Company Law of People's Republic of China

catalogue

Chapter I General rules

Chapter II Establishment and organizational structure of a limited liability company

Section 1 is established

Section 2 Organizational structure

Section 3 Special Provisions for one-person limited liability companies

Section 4 Special Provisions for wholly State-owned companies

Chapter III Equity transfer of a limited liability company

Chapter IV Establishment and organization of a joint stock limited company

Section 1 is established

Section 2 General Meeting of shareholders

Section 3 The Board of Directors and the Manager

Section 4 The Board of Supervisors

Section V Special provisions on the organizational structure of listed companies

Chapter V Issuance and Transfer of shares of a joint stock limited company

Section 1 Share issuance

Section 2 Transfer of shares

Chapter VI Qualifications and Obligations of directors, supervisors and senior managers of the Company

Chapter VII Corporate Bonds

Chapter VIII Corporate finance and accounting

Chapter IX Merger, division, Capital Increase and capital reduction of the Company

Chapter X Company dissolution and liquidation

Chapter XI Branches of Foreign Companies

Chapter XII Legal liability

Chapter XIII Supplementary Provisions

Chapter I General rules

Article 1 This Law is enacted with a view to regulating the organization and conduct of a company, protecting the lawful rights and interests of the company, shareholders and creditors, maintaining social and economic order and promoting the development of the socialist market economy.

Article 2 The term "company" as used in this Law refers to a limited liability company or a company limited by shares established within the territory of China in accordance with this Law.

Article 3 A company is an enterprise legal person and has independent legal person property and enjoys property rights as a legal person. The company shall be liable for the debts of the company with all its property.

The shareholders of a limited liability company shall be liable to the company within the limit of the amount of capital contribution they have subscribed to; The shareholders of a joint stock limited company shall be liable to the company to the extent of the shares they have subscribed for.

Article 4 Shareholders of a company shall enjoy the rights to gain from assets, participate in major decisions and choose managers according to law.

Article 5 In conducting business activities, a company must abide by laws and administrative regulations, abide by social ethics and business ethics, be honest and trustworthy, accept the supervision of the government and the public, and assume social responsibilities.

The legitimate rights and interests of the company shall be protected by law and shall not be infringed upon.

Article 6 To establish a company, an application for establishment registration shall be filed with the company registration authority in accordance with law. If the requirements for establishment stipulated in this Law are met, the company registration authority shall register it as a limited liability company or a joint stock limited company respectively. Any company that fails to meet the requirements for its establishment as provided for in this Law shall not be registered as a limited liability company or a company limited by shares.

Where the establishment of a company is required to be approved by laws or administrative regulations, the approval formalities shall be completed in accordance with law before the company registration.

The public may apply to the company registration authority for inquiry of the company registration matters, and the company registration authority shall provide inquiry services.

Article 7 A company established according to law shall be issued a business license by the company registration authority. The date of issuance of the company's business license shall be the date of establishment of the company.

The company's business license shall state the company's name, domicile, registered capital, business scope, the name of its legal representative and other matters.

Where the matters recorded in the company's business license are changed, the company shall register the change according to law, and the company registration authority shall renew the business license.

Article 8 A limited liability company established in accordance with this Law must indicate the words limited liability company or limited company in its name.

A joint stock limited company established in accordance with this Law must indicate the words "joint stock limited company" or "joint stock company" in its name.

Article 9 The change of a limited liability company into a joint stock limited company shall meet the requirements of a joint stock limited company as provided for in this Law. The change of a joint stock limited company into a limited liability company shall meet the requirements for a limited liability company as provided for in this Law.

Where a limited liability company is changed into a joint stock limited company, or a joint stock limited company is changed into a limited liability company, the claims and debts of the company before the change shall be taken over by the company after the change.

Article 10 A company shall have its domicile at the place where its main office is located.

Article 11 To establish a company, the articles of association must be formulated in accordance with law. The articles of association shall be binding on the company, its shareholders, directors, supervisors and senior managers.

Article 12 The business scope of a company shall be stipulated in its articles of association and registered according to law. A company may amend its articles of association and change its business scope, but it shall register the change.

Items within the business scope of the company that are subject to approval as prescribed by laws and administrative regulations shall be approved according to law.

Article 13 The legal representative of a company shall be the chairman, executive director or manager in accordance with the articles of association of the company, and shall be registered according to law. If the legal representative of the company is changed, the change shall be registered.

Article 14 A company may establish branch offices. To establish a branch company, it shall apply for registration with the company registration authority and obtain a business license. The branch does not have the status of a legal person, and its civil liability shall be borne by the company.

A company may establish a subsidiary, which shall have the status of a legal person and independently bear civil liabilities according to law.

Article 15 A company may invest in other enterprises; However, unless otherwise provided by law, it may not become a joint and several liability investor for the debts of the invested enterprise.

Article 16 Where a company makes investment in other enterprises or provides guarantees for others, a decision shall be made by the board of directors or the shareholders' meeting or the general meeting of shareholders in accordance with the articles of association of the company; Where the articles of association of the company stipulate a limit on the total amount of investment or guarantee or the amount of a single investment or guarantee, the prescribed limit shall not be exceeded.

Where a company provides guarantees for its shareholders or actual controllers, a resolution must be made by the shareholders' meeting or the shareholders' assembly.

The shareholder mentioned in the preceding paragraph or the shareholder under the control of the actual controller mentioned in the preceding paragraph shall not vote on the matters mentioned in the preceding paragraph. The vote shall be passed by more than half of the votes held by the other shareholders present at the meeting.

Article 17 A company must protect the lawful rights and interests of its employees, sign labor contracts with them according to law, participate in social insurance, strengthen labor protection, and realize production safety.

The company shall, in various forms, strengthen the vocational education and on-the-job training of its employees and improve their quality.

Article 18 The employees of the company shall organize trade unions in accordance with the Trade Union Law of the People's Republic of China, carry out trade union activities, and safeguard the legitimate rights and interests of the employees. The company shall provide necessary conditions for the activities of its trade union. The trade union of the Company shall, on behalf of the employees, sign a collective contract with the company in accordance with the law on matters such as labor remuneration, working hours, welfare, insurance and labor safety and health.

The company shall, in accordance with the provisions of the Constitution and relevant laws, exercise democratic management through the workers' congress or other forms.

When the company studies and decides on major issues concerning restructuring and operation, and formulates important rules and regulations, it shall listen to the opinions of the company's trade union, and listen to the opinions and suggestions of the workers and workers through the workers' congress or other forms.

Article 19 In a company, organizations of the Communist Party of China shall be established to carry out Party activities in accordance with the Constitution of the Communist Party of China. The company shall provide necessary conditions for the activities of the Party organization.

Article 20 Shareholders of a company shall abide by laws, administrative regulations and the articles of association, exercise their rights as shareholders according to law, and shall not abuse their rights to harm the interests of the company or other shareholders. The independent status of a company legal person and the limited liability of shareholders shall not be abused to harm the interests of the company's creditors.

If a shareholder of a company abuses his rights and causes losses to the company or other shareholders, he shall be liable for compensation according to law.

If a shareholder of a company abuses the independent status of the company legal person and the limited liability of the shareholder to evade debts and seriously damages the interests of creditors of the company, he shall bear joint and several liability for the debts of the company.

Article 21 No controlling shareholder, actual controller, director, supervisor or senior manager of a company may use their association to harm the interests of the company.

If a company violates the provisions of the preceding paragraph and causes losses to the company, it shall be liable for compensation.

Article 22 The resolution of the shareholders' meeting or the shareholders' meeting or the board of directors shall be invalid if the content of the resolution violates laws or administrative regulations.

If the convening procedure or voting method of the shareholders' meeting or the shareholders' general meeting or the board of directors violates laws, administrative regulations or the articles of association of the company, or the content of the resolution violates the articles of association of the company, the shareholders may, within 60 days from the date of making the resolution, request the people's court to cancel it.

If a shareholder files a lawsuit in accordance with the provisions of the preceding paragraph, the people's court may, at the request of the company, require the shareholder to provide corresponding security.

If a company has gone through the alteration registration according to the resolution of the shareholders' meeting or the shareholders' meeting or the board of directors, after the people's court declares the resolution invalid or revokes the resolution, the company shall apply to the company registration authority for the cancellation of the alteration registration.

Chapter II Establishment and organizational structure of a limited liability company

Section 1 is established

Article 23 The establishment of a limited liability company shall meet the following requirements:

(1) The number of shareholders meets the quorum;

(2) the amount of capital contribution subscribed by all shareholders in accordance with the provisions of the articles of association;

(3) The shareholders jointly formulate the articles of association of the company;

(4) Having a company name and establishing an organizational structure that meets the requirements of a limited liability company;

(5) Having a company residence.

Article 24 A limited liability company shall be established with capital contribution from less than fifty shareholders.

Article 25 The articles of association of a limited liability company shall state the following:

(1) Name and domicile of the company;

(2) the business scope of the company;

(3) the registered capital of the company;

(4) the name of the shareholder;

(5) the method, amount and time of capital contribution of the shareholder;

(6) the organization of the company, its formation method, functions and powers, and rules of procedure;

(7) Legal representative of the company;

(8) Other matters deemed necessary by the shareholders' meeting.

The shareholders shall sign and seal the articles of association.

Article 26 The registered capital of a limited liability company shall be the amount of capital contributions subscribed by all shareholders registered with the company registration authority.

Where laws, administrative regulations or decisions of The State Council provide otherwise on the minimum amount of registered capital paid in and registered capital of a limited liability company, such provisions shall prevail.

Article 27 A shareholder may make capital contribution in currency, or in real goods, intellectual property rights, land use rights and other non-monetary property that can be valued in currency and transferred according to law; However, the property shall not be used as capital contribution in accordance with laws and administrative regulations.

The value of non-monetary property as capital contribution shall be assessed and verified, and the value shall not be overestimated or underestimated. Where laws and administrative regulations have provisions on valuation, such provisions shall prevail.

Article 28 Shareholders shall pay in full and on time the amount of capital contribution they have each subscribed to as stipulated in the articles of association of the company. Where a shareholder makes capital contribution in currency, he shall deposit the full amount of his capital contribution in a bank account opened by the limited liability company; Where capital contribution is made with non-monetary property, the formalities for the transfer of property rights shall be completed in accordance with law.

If a shareholder fails to pay his capital contribution in accordance with the provisions of the preceding paragraph, he shall, in addition to paying the company in full, also bear the liability for breach of contract to the shareholder who has paid the capital contribution in full on time.

Article 29 After a shareholder has fully subscribed to the capital contribution provided for in the articles of association of a company, the representative appointed by all the shareholders or the agent jointly entrusted shall submit the application for company registration, the articles of association and other documents to the company registration authority to apply for registration of establishment.

Article 30 If, after the establishment of a limited liability company, it is found that the actual value of the non-monetary property contributed by the establishment company is significantly lower than the amount set forth in the articles of association, the difference shall be made up by the shareholder who has made the contribution. Other shareholders at the time of establishment of the company shall bear joint liability.

Article 31 After the establishment of a limited liability company, a certificate of capital contribution shall be issued to the shareholders.

The capital contribution certificate shall specify the following matters:

(1) The name of the company;

(2) the date of establishment of the company;

(3) the registered capital of the company;

(4) the name of the shareholder, the amount of capital contribution paid and the date of capital contribution;

(5) The number and date of issuance of the capital contribution certificate.

The capital contribution certificate shall be sealed by the company.

Article 32 A limited liability company shall keep a register of shareholders, which shall record the following matters:

(1) the name and domicile of the shareholder;

(2) the amount of capital contributed by shareholders;

(3) Number of the capital contribution certificate.

A shareholder recorded in the register of shareholders may claim to exercise the rights of shareholders in accordance with the register of shareholders.

The company shall register the names of shareholders with the company registration authority; Where there is a change in the registered item, the change shall be registered. Without registration or alteration of registration, it may not oppose any third party.

Article 33 Shareholders shall have the right to consult and copy the articles of association, minutes of shareholders' meetings, resolutions of the board of directors' meetings, resolutions of the board of supervisors' meetings and financial and accounting reports.

Shareholders may request access to the accounting books of the company. Where a shareholder requests to inspect the accounting books of the company, he shall make a written request to the company, stating the purpose. Where the company has reasonable grounds to believe that a shareholder's inspection of the accounting books has an improper purpose and may harm the legitimate interests of the company, it may refuse to provide such inspection, and shall give a written reply to the shareholder and explain the reasons within 15 days from the date the shareholder makes a written request. If the company refuses to provide inspection, the shareholders may request the people's court to require the company to provide inspection.

Article 34 Shareholders shall receive dividends in proportion to their paid-in capital contribution; When the company increases its capital, the shareholders shall have the right to subscribe to the capital contribution in accordance with the proportion of the capital contribution actually paid. However, all shareholders agree not to share dividends in accordance with the proportion of capital contribution or do not subscribe to capital contribution in accordance with the proportion of capital contribution.

Article 35 After the establishment of a company, no shareholder may withdraw his capital contribution.

Section 2 Organization of machinery

Article 36 The shareholders' meeting of a limited liability company shall be composed of all the shareholders. The shareholders' meeting is the company's authority and shall exercise its functions and powers in accordance with this Law.

Article 37 The shareholders' meeting shall exercise the following functions and powers:

(1) To decide on the company's business policy and investment plan;

(2) to elect and replace directors and supervisors who are not employees' representatives, and to decide on matters related to the remuneration of directors and supervisors;

(3) To examine and approve the report of the Board of directors;

(4) To examine and approve the reports of the board of supervisors or the supervisors;

(5) To examine and approve the company's annual financial budget plan and final account plan;

(6) To examine and approve the company's profit distribution plans and plans for making up losses;

(7) To make resolutions on the increase or reduction of the company's registered capital;

(8) To make resolutions on the issuance of corporate bonds;

(9) To make resolutions on merger, division, dissolution, liquidation or change of company form;

(10) amending the articles of association;

(11) Other functions and powers provided for in the articles of association.

If the shareholders unanimously agree in writing on the matters mentioned in the preceding paragraph, a decision may be made directly without holding a shareholders' meeting, and the decision document shall be signed and sealed by all the shareholders.

Article 38 The first meeting of the shareholders' meeting shall be convened and presided over by the shareholder who contributes the most capital, and shall exercise its functions and powers in accordance with the provisions of this Law.

Article 39 The shareholders' meeting shall be divided into regular meetings and temporary meetings.

Regular meetings shall be held on time in accordance with the provisions of the articles of association. An interim meeting shall be convened if the shareholders representing more than one tenth of the voting rights, more than one third of the directors, the board of supervisors or the supervisor of a company without a board of supervisors.

Article 40 Where a limited liability company has a board of directors, the shareholders' meeting shall be convened by the board of directors and presided over by the chairman; If the chairman is unable to perform his duties or fails to do so, the vice chairman shall preside; If the vice chairman is unable to perform his duties or fails to perform his duties, a director shall be jointly nominated by more than half of the directors to preside.

Where a limited liability company does not have a board of directors, the shareholders' meeting shall be convened and presided over by the executive director.

If the board of directors or an executive director is unable or fails to perform his duties in convening a shareholders' meeting, the board of supervisors or the supervisor of a company without a board of supervisors shall convene and preside over the meeting; If the board of supervisors or the supervisor does not convene and preside over the meeting, the shareholders representing more than one-tenth of the voting rights may convene and preside over the meeting on their own.

Article 41 A notice shall be given to all shareholders 15 days in advance of the convening of a shareholders' meeting; However, unless otherwise provided by the articles of association or otherwise agreed by all the shareholders.

The shareholders' meeting shall make minutes of the decisions on the matters discussed, and the shareholders present at the meeting shall sign the minutes.

Article 42 The shareholders shall exercise their voting rights in accordance with the proportion of capital contribution at the shareholders' meeting; Except as otherwise provided in the articles of association.

Article 43 Unless otherwise provided for in this Law, the methods of discussion and voting procedures of the shareholders' meeting shall be prescribed by the articles of association.

A resolution to amend the articles of association of the company, increase or decrease the registered capital, and a resolution to merge, split, dissolve or change the form of the company shall be passed by the shareholders representing more than two-thirds of the voting rights.

Article 44 A limited liability company shall have a board of directors, which shall consist of 3 to 13 members; However, except as otherwise provided for in Article 50 of this Law.

Where two or more state-owned enterprises or two or more other state-owned investment entities invest in a limited liability company, its board of directors shall include representatives of the company's employees; Members of the board of directors of other limited liability companies may include representatives of the employees of the company. The staff representatives on the board of directors shall be democratically elected by the staff and workers of the company through the staff and workers' congress, the staff and workers' congress or any other form.

The board of directors shall have a chairman and may have a vice chairman. The method for selecting the chairman and vice-chairman shall be prescribed by the articles of association of the company.

Article 45 The term of office of the directors shall be prescribed by the articles of association, provided that each term of office shall not exceed three years. When the term of office of a director expires, he may be re-elected.

If a director fails to be re-elected in time after the expiration of his term of office, or if a director resigns during his term of office resulting in fewer than the quorum of the board of directors, the original director shall still perform his duties as a director in accordance with laws, administrative regulations and the articles of association before the newly elected director takes office.

Article 46 The board of directors shall be responsible to the shareholders' meeting and exercise the following functions and powers:

(1) to convene meetings of the shareholders' meeting and report its work to the shareholders' meeting;

(2) implementing the resolutions of the shareholders' meeting;

(3) to decide on the company's business plan and investment plan;

(4) To formulate annual financial budget plans and final accounting plans of the company;

(5) formulating profit distribution plans and plans for making up losses of the company;

(6) To formulate plans for increasing or reducing the company's registered capital and issuing company bonds;

(7) formulating plans for merger, division, dissolution or change of company form;

(8) Deciding on the establishment of the company's internal management organization;

(9) to decide on the appointment or dismissal of the company's manager and matters relating to his remuneration, and to decide on the appointment or dismissal of the company's deputy manager and chief financial officer and matters relating to their remuneration upon the nomination of the manager;

(10) To formulate the basic management system of the company;

(11) Other functions and powers provided for in the articles of association.

Article 47 Meetings of the board of directors shall be convened and presided over by the chairman of the board; If the chairman is unable to perform his duties or fails to perform his duties, the vice chairman shall convene and preside over the meeting; If the vice chairman is unable to perform his duties or fails to perform his duties, a director jointly nominated by more than half of the directors shall convene and preside over the meeting.

Article 48 Unless otherwise provided for in this Law, the methods of discussion and voting procedures of the board of directors shall be prescribed by the articles of association.

The board of directors shall prepare minutes of the decisions on the matters discussed, and the directors present at the meeting shall sign the minutes.

Resolutions of the board of directors shall be voted on by one person, one vote.

Article 49 A limited liability company may have a general manager, who shall be appointed or dismissed by the board of directors. The manager is responsible to the Board of Directors and exercises the following powers and functions:

(1) to preside over the production and operation management of the company and organize the implementation of the resolutions of the Board of directors;

(2) Organizing the implementation of the company's annual business plan and investment plan;

(3) Drawing up plans for the establishment of the company's internal management organization;

(4) To formulate the basic management system of the company;

(5) Formulating specific rules and regulations of the company;

(6) to propose the appointment or dismissal of the company's deputy manager and chief financial officer;

(7) To appoint or dismiss persons in charge of management other than those who should be appointed or dismissed by the Board of directors;

(8) Other functions and powers conferred by the Board of Directors.

Where the articles of association provide otherwise on the functions and powers of the manager, such provisions shall prevail.

The manager was present at the board meeting.

Article 50 A limited liability company with a small number of shareholders or a small scale may have one executive director and no board of directors. An executive director may concurrently serve as the manager of the company.

The powers of the executive director shall be prescribed by the articles of association.

Article 51 A limited liability company shall have a board of supervisors, which shall consist of at least three members. A limited liability company with a small number of shareholders or a small scale may have one or two supervisors and no board of supervisors.

The board of supervisors shall include shareholders' representatives and an appropriate proportion of employees' representatives, of which the proportion of employees' representatives shall not be less than one-third, and the specific proportion shall be prescribed by the articles of association of the company. The staff representatives on the board of supervisors shall be democratically elected by the staff and workers of the company through the staff and workers' congress, the staff and workers' congress or other forms.

The board of supervisors shall have a chairman who shall be elected by more than half of all supervisors. The chairman of the Board of supervisors shall convene and preside over meetings of the board of supervisors; If the chairman of the board of supervisors is unable or fails to perform his duties, a supervisor jointly nominated by more than half of the supervisors shall convene and preside over the meeting of the board of supervisors.

No director or senior manager shall serve concurrently as a supervisor.

Article 52 The term of office of a supervisor shall be three years. When the term of office of a supervisor expires, he may be re-elected.

If a supervisor fails to be re-elected in a timely manner upon the expiration of his term of office, or if a supervisor resigns during his term of office resulting in fewer than the quorum of the members of the board of supervisors, the original supervisor shall continue to perform his duties as a supervisor in accordance with the provisions of laws, administrative regulations and the articles of association before the newly elected supervisor takes office.

Article 53 The board of supervisors or supervisors of a company without a board of supervisors shall exercise the following functions and powers:

(1) Examine the company's financial affairs;

(2) To supervise the performance of company duties by directors and senior managers, and to propose removal of directors and senior managers who violate laws, administrative regulations, the articles of association or resolutions of the shareholders' meeting;

(3) requiring directors and senior managers to make corrections when their acts harm the interests of the company;

(4) to propose the convening of a temporary shareholders' meeting, and to convene and preside over a shareholders' meeting when the board of directors fails to perform its duties of convening and presiding over a shareholders' meeting as prescribed by this Law;

(5) To put forward proposals to the shareholders' meeting;

(6) to institute legal proceedings against directors and senior managers in accordance with the provisions of Article 151 of this Law;

(7) Other functions and powers provided for in the articles of association.

Article 54 Supervisors may attend meetings of the board of directors without voting rights and raise questions or suggestions on matters resolved by the Board of directors.

The board of supervisors or the supervisors of a company without a board of supervisors may investigate the operation of the company if they find it abnormal; If necessary, it may employ accounting firms to assist it in its work, and the expenses shall be borne by the company.

Article 55 The Board of supervisors shall hold a meeting at least once a year, and the supervisor may propose a temporary meeting of the board of supervisors.

Unless otherwise provided for in this Law, the method of discussion and voting procedure of the board of supervisors shall be prescribed by the articles of association.

A resolution of the board of supervisors shall be passed by more than half of the supervisors.

The board of supervisors shall prepare meeting minutes of the decisions on the items discussed, and the supervisors present at the meeting shall sign the meeting minutes.

Article 56 The expenses necessary for the board of supervisors or the supervisors of a company without a board of supervisors to exercise their functions and powers shall be borne by the company.

Section 3 Special Provisions for one-person limited liability companies

Article 57 The provisions of this Section shall apply to the establishment and organizational structure of a one-person limited liability company; Where there are no provisions in this section, the provisions of Sections 1 and 2 of this Chapter shall apply.

"One-person limited liability company" as used in this Law means a limited liability company with only one natural person shareholder or one legal person shareholder.

Article 58 A natural person can only invest in the establishment of a one-person limited liability company. The one-person limited liability company cannot invest in the establishment of a new one-person limited liability company.

Article 59 A one-person limited liability company shall indicate in the company registration whether it is solely owned by a natural person or solely owned by a legal person, and shall specify it in the company's business license.

Article 60 The articles of association of a one-person limited liability company shall be formulated by the shareholders.

Article 61 A one-person limited liability company shall not have a shareholders' meeting. When a shareholder makes a decision listed in paragraph 1 of Article 37 of this Law, it shall be in writing and deposited with the Company after being signed by the shareholder.

Article 62 A one-person limited liability company shall prepare its financial and accounting reports at the end of each fiscal year and have them audited by an accounting firm.

Article 63 If a shareholder of a one-person limited liability company cannot prove that the company property is independent of the shareholder's own property, he shall be jointly and severally liable for the company's debts.

Section 4 Special Provisions for wholly State-owned companies

Article 64 The provisions of this section shall apply to the establishment and organizational structure of a wholly state-owned company; Where there are no provisions in this section, the provisions of Sections 1 and 2 of this Chapter shall apply.

The term "wholly state-owned company" as used in this Law refers to a limited liability company solely funded by the State and authorized by The State Council or local people's government to the state-owned assets supervision and administration institution of the people's government at the same level to perform the functions of investor.

Article 65 The articles of association of a wholly state-owned company shall be formulated by the state-owned assets supervision and administration institution, or formulated by the board of directors and submitted to the state-owned assets supervision and administration institution for approval.

Article 66 A wholly state-owned company shall not have a shareholders' meeting, and the state-owned assets supervision and administration institution shall exercise the functions and powers of the shareholders' meeting. The state-owned assets supervision and administration institution may authorize the board of directors of a company to exercise part of the functions and powers of the shareholders' meeting and decide on major matters of the company, but the merger, division, dissolution, increase or reduction of the company's registered capital and the issuance of company bonds must be decided by the state-owned assets supervision and administration institution. Among them, the merger, division, dissolution or bankruptcy of an important wholly state-owned company shall be examined by the state-owned assets supervision and administration institution and submitted to the people's government at the same level for approval.

The important wholly state-owned companies mentioned in the preceding paragraph shall be determined in accordance with the regulations of The State Council.

Article 67 A wholly state-owned company shall have a board of directors, which shall exercise its functions and powers in accordance with the provisions of Articles 46 and 66 of this Law. Each term of office of a director shall not exceed three years. The board of directors shall include representatives of the employees of the company.

The members of the board of directors shall be appointed by the state-owned assets supervision and administration institution; However, the employees' representatives among the members of the board of directors shall be elected by the employees' congress of the company.

The board of directors shall have a chairman and may have a vice chairman. The chairman and vice chairman shall be appointed by the state-owned assets supervision and administration institution from among the members of the board of directors.

Article 68 A wholly state-owned company shall have a manager, who shall be appointed or dismissed by the board of directors. The manager shall exercise his functions and powers in accordance with Article 49 of this Law.

With the consent of the state-owned assets supervision and administration agency, a member of the board of directors may concurrently serve as a manager.

Article 69 Without the consent of the state-owned assets supervision and administration institution, the chairman, vice-chairman, director or senior manager of a wholly state-owned company may not take up part-time jobs in other limited liability companies, joint stock limited companies or other economic organizations.

Article 70 The board of supervisors of a wholly state-owned company shall not have less than five members, and the proportion of employees' representatives shall not be less than one third, the specific proportion shall be prescribed by the articles of association.

The members of the board of supervisors shall be appointed by the state-owned assets supervision and administration institution; However, the workers' representatives among the members of the board of supervisors shall be elected by the workers' congress of the company. The chairman of the Board of supervisors shall be appointed by the state-owned assets supervision and administration institution from among the members of the board of supervisors.

The Board of Supervisors shall exercise the functions and powers prescribed in items (1) to (3) of Article 53 of this Law and other functions and powers prescribed by The State Council.

Chapter III Equity transfer of a limited liability company

Article 71 Shareholders of a limited liability company may transfer all or part of their equity to each other.

The transfer of shares by a shareholder to a person other than a shareholder shall be subject to the consent of more than half of the other shareholders. The shareholders shall notify other shareholders in writing of the transfer of their shares for consent. If the other shareholders fail to reply within 30 days from the date of receiving the written notice, they shall be deemed to have consented to the transfer. If more than half of the other shareholders do not agree to the transfer, the shareholders who do not agree shall purchase the transferred equity. Failure to purchase shall be deemed as consent to the transfer.

If the equity is transferred with the consent of the shareholder, other shareholders shall have the right of preemption under the same conditions. If two or more shareholders claim to exercise the preemptive right, the respective purchase ratio shall be determined through consultation; If no agreement can be reached through negotiation, the pre-emptive right shall be exercised according to the respective proportion of investment at the time of transfer.

Where the articles of association provide otherwise for the transfer of equity, such provisions shall prevail.

Article 72 When a people's court transfers a shareholder's equity in accordance with the compulsory enforcement procedures prescribed by law, it shall notify the company and all the shareholders, and other shareholders shall have the right of preemption under equal conditions. Any other shareholder who fails to exercise the right of preemption within 20 days from the date of notification by the people's court shall be deemed to have waived the right of preemption.

Article 73 After the equity is transferred in accordance with Articles 71 and 72 of this Law, the company shall cancel the capital contribution certificate of the original shareholder, issue the capital contribution certificate to the new shareholder, and modify the records of the shareholders and their capital contribution in the articles of association and the register of shareholders accordingly. The amendment to the articles of association shall not be subject to the vote of the shareholders.

Article 74 Under any of the following circumstances, a shareholder who votes against the resolution of the shareholders' meeting may request the company to purchase its equity at a reasonable price:

(1) The company has not distributed profits to shareholders for five consecutive years, but the company has made profits for those five consecutive years, and the conditions for profit distribution prescribed by this Law are met;

(2) Merger, division or transfer of the principal property of the company;

(3) When the term of business stipulated in the articles of association expires or any other cause for dissolution stipulated in the articles of association occurs, the shareholders' meeting passes a resolution to amend the articles of association so that the company can survive.

If a shareholder and the company fail to reach an equity purchase agreement within 60 days from the date of the adoption of the resolution at the shareholders' meeting, the shareholder may bring a lawsuit in the people's court within 90 days from the date of the adoption of the resolution at the shareholders' meeting.

Article 75 After the death of a natural person shareholder, his legal successor may inherit the qualifications of the shareholder; Except as otherwise provided in the articles of association.

Chapter IV Establishment and organization of a joint stock limited company

Section 1 is established

Article 76 To establish a joint stock limited company, the following conditions shall be met:

(1) the number of sponsors meets the quorum;

(2) The total amount of capital stock subscribed by all the promoters or the total amount of paid-in capital stock raised in accordance with the provisions of the articles of association of the company;

(3) The issuance and preparation of shares comply with legal provisions;

(4) The sponsors formulate the articles of association of the company, which are established by means of public offering and approved by the founding meeting;

(5) Having a company name and establishing an organizational structure that meets the requirements of a joint stock limited company;

(6) Having a company residence.

Article 77 A joint stock limited company may be established by initiating or raising shares.

Establishment by initiation means the establishment of a company by the promoters subscribing for all the shares to be issued by the company.

Establishment by public offering refers to the establishment of a company by the promoters subscribes for a part of the shares to be issued by the company, and the rest of the shares are raised to the public or to specific parties.

Article 78 For the establishment of a joint stock limited company, there shall be not less than two but not more than two hundred sponsors, of whom more than half shall have domiciles within the territory of China.

Article 79 The promoters of a joint stock limited company shall be responsible for the preparation of the company.

The sponsors shall sign a sponsor agreement to specify their respective rights and obligations during the establishment of the company.

Article 80 Where a joint stock limited company is established by way of initiation, its registered capital shall be the total share capital subscribed by all the promoters registered with the company registration authority. The promoters shall not raise shares from others before the shares subscribed for have been fully paid.

Where a joint stock limited company is established by means of public offering, its registered capital shall be the total paid-in share capital registered with the company registration authority.

Where laws, administrative regulations or decisions of The State Council provide otherwise on the minimum amount of registered capital paid in and registered capital of a joint stock limited company, such provisions shall prevail.

Article 81 The articles of association of a joint stock limited company shall state the following:

(1) Name and domicile of the company;

(2) the business scope of the company;

(3) the way of establishment of the company;

(4) The total number of shares, amount per share and registered capital of the company;

(5) the name of the initiator, the number of shares subscribed for, the method and time of investment;

(6) composition, functions and powers and rules of procedure of the Board of directors;

(7) Legal representative of the company;

(8) the composition, functions and powers and rules of procedure of the board of supervisors;

(9) the company's profit distribution method;

(10) Reasons for dissolution and liquidation methods of the company;

(11) the company's notification and announcement measures;

(12) Other matters deemed necessary by the general meeting of shareholders.

Article 82 The provisions of Article 27 of this Law shall apply to the method of capital contribution of sponsors.

Article 83 Where a joint stock limited company is established by way of initiation, the promoters shall acknowledge in writing the shares they have subscribed for as required by the articles of association and pay capital contributions in accordance with the articles of association. Where capital contribution is made with non-monetary property, the formalities for the transfer of property rights shall be completed in accordance with law.

If the promoters fail to pay their capital contribution in accordance with the provisions of the preceding paragraph, they shall be liable for breach of contract in accordance with the promoters' agreement.

After the sponsors have fully subscribed to the capital contribution stipulated in the articles of association of the company, they shall elect the board of directors and the board of supervisors, and the board of directors shall submit the articles of association of the company and other documents prescribed by laws and administrative regulations to the company registration authority to apply for registration of establishment.

Article 84 Where a joint stock limited company is established by public offering, the shares subscribed by the promoters shall not be less than 35 percent of the total number of shares of the company. However, where laws and administrative regulations provide otherwise, such provisions shall prevail.

Article 85 When offering shares to the public, the promoters must publish a prospectus and prepare a subscription form. The subscription letter shall state the matters set out in Article 86 of this Law, and the subscriber shall fill in the number of shares to be subscribed, the amount of shares, and the address, and sign and seal it. Subscribers pay for shares according to the number of shares subscribed.

Article 86 The prospectus shall be accompanied by the articles of association formulated by the promoters and shall state the following matters:

(1) the number of shares subscribed by the promoters;

(2) the par value and issue price of each share;

(3) the total number of bearer shares issued;

(4) the purpose of the raised funds;

(5) the rights and obligations of the subscribers;

(6) The starting and ending period of the stock offering and the explanation that the subscriber may withdraw the subscribed shares if the stock is not fully raised within the time limit.

Article 87 Where the promoters offer shares to the public, they shall be underwritten by a securities company established according to law and an underwriting agreement shall be signed.

Article 88 Where the promoters offer shares to the public, they shall sign an agreement with the bank for the collection of share proceeds.

The bank that collects the share proceeds shall collect and keep the share proceeds in accordance with the agreement, issue the receipt documents to the subscribers who have paid the share proceeds, and have the obligation to issue the receipt certificates to the relevant departments.

Article 89 After the funds for issuing shares have been fully paid, the capital must be verified by a lawfully established capital verification institution and a certificate issued. The sponsors shall preside over a founding meeting of the company within 30 days from the date of full payment of the share capital. The founding meeting shall be composed of the promoters and subscribers.

If the shares issued have not been fully raised beyond the deadline prescribed in the prospectus, or if the sponsors fail to hold a founding meeting within 30 days after the funds for the shares issued have been fully paid, the subscribers may require the sponsors to return the funds paid plus the interest on the deposit in the bank for the same period.

Article 90 The sponsors shall notify the subscribers of the date of the founding meeting or make a public announcement 15 days before the founding meeting is held. The founding meeting may be held only if the initiators and subscribers representing more than half of the total number of shares are present.

The creative assembly shall exercise the following functions and powers:

(1) To examine the reports of the sponsors on the preparation of the company;

(2) Adoption of the articles of association;

(3) To elect members of the Board of directors;

(4) to elect members of the Board of Supervisors;

(5) Reviewing the establishment expenses of the company;

(6) To examine the valuation of the assets used by the promoters as stock funds;

(7) Where force majeure or major changes in operating conditions directly affect the establishment of the company, a decision not to establish the company may be made.

A resolution of the founding meeting on the matters set out in the preceding paragraph must be adopted by more than half of the votes held by the subscribers present at the meeting.

Article 91 After the promoters or subscribers have paid the share capital or paid the capital contribution as part of the share capital, they may not withdraw their share capital, except where the shares are not fully raised on time, the promoters fail to hold the founding meeting on time, or the founding meeting decides not to establish the company.

Article 92 The board of directors shall, within 30 days after the completion of the founding meeting, submit the following documents to the company registration authority to apply for registration of establishment:

(1) Application for company registration;

(2) Minutes of the founding meeting;

(3) the articles of association;

(4) capital verification certificate;

(5) the employment documents and identity certificates of the legal representative, director and supervisor;

(6) the legal person qualification certificate of the initiator or the identity certificate of a natural person;

(7) The company's domicile certificate.

Where a joint stock limited company is established by means of public offering, it shall also submit to the company registration authority the approval document of the securities regulatory body under The State Council.

Article 93 If, after the establishment of a joint stock limited company, the promoters fail to pay their capital contributions in full in accordance with the provisions of the articles of association of the company, they shall pay them in arrears; The other promoters shall bear joint and several liability.

If, after the establishment of a joint stock limited company, it is found that the actual value of the non-monetary property contributed by the establishment company is significantly lower than the amount set forth in the articles of association, the sponsors who have made the contribution shall make up the difference; The other promoters shall bear joint and several liability.

Article 94 The promoters of a joint stock limited company shall bear the following responsibilities:

(1) If the company cannot be established, it shall be jointly and severally liable for the debts and expenses incurred in the act of establishment;

(2) If the company fails to be established, it shall be jointly and severally liable for the return of the share proceeds paid by the subscribers plus the interest on the deposit in the bank for the same period;

(3) In the course of the establishment of a company, where the interests of the company are harmed due to the negligence of the promoters, the company shall be liable for compensation.

Article 95 When a limited liability company is changed into a joint stock limited company, its total paid-in capital shall not be higher than its net assets. When a limited liability company is changed into a joint stock limited company and shares are publicly issued for the purpose of increasing its capital, it shall be handled according to law.

Article 96 A joint stock limited company shall keep its articles of association, register of shareholders, bond stubs, minutes of meetings of shareholders' general meetings, minutes of meetings of the board of directors, minutes of meetings of the board of supervisors and financial and accounting reports with the company.

Article 97 A shareholder shall have the right to consult the articles of association, the register of shareholders, the stubs of bonds of the company, the minutes of the shareholders' general meeting, the resolutions of the board of directors, the resolutions of the board of supervisors and the financial and accounting reports of the company, and to make suggestions or raise questions about the operation of the company.

The second section of the general meeting

Article 98 The general meeting of shareholders of a joint stock limited company shall be composed of all the shareholders. The general meeting of shareholders shall be the authority of the company and shall exercise its functions and powers in accordance with this Law.

Article 99 The provisions of paragraph 1 of Article 37 of this Law concerning the functions and powers of the shareholders' meeting of a limited liability company shall apply to the shareholders' meeting of a joint stock limited company.

Article 100 The annual meeting of the shareholders' assembly shall be held once a year. Under any of the following circumstances, an extraordinary general meeting of shareholders shall be convened within two months:

(1) The number of directors is less than two-thirds of the number provided for in this law or in the articles of association of the company;

(2) when the company's uncompensated losses amount to one-third of the total paid-in share capital;

(3) when requested by shareholders who hold more than 10 percent of the company's shares individually or collectively;

(4) when the Board of directors deems it necessary;

(5) When proposed by the Board of supervisors;

(6) Other circumstances provided for in the articles of association.

Article 101 A meeting of the shareholders' assembly shall be convened by the board of directors and presided over by the chairman; If the chairman is unable to perform his duties or fails to do so, the vice chairman shall preside; If the vice chairman is unable to perform his duties or fails to perform his duties, a director shall be jointly nominated by more than half of the directors to preside.

If the board of directors is unable to perform or fails to perform its duty of convening a meeting of the shareholders' meeting, the board of supervisors shall convene and preside over it in a timely manner; If the board of supervisors does not convene and preside over the meeting, the shareholders who hold more than 10% of the company's shares individually or collectively for more than 90 consecutive days may convene and preside over the meeting on their own.

Article 102 In convening a meeting of the shareholders' general meeting, the time and place of the meeting and the matters to be considered shall be notified to all shareholders 20 days in advance of the meeting; Notice shall be given to all shareholders 15 days in advance of the convening of the extraordinary shareholders' meeting. Where bearer shares are issued, the time, place and matters for deliberation of the meeting shall be announced 30 days before the meeting is convened.

Shareholders who hold more than 3% of the company's shares individually or in aggregate may put forward provisional proposals and submit them in writing to the board of directors ten days before the convening of the shareholders' meeting; The Board of Directors shall notify the other shareholders within two days after receiving the proposal, and submit the provisional proposal to the general meeting of shareholders for consideration. The content of the provisional proposal shall fall within the scope of the authority of the shareholders' meeting, and have clear topics and specific resolutions.

The general meeting of shareholders shall not adopt resolutions on matters not listed in the notice in the preceding two paragraphs.

If a bearer of shares attends a meeting of the general meeting of shareholders, he shall deposit his shares in the company from five days before the meeting to the close of the general meeting of shareholders.

Article 103 A shareholder who attends a meeting of the general meeting of shareholders shall have one vote for each share he holds. However, the shares of the Company held by the Company have no voting rights.

A resolution made by the general meeting of shareholders must be passed by more than half of the voting rights held by the shareholders present at the meeting. However, resolutions adopted by the shareholders' meeting to amend the articles of association of the company, increase or decrease the registered capital, and resolutions on merger, division, dissolution or change of the company form must be passed by more than two-thirds of the voting rights held by the shareholders present at the meeting.

Article 104 Where this Law and the articles of association stipulate that the transfer or transfer of material assets or the provision of guarantees by the company must be resolved by the shareholders' meeting, the board of directors shall convene a meeting of the shareholders' meeting in a timely manner and the shareholders' meeting shall vote on the above-mentioned matters.

Article 105 The election of directors and supervisors by the shareholders' assembly may be conducted by a cumulative voting system in accordance with the provisions of the articles of association or the resolutions of the shareholders' assembly.

The term "cumulative voting system" as used in this Law means that when the general meeting of shareholders elects directors or supervisors, each share shall have the same voting rights as the number of directors or supervisors to be elected, and the voting rights of the shareholders may be used collectively.

Article 106 A shareholder may appoint an agent to attend a meeting of the shareholders' general meeting. The agent shall submit to the company a power of attorney from the shareholder and exercise his voting rights within the scope of his authorization.

Article 107 The shareholders' meeting shall prepare minutes of the decisions on the items discussed at the meeting, and the presiding officer and the directors present at the meeting shall sign the minutes. The minutes of the meeting shall be kept together with the register of signatures of the shareholders present and the proxy for attendance.

Section 3 The Board of Directors and the Manager

Article 108 A joint stock limited company shall have a board of directors, which shall consist of five to nineteen members.

The board of directors may include representatives of the employees of the company. The staff representatives on the board of directors shall be democratically elected by the staff and workers of the company through the staff and workers' congress, the staff and workers' congress or any other form.

The provisions of Article 45 of this Law concerning the term of office of directors of a limited liability company shall apply to the directors of a joint stock limited company.

The provisions of Article 46 of this Law concerning the functions and powers of the board of directors of a limited liability company shall apply to the board of directors of a joint stock limited company.

Article 109 The board of directors shall have one chairman and may have a vice chairman. The chairman and vice chairman shall be elected by the board of directors by more than half of all the directors.

The chairman shall convene and preside over the meetings of the board of directors and inspect the implementation of the resolutions of the board of directors. The vice chairman shall assist the chairman in his work. If the chairman is unable or fails to perform his duties, the vice Chairman shall perform his duties; If the vice chairman is unable to perform his duties or fails to perform his duties, a director shall be jointly nominated by more than half of the directors to perform his duties.

Article 110 The board of directors shall hold meetings at least twice a year, and notice of each meeting shall be given to all directors and supervisors ten days in advance.

Shareholders representing more than one-tenth of the voting rights, more than one-third of the directors or the board of supervisors may propose convening an extraordinary meeting of the board of directors. The chairman shall convene and preside over the meeting of the board of directors within 10 days after receiving the proposal.

When the board of directors convenes a temporary meeting, it may prescribe a separate form and time limit for the notification of the meeting.

Article 111 A board meeting may be held only when more than half of the directors are present. A resolution made by the board of directors must be passed by more than half of all the directors.

Resolutions of the board of directors shall be voted on by one person, one vote.

Article 112 A meeting of the board of directors shall be attended by the director himself; If a director is unable to attend the meeting for any reason, he may appoint another director to attend the meeting on his behalf in writing, and the power of attorney shall specify the scope of authorization.

The board of directors shall prepare minutes of the decisions on the matters discussed at the meeting, and the directors present at the meeting shall sign the minutes.

The directors shall be responsible for the resolutions of the Board of directors. If the resolution of the board of directors violates laws, administrative regulations, the articles of association of the company or the resolution of the general meeting of shareholders and causes serious losses to the company, the directors participating in the resolution shall be liable for compensation to the company. However, if it is proved that the objection was expressed at the time of voting and recorded in the minutes of the meeting, the director may be exempted from liability.

Article 113 A joint stock limited company shall have a general manager who shall be appointed or dismissed by the board of directors.

The provisions of Article 49 of this Law concerning the functions and powers of the manager of a limited liability company shall apply to the manager of a joint stock limited company.

Article 114 The board of directors of a company may decide that a member of the board shall concurrently serve as the manager.

Article 115 A company may not lend money to its directors, supervisors or senior managers directly or through its subsidiaries.

Article 116 A company shall regularly disclose to its shareholders the remuneration received by its directors, supervisors and senior managers from the company.

Section 4 The Council of Supervisors

Article 117 A joint stock limited company shall have a board of supervisors, which shall consist of at least three members.

The board of supervisors shall include shareholders' representatives and an appropriate proportion of employees' representatives, of which the proportion of employees' representatives shall not be less than one-third, and the specific proportion shall be prescribed by the articles of association of the company. The staff representatives on the board of supervisors shall be democratically elected by the staff and workers of the company through the staff and workers' congress, the staff and workers' congress or other forms.

The board of supervisors shall have a chairman and may have a vice chairman. The chairman and vice chairman of the board of supervisors shall be elected by more than half of all supervisors. The chairman of the Board of supervisors shall convene and preside over meetings of the board of supervisors; If the chairman of the board of supervisors is unable or fails to perform his duties, the vice chairman of the board of Supervisors shall convene and preside over the meeting of the board of supervisors; If the vice chairman of the board of supervisors is unable or fails to perform his duties, a supervisor jointly nominated by more than half of the supervisors shall convene and preside over the meeting of the board of supervisors.

No director or senior manager shall serve concurrently as a supervisor.

The provisions of Article 52 of this Law concerning the term of office of the supervisors of a limited liability company shall apply to the supervisors of a joint stock limited company.

Article 118 The provisions of Articles 53 and 54 of this Law concerning the functions and powers of the Board of Supervisors of a limited liability company shall apply to the board of Supervisors of a joint stock limited company.

Expenses necessary for the Board of supervisors to exercise its functions and powers shall be borne by the company.

Article 119 The Board of supervisors shall meet at least once every six months. The supervisor may propose a temporary meeting of the board of supervisors.

Unless otherwise provided for in this Law, the method of discussion and voting procedure of the board of supervisors shall be prescribed by the articles of association.

A resolution of the board of supervisors shall be passed by more than half of the supervisors.

The board of supervisors shall prepare meeting minutes of the decisions on the items discussed, and the supervisors present at the meeting shall sign the meeting minutes.

Section V Special provisions on the organizational structure of listed companies

Article 120 The term "listed company" as used in this Law refers to a company limited by shares whose shares are listed and traded on a stock exchange.

Article 121 Where a listed company purchases or sells major assets or the amount of guarantee exceeds 30 percent of the company's total assets within one year, a resolution shall be made by the shareholders' meeting and adopted by more than two-thirds of the voting rights held by the shareholders present at the meeting.

Article 122 A listed company shall have independent directors. Specific measures shall be formulated by The State Council.

Article 123 A listed company shall have a secretary of the board of directors, who shall be responsible for the preparation of the general meeting of the company's shareholders and the meeting of the board of directors, the storage of documents, the management of the company's shareholders' information, and the handling of information disclosure affairs.

Article 124 Where a director of a listed company has any connection with the enterprise involved in the matters resolved at the meeting of the board of directors, he shall not exercise the right to vote on the resolution, nor shall he exercise the right to vote on behalf of other directors. The meeting of the board of directors may be held with the attendance of more than half of the unrelated directors, and the resolutions made at the meeting of the Board of directors shall be passed by more than half of the unrelated directors. If the number of unrelated directors attending the board meeting is less than three, the matter shall be submitted to the shareholders' meeting of the listed company for deliberation.

Chapter V Issuance and Transfer of shares of a joint stock limited company

Section 1 Stock issuing bank

Article 125 The capital of a joint stock limited company is divided into shares, each of which is equal in amount.

Shares of a company are in the form of shares. A stock is a certificate issued by a company to certify the shares held by a shareholder.

Article 126 The issue of shares shall be based on the principle of fairness and impartiality, and each share of the same class shall have the same rights.

For shares of the same class issued at the same time, the conditions and price of each share shall be the same; Any unit or individual shall pay the same price for each share subscribed.

Article 127 The issue price of a share may be at or above the par value, but may not be lower than the par value.

Article 128 Stocks shall be in paper form or other forms prescribed by the securities regulatory body under The State Council.

The stock shall state the following major matters:

(1) The name of the company;

(2) the date of establishment of the company;

(3) the class of shares, the par value and the number of shares represented;

(4) the serial number of the stock.

The shares shall be signed by the legal representative and sealed by the company.

The sponsors' stocks shall be marked with the words sponsors' stocks.

Article 129 The shares issued by a company may be registered shares or unregistered shares.

The stocks issued by the company to the promoters or legal persons shall be registered stocks, and the names or names of the promoters or legal persons shall be recorded, and no other account shall be established or the names of representatives shall be recorded.

Article 130 Where a company issues registered shares, it shall keep a register of shareholders, which shall record the following matters:

(1) the name and domicile of the shareholder;

(2) The number of shares held by each shareholder;

(3) the serial number of the stocks held by each shareholder;

(4) The date on which each shareholder acquires the shares.

Where bearer shares are issued, the company shall record the number, serial number and date of issue of its shares.

Article 131 The State Council may make separate provisions on the issuance by a company of shares other than those prescribed herein.

Article 132 After the establishment of a joint stock limited company, the shares shall be formally delivered to the shareholders. The company shall not deliver shares to shareholders before its establishment.

Article 133 Where a company issues new shares, the shareholders' meeting shall make resolutions on the following matters:

(1) The type and amount of new shares;

(2) the issue price of new shares;

(3) the starting and ending date of the issuance of new shares;

(4) The type and amount of new shares issued to existing shareholders.

Article 134 When a company is approved by the securities regulatory body under The State Council to issue new shares to the public, it must publish a prospectus for new shares and financial accounting reports, and prepare a subscription form.

The provisions of Articles 87 and 88 of this Law shall apply to the public issuance of new shares by a company.

Article 135 When a company issues new shares, it may determine its pricing plan in light of the company's business and financial situation.

Article 136 After a company has fully raised its share capital by issuing new shares, it must register the change with the company registration authority and make a public announcement.

Section II Share transfer

Article 137 Shares held by shareholders may be transferred according to law.

Article 138 The transfer of shares by a shareholder shall be carried out at a lawfully established stock exchange or in other ways prescribed by The State Council.

Article 139 Registered shares shall be transferred by the shareholder in the form of endorsement or by other means prescribed by laws and administrative regulations; After the transfer, the company shall record the name and domicile of the transferee in the register of shareholders.

Within 20 days before the general meeting of shareholders is held or within five days before the basis on which the company decides to distribute dividends, no change in the register of shareholders as provided in the preceding paragraph shall be registered. However, where the law provides otherwise for the registration of changes to the register of shareholders of a listed company, such provisions shall prevail.

Article 140 The transfer of bearer shares shall become effective as soon as the shareholder delivers the shares to the transferee.

Article 141 The shares of the company held by the promoters shall not be transferred within one year from the date of establishment of the company. The shares issued by the company before its public offering of shares shall not be transferred within one year from the date when the company's shares are listed on the stock exchange.

The directors, supervisors and senior managers of the company shall report to the Company the shares of the Company held by them and the changes thereof, and the shares transferred each year during the term of office shall not exceed 25 percent of the total shares of the Company held by them; The shares held by the Company shall not be transferred within one year from the date of listing of the company's shares. The above-mentioned personnel shall not transfer the shares of the Company held by them within six months after their resignation. The articles of association of a company may make other restrictive provisions on the transfer of the shares of the company held by the directors, supervisors and senior managers of the company.

Article 142 A company may not purchase its own shares. However, any of the following circumstances shall be excluded:

(1) Reducing the registered capital of the company;

(2) Merging with other companies holding shares of the Company;

(3) Using the shares for employee stock ownership plans or stock incentive;

(4) Shareholders request the Company to purchase their shares due to their objection to the resolution on merger or division made by the general meeting of shareholders;

(5) The shares are used to convert corporate bonds issued by the listed company that can be converted into shares;

(6) The listed company is necessary to safeguard the value of the company and shareholders' rights and interests.

Where a company purchases its shares under the circumstances specified in items (1) and (2) of the preceding paragraph, a resolution of the shareholders' meeting shall be adopted; Where a company purchases its shares under any of the circumstances specified in items (3), (5) or (6) of the preceding paragraph, it may, in accordance with the provisions of the articles of association of the company or the authorization of the general meeting of shareholders, make a resolution at a meeting of the board of directors attended by more than two-thirds of the directors.

After a company purchases its shares in accordance with the provisions of the first paragraph of this article, if it falls under the circumstances of Item (1), it shall cancel the shares within 10 days from the date of purchase; If it falls under items (2) or (4), it shall be transferred or cancelled within six months; In the case of items (3), (5) and (6), the total number of shares held by the company shall not exceed 10% of the total number of shares issued by the company, and shall be transferred or cancelled within three years.

Where a listed company purchases its own shares, it shall fulfill the obligation of information disclosure in accordance with the Securities Law of the People's Republic of China. Where a listed company purchases its shares under the circumstances specified in items (3), (5) and (6) of paragraph 1 of this article, it shall do so through open centralized transactions.

The company shall not accept its own shares as the subject matter of the pledge.

Article 143 Where a registered stock is stolen, lost or destroyed, the shareholder may request the people's court to declare the stock invalid in accordance with the public notice procedure prescribed in the Civil Procedure Law of the People's Republic of China. After the people's court declares the stock invalid, the shareholder may apply to the company for reissuance of the stock.

Article 144 The stocks of a listed company shall be listed and traded in accordance with relevant laws, administrative regulations and the trading rules of a stock exchange.

Article 145 A listed company must, in accordance with the provisions of laws and administrative regulations, make public its financial status, business operations and major litigation, and publish its financial and accounting reports half a year in each fiscal year.

Chapter VI Qualifications and Obligations of directors, supervisors and senior managers of the Company

Article 146 Under any of the following circumstances, a person may not serve as a director, supervisor or senior manager of a company:

(1) having no or limited capacity for civil conduct;

(2) having been sentenced to criminal punishment for embezzlement, bribery, embezzlement or misappropriation of property or disrupting the order of the socialist market economy and the term of execution has not exceeded five years, or having been deprived of political rights for a crime and the term of execution has not exceeded five years;

(3) if he serves as a director, factory director or manager of a company or enterprise in bankruptcy liquidation and is personally responsible for the bankruptcy of the company or enterprise, it has not been more than three years since the date of completion of the bankruptcy liquidation of the company or enterprise;

(4) Acting as the legal representative of a company or enterprise whose business license has been revoked or ordered to close due to violations of the law, and having personal responsibility, it has not been more than three years since the date the business license of the company or enterprise has been revoked;

(5) A large amount of debt owed by an individual has not been repaid at maturity.

Where a company elects or appoints a director or supervisor or hires a senior manager in violation of the provisions of the preceding paragraph, such election, appointment or appointment shall be invalid.

If a director, supervisor or senior manager occurs in any of the circumstances listed in paragraph 1 of this article during his or her term of office, the Company shall remove him or her from office.

Article 147 The directors, supervisors and senior managers shall abide by laws, administrative regulations and the articles of association of the company, and bear the duty of loyalty and diligence to the company.

Directors, supervisors and senior managers shall not take advantage of their powers to accept bribes or other illegal income, and shall not encroach on the property of the company.

Article 148 Directors and senior managers shall not engage in any of the following acts:

(1) misappropriating company funds;

(2) Deposit the company's funds in its own name or in an account opened in the name of another individual;

(3) In violation of the articles of association of the company, without the consent of the shareholders' meeting, the shareholders' meeting or the board of directors, lending the company's funds to others or providing guarantees for others with the company's property;

(4) entering into contracts or transactions with the Company in violation of the articles of association or without the approval of the shareholders' meeting or the shareholders' meeting;

(5) Without the approval of the board of shareholders or the general meeting of shareholders, taking advantage of his position to seek business opportunities belonging to the company for himself or others, operating for himself or for others the same business as the company he works for;

(6) accepting commissions for transactions between others and the company as their own;

(7) Unauthorized disclosure of company secrets;

(8) Other acts that violate the duty of loyalty to the company.

The income obtained by directors and senior managers in violation of the provisions of the preceding paragraph shall be owned by the company.

Article 149 Where a director, supervisor or senior manager violates any law, administrative regulation or the articles of association of the company while performing his duties, thereby causing losses to the company, he shall be liable for compensation.

Article 150 If the shareholders' meeting or the shareholders' meeting requests the directors, supervisors or senior managers to attend the meeting as non-voting delegates, the directors, supervisors or senior managers shall attend the meeting as non-voting delegates and accept the shareholders' questions.

The directors and senior managers shall truthfully provide relevant information and materials to the board of supervisors or to the supervisors of a limited liability company without a board of supervisors, and shall not impede the board of supervisors or the supervisors from exercising their functions and powers.

Article 151 Where a director or senior manager falls under the circumstances prescribed in Article 149 of this Law, a shareholder of a limited liability company or a shareholder of a joint stock limited company who holds more than one percent of the company's shares individually or in aggregate for more than 180 consecutive days may request in writing the Board of Supervisors or the supervisor of a limited liability company without a board of supervisors to bring a lawsuit before a people's court. If the supervisor falls under any of the circumstances provided for in Article 149 of this Law, the aforementioned shareholder may request in writing the board of directors or the executive director of a limited liability company without a board of directors to bring a suit before the people's court.

Where the board of supervisors, the supervisor of a limited liability company without a board of supervisors, or the board of directors or the executive director of a limited liability company refuses to bring a suit after receiving the written request of the shareholder as provided for in the preceding paragraph, or fails to bring a suit within 30 days from the date of receipt of the request, or if the circumstances are urgent and failure to bring a suit immediately will cause irreparable harm to the interests of the company, The shareholders mentioned in the preceding paragraph shall have the right to bring a suit directly in the people's court in their own name for the benefit of the company.

Where any other person infringes upon the lawful rights and interests of the company and causes losses to the company, the shareholders mentioned in the first paragraph of this Article may bring a suit to the People's Court in accordance with the provisions of the preceding two paragraphs.

Article 152 Where a director or senior manager violates laws, administrative regulations or the articles of association, thereby harming the interests of a shareholder, the shareholder may bring a suit before a people's court.

Chapter VII Corporate Bonds

Article 153 The term "company bonds" as used in this Law refers to the marketable securities issued by a company in accordance with legal procedures and agreed to repay the principal and interest at a certain time limit.

The issuance of corporate bonds by a company shall comply with the issuance conditions stipulated in the Securities Law of the People's Republic of China.

Article 154 After the application for the issue of corporate bonds has been approved by the department authorized by The State Council, the measures for raising corporate bonds shall be announced.

The company's measures for offering bonds shall state the following major matters:

(1) The name of the company;

(2) the purposes of the funds raised by bonds;

(3) the total amount of bonds and the par value of bonds;

(4) the method of determining the bond interest rate;

(5) the time limit and method of repayment of principal and interest;

(6) the situation of bond guarantee;

(7) the issuance price and the starting and ending date of the issuance of the bonds;

(8) net assets of the company;

(9) The total amount of corporate bonds that have been issued and have not yet matured;

(10) underwriting agencies for corporate bonds.

Article 155 Where a company issues corporate bonds in the form of physical certificates, it must specify on the bonds such matters as the name of the company, the par value of the bonds, the interest rate, the time limit for repayment, etc. The bonds must be signed by the legal representative and sealed by the company.

Article 156 Company bonds may be registered bonds or bearer bonds.

Article 157 When issuing corporate bonds, a company shall keep a book of bond stubs.

Where registered company bonds are issued, the following matters shall be stated in the company's bond stub book:

(1) the name and domicile of the bondholder;

(2) the date on which the bondholder acquired the bonds and the number of the bonds;

(3) the total amount of the bonds, the par value of the bonds, the interest rate, and the term and method of repayment of the principal and interest;

(4) the issuance date of the bonds.

Where bearer corporate bonds are issued, the company's bond stub book shall indicate the total amount of the bonds, the interest rate, the term and method of repayment, the date of issue and the serial number of the bonds.

Article 158 The registration and settlement institutions of registered company bonds shall establish relevant systems for bond registration, deposit, interest payment and redemption.

Article 159 Company bonds may be transferred, and the transfer price shall be agreed upon by the assignor and the assignee.

If a company's bonds are listed and traded on a stock exchange, they shall be transferred in accordance with the trading rules of the stock exchange.

Article 160 Registered company bonds shall be transferred by their holders by endorsement or by other means prescribed by laws and administrative regulations. After the transfer, the company shall record the name and domicile of the transferee in the company's bond stub book.

The transfer of bearer company bonds shall be effective as soon as the bondholder delivers the bonds to the transferee.

Article 161 A listed company may, upon a resolution of the shareholders' general meeting, issue corporate bonds that can be converted into shares, and the specific conversion measures shall be specified in the measures for raising corporate bonds. When a listed company issues corporate bonds that can be converted into stocks, it shall submit the issue to the securities regulatory body under The State Council for approval.

When issuing corporate bonds that can be converted into stocks, the words "convertible corporate bonds" shall be marked on the bonds, and the amount of convertible corporate bonds shall be indicated in the company's bond stub book.

Article 162 Where a company issues bonds that can be converted into shares, the company shall, in accordance with its conversion method, issue shares to the bondholders, provided that the bondholders have the right to choose whether to convert the shares or not.

Chapter VIII Corporate finance and accounting

Article 163 A company shall establish its own financial and accounting system in accordance with laws, administrative regulations and the provisions of the financial department of The State Council.

Article 164 A company shall, at the end of each fiscal year, prepare its financial and accounting reports, which shall be audited by an accounting firm in accordance with law.

Financial accounting reports shall be prepared in accordance with laws, administrative regulations and the provisions of the financial department under The State Council.

Article 165 A limited liability company shall submit its financial and accounting reports to its shareholders within the time limit prescribed in its articles of association.

The financial and accounting reports of a joint stock limited company shall be made available to the Company for inspection by the shareholders 20 days prior to the convening of the annual meeting of the shareholders. A joint stock limited company that publicly issues shares must publish its financial and accounting reports.

Article 166 When a company distributes after-tax profits for the current year, 10% of the profits shall be included in the company's statutory reserve fund. If the accumulative amount of the company's statutory reserve fund is more than 50% of the company's registered capital, it may no longer be withdrawn.

Where the company's statutory reserve fund is not sufficient to make up the losses of previous years, the company shall first make up the losses with the profits of the current year before drawing the statutory reserve fund in accordance with the provisions of the preceding paragraph.

After the company has drawn the statutory reserve fund from the after-tax profits, it may, upon a resolution of the shareholders' meeting or the general meeting of shareholders, also draw its discretionary reserve fund from the after-tax profits.

The after-tax profits remaining after the company has made up its losses and withdrawn its reserve fund shall be distributed by the limited liability company in accordance with the provisions of Article 34 of this Law; A joint stock limited company shall distribute the shares in proportion to the shares held by the shareholders, except where the articles of association of the joint stock limited company stipulate that the shares shall not be distributed in proportion to the shares.

If the shareholders' meeting, the general meeting of shareholders or the board of directors, in violation of the provisions of the preceding paragraph, distributes profits to shareholders before the company makes up its losses and draws the statutory reserve fund, the shareholders must return the profits distributed in violation of the provisions to the company.

Profits shall not be distributed from the shares held by the company.

Article 167 The excess proceeds from the issuance of shares of a joint stock limited company at a price exceeding the par value of the shares and other income that the financial department of The State Council has stipulated as included in the capital reserve shall be included in the capital reserve of the company.

Article 168 The company's common reserve fund shall be used to make up the company's losses, expand the company's production and operation, or be converted to increase the company's capital. However, the capital reserve may not be used to cover the company's losses.

When the statutory reserve fund is converted into capital, the reserve fund retained shall not be less than 25 percent of the registered capital of the company before the conversion.

Article 169 The appointment or dismissal of a public accounting firm that undertakes audit services shall be decided by the shareholders' meeting, the shareholders' meeting or the board of directors in accordance with the articles of association of the company.

When a company's shareholders' meeting, general meeting of shareholders or board of directors votes on the dismissal of a public accounting firm, it shall allow the public accounting firm to state its opinions.

Article 170 A company shall provide true and complete accounting documents, accounting books, financial accounting reports and other accounting materials to the accounting firm it employs, and may not refuse, conceal or make false statements.

Article 171 A company shall not maintain any accounting books in addition to its legal accounting books.

The assets of the company shall not be stored in an account in the name of any individual.

Chapter IX Merger, division, Capital Increase and capital reduction of the Company

Article 172 A company may adopt a merger by absorption or a merger by new establishment.

The absorption of one company by other companies is a merger by absorption, and the absorbed company is dissolved. The merger of two or more companies to establish a new company is a new merger, and the parties to the merger shall be dissolved.

Article 173 For a company merger, the parties to the merger shall sign a merger agreement and prepare a balance sheet and a list of assets. The company shall notify the creditors within 10 days from the date of making the merger resolution, and make an announcement in a newspaper within 30 days. Creditors may, within 30 days from the date of receipt of the notice, or within 45 days from the date of public announcement if they have not received the notice, require the company to pay off its debts or provide corresponding guarantees.

Article 174 In the event of a company merger, the claims and debts of the parties to the merger shall be taken over by the company that survives the merger or the newly established company.

Article 175 Where a company is divided, its property shall be divided accordingly.

In case of division of a company, a balance sheet and a list of assets shall be prepared. The company shall notify the creditors within 10 days from the date of making the resolution on division, and make a public announcement in a newspaper within 30 days.

Article 176 The debts of a company before its division shall be jointly and severally liable by the company after the division. However, unless otherwise agreed in a written agreement between the Company and its creditors on the payment of debts before the division.

Article 177 When a company needs to reduce its registered capital, it must prepare a balance sheet and an inventory of its assets.

The company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make a public announcement in a newspaper within 30 days. The creditor shall, within 30 days from the date of receipt of the notice, or within 45 days from the date of public announcement if it has not received the notice, have the right to require the company to pay off its debts or provide corresponding security.

Article 178 When a limited liability company increases its registered capital, the capital contribution subscribed by the shareholders shall be subject to the relevant provisions of this Law on the payment of capital contributions for the establishment of a limited liability company.

When a joint stock limited company issues new shares for the purpose of increasing its registered capital, the shareholders shall subscribe for new shares in accordance with the relevant provisions of this Law on the payment of share fees for the establishment of a joint stock limited company.

Article 179 Where a company is merged or divided and the registered items are changed, it shall register the change with the company registration authority in accordance with law. If the company is dissolved, the company shall be registered for cancellation according to law; Where a new company is to be established, the company establishment registration shall be completed in accordance with the law.

If a company increases or decreases its registered capital, it shall register the change with the company registration authority according to law.

Chapter X Company dissolution and liquidation

Article 180 A company is dissolved for the following reasons:

(1) the term of operation stipulated in the articles of association expires or other causes for dissolution stipulated in the articles of association occur;

(2) dissolution by resolution of the shareholders' meeting or the shareholders' general meeting;

(3) The company needs to be dissolved due to merger or division;

(4) The business license is revoked, the business is ordered to close down or the business is revoked according to law;

(5) The people's court shall dissolve it in accordance with the provisions of Article 182 of this Law.

Article 181 Where a company falls under Item (1) of Article 180 of this Law, it may continue to exist by amending its articles of association.

To amend the articles of association in accordance with the provisions of the preceding paragraph, a limited liability company must be approved by the shareholders holding more than two-thirds of the voting rights, and a joint stock limited company must be approved by the shareholders attending the shareholders' meeting with more than two-thirds of the voting rights.

Article 182 In case of serious difficulties in the operation and management of a company, the continued existence of which would cause heavy losses to the interests of the shareholders and which cannot be resolved through other means, the shareholders holding more than 10 percent of the voting rights of all the shareholders of the company may request the people's court to dissolve the company.

Article 183 Where a company is dissolved as a result of items (1), (2), (4) or (5) of Article 180 of this Law, a liquidation group shall be established within 15 days from the date of occurrence of the cause of dissolution to begin liquidation. The liquidation group of a limited liability company shall be composed of the shareholders, and the liquidation group of a joint stock limited company shall be composed of the directors or other personnel determined by the shareholders' meeting. If a liquidation group is not established within the time limit, the creditor may apply to the people's court to appoint relevant personnel to form a liquidation group to conduct liquidation. The people's court shall accept the application and organize the liquidation team to carry out liquidation in a timely manner.

Article 184 The liquidation team shall exercise the following functions and powers during the liquidation period:

(1) liquidate the company's assets and prepare a balance sheet and a list of assets respectively;

(2) notifying or announcing creditors;

(3) dealing with the company's outstanding business related to liquidation;

(4) to settle the taxes owed and the taxes generated in the course of liquidation;

(5) to settle claims and debts;

(6) Disposing of the remaining property of the company after paying off its debts;

(7) Participating in civil litigation activities on behalf of the company.

Article 185 The liquidation group shall notify the creditors within 10 days from the date of its establishment and make a public announcement in a newspaper within 60 days. Creditors shall, within 30 days from the date of receipt of the notice, or within 45 days from the date of public announcement if they have not received the notice, report their claims to the liquidation group.

In declaring a creditor's right, the creditor shall explain the relevant matters of the creditor's right and provide supporting materials. The liquidation group shall register the creditor's rights.

During the period of filing claims, the liquidation group shall not pay off the creditors.

Article 186 After liquidating the company's assets and preparing the balance sheet and list of assets, the liquidation group shall work out a liquidation plan and submit it to the shareholders' meeting, the shareholders' meeting or the people's court for confirmation.

The remaining property of the company after the payment of liquidation expenses, employees' wages, social insurance expenses and legal compensation, the payment of taxes owed and the repayment of company debts shall be distributed in proportion to the capital contribution of the shareholders of a limited liability company and in proportion to the shares held by the shareholders of a joint stock limited company.

During the liquidation period, the company shall continue to exist, but shall not carry out any business activities unrelated to the liquidation. The property of the company shall not be distributed to the shareholders before it has been paid off in accordance with the provisions of the preceding paragraph.

Article 187 Where the liquidation group, after liquidating the company's assets and preparing the balance sheet and list of assets, finds that the company's assets are insufficient to repay its debts, it shall apply to the people's court for the declaration of bankruptcy according to law.

After the company is declared bankrupt by a ruling of the people's court, the liquidation team shall transfer the liquidation affairs to the people's court.

Article 188 After the liquidation of a company, the liquidation group shall prepare a liquidation report, submit it to the shareholders' meeting, the shareholders' meeting or the people's court for confirmation, submit it to the company registration authority, apply for cancellation of the company registration, and announce the termination of the company.

Article 189 Members of the liquidation group shall be faithful to their duties and perform their liquidation obligations according to law.

No member of the liquidation group shall take advantage of his power to accept bribes or other illegal income, and shall not encroach on the property of the company.

If any member of the liquidation group causes losses to the company or creditors due to intent or gross negligence, he shall be liable for compensation.

Article 190 Where a company is declared bankrupt according to law, bankruptcy liquidation shall be carried out in accordance with the law on enterprise bankruptcy.

Chapter XI Branches of Foreign Companies

Article 191 The term "foreign company" as used in this Law means a company established outside China in accordance with foreign laws.

Article 192 To establish a branch within the territory of China, a foreign company must file an application with the Chinese competent authority and submit its articles of association, the company registration certificate of the country to which it belongs and other relevant documents. Upon approval, it shall register with the company registration authority in accordance with law and obtain a business license.

The examination and approval measures for branches of foreign companies shall be formulated separately by The State Council.

Article 193 Where a foreign company establishes a branch within the territory of China, it must appoint a representative or agent in charge of the branch within the territory of China and allocate funds appropriate to the business activities of the branch.

Where a minimum amount of operating funds of a branch of a foreign company needs to be prescribed, it shall be prescribed separately by The State Council.

Article 194 A branch of a foreign company shall indicate in its name the nationality and form of liability of the foreign company.

The branch office of a foreign company shall keep the articles of association of the foreign company in its office.

Article 195 A branch established by a foreign company within the territory of China shall not have the status of a Chinese legal person.

A foreign company shall bear civil liability for the business activities of its branches within the territory of China.

Article 196 When a branch of a foreign company established with approval engages in business activities within the territory of China, it must abide by Chinese laws and must not harm the public interests of China, and its lawful rights and interests shall be protected by Chinese laws.

Article 197 When a foreign company cancels its branch within the territory of China, it must pay off its debts according to law and carry out liquidation in accordance with the provisions of this Law on company liquidation procedures. The property of its branches shall not be transferred outside China until the debts are paid.

Chapter XII Legal Responsibilities

Article 198 Where, in violation of the provisions of this Law, a company falsely declares its registered capital, submits false materials or conceals material facts by other fraudulent means to obtain company registration, the company registration authority shall order it to make corrections, and impose a fine of not less than 5 percent but not more than 15 percent of the amount of registered capital falsely stated; A fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed on a company that submits false materials or conceals important facts by other fraudulent means; If the circumstances are serious, the company registration shall be revoked or the business license revoked.

Article 199 Where the promoters or shareholders of a company make false capital contributions, fail to deliver or fail to deliver on time the monetary or non-monetary property used as capital contributions, the company registration authority shall order them to make corrections and impose a fine of not less than 5 percent but not more than 15 percent of the amount of false capital contributions.

Article 200 Where the promoters or shareholders of a company, after the establishment of the company, withdraw their capital contributions, the company registration authority shall order them to make corrections and impose a fine of not less than 5 percent but not more than 15 percent of the capital withdrawn.

Article 201 Where a company, in violation of the provisions of this Law, establishes account books other than those prescribed by law, the financial department of the people's government at or above the county level shall order it to make corrections and impose a fine of not less than 50,000 yuan but not more than 500,000 yuan.

Article 202 Where a company makes false records or conceals important facts in the financial accounting reports and other materials provided to the relevant competent authorities according to law, the competent authorities shall impose a fine of not less than 30,000 yuan but not more than 300,000 yuan on the persons in charge directly responsible and other persons directly responsible.

Article 203 Where a company fails to draw the statutory reserve fund in accordance with the provisions of this Law, the financial department of the people's government at or above the county level shall order the company to make up the full amount that should be drawn, and may impose a fine of not more than 200,000 yuan on the company.

Article 204 Where a company fails to notify or make public a notice to creditors in accordance with the provisions of this Law at the time of merger, division, reduction of registered capital or liquidation, the company registration authority shall order it to make corrections and impose a fine of not less than 10,000 yuan but not more than 100,000 yuan on the company.

Where a company conceals assets during liquidation, makes false records on its balance sheet or list of assets, or distributes company assets before debts are paid off, the company registration authority shall order it to make corrections and impose a fine of not less than 5 percent but not more than 10 percent of the amount of company assets distributed before debts are paid off; A fine of not less than 10,000 yuan but not more than 100,000 yuan shall be imposed on the persons directly in charge and other persons directly responsible.

Article 205 Where a company conducts business activities unrelated to liquidation during the liquidation period, the company registration authority shall give it a warning and confiscate its illegal gains.

Article 206 Where the liquidation group fails to submit a liquidation report to the company registration authority in accordance with the provisions of this Law, or conceals important facts or contains major omissions in the liquidation report submitted, the company registration authority shall order it to make corrections.

Where any member of the liquidation group engages in malpractices for personal gain, seeks illegal income or embezzles company property by taking advantage of his power, the company registration authority shall order him to return the company property, confiscate his illegal income, and may impose a fine of not less than one time but not more than five times his illegal income.

Article 207 Where an institution undertaking asset assessment, capital verification or verification provides false materials, the company registration authority shall confiscate its illegal income and impose a fine of not less than one time but not more than five times the illegal income, and may order the institution to suspend business, revoke the qualification certificates of the persons directly responsible and revoke its business license according to law.

Where an institution undertaking assets assessment, capital verification or verification provides a report with major omissions due to negligence, the company registration authority shall order it to make corrections; if the circumstances are serious, a fine of not less than one time but not more than five times the income thereof shall be imposed, and the relevant competent department may order the institution to suspend business, revoke the qualification certificates of the persons directly responsible, and revoke the business license.

If an institution undertaking asset evaluation, capital verification or verification causes losses to the creditors of the company due to the false evaluation results, capital verification or verification certificates issued by it, it shall be liable for compensation within the amount of the false evaluation or verification, unless it can prove that it is not at fault.

Article 208 Where a company registration authority registers an application for registration that does not meet the conditions prescribed by this Law, or fails to register an application for registration that meets the conditions prescribed by this Law, the person directly in charge and other persons directly responsible shall be subject to administrative sanctions according to law.

Article 209 Where the superior department of the company registration authority forces the company registration authority to register an application for registration that does not meet the conditions prescribed by this Law, or to refuse to register an application for registration that meets the conditions prescribed by this Law, or to cover up an illegal registration, the person directly in charge and other persons directly responsible shall be subject to administrative sanctions according to law.

Article 210 Where a company illegally uses the name of a limited liability company or a branch of a limited liability company or a branch of a limited liability company or a joint stock limited company without lawfully registering as a limited liability company or joint stock limited company, the company registration authority shall order it to make corrections or prohibit it. A fine of not more than 100,000 yuan may also be imposed.

Article 211 Where a company fails to start business more than six months after its establishment without justifiable reasons, or ceases business on its own for more than six consecutive months after its establishment, its business license may be revoked by the company registration authority.

Where the registered items of a company are changed, the company registration authority shall order it to register within a specified time limit if it fails to do so in accordance with the provisions of this Law; Those who fail to register within the time limit shall be fined not less than 10,000 yuan but not more than 100,000 yuan.

Article 212 Where a foreign company, in violation of the provisions of this Law, establishes a branch within the territory of China without authorization, the company registration authority shall order it to make corrections or close it down, and may concurrently impose a fine of not less than 50,000 yuan but not more than 200,000 yuan.

Article 213 Where a company uses its name to engage in serious illegal acts that endanger state security or social and public interests, its business license shall be revoked.

Article 214 Where a company violates the provisions of this Law and should bear civil liability for compensation and pay a fine or fine, if its assets are insufficient to pay, it shall first bear civil liability for compensation.

Article 215 Whoever violates the provisions of this Law and constitutes a crime shall be investigated for criminal responsibility according to law.

Chapter XIII Supplementary Provisions

Article 216 The meanings of the following terms in this Law:

(1) Senior management personnel refer to the manager, deputy manager, person in charge of finance of the company, secretary of the board of directors of the listed company and other personnel as stipulated in the articles of association of the company.

(2) A controlling shareholder means a shareholder whose capital contribution accounts for more than 50 percent of the total capital of a limited liability company or whose shares account for more than 50 percent of the total capital of a joint stock limited company; Although the amount of capital contribution or the proportion of shares held is less than 50%, the voting rights enjoyed by the amount of capital contribution or the shares held are sufficient to have a significant influence on the resolutions of the shareholders' meeting or the shareholders' meeting.

(3) The actual controller means a person who, although not a shareholder of the company, can actually control the conduct of the company through an investment relationship, agreement or other arrangement.

(4) Relevant relationship refers to the relationship between a company's controlling shareholder, actual controller, director, supervisor, senior management and the enterprise directly or indirectly controlled, as well as other relationships that may lead to the transfer of the company's interests. However, enterprises controlled by the state are not only related to each other because they are controlled by the state.

Article 217 This Law shall apply to limited liability companies and joint stock limited companies with foreign investment; Where the laws on foreign investment provide otherwise, such provisions shall apply.

Article 218 This Law shall come into force as of January 1, 2006.