Article 120 of the Law on Enterprises provides as follows:
Ordinary shares of founding shareholders
1. A newly established joint stock company must have at least three founding shareholders. A joint stock company converted from a state-owned enterprise or from a limited liability company, or formed through division, separation, consolidation, or merger of another joint stock company, is not required to have founding shareholders; in such cases, the company’s Charter submitted in the enterprise registration dossier must bear the signature of the legal representative or of the ordinary shareholders of that company.
2. The founding shareholders must together register to subscribe for at least 20% of the total number of ordinary shares authorized for offering upon enterprise registration.
3. Within three (03) years from the date the company is granted the Enterprise Registration Certificate, ordinary shares of founding shareholders may be freely transferred to other founding shareholders but may only be transferred to persons who are not founding shareholders if approved by the General Meeting of Shareholders. In this case, the founding shareholder intending to transfer ordinary shares shall not have the right to vote on such transfer.
4. The restrictions stipulated in Clause 3 of this Article do not apply to the following ordinary shares:
a) Shares additionally acquired by founding shareholders after enterprise registration;
b) Shares that have already been transferred to persons who are not founding shareholders.
