🎀Enterprise Law 2014 clearly stipulates the right to transfer shares, cases of transfer of shares. Hnlaw & Partners please outline some of these provisions as follows:
1. Right to transfer shares:
🎀According to clause 1 Article 126 Law on Enterprise 2014: “Shares may be freely transferred”
Except the following cases:
- Charter of the company regulates the provision on share transferring limitation. Excepting the case that the Charter has such provision, such provision is only valid when clarified in the Stock of the relevant shares.
- According to clause 3 Article 119 of Law on Enterprise 2014: Within 3 years from the date the enterprise registration certificate is granted to the company, its founding shareholders have the right to freely transfer their shares to other founding shareholders and may transfer their ordinary shares to persons other than founding shareholders if approved by the General Meeting of Shareholders. In this case, shareholders intending to transfer shares may not vote on the transfer of such shares.
- According to clause 3 Article 116 of Law on Enterprise 2014: Voting preference shareholders may not transfer their shares to other persons.
2. Cases of share transferring:
🎀According to clause 2, 3, 4, 5 Article 126 Law on Enterprise 2014, : Cases of share transferring include:
- Transferring under contracts. In these cases, the transferring documents must be signed by the transferer and the transferee or their authorized representative.
- Transfer of shares through trading on the stock market. The order, procedures and the recording of ownership comply with the law on securities.
- If an individual shareholder dies, his/her heir by testament or by law shall become a shareholder of the company.
- If an individual dies without any heir or his/her heir disclaims the inheritance or his/her right to inherit is deprived, such shares shall be dealt with in accordance with the civil law.
- Shareholders have the right to donate some or all of their shares in the company to others; and the right to use shares for debt repayment. In this case, the donee or recipient of the debt repayment with shares shall become a shareholder of the company.
🎀Hnlaw & Partners Law Firm