Article 116 of the Law on Enterprises 2020 provides as follows:
Voting preference shares and rights of shareholders holding voting preference shares
-
Voting preference shares are ordinary shares that carry more votes than other ordinary shares; the number of votes attached to one voting preference share shall be provided in the company’s Charter. Only organizations authorized by the Government and founding shareholders are entitled to hold voting preference shares. The voting preference rights of founding shareholders shall be valid for 03 years from the date the company is granted the Enterprise Registration Certificate. The voting rights and the duration of voting preference shares held by organizations authorized by the Government shall be provided in the company’s Charter. Upon expiry of the preference period, voting preference shares shall be converted into ordinary shares.
-
Shareholders holding voting preference shares shall have the following rights:
a) To vote on matters falling within the competence of the General Meeting of Shareholders with the number of votes specified in Clause 1 of this Article;
b) Other rights as ordinary shareholders, except as provided in Clause 3 of this Article. -
Shareholders holding voting preference shares shall not transfer such shares to other persons, except in cases of transfer pursuant to an effective court judgment or decision, or inheritance.
-
The Government shall provide detailed regulations on this Article.
Voting preference shares of state-owned enterprises are governed by Article 11 of Decree No. 47/2021/ND-CP guiding certain provisions of the Law on Enterprises, which provides:
Article 11. Voting preference shares
-
The Charter of a joint stock company must specifically stipulate the duration and the total number of votes or the voting ratio corresponding to each voting preference share.
-
The organizations authorized by the Government referred to in Clause 1, Article 116 of the Law on Enterprises are state ownership representative agencies, which shall exercise the rights and obligations of the state as the owner of voting preference shares.
-
The voting preference duration applicable to voting preference shares held by founding shareholders of a joint stock company is 03 years from the date the company is granted the Enterprise Registration Certificate, except for voting preference shares held by organizations authorized by the Government.
