On May 5, 2025, the Ministry of Finance issued Circular 19/2025/TT-BTC, regulating public company registration, revocation of public company status, and audited charter capital contribution reports ("Circular 19"), with notable new provisions as follows:
1. Public company registration documents must include a charter capital contribution report covering at least 10 years up to the registration date
The 2024 amendment Law on Securities introduces a new component in the public company registration documents: the "Audited Charter Capital Contribution Report" ("Capital Contribution Report")
Circular 19 specifies the following requirements for the Capital Contribution Report:
- It must cover a minimum period of 10 years up to the date of public company registration (for companies established for less than 10 years, the report should cover the period from the company's establishment or from the issuance of the first business registration certificate as a joint-stock company in cases of corporate privatization).
- The audit opinion on the Capital Contribution Report must be a clean audit opinion; if there are emphasized issues or other concerns, the company must provide explanations and obtain confirmation from an independent auditing organization.
These requirements also apply to the Capital Contribution Report included in initial public offering registration documents under the 2024 amendment Law on Securities.
2. Guidelines for revoking public company status due to violations of information disclosure obligations
The 2024 amendment Law on Securities establishes that a public company may lose its public company status if it fails to meet disclosure obligations (such as not disclosing audited annual financial reports or resolutions of the Annual General Meeting of Shareholders) for two consecutive years. Accordingly, Circular 19 outlines the procedure for revoking the status of a non-compliant public company:
- Timing: Revocation occurs 30 days after the deadline for disclosing audited annual financial statements or holding the Annual General Meeting of Shareholders if the public company has failed to comply for two consecutive years.
- Authority: The State Securities Commission is responsible for enforcing revocation.
- Execution: The decision to revoke public company status will be formally announced to the company and the Stock Exchange where its shares are listed or registered for trading. It will also be published on the official information disclosure platform of the State Securities Commission.
3. Public companies must disclose information when failing to meet public company requirements
Specifically, public companies that no longer meet requirements related to capital, shareholders, or shareholder structure under the Securities Law must disclose this information within 24 hours of the event occurring.
These provisions in Circular 19 enhance regulatory oversight and tighten control over public companies, particularly in financial transparency and shareholder accountability. The goal is to develop a stable, secure, sustainable, and well-regulated securities market.
Circular 19 will take effect from May 5, 2025.
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