prescribed by the company’s charter.
– The person who convenes the GMS shall include the issues proposed in accordance with Clause 2 of Article 142 Law on Enterprises in the draft agenda, except in the cases specified in Clause 3 of Article 142 Law on Enterprises. The issues will be included in the official agenda if their inclusion is accepted by the GMS.
Invitations to the GMS
– The person who convenes the GMS shall send invitations to all shareholders on the list of shareholders entitled to participate in the GMS at least 21 days before the opening day unless an earlier time is specified in the company’s charter. The invitation shall contain the participant’s name, headquarters/mailing address, EID number, time and location of the meeting and other requirements.
– Invitations shall be sent to mailing addresses of the shareholders and posted on the company’s website. If necessary, the invitation may be published on a local or central daily newspaper as prescribed by the company’s charter.
– An invitation shall be sent together with:
+ The meeting agenda, meeting documents and the draft resolution on each issue in the agenda;
+ The votes.
– The invitation and meeting documents mentioned in Clause 3 of Article 143 Law on Enterprises may be uploaded on the company’s website (if any) instead of sending physical invitations and documents. In this case, the invitation shall contain instructions on how to download the documents.
Exercising the right to attend the GMS
– Shareholders and representatives of shareholders that are organizations may directly participate in the GMS or authorize one or some other organizations and individuals to participate the GMS, or participate in the GMS in one of the forms specified in Clause 3 of Article 144 Law on Enterprises
– The authorization of participants in the GMS shall be made in writing. The authorization letter shall be made in accordance with civil laws and specify the name of the authorized participant, the quantity of shares authorized. The authorized participant shall present the authorization letter before entering the meeting room.
– It will be considered that a shareholder attends and votes at the GMS in the following cases:
+ The shareholder directly participates in and votes at the GMS;
+ The shareholder authorizes another organization or individual to participate in and vote at the meeting;
+ The shareholder participates and votes online or through other electronic methods;
+ The shareholder sends the votes to the GMS by post, fax or email;
+ The shareholder sends the votes by other means specified in the company’s charter.
Conditions for conducting the GMS
– The GMS shall be conducted when it is participated by a number of shareholders that represent more than 50% of the votes; the specific ratio shall be specified in the company’s charter.
– In case the conditions for conducting the meeting prescribed in Clause 1 of Article 145 Law on Enterprises are not fulfilled, the second invitation shall be sent within 30 days from the first meeting date unless otherwise prescribed by the company’s charter. The second GMS shall be conducted when it is participated by a number of shareholders that represent at least 33% of the votes; the specific ratio shall be specified in the company’s charter.
– In case the conditions for conducting the second meeting prescribed in Clause 2 of Article 145 Law on Enterprises are not fulfilled, the third invitation shall be sent within 20 days from the second meeting date unless otherwise prescribed by the company’s charter. The third GMS shall be conducted regardless of the number of votes represented by the participants.
– Only the GMS has the right to change the agenda enclosed with the invitation prescribed in Article 142 of Law on Enterprises.
Meeting and voting protocols
Unless otherwise prescribed by the company’s charter, the following meeting and voting protocol shall be followed:
– The shareholders that participate in the GMS shall be registered before the meeting is declared open;
– Election of the chair, secretary and election board:
+ The President of the Board of Directors shall assume the role or the chair or authorize a member of Board of Directors to chair the GMS if it is convened by the Board of Directors. In case the chair is not present or is temporarily unable to work, the remaining members of the Board of Directors shall elect one of them as the chair under the majority rule. In case a chair cannot be elected, the chief of the Board of Controllers shall preside over the election of the GMS chair, in which case the person that receives the most votes will be the chair;
+ Except for the cases specified in Point a of Clause 2 of Article 146 Law on Enterprises, the person that signs the decision to convene the GMS shall preside over the election of the chair by the GMS, in which case the person that receives the most votes will be the chair;
+ The chair shall designate one or some persons as the secretary(ies) of the GMS;
+ The GMS shall elect one or some people as the election board as requested by the chair;
– The meeting agenda shall be ratified by the GMS during the opening session. The agenda shall specify the duration of each issue therein;
– The chair is entitled to implement necessary and reasonable measures to maintain order during the meeting and adhere to the ratified agenda and serve the majority of the participants;
– The GMS shall discuss and vote on each issue on the agenda. Votes include affirmative votes, negative votes and abstentions. The voting result shall be announced by the chair before the meeting ends unless otherwise prescribed by the company’s charter;
– Shareholders and authorized participants that arrive at the meeting after it is declared open will be registered and has the right to vote after registration. In this case, previous voting result shall remain unchanged;
– The person who convenes or chair the GMS has the rights to:
+ Request all participants to facilitate inspection and other lawful and reasonable security measures;
+ Request a competent authority to maintain order during the meeting; expel those who do not comply with the chair’s instructions, deliberately disrupt order, obstruct the meeting progress or disobey security requirements;
– The chair is entitled to postpone the GMS that has a sufficient number of participants for up to 03 working days from the initial opening day or change the meeting location in the following cases:
+ The current meeting location does not have enough seats for all participants;
+ Communication devices at the current meeting location are not adequate for all participant to discuss and vote;
+ One or some participants disrupt the meeting and thus threaten the fairness and legality of the meeting;
– In case the chair postpones or suspends the GMS against Clause 8 of Article 146 Law on Enterprises, the GMS shall elect another participant to chair the meeting until the end; all resolutions ratified at the meeting shall be effective.
Services of Lawyer X
Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.
On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, Lawyer X’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
Confidentiality of client information: Finally, all personal information of clients Lawyer X will be 100% confidential.
If you need any further information, please contact LSX Law firm: at +84846175333 or Email: [email protected]
Frequently asked questions
Board of Directors shall convene annual and ad hoc GMS
The person who convenes the GMS shall prepare the agenda.
General Meetings of Shareholders (GMS) shall be convened annually and whenever necessary. The meeting location is the place where the chair attends and shall be within Vietnam’s territory.
Conclusion: So the above is How shall General Meetings of Shareholders be conducted under Viet Nam Law?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
