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Company Law of the People's Republic of China (revised in 2005)

Updated: 2006-04-17 10:09

Article 33 A limited liability company shall prepare a register of
shareholders, which shall specify the following:
(1) the name of every shareholder and his/its domicile thereof;
(2) the amount of capital contribution made by every shareholder;
(3) the serial number of every capital contribution certificate. The
shareholders recorded in the register of shareholders may, in light of
the register of shareholders, claim to and exercise the shareholder's
rights. A company shall register every shareholder's name and the amount
of its capital contribution in the company registration authority. Where
any of the registered items is changed, it shall handle the modification
of the registration. If the company fails to do so, it shall not, on the
basis of the unregistered or un-modified registration item, stand up to
any third party.

Article 34 The shareholder shall be entitled to consult and copy the
articles of association, records of the shareholders' meetings,
resolutions of the meetings of the board of directors, resolutions of the
meetings of the board of supervisors, as well as financial reports.
The shareholder may request to consult the accounting books of the
company. Where a shareholder requests to consult the accounting books of
the company, it shall submit to the company a written request which shall
state its motives. If the company, pursuant to any justifiable reason,
considers that the shareholder's request to consult the accounting books
for any improper purpose may damage the legitimate interests of the
company, it may reject the request of the shareholder, and shall, within
in 15 days after the shareholder submits a written request, give it a
written reply which shall include an explanation. If the company rejects
the request of any shareholder to consult the accounting books, the
shareholder may plead the people's court to demand the company to approve
consultation.

Article 35 The shareholders shall distribute dividends in light of the
percentages of capital contributions actually made by them, unless all
shareholders agree that the dividends are not distributed on the
percentages of capital contributions. Where the company is to increase
its capital, its shareholders have the preemptive right to contribute to
the increased amount on the basis of the same percentages of the old
capital contributions they have made, unless all shareholders agree that
they will not contribute to the increased amount of capital on the basis
of the percentages of the old capital contributions they have made.

Article 36 After the establishment of a company, no shareholder may
illegally take away the contribution capital. Section 2 Organizational
Structure

Article 37 The shareholders' meeting of a limited liability company shall
comprise all the shareholders. It shall be the authority of the company,
and shall exercise its authorities according to this Law.

Article 38 The shareholders' meeting shall exercise the following
authorities:
(1) determining the company's operation guidelines and investment plans;
(2) electing and changing the director and supervisors assumed by
non-representatives of the employees, and determining the matters
concerning their remuneration;
(3) deliberating and approving the reports of the board of directors;
(4) deliberating and approving the reports of the board of supervisors
or the supervisor;
(5) deliberating and approving annual financial budget plans and final
account plans of the company;
(6) deliberating and approving profit distribution plans and loss
recovery plans of the company;
(7) making resolutions on the increase or decrease of the company's
registered capital;
(8) making resolutions on the issuance of corporate bonds;
(9) adopting resolutions on the assignment, split-up, change of company
form, dissolution, liquidation of the company;
(10) revising the articles of association of the company;
(11) other functions as specified in the articles of association. Where
any of the matters as listed in the preceding paragraph is consented by
all the shareholders it in writing, it is not required to convene a
shareholders' meeting. A decision may be made directly with the
signatures or seals of all the shareholders.

Article 39 The shareholders' meeting shall be convened and presided over
by the shareholder who has made the largest percentage of capital
contributions and shall exercise its authorities according to this Law.

Article 40 The shareholders' meetings shall be classified into regular
meetings and temporary meetings. The regular meetings shall be timely
held in pursuance with the articles of association. Where a temporary
meeting is proposed by the shareholders representing 1/10 of the voting
rights or more, or by directors representing 1/3 of the voting rights or
more, or by the board of supervisors, or by the supervisors of the
company with no board of supervisors, a temporary meeting shall be held.

Article 41 Where a limited liability company has set up a board of
directors, the shareholders' meetings shall be convened by the board of
directors and presided over by the chairman of the board of directors. If
the chairman is unable or does not perform his duties, the meetings
thereof shall be presided over by the deputy chairman of the board of
directors. If the deputy chairman of the board of directors is unable or
does not perform his duties, the meetings shall be presided over by a
director jointly recommended by half or more of the directors. Where a
limited liability company has not set up the board of directors, the
shareholders' meetings shall be convened and presided over by the acting
director.
If the board of directors or the acting director is unable or does not
perform the duties of convening the shareholders' meeting, the board of
supervisors or the supervisor of the company with no board of supervisors
may convene and preside over such meetings. If the board of supervisors
or supervisor does not convene or preside over such meetings, the
shareholder representing 1 / 10 or more of the voting rights may convene
and preside over such meetings on his/its own initiative.

Article 42 Every shareholder shall be notified 15 days before a
shareholders' meeting is held, unless it is otherwise prescribed by the
articles of association or it is otherwise stipulated by all the
shareholders. A shareholders' meeting shall make records for the
decisions on the matters discussed at the meeting. The shareholders who
attend the meeting shall affix their signatures to the records.

Article 43 The shareholders shall exercise their voting rights at the
shareholders' meetings on the basis of their respective percentage of the
capital contributions, unless it is otherwise stipulated by the articles
of association.

Article 44 The discussion methods and voting procedures of the
shareholders' meeting shall be prescribed in the articles of association,
unless it is otherwise provided for by this Law. A resolution made at a
shareholders' meeting on amending the articles of association, increasing
or reducing the registered capital, merger, split-up, dissolution or
change of the company form shall be adopted by the shareholders
representing 2 / 3 or more of the voting rights.

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Saturday, December 15, 2007

Learn Chinese online - Company Law of the People's Republic of China (revised in 2005)

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