Initial public offering, also known as IPO (abbreviated in English: Initial Public Offering) refers to the operation of a company for the first time to raise capital widely from the public through the initial issuance of shares and listing on the stock exchange. So what are the requirements for offering shares to the public for the first time? Let’s join Nghiep Thanh Law to know more about this topic.
1. What are securities? How many types of securities?
Securities are long-term valuable documents or journal entries certifying the owners’ legitimate rights and interests to the capital or assets of the issuing organization. Securities are commodities of the stock market.
Securities include the following types:
– Stocks, bonds, fund certificates;
– Stock warrants, covered warrants, right to purchase shares, depository receipts;
– Derivative securities;
– Other types of securities prescribed by the Government.
2. Conditions for the initial public offering of shares of a joint-stock company
– The amount of charter capital contributed at the time of registration for the offering is from VND 30 billion or more calculated according to the value recorded in the accounting books .
– Business activities of 02 consecutive years before the year of registration of the offering must be profitable;
– No accumulated loss on the offering registration date.
– Having an issuance plan;
– Having a plan to use capital obtained from the offering of shares approved by the General Meeting of Shareholders.
Minimum percentage of shares
– A minimum of 15% of the issuing organization’s voting shares must be sold to at least 100 investors who are not major shareholders;
– In case the charter capital of the issuing organization is VND 1,000 billion or more, the minimum ratio is 10% of the voting shares of the issuing organization.
– Major shareholders must commit together to hold at least 20% of the charter capital of the issuing organization for at least 01 year from the date of closing the offering;
– Having a commitment and having to list or register for trading of shares on the securities trading system after the end of the offering.
– The issuing organization is not being examined for penal liability or has been convicted of one of the crimes of infringing upon the economic management order but has not yet had its criminal record cleared;
– There is a securities company consulting the dossier for registration of a public offering of shares unless the issuing organization is a securities company;
– The issuing organization must open a blocked account to receive money to buy shares of the offering.
All the above regulations are general regulations for a joint-stock company wishing to list on the stock exchange. Besides, each stock exchange may have its own and stricter conditions.
For example, the HOSE stipulates that the company’s charter capital at the time of registration for the offering is VND 120 billion, while the HNX reuquires VND 30 billion. The HOSE also requires the company to operate for at least 02 years as a joint stock company.
Readers may refer to Can a person under 18 years old own capital in the company in Viet Nam?
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Translator: Le Khanh Linh
Content writer: Bui Thi Nhu
Instructor: Nguyen Linh Chi
Admin: Lawyer Thuan
 Article 4.1 Law on Securities 2019.
 Article 15.1 Law on Securities 2019.