1. In case of cancellation of the status of a public company

Article 8 of Circular 118/2020/TT-BTC stipulates in 04 following cases

In case the conditions are not met as a public company after division, consolidation, merger, dissolution or bankruptcy of the enterprise, specifically

• Public companies shall report and publish information on the reorganization, dissolution or bankruptcy of enterprises in accordance with the law on information disclosure on the stock market;
• After a public company is updated with its legal status on the National Business Registration Database or when there is a court decision declaring the enterprise bankrupt, the State Securities Commission shall consider and notify on the State Securities Commission’s information disclosure medium about canceling the status of a public company.

In case the Certificate of Business Registration is revoked by a public company

• A public company whose Certificate of Business Registration shall be revoked shall report and disclose information in accordance with the law on information disclosure on the stock market;
• The State Securities Commission shall consider canceling the status of a public company within 180 days from the date of receipt of the report on the revocation of the Certificate of Business Registration;
• After the expiry of the time limit as prescribed above, the State Securities Commission shall announce on the State Securities Commission’s means of disclosure information about the cancellation of the status of a public company.

In case the conditions are not met, the public company after separation or receipt of enterprise merger.

In case the conditions for being a public company are not met due to the conversion of the type of enterprise from a joint stock company into a limited liability company, in which

• A public company that is granted an enterprise registration certificate due to the change of type of enterprise must report and disclose information in accordance with the law on information disclosure on the stock market;
• After receiving the report and disclosing information in accordance with the above regulations, the State Securities Commission shall consider and notify on the information disclosure medium of the State Securities Commission the cancellation of the status of a public company.

2. Order of cancellation of public company status

Pursuant to Article 38 of the Law on Securities 2019 stipulates as follows:

–    A public company shall send the State Securities Commission a written notice enclosing the list of shareholders provided by the Vietnam Securities Depository and Clearing Corporation within 15 days from the date of having charter capital contributed not enough VND 30 billion on the most recently audited financial statements or shareholder structure satisfy the conditions specified at Point a, Clause 1, Article 32 of this Law based on the certification of the Vietnam Securities Depository and Clearing Corporation.

–    After 01 year from the date of no longer meeting the provisions of Point a, Clause 1, Article 32 of this Law but the company still fails to meet the conditions for being a public company, the State Securities Commission shall consider canceling the status of a public company.

–    The company must fully comply with regulations related to public companies until the time the State Securities Commission announces the cancellation of the status of a public company.

–    Within 07 working days from the date of receipt of the notice of the State Securities Commission on the cancellation of the status of a public company, the company is responsible for announcing the cancellation of the status of a public company on the company’s website, the State Securities Commission’s means of disclosure, Vietnam Stock Exchange and carry out procedures for delisting and registration of transactions in accordance with the provisions of law.

–    The Minister of Finance shall stipulate the cancellation of the status of a public company in case of failure to satisfy the conditions for being a public company due to reorganization, dissolution or bankruptcy of the enterprise.

3. Dossier of cancellation of public company status

A public company in the case specified in Clause 2, Article 38 of the Law on Securities 2019, must submit a dossier of cancellation of public company status to the State Securities Commission.

A dossier of cancellation of public company status includes:

–    Certificate of business registration;

–    A written notice that the public company no longer meets the provisions of Point a, Clause 1, Article 32 of the Law on Securities 2019;

–    List of shareholders provided by Vietnam Securities Depository and Clearing Corporation;

–    The most recent year’s financial statements are audited by an approved auditing organization. In case the company increases its charter capital after the end of the latest accounting period, the company must supplement the most recent audited financial statements.

4. Violating regulations on cancellation of public company status

According to Article 14 of Decree 156/2020/ND-CP stipulates as follows:

–    Violations of regulations on notification to the State Securities Commission when they no longer meet the conditions for being a public company as prescribed in Article 32 of the Law on Securities are sanctioned as follows:

• Warning penalty when notifying the State Securities Commission less than 15 days later than prescribed;
• A fine ranging from VND 5,000,000 to VND 10,000,000 when notifying the State Securities Commission 15 days or more late than prescribed;
• A fine ranging from VND 10,000,000 to VND 15,000,000 for failing to notify the State Securities Commission as prescribed.

–    A fine ranging from VND 30,000,000 to VND 50,000,000 shall be imposed for failure to submit or untimely submission of a dossier of cancellation of public company status as prescribed in Article 39 of the Law on Securities in case a dossier for cancellation of public company status must be filed in accordance with law.

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