Identification Of Beneficial Owner: Criteria Applicable To Joint Stock Companies

The specific ownership structure is as follows: Mr. A holds 200,000 common shares; Mr. B holds 200,000 common shares; and Mr. C holds 100,000 common shares. Under the new regulations, enterprises must declare information about their beneficial owners. In this case, how should the beneficial owners be determined?

Answer

According to Article 17 of Decree No. 168/2025/ND-CP, the criteria for determining a beneficial owner are prescribed as follows:

“1. Criteria for determining a beneficial owner of an enterprise

The beneficial owner of an enterprise with legal entity status (hereinafter referred to as the "beneficial owner of the enterprise") is an individual who meets one of the following criteria:

a) An individual who directly or indirectly owns at least 25% of the charter capital or 25% of the total voting shares of the enterprise;

b) An individual who has the right to control the decision-making on at least one of the following matters: appointment, dismissal, or removal of the majority or all members of the Board of Directors, the Chairperson of the Board of Directors, the Chairperson of the Members' Council; the legal representative; the Director or General Director of the enterprise; amendments or supplements to the enterprise’s charter; changes in the organizational structure of the company’s management; reorganization or dissolution of the company.

2. Indirect ownership under Point a, Clause 1 of this Article refers to an individual who owns at least 25% of the charter capital or 25% of the total voting shares of the enterprise through another organization.”.

Based on the information provided by the Client and in accordance with the criteria under Point a, Clause 1, Article 17 of Decree No. 168/2025/ND-CP, which stipulates that “an individual directly or indirectly owns at least 25% of the charter capital or 25% of the total voting shares of the enterprise,” the determination is as follows:

- Mr. A holds 200,000 common shares, equivalent to 40% of the total voting shares, and is therefore identified as a beneficial owner of the Company.

- Mr. B holds 200,000 common shares, also equivalent to 40% of the total voting shares, and is likewise identified as a beneficial owner of the Company.

- Mr. C holds 100,000 common shares, equivalent to 20% of the total voting shares, and is therefore not considered a beneficial owner of the Company, unless he meets the control criteria under Point b, Clause 1, Article 17 mentioned above.

Conclusion: Based on the proportion of voting shares owned in accordance with Article 17 of Decree No. 168/2025/ND-CP, Mr. A and Mr. B meet the conditions and are identified as beneficial owners of the enterprise. Therefore, the Company must carry out the procedure for declaring information on beneficial owners using Form No. 10 issued together with Circular No. 68/2025/TT-BTC.