When listening to information on the mass media, many people still do not understand what a public company is, what a listed company is. Some people believe that a public company and a listed company are one. So, in this article, we will help you to distinguish these two types of companies.
What is a public company? What is a listed company?
– A public company is defined in Article 25 of the 2006 Law on Securities, which is a joint-stock company in one of the following three types:
The company has already conducted the public offering of its stocks;
The company has its stocks listed at the Stock Exchange or the Securities Trading Center;
The company has its stocks owned by at least one hundred investors, excluding professional securities investors, and has a charter capital of VND 10 billion or more.
– A listed company is a public company whose stocks are traded on the stock exchanges.
Thus, a listed company is a public company but the public does not mean that it is a listed company.
For becoming a public company, an enterprise only needs to satisfy one of the conditions specified in Clause 1, Article 25 of the 2006 Law on Securities.
However, to become a listed company, it is required to satisfy 3 conditions as per Article 12 of the 2006 Law on Securities as follows:
– The enterprise has a charter capital contributed at the time of offering registration of VND 10 billion or more accounted according to the book value;
– Its business operation in the year preceding the year of offering registration is profitable and, at the same time, it has no accrued loss up to the year of offering registration;
– Its issuance plan and plan on the use of capital generated from the sale offer are adopted by the Shareholders’ General Assembly.
According to Article 54 of Decree No. 58/2012/ND-CP detailing and guiding the implementation of several articles of the Securities Law and the Law amending and supplementing some articles of the Law on Securities:
– Regarding charter capital: A public company must have a charter capital of 10 billion VND or more while a listed company must have a charter capital of 30 billion VND
– Regarding the publicity: A public company requires at least 100 investors to hold shares, excluding professional investors who are financial institutions while a listed company requires an additional condition of 100 shareholders holding at least 15% of the shares with voting rights;
– Regarding the stock holding duration of the members in the board of leaders: There are no regulations on the compulsory stock holding percentage and time of the leaders in a public company, while the listed company requires the board of leaders to hold 100% of the shares within 6 months from the listing date and 50% of these shares in the next 06 months.
This is the article advising on “Differentiating between listed companies and public companies” by Apra Law Firm. If you have any questions or concerns, please contact the hotline for further advice and support.
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