〖上接中华人民共和国公司法(1)〗
Company Law of the People'sRepublic of China
(Adopted at the Fifth session ofthe Standing Committee of theEighth National People'sCongress on December 29, 1993)
Whole document
Company Law of the People'sRepublic of China
(Adopted at the Fifth session ofthe Standing Committee of the
Eighth National People'sCongress on December 29, 1993)
Chapter 1 General Provisions
Article 1
This Law is formulated in accordance with theConstitution in order to
adapt to the needs to establisha modem enterprise system, standardize the
organization and activities ofcompanies, protect the legitimate rights
and interests of companies,shareholders and creditors, safeguard social
and economic order and promotethe development of the socialist market
economy.
Article 2
In this Law, the term "company" refers to a limitedliability company
or a company limited by sharesestablished within Chinese territory in
accordance with thisLaw.
Article 3
All limited liability companies and companieslimited by shares are
enterprise legalpersons.
In the case of a limited liability company, ashareholder is liable to
the company to the extentof the amount of the shareholder's capital
contribution. A limitedliability company is liable for the debts of the
company with all itsassets.
In the case of a company limited by shares, its entire capital is
divided into shares of equalvalue and shareholders shall be liable to the
company to the extent of theshares held by them. A company limited by
shares is liable for the debtsof the company with all its assets.
Article 4
The shareholders of a company, as capitalcontributors, have the right
to enjoy the benefits of theassets of the company, make major decisions,
choose managers etc. inaccordance with the amount of capital they have
invested in thecompany.
A company enjoys all legal person property rightsconstituted by the
shareholders' investment, enjoys civil rights and assumes civil
liabilities in accordance withlaw.
Ownership of the State-owned assets in a companybelongs to the state.
Article 5
With respect to all its corporateproperty, a company conducts its
business autonomously inaccordance with law and is responsible for its
own profits andlosses.
Under the state's macro regulation and controladjustment, a company
organizes its production andoperations autonomously according to market
demand with theobjectives of raising economic efficiency and labour
productivity and preserving andincreasing the value of assets.
Article 6
A company implements an internalmanagement structure with a clear
division of rights and responsibilities, scientific management and
combined incentives andrestrictions.
Article 7
A state owned enterprise which is being reorganized asa company shall
replace its system of operation, gradually and systematically take
inventory of its assets andverify its capital, determine property rights,
clear creditors' rightsand indebtedness, value assets and set up a
standardized internal managementstructure in accordance with the law and
conditions and requirements ofadministrative regulations.
Article 8
The establishment of a limited liability company or acompany limited
by shares shall comply with theconditions set out in this Law. A company
complying with the conditions ofthis Law is registered as a limited
liability company or a companylimited by shares. A Company which does not
comply with the conditions setout in this Law shall not be registered as
a limited liability company or acompany limited by shares.
Where the law or administrative regulations require that the
establishment of a company besubmitted for examination and approval, the
procedures for such examinationand approval are carried out before the
company is registered.
Article 9
A limited liability company established inaccordance with this Law
shall have the words "limitedliability company" in its name.
A company limited by shares established inaccordance with this Law
shall have the words "companylimited by shares" in its name.
Article 10
The domicile of a company is the place whereits principal place of
business is located.
Article 11
In establishing a company, the company's articles ofassociation shall
prepared in accordance with thisLaw. The articles of association are
binding on thecompany, the shareholders, directors, supervisors and
managers.
A company's business scope is specified in itsarticles of association
and registered in accordancewith the law. For items in a company's
business scope which arerestricted by law or administrative regulations,
approval shall be obtained inaccordance with the law.
A company shall conduct business activities within its registered
business scope. A company maychange its business scope by amendments to
its articles of association inaccordance with procedures provided by law
and after changing its registration with the company registration
authority.
Article 12
A company may invest in other limited liabilitycompanies or companies
limited by shares and be liableto the companies which it has invested in
to the extent of the amount ofcapital invested in such companies.
Except for investment companies and holding companiesspecified by the
State Council, where a company invests in other limited liability
companies or companies limited by shares, the aggregate amount of
investment shall not exceedfifty per cent of the net assets of the
company, not including anyincrease in the capital of the other limited
liability companies or companieslimited by shares in which the company
invests arising from any conversion of profits of these companies into
capital following suchinvestment.
Article 13
A company may set up branches. Branches of a companydo not have the
status of enterprise legalpersons and the company assumes the civil
liabilities of itsbranches.
A company may set up subsidiaries. Subsidiaries of acompany have the
status of enterprise legal persons and assume civil liabilities
independently in accordance withthe law.
Article 14
In conducting its business activities, a companyshall abide by the
law and by businessethics, strengthen the construction of socialist
spiritual civilization andaccept the supervision of the government and
the public.
The legitimate rights and interests of a company areprotected by law
and shall not beinfringed.
Article 15
A company shall protect the legitimaterights and interests of its
staff and workers, strengthenlabour protection and bring about production
safety.
A company should use various means to enhancevocational education and
on-the-job training for staffand workers to increase their work quality.
Article 16
The staff and workers of a company organize a trade union in
accordance with the law to carryout union activities and protect the
lawful rights and interests ofthe staff and workers. A company shall
provide the necessary conditionsfor activities of the trade union of the
company.
Limited liability companies established withinvestment by a wholly
state-owned company and thoseestablished with investment by two or more
state-ownedenterprises or two or more other state-owned investment
entities practice democraticmanagement in accordance with the provisions
of the Constitution and of relevant laws through the representative
conferences of the staff andworkers and otherwise.
Article 17
The activities of the base-level organizations of theCommunist Party
of China in the company aredealt with in accordance with the Charter of
the Communist Party ofChina.
Article 18
The Law applies to limited liability companies with foreign
investment. Where the laws on Sino-foreign equity joint venture
enterprises, Sino-foreign co-operative joint venture enterprises and
wholly-owned foreign enterprisesotherwise provide, the provisions of such
laws apply.
Chapter 2 Establishment and Organizational Structureof A Limited Liability Company
Section 1 Establishment
Article 19
Establishment of a limited liability company shall be subject to
fulfillment of the followingconditions;
(1) the number of shareholders meets the requirementsof the law;
(2) the investment contributed by shareholders meets the minimum
amount of capital required bylaw;
(3) the company's articles of associationare formulated jointly by
the shareholders;
(4) there is a company name, and an organizationalstructure complying
with the requirements forestablishing a limited liability company; and
(5) there is a fixed site for production and operations and the
necessary conditions forproduction and operations.
Article 20
A limited liability company is established by capital contributions
made jointly by at least two andno more than fifty shareholders.
A state-authorized investment institution ora department authorized
by the state may invest onits own to establish a wholly state-owned
limited liabilitycompany.
Article 21
A state-owned enterprise established before theimplementation of this
Law which fulfills theconditions for the establishment of a limited
liability company under this Law may be reorganized as a wholly
state-owned limited liabilitycompany in the case of an investment entity
with a single investor, or as alimited liability company as provided in
the first paragraph of thepreceding Article in the case of an investment
entity with manyinvestors.
Implementing procedures and specific means forthe reorganization of
state-owned enterprises intocompanies are specified by the State Council
in separateprovisions.
Article 22
The articles of association of a limited liabilitycompany shall set
out the following:
(1) the company's name and domicile;
(2) the company's business scope;
(3) the company's registered capital;
(4) shareholders' names or titles;
(5) shareholders' rights and obligations;
(6) the form and amount of shareholders' capitalcontributions;
(7) conditions for shareholders' transfer of capitalcontributions;
(8) the company's organs and the method of establishing them, their
powers and rules of procedurefor discussion;
(9) the company's legal representative;
(10) grounds for the dissolution of thecompany and method for its
liquidation; and
(11) other matters which the shareholders consider necessary to
provide for.
The shareholders shall sign and seal the company's articles of
association.
Article 23
A limited liability company's registered capital is the capital
actually contributed byall the shareholders and registered with the
company registrationauthorities.
The registered capital of a limitedliability company shall not be
less than the following minimumamounts:
(1) for a company engaging principally inproduction operations, RMB
500,000 yuan;
(2) for a company engaging principally in wholesalingcommodities, RMB
500,000 yuan;
(3) for a company engaging principally in commercial retailing, RMB
300,000 yuan;
(4) for a company engaging principally in technology development,
consultancy and services, RMB100,000 yuan.
Requirements for the minimum amount of registered capital for a
limited liability company in aparticular line of business to be higher
than the amount stated in thepreceding paragraphs are provided for in
separate laws or administrativeregulations.
Article 24
Shareholders may make capital contributions incurrency, or may invest
in kind, use industrialproperty, non-patented technology or land use
rights to make capitalcontributions based on their appraised value. For
investment in kind, industrialproperty, non-patented technology or land
use rights which are capitalcontributions, a valuation shall be carried
out and the property contributed verified, without overvaluation or
undervaluation. The valuation ofland use rights is to be dealt with in
accordance with the provisionsof laws and administrative regulations.
The amount of industrial property or non-patented technology
contributed as capital basedon its appraised value shall not exceed
twenty percent of the registeredcapital of a company, except as otherwise
specified by the statefor the use of the results of new and high
technology.
Article 25
Shareholders shall pay in full their respective subscribed capital
contributions specified in thearticle of association. If a shareholder
makes its contribution incurrency, the currency contribution shall be
deposited in full into atemporary account established with a bank by the
proposed limited liabilitycompany; if the contribution is to be made in
investment in kind, industrial property, non-patented technology or land
use rights, procedures fortransfer of the property rights shall be dealt
with in accordance with thelaw.
If a shareholder does not pay its subscribedcapital contribution in
accordance with the provisions of the preceding paragraph, such
shareholder shall be liable fordefault to the other shareholders who have
fully paid their capitalcontributions.
Article 26
After the shareholders have paid in full their subscribed capital
contributions a legallyauthorized investment verification authority must
verify the investment and issuecertificate.
Article 27
Upon verification by a legally authorized investment verification
authority of all capital contributions of shareholders, a designated
representative or jointlyappointed agent of all the shareholders applies
to the company registrationauthority to register the establishment of the
company, submitting the companyregistration application, the company's
article ofassociation, investment verification certificate and other
documents.
If examination and approval from relevant departmentsis required in
accordance with any law or administrative regulation, the approval
documents shall be submittedwhen applying to register the establishment
of the company.
Where the conditions required by this Law are met, the company
registration authority registersthe company and issues a company business
licence. Where the conditions ofthis Law are not met, the company is not
registered.
The date of issue of the business licence is the dateof establishment
of a limited liabilitycompany.
Article 28
After the establishment of a limited liabilitycompany, if the actual
values of the investment in kind, industrial property, non-patented
technology or land use rightsare obviously lower than the values set in
the articles of association,the difference shall be made up by the
shareholder(s) who contributedsuch investment, and other shareholders at
the time of the establishment ofthe company shall be jointly liable for
the difference.
Article 29
If a branch or branches of a limited liability companyis established
at the same time a limitedliability company is established, application
for the registration ofthe branch(es) shall be made to the company
registration authority to obtainthe business licence(s).
If a branch or branches of a limited liability companyare established
after the establishmentof the company, application for registration
shall be made by the legalrepresentative of the company to the company
registration authority to obtainthe business licence(s).
Article 30
An investment certificate shall be issued to each ofthe shareholders
upon the establishment of alimited liability company.
An investment certificate shall set out thefollowing:
(1) the company's name;
(2) the company's date of registration;
(3) the company's registered capital;
(4) the shareholder's name and the amount and date of payment of
capital contribution;and
(5) the number and date of issue of the investmentcertificate.
An investment certificate is sealed with the company'sseal.
Article 31
A limited liability company shall establish a registerof shareholders
setting out thefollowing:
(1) the shareholders' names and domiciles;
(2) the shareholders' amounts of capitalcontributions; and
(3) the numbers of the investmentcertificates.
Article 32
Shareholders have the right to examine the minutes of shareholders'
meetings and the company's financial andaccounting reports.
Article 33
Shareholders are entitled to receive dividends inaccordance with the
proportions of their capitalcontributions. Shareholders have a preemptive
right to subscribe capital whena company increases its capital.
Article 34
Shareholders shall not withdraw their capitalcontributions after the
registration of acompany.
Article 35
Shareholders may transfer among themselves all or part of their
capital contributions.
Where a shareholder transfers its capital contribution to a person
other than a shareholder, the consent of more than half of all
shareholders shall be required.A shareholder objecting to such transfer
shall purchase the capital contribution to be transferred and such
shareholder is deemed to haveagreed to the transfer if he does not
purchase the capitalcontribution.
For a transfer of capital contribution which istransferred with the
consent of the shareholders,other shareholders have a pre-emptive right
to purchase it on the sameconditions.
Article 36
After a shareholder transfers its capitalcontribution in accordance
with the law, the companyrecords in the register of shareholders the name
of the transferee, its domicileand the amount of the capital contribution
transferred.
Section 2 Organizational Structure
Article 37
The shareholder's meetings of a limited liabilitycompany are made up
of all shareholders. The shareholders' meeting is the company's
authoritative organization,exercising its powers in accordance with this
Law.
Article 38
The shareholders' meeting exercises the followingpowers:
(1) to decide on the company's operational policies and investment
plans;
(2) to elect and replace directors and decide onmatters relating to
the remuneration ofdirectors;
(3) to elect and replace the supervisorswho are representatives of
the shareholders, and decide onmatters relating to the remuneration of
supervisors;
(4) to examine and approve reports of the board ofdirectors;
(5) to examine and approve reports of the board ofsupervisors or any
supervisor(s);
(6) to examine and approve the company's proposed annual financial
budget and finalaccounts;
(7) to examine and approve the company's plans forprofit distribution
and recovery oflosses;
(8) to decide on increases in or reductions of the company's
registered capital;
(9) to decide on the issue of bonds by thecompany;
(10) to decide on transfers of capital contribution byshareholders to
a person other than ashareholder;
(11) to decide on issue such as merger,division, change in corporate
form or dissolution andliquidation of the company; and
(12) to amend the company's articles ofassociation.
Article 39
Except as otherwise provided in this Law,methods of discussion and
voting procedures for shareholders' meetings are specified in the
company's articles ofassociation.
A resolution for an increase in orreduction of registered capital,
division, merger, dissolution orchange in corporate form of the company
shall be passed by shareholdersrepresenting two-thirds or more of the
voting rights.
Article 40
A company may amend its articles of association. Aresolution to amend
the company's articles ofassociation shall be passed by shareholders
representing two-thirds or moreof the voting rights.
Article 41
Shareholders shall exercise voting rights atshareholders' meetings in
accordance with the proportionsof their capital contribution.
Article 42
The first shareholders' meeting is convened andpresided over by the
shareholder whose capitalcontribution is the largest. Such shareholder
exercises its rights inaccordance with this Law.
Article 43
Shareholders' meetings are divided into regularmeetings and interim
meetings.
Regular meeting shall be convened on time in accordance with the
provisions of the articles of association. Shareholders representing
one-fourth or more of thevoting rights or one-third or more of the
directors or supervisors mayrequest that an interim meeting be convened.
Where a limited liability company has a board of directors,
shareholders' meetings areconvened by the board of directors and presided
over by the chairman of theboard of directors. If the chairman of the
board of directors isunable to perform his duties for a particular
reason, the vice-chairman oranother director designated by the chairman
presides over themeeting.
Article 44
When convening a shareholders' meeting, notice shallbe given to all
shareholders fifteen days beforethe meeting is convened.
Shareholders' meetings shall keep minutesof the decisions made on
matters discussed. The minutesshall be signed by the shareholders present
at the meeting.
Article 45
A limited liability company has a board of directors with three to
thirteen members.
For a limited liability company established with theinvestment of two
or more state-owned enterprisesor two or more state-owned investment
entities, members of its boardof directors shall include representatives
of the staff and workers ofthe company. Representatives of staff and
workers on the board ofdirectors are chosen by the company's staff and
workers by democraticelection.
The board of directors has one chairman and may have one or two
vice-chairmen. The method ofelection of the chairman and vice-chairmen is
specified in the articles ofassociation.
The chairman of the board of directors is the legalrepresentative of
the company.
Article 46
The board of directors is responsible to the shareholders' meetings
and exercises the followingpowers:
(1) to be responsible for convening shareholders' meetings and
accountable to the shareholders'meeting;
(2) to implement the resolutions of the shareholders'meeting;
(3) to decide on the operational plans and investment plan of the
company;
(4) to formulate the company's proposedannual financial budget and
final accounts;
(5) to formulate plans for profit distribution andrecovery of losses;
(6) to formulate plans for increases in or reductionsof the company's
registered capital;
(7) to prepare plans for merger, division,change in corporate form
and dissolution of thecompany;
(8) to decide on the set up of the company's internal management
structure;
(9) to appoint or dismiss the company's manager(general manager) (the
"manager") and pursuant to themanager's nominations to appoint or dismiss
the deputy manager and thefinancial officers of the company and decide
upon their remuneration;and
(10) to formulate the company's basic managementsystem.
Article 47
The term of office of the directors is asprovided in the company's
articles of association,provided that each term shall not be longer than
three years. At the end ofa director's term, the director may serve
another term ifre-elected.
The shareholders' meeting shall not without reasonremove a director
from office before the expire ofthat director's term.
Article 48
Meetings of the board of directors are convened andpresided over by
the chairman. When the chairmanis unable to perform his duties for a
particular reason, thevice-chairman or another director designated by the
chairman convenes and presidesover the meetings. One-third or more of the
directors may request that aninterim meeting be convened.
Article 49
Except as otherwise provided in this Law,methods of discussion and
voting procedures for the boardof directors are provided for in the
company's articles ofassociation.
When convening a meeting of the board of directors, notice of the
meeting shall be given to alldirectors ten days before the meeting is
convened.
The board of directors shall keep minutesof the decisions made on
matters discussed. Such minutesshall be signed by the directors present
at the meeting.
Article 50
A limited liability company has a manager who is appointed or
dismissed by the board ofdirectors. The manager is responsible to the
board of directors and exercisesthe following powers:
(1) to be in charge of the company's production, operations and
management and organize theimplementation of the resolutions of the board
of directors;
(2) to organize the implementation of the company's annual business
plan and investmentplan;
(3) to propose plans for the putting in place of the company's
internal managementstructure;
(4) to propose the company's basic managementsystem;
(5) to formulate specific rules and regulations forthe company;
(6) to propose the appointment or dismissalof the company's deputy
manager(s) and financialofficers;
(7) to appoint or dismiss management officers other than those
required to be appointed ordismissed by the board of directors; and
(8) other powers conferred by thecompany's articles of association
and the board ofdirectors.
The manager is present at meetings of the board ofdirectors.
Article 51
A limited liability company with a relatively small number of
shareholders and ofa relatively small scale may have one executive
director and no board ofdirectors. The executive director may also be the
company's manager.
The powers of the executive director shall be specified in the
company's articles ofassociation with reference to the provisions of
Article 46 of thisLaw.
Where a limited liability company has no board of directors, the
executive director is the legalrepresentative of the company.
Article 52
A limited liability company with a relatively large scale of
operations shall have a board ofsupervisors with not less than three
members. The board of supervisors elects a convener from among its
members.
The board of supervisors is made up of representativesof shareholders
and a reasonable proportion ofrepresentatives from the company's staff
and workers, the specific proportion to be provided in the company's
articles of association.Representatives of the staff and workers on the
board of supervisors are chosenby the company's staff and workers by
democratic election.
A limited liability company with a relatively small number of
shareholders and of a smallscale may have one to two supervisors.
The directors, manager and financial officers of thecompany shall not
act concurrently assupervisors.
Article 53
The term of office of the supervisors is three years.At the end of a
supervisor's term, thesupervisor may serve another term, if reelected.
Article 54
The board of supervisors as supervisor (s) exercises the following
powers:
(1) to inspect the company's financialsituation;
(2) to exercise supervision over the acts of thedirectors and manager
carried out while performingtheir corporate functions which violate laws,
regulations or the company'sarticles of association;
(3) to demand remedies from a director ormanager when the acts of
such director or manager areharmful to the company's interests;
(4) to propose the convening of an interimshareholders' meeting; and
(5) other powers specified in the company's articlesof association.
The supervisors are present at meetings of the board of directors.
Article 55
When considering and deciding on the wages, welfare and production
safety of the staff and workersand labour protection, labour insurance
and other issues involving the personal interests of the staff and
workers, the company shall firstsolicit and consider the opinions of the
company's trade union and staff and workers, and shall invite
representatives from the tradeunion and the staff and workers to attend
the relevant meetings.
Article 56
When considering and deciding on major issues relating to the
company's production andoperations and formulating important rules and
regulations, the companyshall solicit and consider the opinions and
proposals of the company's tradeunion and staff and workers.
Article 57
Any of the following persons shall not serve as adirector, supervisor
or manager of acompany:
(1) persons without civil capacity or with restrictedcivil capacity;
(2) persons who have committed theoffences of corruption, bribery,
infringement ofproperty, misappropriation of property or sabotaging the
socioeconomic order, and havebeen sentenced to criminal penalties, where
less than five years haveelapsed since the date of completion of the
sentence; or persons who havebeen deprived of their political rights due
to criminal offences, where lessthan five years have elapsed since the
date of the completion ofimplementation of this deprivation;
(3) persons who are former directors, factorydirectors or managers of
a company or enterprise whichhas become bankrupt and been liquidated as a
result of mismanagement and arepersonally liable for the bankruptcy of
such company or enterprise,where less than three years have elapsed since
the date of thecompletion of the bankruptcy and liquidation of the
company or enterprise;
(4) persons who were legal representatives of acompany or enterprise
which had its business licencerevoked due to a violation of the law and
who are personally liable, whereless than three years have elapsed since
the date of the revocation ofthe business licence; or
(5) persons who have a relatively large amount of debts due and
outstanding.
Where a company elects, nominates or appoints any director or
supervisor or employs a manager contrary to the provisions of the
preceding clause, such election, appointment or employment is
ineffective.
Article 58
State civil servants shall not act concurrently as a company's
director, supervisor ormanager.
Article 59
The directors, supervisors or managers shallabide by the company's
articles ofassociation, faithfully execute their official duties and
protect the company's interests.They shall not exploit their position and
power in the company to advancetheir own private interests.
The directors, supervisors or managers of a companyshall not exploit
their position to accept bribesor other illegal income or wrongfully take
over company property.
Article 60
The directors or managers shall notmisappropriate company funds or
loan such funds toothers.
The directors or managers shall not open accounts intheir own names
or in the names of otherindividuals for the deposit of the company's
assets.
The directors or managers shall not provide aguarantee for debts of a
shareholder of thecompany or other individual(s) with the company's
assets.
Article 61
The directors or managers shall not engage on theirown behalf or on
behalf of others in any businesssimilar to the business of the company in
which they hold office or in activities harmful to the company's
interests. The proceeds fromsuch business or activities shall belong to
the company.
Unless otherwise provided in the company's articles ofassociation or
with the consent of ashareholders' meeting, a director or manager shall
not enter into any contracts ortransactions with the company.
Article 62
The directors, supervisors or managers shall notdisclose the secrets
of the company except inaccordance with the provisions of the law or with
the consent of a shareholders'meeting.
Article 63
Where a director, supervisor or manager of a companyviolates the law,
administrative regulations orthe company's articles of association while
performing his officialcorporate duties resulting in harm to the company,
such director, supervisor ormanager shall be liable for damages.
Section 3 Wholly State-Owned Companies
Article 64
"A wholly state-owned company" in this Law refers to a limited
liability company in which astate-authorized investment institution or a
state-authorized department isthe sole investor and which is established
solely by a state-authorized investment institution or by a
state-authorizeddepartment.
A company designated by the State Council for the production of
special products or belonging toa specified trade shall be established in
the form of a wholly state-ownedcompany.
Article 65
The articles of association of a wholly state-owned company are
formulated in accordance withthis Law by the state-authorized investment
institution or thestate-authorized department or formulated by the board
of directors, and reported tothe state-authorized investment institution
or the state-authorizeddepartment for approval.
Article 66
A wholly state-owned company does not haveshareholders' meetings. The
company's board of directors is authorized by the state-authorized
investment institution or thestate-authorized department to exercise part
of the powers of theshareholders' meetings, decide on the major issues of
the company, provided thatdecisions on merger, division, dissolution of
the company, increaseor decrease in capital and issue of corporate bonds
shall be decided by thestate-authorized investment institution or the
state-authorizeddepartment.
Article 67
The state-authorized investmentinstitution or the state-authorized
department shall exercisesupervision and management over the state-owned
assets of a wholly state-ownedcompany in accordance with the provisions
of law and administrativeregulations.
Article 68
A wholly state-owned company shall have a board of directors which
carries out its duties inaccordance with the provisions of Article 46 and
Article 66 of this Law. The termof office of the board of directors is
three years.
The board of directors has three to nine members, appointed or
replaced by the state-authorized investment institution or the
state-authorized department inaccordance with the board of directors'
terms. Members of the board ofdirectors shall include representatives of
the staff and workers of thecompany. Representatives of the staff and
workers on the board ofdirectors are chosen by the company's staff and
workers by democraticelection.
The board of directors has a chairman and mayhave one vice-chairman
if necessary. The chairman andthe vice-chairman are designated from among
the directors by the state-authorized investment institution or the
state-authorizeddepartment.
The chairman of the board of directors is the legalrepresentative of
the company.
Article 69
A wholly state-owned company shall have a manager whois appointed or
dismissed by the board ofdirectors. The manager exercises his powers in
accordance with the provisionsof Article 50 of this Law.
With the consent of the state-authorized investmentinstitution or the
state-authorized department,members of the board of directors may act
concurrently asmanager.
Article 70
The chairman and vice-chairman of theboard of directors, directors
and the manager of a whollystate-owned company shall not act concurrently
as officers of other limitedliability companies, companies limited by
shares or other economic organizations without the consent of the
state-authorized investment institution or the state-authorized
department.
Article 71
To transfer assets of a wholly state-owned company, inaccordance with
the provisions oflaw and administration regulations, examination and
approval and procedures fortransfer of property rights are handled by the
state-authorized investment institution or the state-authorized
department.
Article 72
Large-scale wholly state-owned companies with a sound system of
operation and management andwhose operational situation is relatively
good may be authorized by theState Council to exercise rights as the
owner of the assets.
Chapter 3 Establishment and Organizational Structureof A Company Limited by Shares
Section 1 Establishment
Article 73
Establishment of a company limited by shares shall besubject to the
fulfillment of the followingconditions:
(1) the number of promoters meets the requirement ofthe law;
(2) the share capital subscribed by the promoters andby public offer
meets the minimum amount ofcapital required by law;
(3) the issue of shares and relatedpreliminary matters comply with
the provisions of law;
(4) articles of association are formulated by the promoters and
adopted by the foundingmeeting;
(5) there is a company name and the establishment ofan organizational
structure complying withthe requirements for the establishment of a
company limited by shares;and
(6) there is a fixed site for production and operations and the
necessary conditions forproduction and operations.
Article 74
A limited liability company may be established bymeans of promotion
or offer.
Establishment by the promoter method means the establishment of a
company by the subscription bythe promoters for all the shares to be
issued by the company.
Establishment by the offer method means establishmentof a company by
the subscription by thepromoters of part of the shares to be issued by a
company and a public offer ofthe remaining part of the shares.
Article 75
The establishment of a company limited by shares shallhave at least
five promoters including morethan half of the promoters with domiciles
within Chineseterritory.
When a state-owned enterprise is reorganized into acompany limited by
shares, there may be less thanfive promoters, but the offer method shall
be adopted for itsestablishment.
Article 76
The promoters of a company limited by shares shall subscribe for
shares for which they arerequired to subscribe in accordance with this
Law and shall be responsible forthe preparation of the establishment of
the company.
Article 77
The establishment of a company limited by shares shallbe approved by
the department authorized by theState Council or by the provincial-level
people's government.
Article 78
The registered capital of a companylimited by share is the total
share capital which hasbeen registered with the company registration
authority and which has beenactually received.
The minimum amount of the registered capital of acompany limited by
shares is RMB 10,000,000.Requirements for the minimum amount of the
registered capital of a companylimited by shares to be higher than the
above amount are provided for in separate laws or administrative
regulations.
Article 79
The articles of association of a company limited byshares shall set
out the following:
(1) the company's name and domicile;
(2) the company's scope of business;
(3) the company's method of establishment;
(4) the total shares, value per share andregistered capital of the
company;
(5) the names of the promoters and the number ofshares subscribed by
them;
(6) the rights and obligations of theshareholders;
(7) the composition, powers, term of office and rulesof procedure for
discussion of the board ofdirectors;
(8) the company's legal representative;
(9) the composition, powers, term of office and rulesof procedure for
discussion of the board ofsupervisors;
(10) the company's method of profitdistribution;
(11) grounds for the dissolution of thecompany and method for its
liquidation;
(12) procedures for company notices and announcements;and
(13)other matters which the shareholders' general meeting considers
necessary to specify.
Article 80
The promoters may make capital contributions in currency, or may
invest in kind, use industrialproperty, non-patented technology or land
use rights to make capitalcontributions based on their appraised value.
For investment in kind,industrial property, non-patented technology or
land use rights which arecapital contributions, a valuation shall be
carried out, the propertycontributed, verified and conversion into shares
made, without over valuation orunder valuation. The valuation of land use
rights is to be dealt with inaccordance with the provisions of laws and
administrationregulations.
The amount of industrial property or non-patented technology
contributed as capital basedon its appraised value shall not exceed
twenty percent of the registeredcapital of a company.
Article 81
When a state-owned enterprise is reorganized into acompany limited by
shares, it is strictlyprohibited to under value state-owned assets for
conversion into shares, sell them at prices below their value, or
distribute them withoutcompensation to individuals.
Article 82
Where a company limited by shares is to by establishedby the promoter
method, the promoters shall paythe full amount for the shares immediately
after they have subscribed inwriting for all shares which the articles of
association provideto be issued. If investment in kind, industrial
property, non-patentedtechnology or land use rights are used as payment
for the shares, procedures for the transfer of the property rights shall
be dealt with in accordance withthe law.
The board of directors and the board of supervisorsshall be elected
after the promoters have paidall capital contributions. The board of
directors submits to the company registration authority the approval
document(s), the company's articles of association, the investment
verification certificate andother documents for the establishment of the
company and applies to registerthe establishment of the company.
Article 83
Where a company limited by shares is to beestablished by the offer
method, the shares subscribedfor by the promoters shall not be less than
thirty-five percent of the totalnumber of shares of the company. The
remaining portion shall beoffered to the public.
Article 84
When the promoters offer shares to the public, andapplication for the
offer shall be submitted to thesecurities administration authorities of
the State Council together withthe following major documents:
(1) document(s) approving the establishment of thecompany;
(2) the company's articles of association;
(3) the operating budget;
(4) the promoters' names, the number of shares subscribed by the
promoters, the type(s) ofcapital contribution and investment verification
certificate;
(5) the prospectus;
(6) the names and addresses of the receiving bankers;and
(7) the names of the underwriters and relevantagreements.
The promoters shall not offer any shares to thepublic without prior
approval of the securities administration authorities of the State
Council.
〖下接中华人民共和国公司法(3)〗