Failure to hold General Meeting of Shareholders, enterprise may request an extension

Illustration image. Source: Internet

Amid the acute respiratory infection due to a new strain of corona virus (Covid-19), which has complex developments, many public companies reported the organisation of the AGM in 2020 was very difficul due to the requirements of disease prevention and control by competent agencies, so the State Securities Commission requested public companies comply with the regulations on the time for organising the general meeting of shareholders in accordance with the Law on Enterprises 2014: “The general meeting of shareholders must hold an annual meeting within four months from the end of the fiscal year. At the request of the management board, the business registration office should extend the but it should not be more than six months from the end of the fiscal year.”

In case of not holding the annual meeting within four months since the end of the fiscal year, the State Securities Commission recommended the management board of the company must send a request document for an extension and send it to business registration agencies for handling.

Besides that, companies need to implement measures to prevent and control epidemics to ensure safety for shareholders, in accordance with the guidance documents of the Prime Minister, the National Steering Committee on Covid-19 prevention and the local government where the meeting is expected to be held.

The State Securities Commission also said companies can hold such meetings online so shareholders can attend and vote online.

However, enterprises need to review provisions of the Law on Enterprise, the company's charter and internal regulations on corporate governance to ensure the company is eligible to organise an online AGM.

In case the company's charter or internal regulations on corporate governance lack specific provisions on the application of modern information technology for shareholders to attend and speak at the AGM (including guiding shareholders to vote online), the State Securities Commission requested the management board of the company elaborate detailed regulations on organising the online AGM, or adds this content to the internal regulations on corporate governance.

To facilitate the implementation, the State Securities Commission requested Vietnam Securities Depository (VSD) close the list of shareholders for supporting the organisation of the AGM and to exercise rights of securities owners and provide other services to public companies in accordance with regulations.