Legal regulations on pending ownership of shares

In current litigation practice, where the ownership of shares is pending status due to arising disputes, determining the timeline for court proceedings in share-related cases is of particular importance to the parties concerned. The progress of handling not only affects the protection of shareholders’ lawful rights and interests but also has a direct impact on corporate governance, management operations, and the overall stability of the enterprise.

I. Overview of issues related to pending ownership of shares

In corporate operations, share ownership constitutes a fundamental legal basis for establishing shareholder status and exercising governance and financial rights. In practice, however, there are numerous cases in which share ownership remains pending status due to disputes, complaints, or the failure to complete the required legal procedures. Such situations commonly arise in transactions involving the purchase and transfer of shares, division of assets, inheritance, or internal conflicts among shareholders.

The lack of clear determination of share ownership not only directly affects the lawful rights and interests of shareholders but also creates adverse consequences for the company, such as difficulties in recording entries in the shareholder register, restrictions on voting rights, delays in profit distribution, and the risk of prolonged court disputes. Accordingly, properly identifying the legal nature of, and issues surrounding, pending share ownership is an important basis for the parties to select appropriate resolution mechanisms and mitigate legal risks.

II. Understanding pending ownership of shares

To clarify the concept and related legal issues, pending ownership of shares should be examined from multiple perspectives, including its legal nature, arising causes, and methods of determination in dispute resolution practice.

1. What is pending ownership of shares and how does it affect shareholders?

Pending ownership of shares refers to a situation in which the ownership of shares has not been finally determined from a legal perspective because it is subject to dispute resolution, complaints, court proceedings, or review and decision by competent authorities or organizations. During such a period, the relevant shareholder is often unable to fully exercise shareholder rights such as transferring shares, voting at the General Meeting of Shareholders, receiving dividends, or participating in corporate governance.

The most significant impact on shareholders is the restriction or temporary suspension of economic rights and governance rights, along with taking legal risks if the final outcome of the dispute is unfavorable.

2. When is share ownership considered pending status?

Share ownership is considered pending in the following common circumstances:

• A lawsuit or request for dispute resolution relating to the shares has been accepted by the Court;
• A share purchase or transfer agreement is subject to a claim for invalidation or rescission;
• The shares are involved in inheritance disputes or division of common property;
• The Court or a competent authority has applied interim urgent measures, such as suspending the transfer of shares.

In these cases, share ownership has not yet been conclusively determined and must await the outcome of proceedings before the competent authority.

3. What factors lead to pending ownership of shares?

Common causes of pending ownership of shares include:

• Share purchase or transfer transactions that fail to comply with statutory requirements or the company’s charter;
• Disputes among shareholders regarding transfer prices, payment obligations, or the timing of ownership transfer;
• Violations of disclosure obligations or restrictions on share transfers;
• Internal corporate conflicts, inheritance disputes, or enforcement of security interests over shares.

4. How is pending ownership of shares determined in a dispute?

The determination of pending share ownership is based on:

• Procedural status: Whether the Court has accepted the case or issued a decision applying interim urgent measures;
• Legal documents relating to the shares: Share purchase/transfer agreements, the shareholder register, and the company’s charter;
• Transaction evidence: Payment records, meeting minutes, and corporate resolutions relating to the disputed shares.

Properly determining the legal status of the shares provides a crucial basis for protecting the parties’ interests and selecting appropriate solutions to disputes concerning pending share ownership.

III. Legal regulations applicable to pending ownership of shares

In the context of increasing internal corporate disputes, pending share ownership is not only a practical issue but is also governed by multiple legal instruments. Identifying the correct legal bases helps clarify the rights and obligations of the parties and serves as a foundation for courts and competent authorities to resolve disputes lawfully and objectively.

1. Which laws govern pending ownership of shares in Viet Nam?

Although Vietnamese law does not expressly use the term “pending ownership of shares”, such a legal status is indirectly regulated through the following legal instruments:

• Law on Enterprise 2020, as amended in 2025:
  + Articles 114 and 115: Provisions on shares, shareholders, and shareholders’ rights, forming the basis for identifying the lawful owner of shares;
  + Article 122: Provisions on the shareholder register, under which only persons recorded in the register are recognized as shareholders of the company. In the cases of disputes, the recording or temporary non-recording of shareholders directly affects share ownership;
  + Article 127: Provisions on share transfers, serving as the primary legal basis for disputes leading to pending share ownership.
• Civil Code 2015:
  + Article 117: Conditions for the validity of civil transactions, used to determine whether a share transfer transaction lead to ownership;
  + Article 131: Legal consequences of invalid civil transactions, which often result in share ownership remaining pending resolution.

Accordingly, pending ownership of shares is established and resolved based on an integrated application of Law on Enterprise, Civil Law, and Civil Procedural Law.

2. Are there any notification requirements regarding pending ownership of shares?

Current law does not prescribe a separate procedure for notifying “pending ownership of shares”. However, notification obligations are indirectly reflected in the following provisions:

• Under Article 122 of the Law on Enterprise 2020, the company is responsible for updating and managing the shareholder register. When a dispute arises or a court decision is issued, the company must record restrictions or the temporary suspension of rights attached to the disputed shares;
• Under Article 196 of the Civil Procedure Code 2015, the Court must notify the acceptance of a case to the litigants and relevant organizations, which serves as the basis for the parties and the company to be aware that the ownership of shares is under resolution;
• If interim urgent measures are applied, the Court’s decision must be promptly served on the parties and relevant organizations for enforcement (Article 133 of the Civil Procedure Code 2015).

Therefore, notification regarding pending share ownership is typically effected through notices of case acceptance or court decisions, rather than through an independent notification procedure.

3. What management violations may lead to shares being pending status?

In practice, many instances of pending share ownership stem from violations in corporate management and administration, including:

• Failure to update or incorrect updating of the shareholder register, in breach of Article 122 of the Law on Enterprise 2020;
• Permitting share transfers in violation of statutory requirements or the company’s charter, particularly in respect of restricted shares (Article 127 of the Law on Enterprise 2020);
• Lack of transparency in corporate governance, failure to disclose or concealment of information relating to share transactions;
• Corporate management acting ultra vires by recognizing shareholder status without satisfying legal conditions.

Such violations not only lead to disputes but also prolong the state of pending share ownership, directly affecting shareholders’ interests and corporate stability.

IV. Questions on pending ownership of shares

In practice, disputes involving pending share ownership often leave shareholders and companies uncertain about their rights, obligations, and appropriate courses of action. Below are common questions and corresponding legal analyses.

1. Can shares with pending ownership be transferred? Why?

As a general principle, shares with pending ownership should not, and are typically not permitted to, be transferred. In fact, the lawful owner of the shares has not yet been conclusively determined.

Pursuant to Article 127 of the Law on Enterprise 2020, a share transfer is effective only when statutory conditions are satisfied and the transfer is recorded in the shareholder register. If the shares are under dispute or subject to interim urgent measures imposed by the Court (Article 114 of the Civil Procedure Code 2015), the transfer transaction may be declared invalid or not recognized, thereby increasing legal risks for the parties.

2. What should the parties do when share ownership is pending resolution?

When pending share ownership arises, the parties should:

• Proactively collect and preserve evidence relating to the share transaction (contracts, payment records, shareholder register entries);
• Promptly notify the company so that the dispute status is recorded and unlawful exercise of shareholder rights is avoided;
• Initiate legal proceedings or request court resolution in accordance with civil procedural law;
• Consider authorizing legal counsel to protect their lawful rights and interests during the dispute resolution process.

Taking timely legal measures from the outset is key to mitigating risks, safeguarding rights, and preventing further complex disputes.

3. What is the legal procedure for resolving pending ownership of shares?

The resolution procedure is governed by the Civil Procedure Code 2015, as amended in 2025, and generally includes:

• Filing a lawsuit or request for dispute resolution relating to the shares (Articles 186 and 188);
• Court acceptance of the case and notification to the relevant parties (Article 195);
• Evidence collection and mediation in accordance with law (Articles 97, 98, and 205);
• First-instance trial (Chapter XIV).

Throughout the proceedings, the Court may apply interim urgent measures to preserve the disputed shares, thereby maintaining the pending status of share ownership until a legally effective judgment or decision is issued.

4. What complaint mechanisms are available in cases of pending share ownership?

Depending on the stage and nature of the case, the parties may:

• File procedural complaints against decisions or procedural acts of Judges or Court Clerks under Article 499 of the Civil Procedure Code 2015;
• File appeals against first-instance judgments or decisions under Articles 271 and 273 of the Civil Procedure Code 2015;
• Request review under retrial procedures where statutory grounds exist.

These mechanisms are intended to ensure that disputes concerning pending share ownership are resolved lawfully and objectively.

5. In which cases may a shareholder lose ownership of shares that are pending status?

A shareholder may lose ownership of shares pending status in the following circumstances:

• The share purchase or transfer contract is declared invalid by the Court under Articles 117 and 131 of the Civil Code 2015;
• The Court determines that the shareholder is not the lawful owner of the disputed shares;
• The shares are subject to enforcement measures for judgment enforcement or other legally binding obligations;
• The shareholder seriously breaches legal obligations, resulting in the ownership not being protected by law.

Accordingly, during the period in which shares are pending resolution, a shareholder’s ownership will only be preserved where the establishment, management, and transfer of shares strictly comply with legal requirements; any violation may result in the loss of lawful ownership.

V. Are you looking for a reputable legal expert to assist with issues relating to pending ownership of shares?

Disputes concerning pending share ownership are often complex with legal risks. Engaging counsel with specialized expertise in corporate law and litigation can help accurately assess the legal status of the shares, formulate effective strategies for protecting your interests, and minimize losses throughout the dispute resolution process.

The above information is provided for reference purposes only. For tailored advice on your specific case, please contact NPLaw for prompt consultation.