What is dividend? Are businesses in Vietnam allowed đá bóng trực tiếp pay dividends in shares?

Regarding this matter, LawNet would like đá bóng trực tiếp answer as follows:

1. What is dividend?

Dividend can be understood as a portion of post-tax profits distributed đá bóng trực tiếp shareholders of a joint stock company. This is the profit that the company earns from its business operations, after setting aside reserves, expenses, and taxes, distributed đá bóng trực tiếp shareholders based on the number of shares they own.

According đá bóng trực tiếp the provisions of Clause 5, Article 4 of thetrực tiếp bóng đá hôm, dividends are defined as follows:

“dividend” means a net profit on each share in cash or other assets.

Thus, dividends are net profits paid đá bóng trực tiếp shareholders of a joint stock company on each share in cash or other assets.

2. Are businesses in Vietnam allowed đá bóng trực tiếp pay dividends in shares?

According đá bóng trực tiếp the provisions of Article 135 of thetrực tiếp bóng đá hômon paying dividends:

- Dividends of preference shares shall be paid under the conditions applied thereto.

- Dividends of ordinary shares shall be determined according đá bóng trực tiếp the realized net profit and the dividend payment from the company’s retained earnings. The joint stock company may only pay dividend of ordinary shares when the following conditions are fully satisfied:

+ The company has fully its tax liabilities and other liabilities as prescribed by law;

+ The company’s funds are contributed đá bóng trực tiếp and the previous losses are made up for as prescribed by law and the company's charter;

+ After dividends are fully paid, the company is still able đá bóng trực tiếp fully pay its debts and other liabilities when they are due.

- Dividends can be paid in cash, the company’s shares or other assets specified in the company's charter. If dividends are paid in cash, it shall be VND and using the methods of payment prescribed by law.

Thus, businesses (for joint stock companies) can absolutely pay dividends in shares đá bóng trực tiếp shareholders if stipulated in the company charter. In addition đá bóng trực tiếp shares, dividends can also be paid in cash or other assets.

3. What are the conditions for scrip issue by public companies in Vietnam?

A public company issuing shares đá bóng trực tiếp pay dividends đá bóng trực tiếp shareholders needs đá bóng trực tiếp comply with the following four conditions:

(1) There is a scrip issue plan which is approved by the GMS.

(2) The undistributed post-tax profit is sufficient đá bóng trực tiếp pay dividend according đá bóng trực tiếp the latest annual financial statement audited by an accredited audit organization.

In case the issuer is a parent company, the distributed profit must not exceed the undistributed post-tax profit on the latest audited consolidated financial statement.

In case the distributed profit is lower than undistributed post-tax profit on the consolidated financial statement and higher than the undistributed post-tax profit on the separate financial statement of the parent company, profit shall only be distributed after profits from subsidiary companies are transferred đá bóng trực tiếp the parent company.

(3) There is a plan for settlement of fractional shares (if any) which is approved by the GMS or Board of Directors.

(4) SBV has approved the increase in charter capital in accordance with regulations of law on credit institutions in case the issuer is a credit institution; The Ministry of Finance has approved the increase in charter cap

Thus, đá bóng trực tiếp issue shares đá bóng trực tiếp pay dividends, a public company needs đá bóng trực tiếp comply with the following 4 conditions: have scrip issue plan which is approved by the GMS, have undistributed post-tax profit, have a plan đá bóng trực tiếp handle fractional shares and be approved by competent state agency.

In particular, determining the source of distributed profits needs đá bóng trực tiếp be based on audited financial statements, especially for parent companies that need đá bóng trực tiếp comply with the principle of consolidated profits.

(Pursuant đá bóng trực tiếp Article 60 ofDecree No. 155/2020/ND-CP

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Key word: public companies | in Vietnam | Vietnam | dividend | dividends | shares |

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