Registration of Share Issuance for Swap under Consolidation or Merger Contract

The Registration of Share Issuance for Swap under Consolidation or Merger Contract is conducted to restructure enterprises in accordance with the Law on Securities. This process requires the issuer to prepare a rigorous legal dossier, a feasible business plan, and obtain approval from the competent authority. This article analyzes the current regulations on this matter in detail.

Conditions for Registration of Share Issuance for Swap under Consolidation or Merger Contract

Plan Approval: The consolidation/merger plan, share swap plan, and post-restructuring business plan must be approved by the General Meeting of Shareholders (GMS), Board of Members, or Company Owners of the participating companies. Note: Votes of interested shareholders/members are counted as valid.

Contract: A consolidation or merger contract signed between the parties in accordance with the Law on Enterprises, accompanied by the Draft Charter of the consolidated/merging company.

Financial Statements: The latest annual financial statements of the participating companies must be audited by an approved auditing organization.

Foreign Ownership: The issuance must comply with regulations on foreign ownership limits.

Compliance with Article 15, Law on Securities:

• The issuer is not being prosecuted for criminal liability or has no unexpunged convictions for economic management crimes.
• There is a consulting securities company (unless the issuer is a securities company).
• There is a commitment to list or register for trading on the securities trading system after the offering.

The competent authority registers the issuance of shares for exchange.

Based on Article 59 of Decree 155/2020/ND-CP, the authority competent to receive, review, and grant the Certificate of Registration of Share Issuance for Swap is the State Securities Commission (SSC).

The SSC is responsible for reviewing the completeness and validity of the dossier and granting the certificate within the statutory time limit.

Registration documents for issuing shares for exchange under a merger or acquisition agreement.

The dossier must be prepared accurately according to Article 56 of Decree 155/2020/ND-CP, including:

1. Registration Form: Form No. 13 or No. 14 (Appendix of the Decree).
2. Prospectus: As prescribed in Article 19 of the Law on Securities.
3. Approval Decisions: Decisions of the GMS/Board of Members/Owners of participating companies approving the M&A plan, swap plan, post-M&A business plan, and listing/trading registration.
4. M&A Contract: The consolidation or merger contract.
5. Draft Charter: Of the consolidated or merging company.
6. Financial Statements: Latest audited annual financial statements and quarterly financial statements (per Clause 5, Article 20, Law on Securities) of participating companies.
7. Foreign Ownership Decision: Decision approving the plan to ensure compliance with foreign ownership limits.
8. Commitment: Written commitment regarding compliance with Point e, Clause 1, Article 15 of the Law on Securities.
9. Consulting Contract: With a securities company.
10. Board/Owner Decision: Approving the registration dossier.
    • Note: For Credit Institutions: Approval from the State Bank of Vietnam. For Insurance Enterprises: Approval from the Ministry of Finance regarding capital increase.
11. Listing Commitment: Written commitment to implement listing or registration for trading.

Sequence and procedures for registering the issuance of shares for exchange under a merger or acquisition agreement.

The process follows Article 55 and Article 59 of Decree 155/2020/ND-CP (amended by Decree 245/2025/ND-CP):

Step 1: Preparation and Plan Approval Participating companies develop the swap plan (swap ratio, quantity, subjects, timing) and obtain approval from the GMS.

Step 2: Submission The issuer prepares and submits the dossier to the SSC.

Step 3: Review and Amendment The issuer amends or supplements the dossier if requested by the SSC to ensure validity.

Step 4: Certification Within 30 days of receiving a complete and valid dossier, the SSC grants the Certificate of Registration of Share Issuance for Swap. If refused, a written response stating the reason is provided.

Step 5: Execution The issuer distributes shares to shareholders of the consolidated/merged companies according to the approved plan. The time for investors to register for the swap must be at least 20 days.

Step 6: Reporting Within 10 days of completion, the issuer sends a Report on Issuance Results to the SSC and discloses information.

• Note: For consolidation, the report must be accompanied by the Enterprise Registration Certificate of the consolidated company.

Long Phan provides consulting services for registering shares for exchange.

Long Phan Consulting Company provides comprehensive M&A support:

• Appraisal & Structuring: Assessing legal status; advising on the swap model and optimal swap ratio to balance interests.
• Drafting & Standardization: Drafting the dossier according to regulations; standardizing documents to minimize SSC requests for supplementation.
• Representation: Working directly with authorities; monitoring dossier progress; explaining legal issues; supporting post-issuance reporting.

Frequently Asked Questions about Registering Shares for Exchange Under Mergers and Acquisitions

Below are some frequently asked questions regarding the procedures for registering the issuance of shares for exchange under merger and acquisition agreements. Please refer to them:

How is the swap ratio determined?

It is agreed upon by the parties and approved by the GMS. Valuation is typically based on audited financial statements, market prices (for listed companies), and independent valuation (net asset value or discounted cash flow). (Legal Basis: Point a, Clause 2, Article 55, Decree 155/2020/ND-CP).

Do dissenting shareholders have buyback rights?

Yes. Shareholders voting against the reorganization resolution have the right to request the company to buy back their shares within 10 days from the resolution date. (Legal Basis: Article 132, Law on Enterprises 2020).

Is a blocked account required?

No. Since the transaction is a share swap (“stock-for-stock”) and involves no cash payment from investors, a blocked account is not required. (Legal Basis: Clause 2, Article 59, Decree 155/2020/ND-CP).

Is a public tender offer required?

No, provided the swap is approved by the GMS, even if ownership exceeds the tender offer thresholds (25%, 35%, etc.). (Legal Basis: Point b, Clause 2, Article 35, Law on Securities 2019).

When is the Competition Commission’s opinion needed?

It is mandatory if the share swap leads to an economic concentration (merger/consolidation) that meets the notification thresholds under the Law on Competition. (Legal Basis: Point d, Clause 2, Article 55, Decree 155/2020/ND-CP).

Conclusion

The Registration of Share Issuance for Swap under Consolidation or Merger Contract is a critical step in corporate expansion. To ensure a smooth, transparent, and legally compliant transaction, please contact Long Phan Consulting Company via Hotline 1900636389 for specialized support.

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