ATFXSharing: Should Private Placement of Stocks Pay Stamp Duty and Stay Away from Investment Fraud

Listed companies can not only issue stocks when they go public, but also after going public. For example, private placement and rights issue are common ways for listed companies to issue stocks, collectively known as the public issuance of new shares by listed companies to the public.

Do I need to pay stamp duty for directional issuance of stocks?

When buying, it is not necessary. When selling, it is necessary. The principle of one-way stamp duty is implemented for targeted issuance of stocks, which only applies to sellers(Inheritance, gift of stock, transferor of stock equity)Impose stamp duty on securities transactions.

When the ban on targeted issuance of stocks is lifted, there is no need to pay tax, but a certain amount of personal income tax needs to be paid when transferring. This includes transaction commission fees, transfer fees, and stamp duty.

Relevant regulations on directional issuance of shares:

【1】The original shareholders shall apply for subscription based on the distribution of shares in their account equity, and shall ensure priority acquisition according to the priority subscription rights. If the excess subscription is made, the subscription shall be made according to the announcement prompts, and the lottery shall be determined based on the additional subscription situation.

【2】Whether other investors can participate depends on the announcement prompts. The number of participating individual stock issuances that customers can apply for according to their needs, and the actual number of households obtained depends on the lottery of the subscription status of the issuances.

【3】Operation method: The customer must declare it on their own, and it will be invalidated upon expiration. Both buying and selling commissions can be achieved, but it is generally recommended that customers use the buying method.

【4】Declaration method: valid for the first time, the same as the new shares, and repeated subscription is invalid.

【5】Can we cancel the order? It cannot be cancelled, and the return on cancellation is considered invalid.

【6】Handling fee: There is no charge for additional issuance.

【7】Allocation code and price: subject to announcement, is there any difference between the original shareholders and other investors.

【8】Number of allotted shares: subject to the announcement. Generally, there is no minimum limit on the number of original shareholders, and the subscription quantity of public shares is subject to the announcement.

【9】Ex-right or not: Generally, additional shares are not ex-right, and the specific announcement of the company's additional issuance shall prevail.

Directional issuance and rights issue are very similar, but there are still differences between the two. Rights issue refers to the distribution of stocks to the original shareholders, known as rights issue. Directional issuance refers to the sale of stocks to the general public. During directional issuance, investors subscribe in cash at the same price as the same stock.