The offering of shares for the first time to the public by a joint stock company is regulated in the Securities Law 2019 to ensure transparency and efficiency in the stock market. In order to offer shares for the first time to the public, a joint stock company must meet various conditions related to business operations, charter capital, shareholder structure, as well as comply with other specific legal requirements.
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Based on Article 15 of the Securities Law 2019 regarding the conditions for offering securities to the public, the requirements for the initial public offering of shares by a joint stock company include:
“1. The conditions for the initial public offering of shares by a joint stock company include:
a) The charter capital contributed at the time of registration for the offering must be at least 30 billion VND based on the value recorded in the accounting books.
b) The business operations for the continuous 2 years prior to the registration year for the offering must be profitable, and there should be no accumulated losses up to the registration year for the offering.
c) There must be a plan for issuance and utilization of the capital obtained from the share offering approved by the General Meeting of Shareholders.
d) At least 15% of the voting shares of the issuing organization must be sold to at least 100 investors who are not major shareholders; in cases where the charter capital of the issuing organization is 1,000 billion VND or more, the minimum ratio is 10% of the voting shares of the issuing organization.
e) Major shareholders before the offering of shares for the first time to the public by the issuing organization must commit to collectively hold at least 20% of the charter capital of the issuing organization for a minimum of 1 year from the end of the offering.
f) The issuing organization must not be under criminal prosecution or have been convicted of any of the economic management offenses without having the conviction records expunged.
g) There must be a securities company advising on the registration dossier for the public offering of shares, except in cases where the issuing organization is a securities company.
h) There must be a commitment to and must list or register the shares for trading on the stock exchange system after the offering ends.
i) The issuing organization must open a restricted account to receive funds for the purchase of shares from the offering.”
Therefore, to offer shares for the first time to the public, a joint stock company must ensure profitable business operations for the continuous 2 years leading up to the registration year for the offering, and must not have accumulated losses up to the registration point. Additionally, the company must comply with the specified conditions.
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