When the stock market is developing very strongly; the issuance and listing of shares on the stock market through the initial IPO activity is the best way for companies to raise capital. However, enterprises must follow not only the process but also the obligations after IPO. So, what are the regulations on companies’ obligations after IPO in Vietnam? Let’s find out in this article.
- 2020 Enterprise Law
- 2019 Securities Law
- Decree 155/2020/ND-CP
- Decree 71/2017/ND-CP
- Circular 69/2020/TT-BTC
What is IPO?
Thus, IPO stands for the English phrase Initial Public Offering, which means the initial public offering of securities. The concept of securities under Vietnamese law includes many forms, but when it comes to the concept of IPO; it is automatically an initial public offering of shares. After companies successfully issue shares to the public, that company becomes a public company. That is, there are at least 100 shareholders who simultaneously own the charter capital of the company. The initial listing of shares of enterprises in Vietnam is relatively complicated and must meet many conditions and go through complicated procedures.
In order to offer shares to the public for the first time; JSC must carry out registration procedures to have their shares listed by the Stock Exchanges on the exchanges. Thus, securities trading and trading activities in Vietnam must follow the HOSE floor of the Ho Chi Minh Stock Exchange, and the HNX of the Hanoi Stock Exchange.
Regulations on companies’ obligations after IPO
Step 1: Announce the Notice of Issuance
Firstly, the applicant must announce the Notice of Issuance on 01 electronic or printed newspaper in 03 consecutive issues within 07 working days from the effective date of the Certificate of registration of public offering of securities.
Step 2: Complete the application
Then, complete the application for securities listing registration or share trading registration within 30 days from the end of the offering. The Board of Directors of a listed company must appoint at least 01 people to perform the duties of the person in charge of corporate governance (can concurrently act as Secretary);
Step 3: Periodic information disclosure
- Audited annual financial statements, 6-month financial statements that have been reviewed by an approved auditing organization, quarterly financial statements;
- Annual report;
- Report on corporate governance;
- Resolution of the Annual General Meeting of Shareholders;
- Other information following the law.
Step 4: Disclosure of unusual information
Accordingly, enterprises must disclose unusual information when one of the following events occurs:
- The company’s account at a bank or foreign bank branch is blocked at the request of a competent authority, when the payment service provider detects signs of fraud or violation of the law related to payment accounts; the account operate again;
- Suspend business; change business registration contents; revoke the Certificate of Business Registration; amend, supplement or suspend or revoke the establishment and operation license or the operation license;
- Approve the decision of the Extraordinary General Meeting of Shareholders following the law;
- Decide to repurchase shares of the company; the date of exercise of the right to buy shares of the bondholder with the right to buy shares, otherwise the date of conversion of the convertible bond into shares and decisions related to the offering or issuance of securities;
- Decide on the reorganization of the enterprise, the dissolution of the enterprise; strategy, medium-term development plan and annual business plan of the company; establishment, dissolution of a subsidiary, associate company, transactions leading to a company becoming; otherwise no longer being a subsidiary or associate company; establishment and closure of branches and representative offices;
- Decide to change the accounting period and applicable accounting policies; results of retrospective adjustment of financial statements; opinion that is not an unqualified opinion of the audit organization on the financial statements; the selection or change of an audit firm;
- Change and appoint new internal people;
- Decide to buy or sell assets or perform transactions with a value greater than 15% of the total assets of the company based on the audited latest year’s financial statements or the latest 06 months’ financial statements. ransack;
Step 5: Disclosure of information upon request
Then, disclose information upon request in case of events that seriously affect the legitimate interests of investors. there is information regarding the company that greatly affects the stock price and it is necessary to confirm that information.
Based on securities law, the form of initial public offering (IPO) will be allowed through the following methods:
Mass media, including newspapers, radio, Internet, etc.
Service with the highest responsibility.
Buy wholesale and resell.
According to the provisions of the Enterprise Law 2020, only a joint-stock company is the only type of enterprise that has the right to offer shares to the public
Correspondingly, to get IPO; an enterprise must fully meet the following conditions:
– Enterprises have a charter capital calculated according to the value recorded in the accounting books at the time of registration of the offering from 10 billion VND or more.
– Business activities of the year preceding the year of IPO registration must be profitable and up to the date of IPO registration must not have a loss.
– There is a plan to issue and use the capital obtained from the IPO; approved by the General Meeting of Shareholders.