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Cases of termination of shareholder status of a joint stock company are specifically stipulated in the Law on Enterprise 2020. Shareholder status can be terminated through many forms such as transfer of shares, company repurchase of shares, or upon a decision of the Court. Understanding these regulations helps shareholders and businesses protect their legitimate rights during business operations.
Individuals and organizations that want to become members of a joint stock company can use the following methods to form legal membership of the company:
According to the provisions of law on enterprises, shareholders of a joint stock company are no longer members of the company in the following cases:
Corresponding to the formation of membership in a JSC, the termination of membership in a JSC will include the following cases:
First, in case a shareholder has not paid for the number of shares registered to buy within 90 days from the date of issuance of the Business Registration Certificate (unless otherwise stipulated), he will naturally lose his status as a member of the company, and are not allowed to transfer the right to buy those shares to another person.
Second, transfer your shares to others: the transfer of shares may be restricted in certain cases. Or the Company buys back shares from shareholders.
Third, shareholders are individuals who die, or organizations that are dissolved or bankrupt. The legal consequences of these cases all make that individual or legal entity no longer a shareholder of the Joint Stock Company.
Fourth, give shares to others or use shares to pay off debt to others. The essence of donating shares or using shares to repay debt is to change the owner of those shares. And of course, the person who donates and the person who uses shares to repay debt will no longer be the owner of those shares. In other words, they are no longer members of the JSC.
According to the provisions of Article 113 of the Law on Enterprises 2020, shareholders must fully pay for the number of shares registered to buy within 90 days from the date of issuance of the Business Registration Certificate, except in the case of the Company Charter, or the share purchase registration contract stipulates a shorter term.
If after this deadline, the shareholder who has not paid for the shares registered to buy will automatically no longer be a shareholder of the company and will not be able to transfer the right to buy those shares to another person;
The company must register to adjust the charter capital by the par value of the fully paid shares and change the founding shareholders within 30 days from the end of the deadline for fully paying for the registered shares.
Unpaid shareholders must be responsible for the total par value of the shares registered to buy for the company’s financial obligations arising within the above period.
Members of the Board of Directors and legal representatives must be jointly responsible for any damages incurred.
Shares are “freely” transferable, except in the case of transferring shares of founding shareholders and (the Company Charter) has regulations restricting the transfer of shares.
Shares can be transferred through Transfer Contracts;
Or it can be traded through the stock market. The order, procedures and recording of ownership comply with the provisions of securities law.
In case a shareholder who is an individual dies, the heir according to the will or law of that shareholder is a shareholder of the company. The order and procedures for inheritance and donation will comply with the provisions of civil law.
Step 1: Send a written request to the company within 10 days from the date the General Meeting of Shareholders passed the resolution on the above issues. In there:
Step 2: The company must buy back the requested shares at the market price or the price calculated according to the principles stipulated in the company charter within 90 days from the date of receiving the request.
Step 3: After paying off all the repurchased shares, if the total value of assets recorded in the company’s accounting books decreases by more than 10%, the company must notify all creditors within 15 days from the date of full payment for the repurchased shares.
Long Phan with a team of experienced people in the field of business and corporate governance provides in-depth consulting services. A practical approach and in-depth legal knowledge help Long Phan become a trusted partner of customers. Our services include:
Long Phan commits to accompanying customers in the process of terminating their status as shareholders at a joint stock company with an experienced team. For detailed advice on related legal procedures, please contact the hotline 0906735386 for quick and professional support.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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