In the course of business operations, changes in the personal information of founding shareholders are inevitable. So how is the change of information of founding shareholders in a joint-stock company implemented? The following article by NPLaw clarifies the procedures and legal issues related to changes in the information of founding shareholders.
I. Demand for changes in the information of founding shareholders in joint-stock companies
Currently, the demand for changes in the information of founding shareholders in joint-stock companies in Vietnam is on the rise, reflecting flexibility and dynamism in business operations. Companies often implement such changes to adjust ownership structures, meet development needs, or resolve internal issues.
Although the need to change founding shareholder information is becoming increasingly common, many enterprises still have difficulties in implementing these procedures due to insufficient understanding of legal regulations or failure to promptly update changes in shareholder structure. It may lead to legal risks and adversely affect the company’s reputation.
In summary, changes in founding shareholder information are an indispensable part of the development process of a joint-stock company. To ensure legality and transparency, enterprises must clearly understand legal regulations and fully comply with required procedures when changes occur in the founding shareholder structure.
II. Legal regulations on changes in the information of founding shareholders in joint-stock companies
2.1. Why must the information of founding shareholders in a joint-stock company be changed?
Changes in the information of founding shareholders in a joint-stock company may arise from various reasons, reflecting the enterprise’s flexibility and adaptability during its operation. The main reasons include:
2.1.1. Failure of founding shareholders to fulfill capital contribution obligations
Pursuant to Article 113 of the Law on Enterprise 2020, founding shareholders must fully pay for the subscribed shares to within 90 days from the date the Enterprise Registration Certificate is granted. If, after such a period, a shareholder fails to pay or only partially pays for such shares, the company must adjust its charter capital and amend the list of founding shareholders within 30 days from the expiration of the payment period.
2.1.2. Transfer of shares by founding shareholders
Under Article 120 of the Law on Enterprise 2020, within three years from the date of issuance of the Enterprise Registration Certificate, founding shareholders may only transfer their ordinary shares to non-founding shareholders upon approval of the General Meeting of Shareholders. After such a period, transfers may be conducted freely. Where a founding shareholder transfers all of their shares, the company must update the list of founding shareholders to reflect such change.
2.1.3. Change in personal information of founding shareholders
When a founding shareholder changes personal information such as full name, contact address, or nationality, the company must update such information in the shareholder register and notify the business registration authority to ensure accuracy and transparency of enterprise records (if any).
2.1.4. Changes in business strategy or organizational structure
When a company adjusts its development strategy or organizational structure, changes in founding shareholders may help supplement necessary resources or expertise, while also reflecting changes in business direction and management.
2.1.5. Inheritance or donation of shares
In cases where a founding shareholder passes away or donates shares to another person, the information of founding shareholders must be updated to reflect changes in share ownership.
Accordingly, changing founding shareholder information is not only a legal requirement but also helps enterprises maintain transparency, accuracy, and consistency with actual business operations.
2.2. Conditions for changing the information of founding shareholders in a joint-stock company
Pursuant to Clause 3, Article 113 of the Law on Enterprise 2020, conditions for changing founding shareholder information are closely connected with the fulfillment of capital contribution obligations, as follows:
- Capital contribution period: Founding shareholders must fully pay for the subscribed shares within 90 days from the date the Enterprise Registration Certificate is granted, unless a shorter period is stipulated in the company charter or share subscription agreement.
- Consequences of failure to fully contribute capital:
+ A shareholder who fails to pay for subscribed shares shall automatically cease to be a shareholder and shall not be entitled to transfer the right to purchase such shares to others.
+ A shareholder who partially pays for subscribed shares shall only be entitled to voting rights, dividends, and other rights corresponding to the paid-up shares, and shall not transfer the right to purchase unpaid shares.
+ Unpaid shares shall be deemed unsold shares, and the Board of Directors has the right to offer such shares for sale to others. - Time for registration of changes: Within 30 days from the expiration of the capital contribution period, the company must:
+ Register an adjustment of charter capital corresponding to the fully paid shares; and
+ Register changes to the information of founding shareholders, removing shareholders who no longer meet statutory conditions.
Accordingly, such changes must be properly implemented with the business registration authority to ensure legality and accurate updating of founding shareholder information in the enterprise registration system.
2.3. How is the change of founding shareholder information in a joint-stock company implemented?
The procedure for changing founding shareholder information in a joint-stock company in Vietnam is clearly regulated and depends on the status of share payment by the relevant shareholder.
2.3.1. Cases requiring notification to the Business Registration Office
The company must notify the Business Registration Office of changes in founding shareholder information if a founding shareholder has failed to pay or has only partially paid for the subscribed shares according to Article 113 of the Law on Enterprise 2020. Such notification must be made within 30 days from the expiration of the payment deadline.
Required documents:
- Notice of change of enterprise registration contents (Form in Appendix II-1 issued together with Circular No. 01/2021/TT-BKHĐT);
- List of founding shareholders of the joint-stock company, excluding information on founding shareholders who have not paid for subscribed shares;
- Power of attorney (if the dossier submitter is not the legal representative).
Submission methods:
- Direct submission to the Business Registration Office where the company’s headquarters is located;
- Online submission via the National Enterprise Registration Portal: https://dangkykinhdoanh.gov.vn.
2.3.2. Cases not requiring notification to the Business Registration Office
If a founding shareholder has fully paid for subscribed shares, changes in founding shareholder information (such as share transfers) are not required to be notified to the Business Registration Office. In such cases, the company only needs to:
- Execute a share transfer agreement between relevant parties;
- Prepare minutes and resolutions of the General Meeting of Shareholders regarding changes in founding shareholders;
- Update shareholder information in the company’s shareholder register;
- Retain internal records in accordance with regulations.
In summary, changes in founding shareholder information in joint-stock companies must be implemented in strict compliance with legal regulations to ensure legality and avoid potential risks.
III. Certain questions regarding changes in founding shareholder information in joint-stock companies
3.1. Is notification to state authorities required when changing founding shareholder information?
Whether notification is required depends on the payment status of the founding shareholder. If the shareholder has not paid or has only partially paid for subscribed shares under Article 113 of the Law on Enterprise 2020, the company must notify the Business Registration Office within 30 days from the expiration of the payment deadline.
3.2. Is amendment of the company charter required when founding shareholder information changes?
Whether the company charter must be amended depends on the nature and extent of the change.
3.2.1. Cases requiring amendment of the company charter
Pursuant to Article 24 of the Law on Enterprise 2020, the charter of a joint-stock company includes main contents such as:
- Company name and headquarters address;
- Business lines;
- Charter capital, total number of shares, types of shares, and par value of each share type;
- Full name, contact address, nationality of founding shareholders; number, type, and par value of shares held by each founding shareholder.
Accordingly, where there are changes in the name, address, nationality, or number of shares of founding shareholders, the company must amend the charter to accurately reflect updated information.
3.2.2. Cases not requiring amendment of the company charter
If changes in founding shareholder information do not affect the essential contents of the charter, amendment is not mandatory. However, the company must still update the shareholder register and maintain internal records in accordance with regulations.
In conclusion, whether amendment of the charter is required depends on whether the changes affect essential charter contents. Each case must be carefully reviewed to ensure compliance with law and maintain the validity of the company charter.
3.3. In which cases must a joint-stock company notify the business registration authority of changes in founding shareholder information?
Pursuant to Clause 2, Article 57 of Decree No. 01/2021/NĐ-CP, an unlisted joint-stock company must notify the Business Registration Office of changes in founding shareholder information if a founding shareholder has not paid or has only partially paid for subscribed shares pursuant to Article 113 of the Law on Enterprise 2020.
The enterprise must make such notification within 30 days from the expiration of the payment deadline.
3.4. Does changing founding shareholder information affect the rights and obligations of other shareholders?
Changes in founding shareholder information may affect the rights and obligations of other shareholders, depending on the nature and scope of the change.
3.4.1. Transfer of founding shares to non-founding shareholders within the first three years
Under Article 120 of the Law on Enterprise 2020, within three years from the issuance of the Enterprise Registration Certificate, founding shareholders may only transfer ordinary shares to non-founding shareholders upon approval of the General Meeting of Shareholders. Such transfers may affect ownership structure and voting rights, thereby impacting other shareholders’ interests.
3.4.2. Changes in personal information of founding shareholders
Where a founding shareholder changes personal information such as name, address, nationality, or ID card/citizen ID/passport number, the company must update the shareholder register. Although such changes do not directly affect other shareholders’ rights and obligations, failure to update may lead to confusion or disputes regarding share ownership.
Accordingly, companies must fully implement update procedures and comply with legal regulations to safeguard the rights of all shareholders.
IV. Legal advisory services on changes in founding shareholder information in joint-stock companies
The above outlines legal issues relating to changes in founding shareholder information in joint-stock companies as provided by NPLaw. Should you have any questions or require further clarification, please contact NPLaw via the following details:
