Share transfers occur when shareholders of a joint-stock company transfer their shares to someone outside the company or to another shareholder. Learn more about the conditions and procedures for share transfer capital contributions in the article below.
1 Share Transfer Conditions of a Joint Stock Company
To be eligible for a share transfer of a joint-stock company, shareholders must meet the following conditions:
- The share transfer must take place within 3 years from the date the enterprise is granted a business registration certificate.
- Shareholders may only transfer their common shares to someone other than a founding shareholder when approved by the General Meeting of Shareholders.
In the case where the remaining founding shareholders do not approve the transfer of shares to outsiders , the transferring shareholder has the right to request the remaining shareholders or the company to buy back the number of shares intended for transfer beforehand, whereby:
- Previously voted preferred shares are not allowed to be transferred.
- Shareholders receiving transferred shares from founding shareholders of the company are not considered founding shareholders.
Share transfers need to meet certain conditions
2 Procedures for Share Transfer of a Joint Stock Company
To carry out the share transfer process, shareholders only need to complete the transfer procedures within the company , without having to make changes to the enterprise registration content at the Business Registration Department – Department of Planning and Investment.
Step 1: Sign the transfer documents within the company
The set of transfer documents to be signed within the company will include the following papers:
- Minutes of the General Meeting of Shareholders
- Decision of the General Meeting of Shareholders
- Share Transfer Agreement
- Minutes of Settlement of Share Transfer Agreement
- Update information of the new shareholder who receives the transfer in the Company’s Shareholder Book
Signing the documents is the first step to transferring shares
Step 2: Submit personal income tax declaration for share transfer
The next step after completing the transfer documents is to submit a personal income tax declaration and pay personal income tax arising from the share transfer. This must be done at the Enterprise Tax Administration Agency or the Tax Sub-Department, Tax Department. To calculate personal income tax, simply multiply the transfer price of securities per transaction by the tax rate (0.1%) .
However, note that the deadline for submitting a personal income tax declaration for share transfers is within 10 days from the date of signing the share transfer agreement. If declared through the enterprise, it must be done before obtaining a new Business Registration Certificate .
The personal income tax declaration includes:
- Minutes of the General Meeting of Shareholders
- Decision of the General Meeting of Shareholders
- Share Transfer Agreement
- Minutes of Settlement of Share Transfer Agreement
- Submit personal income tax declaration at the Enterprise Tax Administration Agency or Tax Sub-Department, Tax Department
Declare personal income tax before transferring shares
3 Some Notes on Share Transfers
To transfer shares at 0 VND , the transferring party must still pay personal income tax because according to the transfer contract, it is considered a contract for the donation of property. Based on Article 16 of Circular No. 111/2013/TT-BTC , it is stipulated that: “For inheritance or gifts that are capital contributions in economic organizations or business establishments; taxable income is the book value of the contributed capital determined based on the company’s accounting books at the time closest to the time of registration of ownership of the contributed capital. The tax rate applied is 10% .”
The share transfer price in the company is determined by the parties and can be freely agreed upon . However, note the provisions of Article 11 of Circular No. 111/2013/TT-BTC , which states: “… the selling price is the actual transfer price stated in the transfer contract or the book value according to the accounting books of the unit with transferable securities at the time of transfer closest to the time of transfer …”
Share transfers have a few points to note
The share transfer procedure can be a bit tricky and complicated. Therefore, we hope that the information provided above will be useful to those who want to learn more about this issue.
The Art of Share Transfer: A Comprehensive Guide to Seamless Transactions
Today, we delve into the intricacies of share transfer procedures and the conditions that govern them.
The Ultimate Guide to Dissolving a Joint-Stock Company
The process of dissolving a company is a intricate journey that requires a comprehensive understanding of the procedures involved. Join us as we unravel the intricate steps involved in winding up a joint-stock company, ensuring a seamless and efficient process.
The Ultimate Guide to Increasing Your Company’s Authorized Capital
“Increasing a company’s chartered capital is an inevitable part of business growth and development. Let’s delve into the intricate details of this process and explore the essential procedures involved in raising the chartered capital.”
