According to the regulations on shareholders in the Law on Enterprise 2020, the rights of shareholders can be categorized into the following groups: economic rights, governance rights, information rights, and litigation rights.

1. What Rights Shareholder Holds in Joint Stock Company?
Shareholders are individual or organization that owns at least one share of the joint-stock
company and also are owner of the joint-stock company. Along with these roles, their
interests are tied to business operations although they may not directly manage the day-
to-day company affairs. In order to implement governance, the powers and
responsibilities of each interest group such as shareholders, the board of directors,
managerial personnel, etc. should be assigned based on the statutory principles and
procedures.
According to the regulations on shareholders in the Law on Enterprise 2020, the rights of
shareholders can be categorized into the following groups: economic rights, governance
rights, information rights, and litigation rights.
Economic rights
Economic right is the right to gain all pecuniary interest with respect to the shares. The
purpose of starting a business or investing in securities comes mainly from earning
income or gaining profits. Economic rights accordingly include:
-Right to entitlement to dividends
-Right to transfer ownership
-Priority right to acquire the newly issued shares
-Right to entitlement to a portion of the assets after dissolution or bankrupt
-Appraisal Right
Among these above rights, right to entitlement to dividends and right to transfer
ownership are the fundamental economic rights of a shareholder.
Dividend of common shares is determined according to the realized net profit and the
dividend payment from the company’s retained earnings. Despite right to entitlement to
dividends, shareholders are still subject to a number of limitations in law and in fact.
Dividend entitlement is determined by the General Meeting of Shareholders based on the
recommendation of the Board of Directors, after the company has fulfilled tax obligations
and other financial obligations, contributed to reserve fund, paid for previous losses and
met the solvency for all due debts and other property obligations. Dividend is not
required to be distributed annually. Depending on the business situation, the General
Meeting of Shareholders may decide to retain profits for reinvestment.

2. Besides dividend entitlement from the company’s operating results, shareholders can also
gain profits by share transfer. This kind of investment is popular with respect of shares or
securities of public companies, investors do not aim for corporate governance rights as
well as dividend, they intend to earn benefits by the difference of the market values of
stocks, especially when the stock value increases.
Governance rights
Modern corporate governance has two principles, one is to separate ownership and
governance and to separate governance and management. It means that the major
shareholders should not hold senior managerial positions in the company and
Chairperson of the Board of Directors should not be assigned to other senior managerial
positions such as General Director and/or Director.
Shareholders may be an individual or organization which they have their own different
interests, goals and abilities. The separation between ownership and management makes
the situation of whom the owner is and how the share get transferred not to affect the
business operation. In the meantime, the separation helps gather professional managers to
implement target intended by the company. According to the laws, members of the Board
of Directors of a public company concurrently holding several executive titles must be
reduced to the minimum to ensure the independence of the Board of Directors, specially
the Chairperson of the Board of Directors shall not be the Director/General Director in a
public company as of August 1st, 2020. There are no similar rules applicable to joint
stock companies which are not public company.
Attendance, speaking and voting at General Meeting of Shareholders are fundamental in
governance right of common shareholders, applicable to all shareholders holding at least
one share. ty. In principle, being a shareholder who holds shares of the company
regardless of the number has equal rights to attend and vote at the General Meeting of
Shareholders. By the General Meeting of Shareholders, the shareholders holding a certain
number of shares can impact decisions on some matters such as election, dismissal, and
removal of members of the Board of Directors and Controllers, amendment and
supplementation of internal documents, major transactions, and others as stipulated in
law on enterprise or charter. In addition to the above rights, the majority shareholders
also have a number of other rights related to governance as follows:
The shareholder or group of shareholders holding at least 5% of the total number of
common shares (charter may require a smaller percentage) is entitled to:
-Call a General Meeting of Shareholders

3. -Request Board of Controllers to inspect each specific matter relating to management,
governance of company affairs if necessary
-Recommend matters to be included in agenda of General Meeting of Shareholders
-The shareholder or group of shareholders holding at least 10% of the total number of
common shares (charter may require a smaller percentage) is entitled to nominate
candidates for the Board of Directors, Board of Controllers
Information rights
Shareholders have the right to access documents and information of the company. In
addition to the basic documents such as the charter, list of shareholders, meeting minutes
and resolutions of the General Meeting of Shareholders, shareholders have the right to
access to reports related to the business affairs.
However, some information is only reviewed by shareholders who own required
percentage of share:
-Access and extract information on full name and contact address as specified in list of
shareholders having voting right and list of shareholders having right to attend General
Meeting of Shareholder; request to adjust his/her inaccurate information
-Access, extract and scan charter of company, meeting minutes of General Meeting of
Shareholder and its resolution
-Access, extract and copy partial or whole list of involved persons and their contracts,
transaction of which the company is other party, interests of Board of Directors,
Controllers, Directors or General Directors and other managerial positions of company
-Access and extract minutes and resolutions of Board of Directors, annual or mid-year
financial reports, reports of Board of Controllers, contracts and transaction approved by
Board of Directors and other documents, excepting for documents related to company’s
know-how and trade secrets (applicable to shareholder and group of shareholders who
own at least 5% of total number of common shares, the charter may require a smaller
percentage)
-Access profit and loss statements, finacial reports, governace and management assement
reports; inspection reports of Board of Controllers (applicable to shareholder who own
shares at least 1 consecutive year, the charter may require a smaller percentage)

4. Different to common joint stock company, a public company must annouce fully,
accurately and promptly the periodic and extraordinary information on business, finance
and governace. Other information must be annouced if it influences share price and
investment decisions of shareholders and investors.
Litigation rights
The Law on Enterprises has provided a mechanism to request the Court or Arbitration to
rescind the resolution of the General Meeting of Shareholders or sue the managerial
personnels when they fail to fully and properly implement their tasks, including:
The shareholder or group of shareholders holding at least 5% of the total number of
common shares (charter may require a smaller percentage) is entitled to:
-Request to rescind resolutions of the General Meeting of Shareholders when the orders
and procedures of calling the meeting and making resolution of the General Meeting of
Shareholders seriously violate the regulations of the Law on Enterprises and company’s
charter
-However, the resolution of the General Meeting of Shareholders adopted by 100% of the
total number of voting shares is legal and effective even when the orders and procedures
of calling the meeting and adopting such resolution violates regulations of the Law on
Enterprises and company’s charter.
-Request to rescind resolutions of the General Meeting of Shareholders when its
provisions violates the laws or company’s charter
-The shareholder, group of shareholders holding at least 1% of the total number of
common shares is entitled to:
-Sue members of Board of Directors, Directors, General Directors separately or jointly
under certain circumstances
The Chairperson of Board of Directors or the Director or General Director usually acts as
the legal representative of the company, representing the company to perform rights and
obligations arising from the company’s transactions, representing the company to take
proceedings before the court or arbitrator. However, when their interests conflict with
those of the shareholders, shareholders have the right to initiate a lawsuit claiming
benefits or compensation. The Law on Enterprise also permits shareholders to sue on
behalf of the company when the above managerital personnels commit violations,
causing damage directly to the company and indirectly to shareholders.

5. Not all shareholders have the right to sue for the above managerial personnels, only those
who own at least 1% of the total number of common shares. This restriction makes sense
with respect of public companies, in order to eliminate unfair competition actions
conducted by minority shareholders who is controlled by the rival companies because
amount of 1% in public company is not a small number.
Similar to a lawsuit against a manager, shareholder or group of shareholders is also
required to own at least 5% of the total number of common shares to request rescission of
the resolution of the General Meeting of Shareholders if there is violation on substantive
law and procedural law. Accordingly, all resolutions of the General Meeting of
Shareholders violating the substantive laws or the company’s charter are rescinded at the
request of shareholders, but only serious procedural violations may be rescinded. There is
no specific instructions for serious procedural violations at this time, the assessment will
depend on personal perspective of the court and arbitrator.
In order to seek further advice, please contact us at ant@antlawyers.vn or call + 84 912
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