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Dispute Resolution

Legal regulations on shareholder disputes

Shareholder disputes are among the most common issues arising in joint-stock companies. The following article outlines the legal regulations governing shareholder disputes and addresses several related questions to help individuals and organizations protect their legitimate rights and interests.

Shareholder disputes are among the most common issues arising in joint-stock companies. The following article outlines the legal regulations governing shareholder disputes and addresses several related questions to help individuals and organizations protect their legitimate rights and interests.

I. Current situation related to shareholder disputes

Shareholder disputes within a company constitute a complex legal issue that may cause serious consequences for the stability and development of the enterprise. Such disputes not only affect internal relationships among shareholders but may also impact the company’s reputation and long-term development.

One of the primary causes of shareholder disputes is the lack of clear agreements, insufficiently stringent internal regulations, and incomplete disclosure of information obligations.

In addition, limited legal knowledge among relevant parties often leads to prolonged disputes, significantly affecting business operations and the reputation of the enterprise.

II. Concept of shareholder disputes

1. What is a shareholder dispute?

According to Clause 3 Article 4 of the Law on Enterprise 2020 (amended in 2025), a shareholder is defined as an individual or organization that owns at least one share of a joint-stock company.

A shareholder dispute can be understood as a conflict or disagreement arising during exercising rights, fulfilling obligations, and protecting the legitimate interests of shareholders in a joint-stock company in accordance with the Law on Enterprise 2020 (amended in 2025).

2. What internal conflicts commonly lead to shareholder disputes?

Shareholder disputes in joint-stock companies often arise from internal conflicts within the company, including:

Conflicts regarding interests and assets: It is the most common cause and directly affects shareholders’ rights.
Profit and dividend distribution: Disagreements regarding the dividend payment ratio or the retention of profits for reinvestment. Minority shareholders often prefer to receive dividends early, whereas major shareholders or management may wish to retain capital for long-term projects.
Capital contribution and ownership: Disputes may arise when shareholders fail to contribute capital as committed but still wish to enjoy corresponding rights, or when disagreements occur regarding the valuation of contributed assets.
Share transfer: Conflicts relating to transfer price, violation of pre-emptive rights of existing shareholders, or legal procedures concerning the transfer of share ownership.
Conflicts regarding management and administration: These disputes commonly occur when parties cannot agree on the company’s operational methods.
Competition for control: Power struggles between major shareholder groups seeking to gain dominance in the Board of Directors or to appoint main management positions.
Disagreements regarding business strategies: Shareholders may hold different perspectives on the company’s direction, major investment decisions, or corporate restructuring.
Lack of transparency: Shareholders may not receive adequate information regarding the company’s financial status, accounting reports, or management decisions.
Violation of the company charter: Parties fail to comply with provisions set out in the company charter or previously agreed shareholder agreements.

Accordingly, shareholder disputes commonly arise from the above-mentioned internal conflicts within the company.

3. Can prolonged shareholder disputes disrupt the company’s operations?

Prolonged shareholder disputes can disrupt the company’s operations and cause significant damage to business activities. Specifically:

Conflicts over control rights or business strategies may prevent the Board of Directors or the General Meeting of Shareholders from approving important decisions.
Investors and credit institutions may hesitate to provide capital to companies experiencing internal conflicts, potentially resulting in cash flow shortages.
Disputes may delay mergers, acquisitions, or the signing of new business contracts because parties fail to reach legal consensus.
Public disclosure of internal disputes may reduce the confidence of customers and partners, directly affecting revenue.
If shareholder disputes cannot be resolved through mediation or court proceedings, they may lead to compulsory share redemption or even dissolution of the enterprise to terminate the conflict.

Therefore, prolonged shareholder disputes may significantly disrupt corporate operations. To minimize risks, enterprises should establish clear company charters and transparent shareholder agreements from the outset as a basis for effective dispute resolution.

III. Legal regulations related to shareholder disputes

1. How does current law regulate the rights and obligations of shareholders?

The rights and obligations of shareholders in a joint-stock company are determined based on the type of shares they hold and their shareholding ratio.

- Regarding shareholders’ rights:

According to Article 115 of the Law on Enterprise 2020 (amended in 2025), ordinary shareholders have the following basic rights to:

Attend and express opinions at the General Meeting of Shareholders and exercise voting rights directly or through authorized representatives or other forms prescribed by the company charter or law. Each ordinary share carries one vote.
Receive dividends as decided by the General Meeting of Shareholders.
Have the pre-emptive right to purchase newly issued shares in proportion to their existing ownership ratio.
Freely transfer their shares to others, except for cases stipulated in Clause 3 Article 120, Clause 1 Article 127 of the Law and other relevant legal provisions.
Examine, search, and extract information regarding names and contact addresses in the list of shareholders with voting rights and request correction of inaccurate information.
Examine, search, extract, or copy the company charter, minutes of meetings of the General Meeting of Shareholders, and resolutions of the General Meeting of Shareholders.
Receive a portion of the remaining assets proportional to their shareholding ratio when the company is dissolved or declared bankrupt.

According to Clause 2 Article 116 of the Law on Enterprise 2020 (amended in 2025), shareholders holding voting preference shares have the following rights to:

Vote on matters within the competence of the General Meeting of Shareholders with the number of votes prescribed by law.
Other rights similar to those of ordinary shareholders.
Shareholders holding voting preference shares may not transfer such shares to others except in cases of transfer according to legally effective court judgments or inheritance.

According to Clause 2 Article 117 of the Law on Enterprise 2020 (amended in 2025), shareholders holding dividend preference shares have the following rights to:

Receive dividends as prescribed.
Receive a portion of the remaining assets corresponding to their shareholding ratio after the company has fully paid its debts and redeemed redeemable preference shares upon dissolution or bankruptcy.
Other rights similar to those of ordinary shareholders.

- Regarding shareholders’ obligations:

According to Article 119 of the Law on Enterprise 2020 (amended in 2025), shareholders have the following obligations to:

Fully and timely pay for the shares they have committed to purchase.
Not withdraw contributed capital represented by ordinary shares from the company in any form, except where the company or another person purchases the shares. If a shareholder withdraws part or all of the contributed share capital contrary to this provision, such shareholder and related persons in the company shall be jointly liable for the company’s debts and other property obligations within the value of the withdrawn shares and for any damages incurred.
Comply with the company charter and internal management regulations.
Execute resolutions and decisions of the General Meeting of Shareholders and the Board of Directors.
Maintain confidentiality of information provided by the company in accordance with the company charter and the law; use such information only to exercise and protect their legitimate rights and interests; and refrain from disseminating or transferring such information to other organizations or individuals.
Other obligations as prescribed by law and the company charter.

Accordingly, the rights and obligations of shareholders are regulated by law as described above.

2. Which legal framework governs shareholder disputes involving foreign elements?

Shareholder disputes involving foreign elements are resolved based on the Vietnamese legal system and relevant international commitments, including:

Law on Investment 2020: Regulating dispute resolution in investment and business activities. According to Clause 1 Article 14 of the Investment Law 2020, disputes relating to investment and business activities in Vietnam shall first be resolved through negotiation and mediation. If negotiation or mediation fails, the dispute may be settled by arbitration or the court.
Civil Code 2015: Providing general principles for determining applicable law in civil relations involving foreign elements from Article 663 to Article 670.
Commercial Law 2005: Providing dispute resolution methods in commercial activities under Article 317.
Civil Procedure Code 2015: Regulating the jurisdiction of Vietnamese courts over cases involving foreign elements from Article 464 to Article 481.
International treaties: Including bilateral investment protection agreements, free trade agreements such as EVFTA and CPTPP, and international conventions to which Vietnam is a member.

Thus, shareholder disputes involving foreign elements are resolved in accordance with the above-mentioned legal framework.

3. What is the statute of limitations for initiating a lawsuit regarding shareholder disputes?

The statute of limitations for initiating a lawsuit related to shareholder disputes depends on the specific nature of the dispute, as follows:

According to Article 429 of the Civil Code 2015, the statute of limitations for filing a lawsuit to request the court to resolve contractual disputes is three (03) years from the date the person with the right to request knows or should have known that their legitimate rights and interests have been infringed.
According to Article 319 of the Commercial Law 2005, the statute of limitations applicable to commercial disputes is two (02) years from the time the legitimate rights and interests are infringed, except for cases of exemption from liability for logistics service providers stipulated in Point e Clause 1 Article 237 of this Law.

Accordingly, parties to a contract should carefully consider the applicable statute of limitations for shareholder disputes in accordance with the above regulations.

4. What is the legal value of the company charter in resolving shareholder disputes?

According to Clause 2 Article 24 of the Law on Enterprise 2020 (amended in 2025), the company charter includes the following principal contents:

Name and address of the company’s headquarter; names and addresses of branches and representative offices (if any);
Business lines;
Charter capital; total number of shares, types of shares, and par value of each type of share for joint-stock companies;
Full names, contact addresses, and nationalities of partners in partnerships; owners or members in limited liability companies; and founding shareholders in joint-stock companies;
Capital contribution portions and their values of each member in limited liability companies and partnerships; number of shares, types of shares, and par value of each type of share held by founding shareholders in joint-stock companies;
Rights and obligations of members in limited liability companies and partnerships; rights and obligations of shareholders in joint-stock companies;
Organizational management structure;
Number, titles, rights, and obligations of the legal representative(s) of the enterprise; allocation of powers and responsibilities where the company has more than one legal representative;
Procedures for adopting company decisions and principles for resolving internal disputes;
Basis and method for determining salaries, remuneration, and bonuses of managers and supervisors;
Cases where members or shareholders may request the company to repurchase capital contributions or shares;
Principles for distribution of after-tax profits and handling of business losses;
Cases of dissolution, procedures for dissolution, and asset liquidation;
Procedures for amending and supplementing the company charter.

Accordingly, the company charter is the most important basis for resolving shareholder disputes and has the following legal value:

Internal dispute resolution foundation: The charter is the most important internal document that clearly defines corporate governance rules, shareholders’ rights and obligations, decision-making mechanisms, and conflict resolution mechanisms.
Binding effect: Provisions in the charter are legally binding upon all shareholders, management members, and the company itself.
Primary legal reference for determining rights and obligations: When disputes arise, competent authorities (courts or arbitration tribunals) generally review the provisions of the charter before applying general legal regulations, particularly regarding voting ratios, management authority, and profit distribution methods.

In summary, the company charter has significant legal value in resolving shareholder disputes.

IV. Frequently asked questions related to shareholder disputes

1. Are shareholder disputes required to be brought before the court?

According to Article 317 of the Commercial Law 2005, dispute resolution methods include:

Negotiation between the parties.
Mediation conducted by an organization, agency, or individual agreed upon by the parties.
Resolution by arbitration or court.

Procedures for resolving commercial disputes at arbitration or courts shall be conducted in accordance with the applicable laws.

Additionally, Article 186 of the Civil Procedure Code 2015 stipulates that agencies, organizations, and individuals have the right to initiate lawsuits at competent courts, either directly or through lawful representatives, to protect their legitimate rights and interests.

Accordingly, shareholder disputes are not necessarily required to be brought before the court and may instead be resolved through mechanisms provided in the company charter or through negotiation and mediation.

2. Do shareholders have the right to request legal assistance when disputes arise?

According to Clause 13 Article 70 of the Civil Procedure Code 2015, litigants have the right to defend themselves or request others to protect their legitimate rights and interests.

Furthermore, Clause 1 and Point a Clause 2 Article 75 of the Civil Procedure Code 2015 provide that a person protecting the legitimate rights and interests of a litigant is a participant in legal proceedings for such a purpose. Lawyers participating in legal proceedings under the Law on Lawyers may act as such representatives upon the request of the litigant and after registration with the court.

Therefore, shareholders have the right under Vietnamese law to hire lawyers to assist, represent, and protect their legitimate interests when disputes arise.

3. What should minority shareholders do to protect their rights when disputes arise with majority shareholders?

Based on Article 115 of the Law on Enterprise 2020 (amended in 2025) regarding shareholders’ general rights, minority shareholders should take the following measures:

Understanding their legal rights: Minority shareholders should clearly understand their rights under the company charter and applicable law to establish a solid legal basis when disputes arise.
Cooperating with other shareholders: Minority shareholders may collaborate with other shareholders to protect common interests. Such cooperation may create sufficient influence over important corporate decisions.
Requesting transparency from the company: Minority shareholders should require the company to provide transparent information regarding business activities and financial conditions.
Exercising the right to initiate legal proceedings: If minority shareholders believe that the company or major shareholders have violated their rights, they may initiate legal action before the court to protect their interests.
Requesting access to information: Minority shareholders may request the company to provide information related to financial conditions and corporate activities to detect early signs of abuse of power or violations of their rights.

Accordingly, minority shareholders should adopt the above measures to protect their interests when disputes arise with major shareholders.

4. Can shareholders authorize others to participate in dispute resolution?

According to Clause 1 Article 138 of the Civil Code 2015, individuals and legal entities may authorize other individuals or legal entities to establish and perform civil transactions.

Pursuant to Clause 1 and Clause 4 Article 85 and Clause 2 Article 86 of the Civil Procedure Code 2015, representatives in civil proceedings include legal representatives and authorized representatives. A representative may be either an individual or a legal person as prescribed by the Civil Code. An authorized representative as provided under the Civil Code shall be deemed an authorized representative in civil proceedings. Such authorized representative in civil proceedings shall exercise the procedural rights and obligations of the litigant in accordance with the scope and contents of the authorization instrument.

Accordingly, shareholders in joint-stock companies may authorize other persons to participate in dispute resolution on their behalf.

5. How can evidence be collected when resolving shareholder disputes?

According to Clause 1 Article 97 of the Civil Procedure Code 2015, agencies, organizations, and individuals have the right to collect documents and evidence by the following means:

Collecting readable, audible, and visible documents and electronic data messages.
Collecting physical evidence.
Identifying witnesses and obtaining witness confirmations.
Requesting agencies, organizations, or individuals to provide copies of documents relevant to the dispute that they are storing or managing.
Requesting certification of witness signatures by the People’s Committee at the commune level.
Requesting the court to collect evidence if the litigant is unable to do so.
Requesting the court to issue decisions on appraisal or asset valuation.
Requesting agencies, organizations, or individuals to perform other tasks in accordance with the law.

Accordingly, shareholders should gather diverse forms of evidence such as documents, electronic data, meeting minutes, witness statements, appraisal results, and requests to competent authorities or courts to verify and support evidence collection for dispute resolution.

V. Why should you seek legal advice from NPLaw for shareholder disputes

The above information provides an overview of shareholder disputes prepared by NPLaw. With a team of experienced lawyers and legal specialists, NPLaw offers reputable and professional legal services to best protect the legitimate rights and interests of our clients. If you require legal assistance, please contact NPLaw for consultation and support.

The above information is provided for reference purposes only. For detailed advice regarding specific cases, please contact NPLaw Law Firm for prompt consultation.