A General Meeting of Shareholders (“GMS” or “meeting”) is considered an occasion for shareholders to express their opinions on important matters of the company. Therefore, holding a GMS is an important procedure for joint stock companies. However, in fact, companies have not pay proper attention to issues arising from holding a GMS to ensure the compliance with legal regulations, which leads to many serious legal consequences affecting the company’s business activities.
Recognizing the importance of such matters, HM&P prepared and published the “Legal Guidelines: Holding a General Meeting of Shareholders” in 2023, by which we received a lot of positive reviews from our valuable clients, public companies, joint stock companies as well as HM&P’s colleagues. With the desire to constanly support clients in best compliance with current regulations, once again, HM&P's team has adjusted and supplemented new information and regulations to provide joint stock companies the most detailed instructions to comply with legal requirements when holding a GMS in 2024.
Below are some noteworthy highlights in our new publication “Legal Guidelines: Holding a General Meetings of Shareholders” 2024:
- Provide readers with insights into the procedure for holding the GMS in accordance with the law;
- Help readers identify common legal issues that may arise in the procedures for holding the GMS;
- Provide reader with guidance at each stage of the process of holding the GMS.
This latest Legal Guidelines has been updated and supplemented with valuable reference sources, notes, frequently asked questions to more fully address the problems that businesses often encounter. This document is prepared based on HM&P's experience in practice from commercial law firms, internal legal practices of leading securities companies, as well as the best compliant listed companies on the market in the present. Therefore, we hope that this will be a necessary and valuable source for joint stock companies in the process of holding annual and extraordinary GMS of businesses.
For your convenience, in this new version, we release the Vietnamese and English versions at the same time.
If you have any question about this Legal Guidelines or HM&P’s services, please contact us:
Our Managing Partner:
Lawyer Nguyen Van Phuc
Phone: 0932 768 630
Email: phuc.nguyen@hmplaw.vn
HM&P Law Firm
Address: 7th Floor, ITAXA Building, 126 Nguyen Thi Minh Khai, Vo Thi Sau Ward, District 3, HCMC
Phone: +84 28 73080839
Email: counsel@hmplaw.vn
Website: hmplaw.vn
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Issuing the decision to hold the GMS |
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Upon a ground for the GMS arises |
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Disclosure of information on preparing the list of shareholders (applicable to public companies) |
At least 20 days before the last registration date |
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Determining the time to prepare the list of shareholders (last registration date) |
No more than 10 days before the date of sending meeting invitations |
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Preparing a list of shareholders for public companies (in case the shareholder is the convenor) |
At least 10 working days before the last registration date |
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Preparing a list of shareholders for a public company (in case the BOD or the SB is the convenor) |
At least 8 working days before the last registration date |
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Preparing meeting agenda, contents and documents |
Before sending the meeting invitations |
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Sending meeting invitations |
At least 21 days before the meeting date |
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Proposing meeting agenda and contents |
At least 3 working days before the meeting date |
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Refusing to propose meeting agenda and contents |
At least 2 working days before the meeting date |
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Shareholders registration |
Before the opening, all the way to the end of the meeting |
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Examining the conditions for conducting the meeting |
Before the opening of the meeting |
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Opening the meeting |
According to the schedule on the meeting invitation |
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Electing the Chairman, appointing the Secretary and electing the Vote Counting Committee |
Right after the opening of meeting |
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Approving the meeting agenda and contents |
Before starting the discussion and voting |
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Discussing and voting on each issue |
According to the specific schedule in the meeting agenda |
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Counting votes |
After completing the voting |
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Announcement of vote counting results |
After completing the counting of votes |
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Approval of the Minute of the meeting and Resolutions |
Before closing |
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Closing the meeting |
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According to the specific schedule in the meeting agenda. |
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Sending the Minute of the meeting, Resolutions and the Minute of Vote Counting |
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Within 15 days from the date of the meeting, adopting the Resolution |
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Information disclosure for public companies |
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Within 24 hours from the adoption of the Resolution |
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Request to annul the Resolution |
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Within 90 days from the date of receipt of the Resolution or Minutes of the meeting |
1. WHEN TO HOLD A GMS?
1.1. Annual GMS
a. When must an annual GMS to held?
A joint stock company must hold an annual GMS within 04 months of the end of the financial year. Unless the charter of the company, the BOD may decide to extend the annual GMS if necessity, but not more than 06 months from the end of the financial year.
Images of annual GMS held by companies of Masan Corporate in 2023
b. Content of the annual GMS
Discussion and approval of the following items:
• An annual business plan of the company;
• An annual financial statement;
• Reports from the Board of Directors (“BOD”) on the governance and performance of the BOD and each BOD member;
• Reports of the Supervisory Board (“SB”) on the business results of the company, performance results of the BOD, the Director or the General Director;
• Reports on the self-assessment of the performance of the SB and the Supervisor;
• Dividend per share of each type of shares;
• Other matters within the scope of its powers.
1.2. Extrordinary GMS
a. When should an extraordinary GMS by held?
• The BOD deems it necessary in the interest of the company;
• The number of remaining members of the BOD or the SB is less than the minimum number of members required by laws;
• At the request of a shareholder or a group of shareholders owning 05% or more of the total number of ordinary shares; or a lower threshold set out in the charter of the company;
• At the request of the SB;
• In the other cases provided by the law and by the charter of the company.
Image of an extraordinary GMS of Hai Phat Investment JSC (Source: Mekong Asean)
b. Content of and extraordinary GMS
In accordance with the principles set out in the Section 1.2.a.
2. POWER TO CONVENE THE GMS
2.1. Power of the BOD
a. Power of the BOD to convene the GMS
The BOD shall have the power to convene all GMS, including annual and extraordinary GMS.
b. Deadline for convening
• For the annual GMS: the BOD shall convene to ensure that the statutory deadline for holding the annual GMS as stipulated in the law.
• For the extraordinary GMS: within 30 days from the date of arising basis for the meeting.
2.2. Power of the SB
a. Power of the SB to convene the GMS
The BOD shall not convene an extraordinary GMS after the expire of the deadline for convening by the BOD.
b. Deadline for convening
Within 30 days of the expire of the deadline for the convening by the BOD.
2.3. Power of shareholders
a. Conditions for shareholders to convene a GMS
Shareholders or groups of shareholders holding 05% or more of the total number of ordinary shares or such lower threshold as prescribed by the charter of the company.
b. Power of shareholders to convene a GMS
The IC does not convene an Extraordinary GMS after the expiration of the deadline of convening the IC, or the BOM fails to convene an Extraordinary GMS after the expiration of the deadline of convening the BOM (if the company does not have an IC).
c. Deadline for convening
Indefinite term.
Note 1: The BOD and the SB must conpensate the company for any damage resulting from the failure to convene the GMS of the BOD and the SB within thei competence.
3. SCOPE OF WORKS OF THE CONVENOR
• Preparing the list of shareholders entitled to attend the meeting;
• Providing information and resolving complaints regarding the list of shareholders;
• Preparing the agenda and the content of the meeting;
• Preparing documents for the meeting;
• Preparing a draft resolution of the GMS according to the proposed content of the meeting; a list with detailing information of candidates in the case of election of members of the BOD, supervisors;
• Fixing the time and place of the meeting;
• Sending the meeting invitation to each shareholder entitled to attend the meeting in accordance with the Law on Enterprises;
• Other duties.
4. SPECIFIC PROCEDURE FOR HOLDING THE GMS
4.1. Pre-GMS phases
Step 1: Issue the decision to hold the GMS
The person responsible for convening the GMS shall issue a decision to hold the GMS.
a. Meeting convened by the BOD
The BOD must hold a meeting of the BOD to decide on matters relating to the GMS. These matters may include:
• The reason for calling the meeting;
• The deadline for the list of attending shareholders to be present (last registration date);
• The time and venue of the GMS;
• The agenda and contents of the meeting;
• Assignment of preparation and organisation tasks to specialised departments and divisions of the Company ;
• Appointment of the Organising Committee for the GMS to prepare and carry out the tasks for the GMS;
The BOD must issue a BOD resolution specifying the reasons for convening the GMS, and the date and the venue of the GMS.
Image of a BOD Resolution of Vietnam Diary Products Joint Stock Company on convening the annual GMS 2024 (Source: Vinamilk)
b. Meeting convened by the SB
Similar to the BOD, the SB shall convene a meeting of the SB to decide on matters relating to the GMS. the decision to convene the meetingmust clearly state that the BOD has refused to convene the GMS at the request of the SB and the written request sent by the SB to the BOD.
c. Meeting call by shareholders
Such a shareholder or group of shareholders shall issue a notice to hold the GMS. The notice shall state:
• The reason for calling the meeting;
• The time and venue of the GMS;
• The deadline for the list of attending shareholders to be present;
• A statement that the BOM has refused to convene the GMS at the request of that shareholder or group of shareholders and, at the same time, the SB has not convened the GMS either (if the company has a SB);
• List of shareholders and groups of shareholders convening the GMS (specifying the information about each shareholder and the number of shares held by the shareholder at the time of convening the meeting is convened);
• A written request from a shareholder or a group of shareholders has sent to the BOD to request for a meeting of the GMS to be convened.
Note 2: For public companies, the convener of the GMS must publish information on the preparation of the list of shareholders entitled to attend the meeting at least 20 days before the last registration date.
Step 2: Preparation of the list of shareholders entitled to attend the meeting
a. Deadline for preparing the list of shareholders
Not more than 10 days before the date on which the invitation to the meeting is sent, unless the charter of the company stipulates a shorter period.
b. Method of preparation of the list of shareholders for private companies
The list of shareholders entitled to attend the GMS is prepared based on the register of shareholders of the company.
c. Procedure for preparing the list of shareholders for public companies
The convener of the GMS shall prepare and send a notice to the Vietnam Securities Depository and Clearing Corporation (“VSDC”), requesting the VSD to prepare and send to the company a list of shareholders holding the company’s shares on the last registration date and send that list to the company. The list of shareholders shall be sent by the VSD to the company within 02 working days from the day following the last registration date.
i) Meeting convened by the BOD
The company must send a complete and valid notice to the VSD at least 08 working days before the last registration date.
Content of a dossier:
• A notice of the last registration date (According to Form 07/THQ attached to Decision No. 109/QD-VSD dated 20 August 2021 of the VSD, promulgating regulations for the exercise of rights of depositors holding the securities in the VSD);
• A copy of a document proving that the last registration date has been published at least 20 days prior to the last registration date;
• Documents relating to the contents of the GMS;
• A resolution of the BOD approving the convening of the extraordinary GMS (if the extraordinary GMS is convened by the BOD).
Image of the Announcement on the last registration date to exercise the right to attend the 2023 Annual GMS of Vissan Joint Stock Company (Source: Vissan)
ii) Meeting convened by the SB
The company must send a complete and valid notice to the VSD at least 08 working days before the last registration date.
Content of a dossier:
• A notice of the last registration date (According to Form 07/THQ attached to Decision No. 109/QD-VSD dated 20 August 2021 of the VSD, promulgating regulations on exercising rights for securities depositors owning securities at the VSD);
• A copy of a document proving that the last registration date has been disclosed at least 20 days before the last registration date;
• Documents relating to the contents of the GMS;
• A SB's document notifying the VSD of the replacement of the BOD to convene the extraordinary GMS, enclosed with documents proving that the BOD did not comply with the provisions of the Law on Enterprise, the charter of the company on convening the extraordinary GMS;
• A minute of the meeting of the SB on the agreement to replace the BOD to convene the extraordinary GMS.
iii) Meeting convened by shareholders
The convener of the GMS must send a complete and valid notice to the VSD at least 10 working days before the last registration date.
Contents of a dossier:
• A notice of the last registration date (According to Form 07/THQ attached to Decision No. 109/QD-VSD dated August 20, 2021 of the VSD, promulgating regulations on exercising rights for securities depositors owning securities at the VSD;
• A copy of the document proving that the last registration date has been disclosed at least 20 days before the last registration date
• Documents related to the contents of the GMS;
• A notice of the shareholder or group of shareholders in authority (including full name, contact address, nationality, number of legal documents of the individual for individual shareholders; name, business code or number of legal documents of the organization, address of the head office for shareholders being organizations; number of shares and time of registration of shares of each shareholder, total number of shares of the whole group of shareholders and the percentage of ownership in the total shares of the company, grounds and reasons for requesting the convening of the GMS) sent to the VSD on the replacement of the BOD, and the SB to convene an extraordinary GMS together with documents proving that the BOD, and the SB failed to strictly comply with the provisions of the Law on Enterprise, the charter of the company on convening the extraordinary GMS;
• Documents and evidence proving that the BOD seriously violated rights of shareholders, obligations of managers, or made decisions beyond its authority/other cases as prescribed in the charter of the company.
• Documents proving that a shareholder or a group of shareholders owns 05% or more of the total number of ordinary shares or a lower threshold as prescribed in the charter of the company.
Note 3: In case a shareholder convenes a meeting of the GMS, the documents prepared and signed by the shareholder, who is an individual/organization without a seal, must be accompanied by a valid copy of the signature certificate of the individual/representative of the organization certified by a competent authority.
Note 4: The company sends the dossier to the VSD in person, or by post or as an electronic document via website: https://www.vsd.vn/vi/is after the Company singed the Contract appendix on the use of electronic communication portal at VSDC.
d. Content of the list of shareholders
• Full name, contact address, nationality, number of legal documents for individuals;
• Name, business code or number of legal documents of the organization, address of the registered office in the case of shareholders who are organizations;
• Quantity of each type of shares, number and date of shareholder registration of each shareholder.
Please read more and download the publication (PDF File) here
