Who has the right to search books and records in public companies?

Article overview

Right to search books and records of public companies allows shareholders to closely monitor business activities, through which shareholders monitor the financial situation and optimize profits, making an important contribution to the company’s development direction. Therefore, the following article by Long Phan will provide the necessary information to help you understand the regulations on the right to search books and records effectively in public companies.

Regulations on the right to search books and records in public companies
Regulations on the right to search books and records in public companies

What is a public company?

A public company is a special form of business organization in the Vietnamese legal system. According to Clause 1, Article 32 of the Law on Securities 2019, a public company is a joint stock company when it falls into one of the following two cases.  Specifically:

  • Have a paid-up charter capital of VND 30 billion or more and have at least 10% of voting shares held by at least 100 investors who are not major shareholders;
  • Successfully conducted initial public offering (IPO) of shares through registration with the State Securities Commission.

Regulations on the right to search books and records in public companies

The right to search books and records in public companies is one of the basic rights of shareholders of public companies. Article 49, Section XI, Appendix I, Circular 116/2020/TT-BTC provides detailed regulations on this issue. The actual right to search books and records in public companies is as follows:

For Common Shareholders:

  • Ordinary shareholders have the right to review, look up and extract information about names and contact addresses in the list of shareholders with voting rights; request correction of your inaccurate information; Review, look up, extract or copy the Company Charter, minutes of the General Meeting of Shareholders and resolutions of the General Meeting of Shareholders;
  • Shareholders or groups of shareholders owning 5% of the total number of common shares or more or [another smaller percentage as stipulated in the company’s Charter have the right to review, look up, and extract minutes from the minutes book. Minutes and resolutions, decisions of the Board of Directors, mid-year and annual financial reports, reports of the Supervisory Board, contracts, transactions that must be approved by the Board of Directors and other documents, except documents related to commercial secrets and business secrets of the Company.

For shareholders or groups of shareholders owning 5% or more of the total common shares:

  • In case an authorized representative of a shareholder or group of shareholders requests to look up books and records, he/she must attach a power of attorney from the shareholder or group of shareholders that he/she represents or a notarized copy of this power of attorney.
The right to look up books and records for shareholders in public companies
The right to look up books and records for shareholders in public companies

Distribution of profits for public companies

Profit distribution in public companies is carried out according to the principles of transparency and fairness. Article 51 Section XIII Appendix I Circular 116/2020/TT-BTC clearly stipulates the process and method of profit distribution. Specifically, the basic principles for profit distribution are as follows:

  1. The General Meeting of Shareholders decides on the level of dividend payment and the form of annual dividend payment from the Company’s retained profits.
  2. The Company does not pay interest on dividends or payments related to a class of shares.
  3. The Board of Directors can propose to the General Meeting of Shareholders to approve the payment of all or part of dividends in shares and the Board of Directors is the agency that implements this decision.
  4. In case dividends or other amounts related to a type of stock are paid in cash, the Company must pay in Vietnamese Dong. Payment can be made directly or through banks based on detailed bank account information provided by shareholders.
  5. The Board of Directors passed a resolution and decided to determine a specific date to finalize the list of shareholders. Based on that date, those registered as shareholders or owners of other securities are entitled to receive dividends in cash or shares, receive notices or other documents.
  6. Other issues related to profit distribution are carried out in accordance with the provisions of law.
Note on profit distribution regulations in public companies
Note on profit distribution regulations in public companies

In-depth and effective consulting on shareholder rights in public companies

With professionalism and experience in the corporate sector. Long Phan specializes in consulting on shareholder rights in public companies, meeting the diverse needs of customers in protecting the rights and optimizing the role of shareholders. And the consulting and support services that Long Phan provides include:

  • Consulting on procedures to look up company books and records.
  • Support the exercise of voting rights and participate in governance on how to exercise voting rights in shareholder meetings.
  • Consulting on shareholder dispute resolution helps choose the optimal dispute resolution plan, from negotiation to settlement in court if necessary.
  • Consulting on the rights and obligations of shareholders.
  • Support to protect the legal rights of shareholders.
  • Consulting on other issues related to shareholders’ rights in public companies.

The right to search books and records in public companies is an important tool to help shareholders effectively monitor corporate operations and accurately grasp the financial situation and make wise investment decisions, and protect your rights. If you need in-depth advice about this right, please contact Long Phan immediately via the hotline 0906735386 for effective advice and support, protecting maximum benefits in your investment activities.