Shares of joint stock companies can, as a rule, be freely transferred. It is regulated in TCC article 490-501.
Share Types
- Bearer shares: Transferred by delivery of promissory note (rarely used)
- Registered shares: Transferred by registration in the share ledger + endorsement/assignment
- Electronic share (on MKK): Electronic shares in public companies registration
Contractual Limitations
Restrictions on share transfer may be imposed in the articles of association:
- Pre-emption right: Other shareholders have priority
- Board of directors' approval requirement
- Drag-along / Tag-along rights (investor agreements)
Public In companies
According to CMB regulations, public disclosure and special event notification are required.
Tax Aspect
- Holding period less than 2 years: capital gains tax
- 0% withholding tax for public company shares (current status)
Supreme Court 11. HD
11. HD adopts that transfers contrary to the share transfer restrictions in the articles of association are invalid against the company, but can be considered valid between the parties.
Commercial law lawyer is recommended.