Company Law of the People's Republic of China 2014

Chapter 1 General Provisions

Article 1 To regulate the organization and conduct of companies, protect the legitimate rights and interests of companies, shareholders, and creditors, maintain social and economic order, and promote the development of the socialist market economy, this law is enacted.

Article 2 The term "company" as used in this law refers to limited liability companies and joint stock companies established within the territory of China in accordance with this law.

Article 3 A company is a corporate legal person, possessing independent corporate property and enjoying corporate property rights. The company is liable for its debts with all its assets.

Shareholders of a limited liability company are liable to the company to the extent of their subscribed capital contributions; shareholders of a joint stock company are liable to the company to the extent of their subscribed shares.

Article 4 Shareholders of a company enjoy rights such as asset income, participation in major decisions, and selection of managers according to law.

Article 5 When engaging in business activities, a company must comply with laws and administrative regulations, observe social and business ethics, act honestly and creditably, accept supervision by the government and the public, and assume social responsibility.

The legitimate rights and interests of a company are protected by law and shall not be infringed.

Article 6 To establish a company, an application for establishment registration shall be submitted to the company registration authority according to law. Those meeting the establishment conditions prescribed by this law shall be registered as limited liability companies or joint stock companies by the company registration authority; those not meeting the conditions shall not be registered as such.

Where laws or administrative regulations require approval for establishing a company, such approval procedures shall be completed according to law before company registration.

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

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

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

If any matters recorded in the business license change, the company shall apply for change registration according to law, and the company registration authority shall reissue the business license.

Article 8 A limited liability company established in accordance with this law must indicate "Limited Liability Company" or "Ltd." in its name.

A joint stock company established in accordance with this law must indicate "Joint Stock Limited Company" or "Stock Company" in its name.

Article 9 A limited liability company changing into a joint stock company shall meet the conditions prescribed for joint stock companies by this law. A joint stock company changing into a limited liability company shall meet the conditions prescribed for limited liability companies by this law.

When a limited liability company changes into a joint stock company, or a joint stock company changes into a limited liability company, the debts and credits before the change shall be inherited by the company after the change.

Article 10 A company shall take the location of its main office as its domicile.

Article 11 The establishment of a company must be in accordance with the law and adopt the company's articles of association. The articles of association are binding on the company, shareholders, directors, supervisors, and senior management personnel.

Article 12 The business scope of a company is stipulated in the articles of association and registered according to law. The company may amend the articles of association and change the business scope, but shall apply for change registration.

Projects within the business scope that require approval according to laws and administrative regulations shall be approved according to law.

Article 13 The legal representative of a company shall be the chairman of the board, executive director, or manager as stipulated in the articles of association and registered according to law. Changes to the legal representative shall be registered.

Article 14 A company may establish branches. To establish a branch, an application for registration shall be submitted to the company registration authority to obtain a business license. A branch does not have legal person status, and its civil liabilities are borne by the company.

A company may establish subsidiaries, which have legal person status and independently bear civil liabilities according to law.

Article 15 A company may invest in other enterprises; however, unless otherwise provided by law, it shall not be a contributor jointly liable for the debts of the invested enterprise.

Article 16 When a company invests in other enterprises or provides guarantees for others, it shall do so according to the articles of association and by resolution of the board of directors or shareholders' meeting; if the articles of association limit the total amount or single amount of investment or guarantee, such limits shall not be exceeded.

If a company provides guarantees for its shareholders or actual controllers, it must be approved by the shareholders' meeting.

Shareholders who are the subject of the previous paragraph or controlled by the actual controllers mentioned shall not participate in the voting on such matters. The resolution shall be passed by more than half of the voting rights held by other shareholders attending the meeting.

Article 17 A company must protect the legitimate rights and interests of employees, sign labor contracts with employees according to law, participate in social insurance, strengthen labor protection, and achieve safe production.

A company shall adopt various forms to strengthen vocational education and job training for employees and improve their quality.

Article 18 Employees of a company organize trade unions and carry out union activities according to the "Trade Union Law of the People's Republic of China" to safeguard their legitimate rights and interests. The company shall provide necessary conditions for the activities of its trade union. The company trade union represents employees to lawfully sign collective contracts with the company on matters such as labor remuneration, working hours, welfare, insurance, and labor safety and hygiene.

A company shall implement democratic management through employee representative meetings or other forms in accordance with the constitution and relevant laws.

When a company studies and decides on restructuring and major business issues, or formulates important rules and regulations, it shall listen to the opinions of the company trade union and solicit opinions and suggestions from employees through employee representative meetings or other forms.

Article 19 Within a company, according to the constitution of the Communist Party of China, the organization of the Communist Party of China shall be established and party activities carried out. The company shall provide necessary conditions for the activities of the party organization.

Article 20 Company shareholders shall comply with laws, administrative regulations, and the articles of association, exercise shareholder rights according to law, and shall not abuse shareholder rights to harm the interests of the company or other shareholders; nor abuse the company's independent legal person status and shareholders' limited liability to harm the interests of the company's creditors.

Shareholders who abuse their rights and cause losses to the company or other shareholders shall bear compensation liability according to law.

Shareholders who abuse the company's independent legal person status and shareholders' limited liability to evade debts and seriously harm the interests of the company's creditors shall bear joint and several liability for the company's debts.

Article 21 The controlling shareholders, actual controllers, directors, supervisors, and senior management personnel of a company shall not use their related relationships to harm the company's interests.

Those who violate the preceding paragraph and cause losses to the company shall bear compensation liability.

Article 22 Resolutions of the company's shareholders' meeting or general meeting of shareholders, or the board of directors that violate laws or administrative regulations are invalid.

If the procedures for convening meetings or voting methods of the shareholders' meeting, general meeting of shareholders, or board of directors violate laws, administrative regulations, or the company's articles of association, or if the resolution content violates the articles of association, shareholders may request the people's court to revoke the resolution within sixty days from the date the resolution was made.

When shareholders file a lawsuit according to the preceding paragraph, the people's court may, upon the company's request, require the shareholders to provide corresponding guarantees.

If the company has completed change registration based on the resolutions of the shareholders' meeting, general meeting of shareholders, or board of directors, and the people's court declares the resolution invalid or revokes the resolution, the company shall apply to the company registration authority to cancel the change registration.

Chapter 2 Establishment and Organizational Structure of Limited Liability Companies

Section 1 Establishment

Article 23 To establish a limited liability company, the following conditions must be met:

(1) Shareholders meet the statutory number;

(2) There is a subscribed capital contribution amount by all shareholders in accordance with the company's articles of association;

(3) Shareholders jointly formulate the company's articles of association;

(4) The company has a name and establishes an organizational structure that meets the requirements of a limited liability company;

(5) The company has a domicile.

Article 24 A limited liability company is established by capital contributions from no more than fifty shareholders.

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

(1) Company name and domicile;

(2) Business scope of the company;

(3) Registered capital of the company;

(4) Names or titles of shareholders;

(5) Shareholders' methods of capital contribution, amount, and timing;

(6) Company's organizational structure, methods of formation, powers, and rules of procedure;

(7) Company's legal representative;

(8) Other matters that the shareholders' meeting deems necessary to stipulate.

Shareholders shall sign and seal the articles of association.

Article 26 The registered capital of a limited liability company is the total subscribed capital contributions of all shareholders registered with the company registration authority.

If laws, administrative regulations, or decisions of the State Council have other provisions regarding the paid-in capital or minimum registered capital of limited liability companies, those provisions shall prevail.

Article 27 Shareholders may contribute capital in currency or in non-monetary assets such as physical assets, intellectual property rights, land use rights, which can be valued in currency and legally transferred; however, assets prohibited by laws or administrative regulations from being used as capital contributions are excluded.

Non-monetary assets used as capital contributions shall be appraised and valued, and the assets verified; overvaluation or undervaluation is not allowed. If laws or administrative regulations have provisions on appraisal and valuation, those provisions shall prevail.

Article 28 Shareholders shall pay their subscribed capital contributions in full and on time as stipulated in the articles of association. Shareholders contributing in currency shall deposit the full amount into the limited liability company's bank account; those contributing non-monetary assets shall complete the transfer of property rights according to law.

If shareholders fail to pay their capital contributions as stipulated in the preceding paragraph, they shall not only pay the company in full but also bear liability for breach of contract to shareholders who have paid their contributions in full and on time.

Article 29 After shareholders have fully subscribed to the capital contributions stipulated in the articles of association, representatives designated by all shareholders or jointly entrusted agents shall submit the company registration application, articles of association, and other documents to the company registration authority to apply for establishment registration.

Article 30 After the establishment of a limited liability company, if it is found that the actual value of non-monetary assets contributed as capital is significantly lower than the value stipulated in the articles of association, the shareholder who contributed the assets shall make up the difference; other shareholders at the time of establishment shall bear joint liability.

Article 31 After the establishment of a limited liability company, it shall issue capital contribution certificates to shareholders.

The capital contribution certificate shall specify the following matters:

(1) Company name;

(2) Date of company establishment;

(3) Registered capital of the company;

(4) Names or titles of shareholders, amount of capital contributed, and date of contribution;

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

The capital contribution certificate shall be sealed by the company.

Article 32 A limited liability company shall prepare a register of shareholders recording the following matters:

(1) Names or titles and domiciles of shareholders;

(2) Amount of capital contributed by shareholders;

(3) Number of capital contribution certificates.

Shareholders recorded in the register of shareholders may assert and exercise shareholder rights based on the register.

The company shall register the names or titles of shareholders with the company registration authority; if registration matters change, change registration shall be handled. Without registration or change registration, rights cannot be asserted against third parties.

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

Shareholders may request to inspect the company's accounting books. Such requests shall be made in writing to the company stating the purpose. If the company reasonably believes the shareholder's purpose is improper and may harm the company's legitimate interests, it may refuse inspection and must respond in writing within fifteen days of the request, explaining the reasons. If the company refuses, shareholders may request the people's court to order the company to provide inspection.

Article 34 Shareholders shall receive dividends in proportion to their paid-in capital; when the company increases capital, shareholders have the right to preferentially subscribe according to their paid-in capital proportion. However, this does not apply if all shareholders agree otherwise regarding dividend distribution or preferential subscription.

Article 35 After the company is established, shareholders shall not withdraw their capital contributions.

Section 2 Organization Structure

Article 36 The shareholders' meeting of a limited liability company is composed of all shareholders. The shareholders' meeting is the company's authority body and exercises its powers in accordance with this law.

Article 37 The shareholders' meeting exercises the following powers:

(1) Decide the company's business policies and investment plans;

(2) Elect and replace directors and supervisors not appointed by employee representatives, and decide on the remuneration of directors and supervisors;

(3) Review and approve the board of directors' report;

(4) Review and approve the supervisory board's or supervisors' report;

(5) Review and approve the company's annual financial budget and final accounts;

(6) Review and approve the company's profit distribution plan and loss recovery plan;

(7) Make resolutions on increasing or decreasing the company's registered capital;

(8) Make resolutions on issuing company bonds;

(9) Make resolutions on company mergers, divisions, dissolutions, liquidations, or changes in company form;

(10) Amend the company's articles of association;

(11) Other powers stipulated in the company's articles of association.

If shareholders unanimously agree in writing on the matters listed in the preceding paragraph, the shareholders' meeting may not be convened, and decisions can be made directly, with all shareholders signing and sealing the decision documents.

Article 38 The first shareholders' meeting shall be convened and presided over by the shareholder with the largest capital contribution, exercising powers in accordance with this law.

Article 39 Shareholders' meetings are divided into regular meetings and extraordinary meetings.

Regular meetings shall be held on time according to the company's articles of association. Extraordinary meetings shall be convened if shareholders representing more than one-tenth of voting rights, more than one-third of directors, or the supervisory board or supervisors of a company without a supervisory board propose to convene.

Article 40 If a limited liability company establishes a board of directors, the shareholders' meeting shall be convened by the board and presided over by the chairman; if the chairman cannot or does not perform duties, the vice chairman shall preside; if the vice chairman cannot or does not perform duties, more than half of the directors shall jointly elect a director to preside.

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

If the board of directors or executive director cannot or does not perform the duty of convening the shareholders' meeting, the supervisory board or supervisors of a company without a supervisory board shall convene and preside; if they do not, shareholders representing more than one-tenth of voting rights may convene and preside themselves.

Article 41 When convening a shareholders' meeting, all shareholders shall be notified fifteen days in advance; except as otherwise provided in the company's articles of association or agreed by all shareholders.

The shareholders' meeting shall record the decisions on the matters discussed, and attending shareholders shall sign the meeting minutes.

Article 42 Shareholders exercise voting rights at the shareholders' meeting according to their capital contribution proportion; except as otherwise provided in the company's articles of association.

Article 43 The procedures for discussion and voting at the shareholders' meeting, except as provided by this law, shall be stipulated in the company's articles of association.

Resolutions to amend the articles of association, increase or decrease registered capital, or resolutions on company mergers, divisions, dissolutions, or changes in company form must be passed by shareholders representing more than two-thirds of voting rights.

Article 44 A limited liability company that establishes a board of directors shall have between three and thirteen members; except as otherwise provided in Article 50 of this law.

Limited liability companies invested by two or more state-owned enterprises or other state-owned investment entities shall have employee representatives on the board; other limited liability companies may have employee representatives. Employee representatives on the board are democratically elected by company employees through the employee representative assembly, employee meeting, or other forms.

The board of directors shall have one chairman and may have a vice chairman. The methods for selecting the chairman and vice chairman shall be stipulated in the company's articles of association.

Article 45 The term of office for directors shall be stipulated in the company's articles of association, but each term shall not exceed three years. Directors may be re-elected upon expiration of their term.

If the term expires without timely re-election, or if a director resigns causing the board to have fewer than the legal number of members, the original directors shall continue to perform their duties according to laws, administrative regulations, and the company's articles of association until the new directors take office.

Article 46 The board of directors is responsible to the shareholders' meeting and exercises the following powers:

(1) Convene shareholders' meetings and report to the shareholders;

(2) Implement resolutions of the shareholders' meeting;

(3) Decide the company's business plans and investment proposals;

(4) Formulate the company's annual financial budget and final accounts;

(5) Formulate the company's profit distribution and loss recovery plans;

(6) Formulate plans for increasing or decreasing registered capital and issuing company bonds;

(7) Formulate plans for company mergers, divisions, dissolutions, or changes in company form;

(8) Decide on the establishment of internal management institutions;

(9) Decide on the appointment or dismissal of the company manager and their remuneration, and based on the manager's nomination, decide on the appointment or dismissal of deputy managers, financial officers, and their remuneration;

(10) Formulate the company's basic management systems;

(11) Other powers stipulated in the company's articles of association.

Article 47 Board meetings shall be convened and presided over by the chairman; if the chairman cannot or does not perform duties, the vice chairman shall convene and preside; if the vice chairman cannot or does not perform duties, more than half of the directors shall jointly elect a director to convene and preside.

Article 48 The procedures for discussion and voting at board meetings, except as provided by this law, shall be stipulated in the company's articles of association.

The board of directors shall record decisions on matters discussed, and attending directors shall sign the meeting minutes.

The board of directors' resolutions are decided by one vote per person.

Article 49: A limited liability company may appoint a manager, who is hired or dismissed by the board of directors. The manager is responsible to the board and exercises the following powers:

(1) Preside over the company's production and business management, and organize the implementation of the board's resolutions;

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

(3) Draft plans for the company's internal management structure;

(4) Draft the company's basic management systems;

(5) Formulate the company's specific rules and regulations;

(6) Propose the appointment or dismissal of the company's deputy managers and financial officers;

(7) Decide on the appointment or dismissal of management personnel other than those whose appointment or dismissal is decided by the board of directors;

(8) Other powers granted by the board of directors.

If the company's articles of association provide otherwise for the manager's powers, those provisions shall prevail.

The manager shall attend board meetings as a non-voting participant.

Article 50: A limited liability company with fewer shareholders or smaller scale may appoint an executive director and not establish a board of directors. The executive director may concurrently serve as the company manager.

The powers of the executive director are stipulated in the company's articles of association.

Article 51: A limited liability company shall establish a supervisory board with no fewer than three members. A limited liability company with fewer shareholders or smaller scale may appoint one or two supervisors without establishing a supervisory board.

The supervisory board shall include shareholder representatives and an appropriate proportion of employee representatives, with employee representatives accounting for no less than one-third. The specific proportion is stipulated in the company's articles of association. Employee representatives on the supervisory board are democratically elected by company employees through the employee representative assembly, employee congress, or other forms.

The supervisory board shall have one chairman, elected by more than half of all supervisors. The chairman convenes and presides over supervisory board meetings; if the chairman cannot or does not perform duties, more than half of the supervisors shall jointly elect a supervisor to convene and preside over meetings.

Directors and senior management personnel shall not concurrently serve as supervisors.

Article 52: The term of office for supervisors is three years. Supervisors may be re-elected consecutively upon term expiration.

If the term of supervisors expires without timely re-election, or if a supervisor resigns during the term causing the supervisory board to fall below the legal number, the original supervisors shall continue to perform their duties according to laws, administrative regulations, and the company's articles of association until the newly elected supervisors assume office.

Article 53: The supervisory board or supervisors in companies without a supervisory board exercise the following powers:

(1) Inspect the company's finances;

(2) Supervise the performance of duties by directors and senior management personnel, and propose dismissal of directors or senior management personnel who violate laws, administrative regulations, the articles of association, or shareholders' meeting resolutions;

(3) When the actions of directors or senior management personnel harm the company's interests, require them to make corrections;

(4) Propose convening an extraordinary shareholders' meeting, and convene and preside over the shareholders' meeting if the board of directors fails to perform the duty of convening and presiding over the meeting as required by law;

(5) Submit proposals to the shareholders' meeting;

(6) Initiate lawsuits against directors or senior management personnel in accordance with Article 151 of this law;

(7) Other powers stipulated in the articles of association.

Article 54: Supervisors may attend board meetings and raise inquiries or suggestions regarding board resolutions.

Supervisors of the supervisory board or companies without a supervisory board may investigate if they find abnormal company operations; if necessary, they may hire accounting firms or others to assist, with costs borne by the company.

Article 55: The supervisory board shall hold at least one meeting annually. Supervisors may propose convening temporary supervisory board meetings.

The procedures and voting methods of the supervisory board meetings shall be stipulated in the articles of association, except as otherwise provided by law.

Resolutions of the supervisory board shall be passed by more than half of the supervisors.

The supervisory board shall record minutes of decisions made, and attending supervisors shall sign the minutes.

Article 56: Expenses necessary for the exercise of supervisory powers by the supervisory board or supervisors in companies without a supervisory board shall be borne by the company.

Section 3: Special Provisions for One-Person Limited Liability Companies

Article 57: The establishment and organizational structure of one-person limited liability companies shall comply with the provisions of this section; where this section does not provide, the provisions of Sections 1 and 2 of this chapter shall apply.

A one-person limited liability company, as referred to in this law, means a limited liability company with only one natural person shareholder or one legal person shareholder.

Article 58: A natural person may only invest in and establish one one-person limited liability company. Such a company may not invest in or establish a new one-person limited liability company.

Article 59: A one-person limited liability company shall indicate whether it is solely owned by a natural person or a legal person in its company registration and business license.

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

Article 61: A one-person limited liability company does not establish a shareholders' meeting. When the shareholder makes decisions listed in the first paragraph of Article 37 of this law, it shall be in written form and signed by the shareholder, then filed with the company.

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

Article 63: If the shareholder of a one-person limited liability company cannot prove that the company's assets are independent from the shareholder's own assets, the shareholder shall bear joint and several liability for the company's debts.

Section 4: Special Provisions for State-Owned Sole Proprietorship Companies

Article 64: The establishment and organizational structure of state-owned sole proprietorship companies shall comply with the provisions of this section; where this section does not provide, the provisions of Sections 1 and 2 of this chapter shall apply.

A state-owned sole proprietorship company, as referred to in this law, means a limited liability company solely funded by the state, with the State Council or local people's government authorizing the state-owned assets supervision and administration agency at the same level to perform the duties of the investor.

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

Article 66 A wholly state-owned company does not set up a shareholders' meeting; the state-owned assets supervision and administration authority exercises the powers of the shareholders' meeting. The state-owned assets supervision and administration authority may authorize the company's board of directors to exercise part of the powers of the shareholders' meeting and decide on major matters of the company, but the company's merger, division, dissolution, increase or decrease of registered capital, and issuance of corporate bonds must be decided by the state-owned assets supervision and administration authority; among them, important mergers, divisions, dissolutions, and bankruptcy applications of wholly state-owned companies shall be reviewed by the state-owned assets supervision and administration authority and reported to the people's government at the same level for approval.

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

Article 67 A wholly state-owned company shall set up a board of directors and exercise its powers in accordance with Articles 47 and 67 of this law. The term of office of directors shall not exceed three years. There shall be employee representatives among the members of the board of directors.

Members of the board of directors are appointed by the state-owned assets supervision and administration authority; however, employee representatives among the board members are elected by the company's employee representative assembly.

The board of directors shall have one chairman and may have a vice chairman. The chairman and vice chairman are designated by the state-owned assets supervision and administration authority from among the board members.

Article 68 A wholly state-owned company shall have a manager appointed or dismissed by the board of directors. The manager exercises powers in accordance with Article 50 of this law.

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

Article 69 The chairman, vice chairman, directors, and senior management personnel of a wholly state-owned company shall not concurrently hold positions in other limited liability companies, joint stock companies, or other economic organizations without the consent of the state-owned assets supervision and administration authority.

Article 70 The number of members of the supervisory board of a wholly state-owned company shall not be less than five, among which the proportion of employee representatives shall not be less than one-third, and the specific proportion shall be stipulated in the company's articles of association.

Members of the supervisory board are appointed by the state-owned assets supervision and administration authority; however, employee representatives among the supervisory board members are elected by the company's employee representative assembly. The chairman of the supervisory board is designated by the state-owned assets supervision and administration authority from among the supervisory board members.

The supervisory board exercises the powers stipulated in items (1) to (3) of Article 53 of this law and other powers prescribed by the State Council.

Chapter 3 Transfer of Equity in Limited Liability Companies

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

When a shareholder transfers equity to a person other than a shareholder, it shall be approved by more than half of the other shareholders. The shareholder shall notify other shareholders in writing to seek consent for the equity transfer. If other shareholders do not respond within thirty days from the date of receiving the written notice, it shall be deemed as consent to the transfer. If more than half of the other shareholders do not agree to the transfer, the dissenting shareholders shall purchase the transferred equity; if they do not purchase, it shall be deemed as consent to the transfer.

Equity transferred with the consent of shareholders shall be subject to the preemptive purchase rights of other shareholders under equal conditions. If two or more shareholders claim to exercise the preemptive purchase rights, they shall negotiate to determine their respective purchase proportions; if negotiation fails, the preemptive purchase rights shall be exercised according to their respective capital contribution proportions at the time of transfer.

If the company's articles of association have other provisions on equity transfer, those provisions shall prevail.

Article 72 When the 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 shareholders. Other shareholders have preemptive purchase rights under equal conditions. If other shareholders do not exercise the preemptive purchase rights within twenty days from the date of notification by the people's court, it shall be deemed as a waiver of the preemptive purchase rights.

Article 73 After transferring equity in accordance with Articles 71 and 72 of this law, the company shall cancel the original shareholder's capital contribution certificate, issue a capital contribution certificate to the new shareholder, and correspondingly amend the records of shareholders and their capital contributions in the articles of association and the shareholder register. Such amendments to the articles of association do not require further resolution by the shareholders' meeting.

Article 74 In any of the following circumstances, shareholders who vote against the resolution of the shareholders' meeting may request the company to purchase their equity at a reasonable price:

(1) The company has not distributed profits to shareholders for five consecutive years, while the company has made profits for those five consecutive years and meets the conditions for profit distribution stipulated by this law;

(2) The company merges, divides, or transfers major assets;

(3) The business term stipulated in the articles of association expires or other dissolution reasons stipulated in the articles of association occur, and the shareholders' meeting passes a resolution to amend the articles of association to continue the company.

If the shareholder and the company cannot reach an equity purchase agreement within sixty days from the date the shareholders' meeting resolution is passed, the shareholder may file a lawsuit with the people's court within ninety days from the date the shareholders' meeting resolution is passed.

Article 75 After the death of a natural person shareholder, his or her legal heirs may inherit the shareholder qualification; however, unless otherwise stipulated in the company's articles of association.

Chapter 4 Establishment and Organizational Structure of Joint Stock Companies

Section 1 Establishment

Article 76 The establishment of a joint stock company shall meet the following conditions:

(1) The promoters meet the statutory number;

(2) The total subscribed capital or the total paid-in capital raised by all promoters complies with the articles of association;

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

(4) The promoters formulate the articles of association, and those established by fundraising are approved by the founding meeting;

(5) The company has a name and establishes an organizational structure that meets the requirements of a joint stock company;

(6) The company has a domicile.

Article 77 The establishment of a joint stock company may be by promoter establishment or fundraising establishment.

Promoter establishment refers to the company being established by promoters subscribing to all the shares to be issued by the company.

Fundraising establishment refers to the company being established by promoters subscribing to part of the shares to be issued by the company, with the remaining shares publicly raised or raised from specific targets.

Article 78 The establishment of a joint stock company shall have more than two and less than two hundred promoters, of whom more than half must have domicile within China.

Article 79: The promoters of a joint stock company shall undertake the company's preparatory affairs.

Promoters shall sign a promoter agreement to clarify their respective rights and obligations during the company's establishment process.

Article 80: For a joint stock company established by promotion, the registered capital shall be the total subscribed capital of all promoters registered with the company registration authority. Before the shares subscribed by the promoters are fully paid, shares shall not be raised from others.

For a joint stock company established by public subscription, the registered capital shall be the total paid-in capital registered with the company registration authority.

If laws, administrative regulations, or decisions of the State Council have other provisions on the paid-in registered capital or the minimum registered capital of joint stock companies, those provisions shall prevail.

Article 81: The articles of association of a joint stock company shall specify the following matters:

(1) Company name and domicile;

(2) Business scope of the company;

(3) The method of company establishment;

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

(5) The names or titles of promoters, the number of shares subscribed, the method and timing of capital contribution;

(6) The composition, powers, and rules of procedure of the board of directors;

(7) Company's legal representative;

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

(9) The company's profit distribution methods;

(10) The causes for company dissolution and liquidation methods;

(11) The company's methods for notifications and announcements;

(12) Other matters that the shareholders' meeting deems necessary to stipulate.

Article 82: The methods of capital contribution by promoters shall be subject to the provisions of Article 27 of this law.

Article 83: For a joint stock company established by promotion, promoters shall subscribe in writing to the shares specified in the articles of association and pay the capital according to the articles of association. For contributions in non-monetary assets, the transfer procedures of property rights shall be handled according to law.

If promoters fail to pay the capital according to the preceding paragraph, they shall bear liability for breach of contract according to the promoter agreement.

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

Article 84: For a joint stock company established by public subscription, the shares subscribed by promoters shall not be less than 35% of the total shares of the company; however, if laws or administrative regulations provide otherwise, those provisions shall prevail.

Article 85: When promoters publicly raise shares from society, they must announce the prospectus and prepare subscription forms. The subscription form shall specify the matters listed in Article 86 of this law, be filled out by subscribers with the number of shares subscribed, amount, address, and be signed and sealed. Subscribers shall pay the share capital 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 specify the following matters:

(1) The number of shares subscribed by promoters;

(2) The par value and issue price per share;

(3) The total number of bearer shares issued;

(4) The use of the raised funds;

(5) The rights and obligations of subscribers;

(6) The start and end dates of the current share offering and an explanation that subscribers may withdraw their subscribed shares if the subscription is not fully completed by the deadline.

Article 87: When promoters publicly raise shares from society, the underwriting must be conducted by a legally established securities company, and an underwriting agreement must be signed.

Article 88: When promoters publicly raise shares from society, they must sign an agreement with a bank for the collection of share payments.

The bank collecting share payments shall collect and keep the payments according to the agreement, issue receipts to subscribers who have paid, and is obligated to provide payment certificates to relevant departments.

Article 89: After the share capital is fully paid, it must be verified by a legally established capital verification institution, which shall issue a certificate. Promoters shall convene the company's founding meeting within thirty days from the date the share capital is fully paid. The founding meeting shall be composed of promoters and subscribers.

If the shares issued exceed the deadline specified in the prospectus and are not fully subscribed, or if the share capital is fully paid but the promoters fail to convene the founding meeting within thirty days, subscribers may request the promoters to refund the paid share capital plus interest at the bank's current deposit rate.

Article 90: Promoters shall notify all subscribers of the meeting date or announce it at least fifteen days before the founding meeting. The founding meeting shall be held only if promoters and subscribers representing more than half of the total shares are present.

The founding meeting exercises the following powers:

(1) Review the promoters' report on the company's preparatory situation;

(2) Approve the articles of association;

(3) Elect members of the board of directors;

(4) Elect members of the board of supervisors;

(5) Audit the company's establishment expenses;

(6) Audit the valuation of assets used by promoters to offset share capital;

(7) If force majeure or significant changes in operating conditions directly affect the company's establishment, it may resolve not to establish the company.

Resolutions on the matters listed in the preceding paragraph must be passed by more than half of the voting rights held by subscribers present at the meeting.

Article 91: After promoters and subscribers have paid the share capital or delivered contributions offsetting share capital, except in cases where shares are not fully subscribed on time, promoters fail to convene the founding meeting on time, or the founding meeting resolves not to establish the company, they shall not withdraw their capital.

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

(1) Company registration application;

(2) Minutes of the founding meeting;

(3) Articles of association;

(4) Capital verification certificate;

(5) Appointment documents and identification of the legal representative, directors, and supervisors;

(6) Proof of legal person status of the promoters or identification of natural persons;

(7) Proof of company domicile.

For joint-stock companies established by public stock issuance through fundraising, approval documents from the State Council's securities regulatory authority shall also be submitted to the company registration authority.

Article 93: After the establishment of a joint-stock company, if the promoters fail to pay the subscribed capital in full as stipulated in the articles of association, they shall make up the payment; other promoters bear joint and several liability.

After the establishment of a joint-stock company, if the actual value of non-monetary assets contributed as capital is significantly lower than the value stipulated in the articles of association, the promoter who contributed the capital shall make up the difference; other promoters bear joint and several liability.

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

(1) If the company cannot be established, they shall bear joint and several liability for debts and expenses arising from the establishment;

(2) If the company cannot be established, they shall bear joint and several liability to return the paid-up share capital to subscribers along with interest at the bank deposit rate for the same period;

(3) During the establishment process, if the promoters' negligence causes damage to the company's interests, they shall be liable to compensate the company.

Article 95: When a limited liability company is converted into a joint-stock company, the total amount of converted paid-in capital shall not exceed the company's net assets. When a limited liability company is converted into a joint-stock company and increases capital by public issuance of shares, it shall be handled according to law.

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

Article 97: Shareholders have the right to inspect the articles of association, register of shareholders, company bond stubs, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors, and financial accounting reports, and may make suggestions or inquiries about the company's operations.

Section 2 Shareholders' Meeting

Article 98: The shareholders' meeting of a joint-stock company is composed of all shareholders. The shareholders' meeting is the company's authority and exercises its powers according to this law.

Article 99: The provisions of Article 37, Paragraph 1 of this law regarding the powers of the shareholders' meeting of a limited liability company apply to the shareholders' meeting of a joint-stock company.

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

(1) When the number of directors is less than two-thirds of the number prescribed by this law or the articles of association;

(2) When the company's unrecovered losses reach one-third of the total paid-in capital;

(3) When shareholders holding individually or collectively more than 10% of the company's shares request it;

(4) When the board of directors deems it necessary;

(5) When the board of supervisors proposes to convene it;

(6) Other circumstances stipulated in the articles of association.

Article 101: The shareholders' meeting shall be convened by the board of directors and presided over by the chairman; if the chairman cannot or does not perform the duties, the vice chairman shall preside; if the vice chairman cannot or does not perform the duties, more than half of the directors shall jointly elect a director to preside.

If the board of directors cannot or does not perform the duty of convening the shareholders' meeting, the board of supervisors shall convene and preside in a timely manner; if the board of supervisors does not convene and preside, shareholders holding individually or collectively more than 10% of the company's shares for more than ninety consecutive days may convene and preside themselves.

Article 102: When convening a shareholders' meeting, the time, place, and matters to be discussed shall be notified to all shareholders twenty days before the meeting; for an extraordinary shareholders' meeting, notification shall be given fifteen days before the meeting; for bearer shares, the time, place, and matters to be discussed shall be announced thirty days before the meeting.

Shareholders holding individually or collectively more than 3% of the company's shares may submit temporary proposals in writing to the board of directors ten days before the shareholders' meeting; the board of directors shall notify other shareholders within two days of receiving the proposal and submit the temporary proposal to the shareholders' meeting for consideration. The content of the temporary proposal shall fall within the scope of the shareholders' meeting's authority and have clear topics and specific resolutions.

The shareholders' meeting shall not make resolutions on matters not listed in the notices mentioned in the previous two paragraphs.

Holders of bearer shares attending the shareholders' meeting shall deposit their shares with the company from five days before the meeting until the meeting is adjourned.

Article 103: Each share held by a shareholder attending the shareholders' meeting has one voting right. However, shares held by the company itself have no voting rights.

Resolutions of the shareholders' meeting must be passed by more than half of the voting rights held by shareholders attending the meeting. However, resolutions to amend the articles of association, increase or decrease registered capital, and resolutions on company mergers, divisions, dissolutions, or changes in company form must be passed by more than two-thirds of the voting rights held by shareholders attending the meeting.

Article 104: When this law and the articles of association stipulate that resolutions on major asset transfers, acquisitions, or external guarantees must be made by the shareholders' meeting, the board of directors shall promptly convene the shareholders' meeting for voting on these matters.

Article 105: The shareholders' meeting may elect directors and supervisors by cumulative voting according to the articles of association or resolutions of the shareholders' meeting.

Cumulative voting as referred to in this law means that when electing directors or supervisors at the shareholders' meeting, each share has as many votes as the number of directors or supervisors to be elected, and shareholders may concentrate their votes.

Article 106: Shareholders may entrust agents to attend the shareholders' meeting. The agent shall submit a shareholder's power of attorney to the company and exercise voting rights within the scope of authorization.

Article 107: The shareholders' meeting shall record the decisions on the matters discussed. The host and attending directors shall sign the meeting minutes. The meeting minutes shall be kept together with the signature register of attending shareholders and the powers of attorney of agents attending on behalf of shareholders.

Section 3 Board of Directors and Manager

Article 108: A joint stock company shall establish a board of directors, consisting of five to nineteen members.

The board of directors may include employee representatives. Employee representatives on the board are democratically elected by company employees through the employee representative assembly, employee meetings, or other forms.

The provisions of Article 45 of this law regarding the term of office of directors of limited liability companies apply to directors of joint stock companies.

The provisions of Article 46 of this law regarding the powers of the board of directors of limited liability companies apply to the board of directors of joint stock companies.

Article 109: The board of directors shall have one chairman and may have one vice chairman. The chairman and vice chairman are elected by the board of directors with the majority of all directors.

The chairman convenes and presides over board meetings and inspects the implementation of board resolutions. The vice chairman assists the chairman; if the chairman cannot or does not perform duties, the vice chairman shall perform them; if the vice chairman cannot or does not perform duties, more than half of the directors shall jointly elect a director to perform the duties.

Article 110: The board of directors shall hold at least two meetings annually, and each meeting shall notify all directors and supervisors at least ten days in advance.

Shareholders representing more than one-tenth of voting rights, one-third or more of directors, or the supervisory board may propose to convene a temporary board meeting. The chairman shall convene and preside over the meeting within ten days of receiving the proposal.

For convening temporary board meetings, the notice method and notice period may be separately determined.

Article 111: Board meetings shall be held only if more than half of the directors are present. Resolutions must be passed by a majority of all directors.

The board of directors' resolutions are decided by one vote per person.

Article 112: Board meetings shall be attended by directors in person; if a director cannot attend, they may authorize another director in writing to attend on their behalf, specifying the scope of authorization.

The board shall record the decisions made at meetings, and attending directors shall sign the meeting minutes.

Directors shall be responsible for board resolutions. If a resolution violates laws, administrative regulations, the company’s articles, or shareholders’ meeting resolutions causing serious losses, directors involved shall compensate the company. However, directors who expressed dissent during voting and recorded it in the minutes may be exempted from liability.

Article 113: A joint stock company shall appoint a manager, who is hired or dismissed by the board of directors.

The provisions of Article 49 of this law regarding the powers of managers of limited liability companies apply to managers of joint stock companies.

Article 114: The company’s board of directors may decide that a board member concurrently serves as manager.

Article 115: The company shall not provide loans directly or through subsidiaries to directors, supervisors, or senior management.

Article 116: The company shall regularly disclose to shareholders the remuneration received by directors, supervisors, and senior management from the company.

Section 4: Supervisory Board

Article 117: A joint stock company shall establish a supervisory board with no fewer than three members.

The supervisory board shall include shareholder representatives and an appropriate proportion of employee representatives, with employee representatives accounting for no less than one-third. The specific proportion is stipulated in the company's articles of association. Employee representatives on the supervisory board are democratically elected by company employees through the employee representative assembly, employee congress, or other forms.

The supervisory board shall have one chairman and may have one vice chairman. The chairman and vice chairman are elected by a majority of all supervisors. The chairman convenes and presides over supervisory board meetings; if unable or unwilling, the vice chairman shall convene and preside; if the vice chairman is unable or unwilling, more than half of the supervisors shall jointly elect a supervisor to convene and preside.

Directors and senior management personnel shall not concurrently serve as supervisors.

The provisions of Article 52 of this law regarding the term of office of supervisors of limited liability companies apply to supervisors of joint stock companies.

Articles 53 and 54 of this law regarding the powers of the supervisory board of limited liability companies apply to the supervisory board of joint stock companies.

Expenses necessary for the supervisory board to exercise its powers shall be borne by the company.

Article 119: The supervisory board shall hold meetings at least once every six months. Supervisors may propose convening temporary supervisory board meetings.

The procedures and voting methods of the supervisory board meetings shall be stipulated in the articles of association, except as otherwise provided by law.

Resolutions of the supervisory board shall be passed by more than half of the supervisors.

The supervisory board shall record minutes of decisions made, and attending supervisors shall sign the minutes.

Section 5: Special Provisions on the Organizational Structure of Listed Companies

Article 120: A listed company, as referred to in this law, is a joint stock company whose shares are listed and traded on a stock exchange.

Article 121: If a listed company purchases or sells major assets or provides guarantees exceeding 30% of the company’s total assets within one year, a resolution must be passed by the shareholders’ meeting with at least two-thirds of the voting rights of attending shareholders.

Article 122: Listed companies shall establish independent directors, with specific measures prescribed by the State Council.

Article 123: Listed companies shall appoint a board secretary responsible for preparing shareholders’ meetings and board meetings, managing documents and shareholder information, and handling information disclosure.

Article 124: Directors of listed companies who have related-party relationships with matters discussed in board resolutions shall not exercise voting rights on those resolutions nor act as proxies for other directors. Board meetings may be held with a majority of unrelated directors present, and resolutions require approval by a majority of unrelated directors. If fewer than three unrelated directors attend, the matter shall be submitted to the shareholders’ meeting for review.

Chapter 5: Issuance and Transfer of Shares of Joint Stock Companies

Section 1: Share Issuance

Article 125: The capital of a joint stock company is divided into shares, each with an equal amount.

The company’s shares take the form of stock certificates, which are proof issued by the company certifying shareholders’ holdings.

Article 126: Share issuance shall be conducted on principles of fairness and justice, and each share of the same class shall have equal rights.

Shares of the same class issued at the same time shall have the same issuance conditions and price per share; any unit or individual subscribing shall pay the same price per share.

Article 127: The stock issuance price may be at par value or above, but not below par value.

Article 128: Stocks may be in paper form or other forms prescribed by the securities regulatory authority of the State Council.

Stocks shall specify the following main items:

(1) Company name;

(2) Date of company establishment;

(3) Stock type, par value, and number of shares represented;

(4) Stock number.

Stocks must be signed by the legal representative and stamped by the company.

Stocks of the promoters shall be marked with the words "Promoter's Stock."

Article 129: Stocks issued by the company may be registered stocks or bearer stocks.

Stocks issued by the company to promoters or legal persons shall be registered stocks, and the name of the promoter or legal person shall be recorded; no separate account name or registration in the name of a representative is allowed.

Article 130: When a company issues registered stocks, it shall prepare a shareholder register recording the following matters:

(1) Names or titles and domiciles of shareholders;

(2) Number of shares held by each shareholder;

(3) Stock numbers held by each shareholder;

(4) Date each shareholder acquired the shares.

For bearer stocks issued, the company shall record the quantity, numbers, and issuance dates of the stocks.

Article 131: The State Council may make separate provisions for other types of shares issued by companies beyond those stipulated in this law.

Article 132: After the establishment of a joint stock company, stocks shall be formally delivered to shareholders. Stocks shall not be delivered to shareholders before the company is established.

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

(1) Types and amounts of new shares;

(2) Issue price of new shares;

(3) Start and end dates of the new share issuance;

(4) Types and amounts of new shares issued to existing shareholders.

Article 134: When a company publicly issues new shares with approval from the securities regulatory authority of the State Council, it must announce the prospectus and financial accounting reports and prepare subscription certificates.

The provisions of Articles 87 and 88 of this law apply to the company's public issuance of new shares.

Article 135: When issuing new shares, the company may determine the pricing plan based on its business and financial conditions.

Article 136: After raising sufficient capital from the issuance of new shares, the company must apply for change registration with the company registration authority and make an announcement.

Section 2: Share Transfer

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

Article 138: Shareholders shall transfer their shares at legally established securities trading venues or by other means prescribed by the State Council.

Article 139: Registered stocks shall be transferred by shareholders through endorsement or other methods prescribed by laws and administrative regulations; after transfer, the company shall record the transferee's name and address in the shareholder register.

No change registration of the shareholder register as stipulated in the preceding paragraph shall be made within twenty days before the shareholders' meeting or within five days before the dividend distribution date decided by the company. However, if the law has other provisions for the change registration of the shareholder register of listed companies, those provisions shall prevail.

Article 140: The transfer of bearer stocks takes effect once the shareholder delivers the stock to the transferee.

Article 141: Shares held by promoters of the company shall not be transferred within one year from the date of establishment of the company. Shares issued before the company's public offering shall not be transferred within one year from the date the company's stocks are listed and traded on the stock exchange.

Directors, supervisors, and senior management personnel of the company shall declare the shares they hold and any changes to the company. During their tenure, the shares transferred annually shall not exceed 25% of the total shares they hold; shares held shall not be transferred within one year from the date the company's stocks are listed and traded. These personnel shall not transfer their shares within six months after leaving office. The company's articles of association may impose other restrictive provisions on the transfer of shares held by directors, supervisors, and senior management personnel.

Article 142: The company shall not repurchase its own shares, except in the following circumstances:

(1) To reduce the company's registered capital;

(2) To merge with another company holding the company's shares;

(3) To award shares to the company's employees;

(4) When a shareholder objects to the company's merger or division resolution passed by the shareholders' meeting and requests the company to repurchase their shares.

The company shall obtain shareholders' meeting approval when repurchasing its shares for reasons specified in items (1) to (3) of the preceding paragraph. Shares repurchased under item (1) shall be canceled within ten days from the date of repurchase; shares repurchased under items (2) and (4) shall be transferred or canceled within six months.

Shares repurchased by the company under item (3) of the first paragraph shall not exceed 5% of the total issued shares; funds used for repurchase shall come from the company's after-tax profits; repurchased shares shall be transferred to employees within one year.

The company shall not accept its own stocks as collateral.

Article 143: If registered stocks are stolen, lost, or destroyed, shareholders may request the people's court to declare the stocks invalid through the public notice procedure stipulated in the Civil Procedure Law of the People's Republic of China. After the court declares the stocks invalid, shareholders may apply to the company for reissuance.

Article 144: Stocks of listed companies shall be listed and traded in accordance with relevant laws, administrative regulations, and stock exchange trading rules.

Article 145: Listed companies must disclose their financial status, operating conditions, and major litigation in accordance with laws and administrative regulations, and publish financial accounting reports semiannually within each fiscal year.

Chapter 6: Qualifications and Duties of Company Directors, Supervisors, and Senior Management Personnel

Article 146: The following persons shall not serve as directors, supervisors, or senior management personnel of the company:

(1) Persons without or with limited civil capacity;

(2) Persons who have been sentenced for embezzlement, bribery, misappropriation of property, or disrupting the socialist market economy order, and whose sentence has been served for less than five years, or who have been deprived of political rights for less than five years due to a crime;

(3) Serving as a director, factory director, or manager of a company or enterprise undergoing bankruptcy liquidation and bearing personal responsibility for the bankruptcy of the company or enterprise, within three years from the completion of the bankruptcy liquidation of the company or enterprise;

(4) Serving as the legal representative of a company or enterprise whose business license has been revoked or ordered to close due to illegal activities and bearing personal responsibility, within three years from the date the business license of the company or enterprise was revoked;

(5) Personal debts of a large amount that have matured and remain unpaid.

If a company violates the provisions of the preceding paragraph in electing, appointing directors, supervisors, or senior management personnel, such election, appointment, or hiring shall be invalid.

If directors, supervisors, or senior management personnel exhibit any of the circumstances listed in the first paragraph of this article during their tenure, the company shall dismiss them from their positions.

Article 147 Directors, supervisors, and senior management personnel shall comply with laws, administrative regulations, and the company's articles of association, and owe the company duties of loyalty and diligence.

Directors, supervisors, and senior management personnel shall not use their powers to accept bribes or other illegal income, nor shall they misappropriate the company's property.

Article 148 Directors and senior management personnel shall not engage in the following behaviors:

(1) Misappropriating company funds;

(2) Depositing company funds in accounts opened in their own name or in the name of others;

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

(4) Violating the company's articles of association or without the consent of the shareholders' meeting or general meeting of shareholders, entering into contracts or transactions with the company;

(5) Without the consent of the shareholders' meeting or general meeting of shareholders, using their position to seek business opportunities belonging to the company for themselves or others, or operating or managing businesses similar to the company they serve for themselves or others;

(6) Accepting commissions from others in transactions with the company and keeping them for themselves;

(7) Disclosing company secrets without authorization;

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

Income obtained by directors and senior management personnel in violation of the preceding paragraph shall belong to the company.

Article 149 Directors, supervisors, and senior management personnel who cause losses to the company by violating laws, administrative regulations, or the company's articles of association while performing their duties shall bear compensation liability.

Article 150 When the shareholders' meeting or general meeting of shareholders requests directors, supervisors, or senior management personnel to attend meetings, they shall attend and accept inquiries from shareholders.

Directors and senior management personnel shall truthfully provide relevant information and materials to the board of supervisors or supervisors of limited liability companies without a board of supervisors and shall not obstruct the exercise of their powers.

Article 151 If directors or senior management personnel have the circumstances specified in Article 150 of this law, shareholders of limited liability companies or shareholders holding more than one percent of the company's shares alone or jointly for more than 180 consecutive days in joint-stock companies may request the board of supervisors or supervisors of limited liability companies without a board of supervisors in writing to file a lawsuit with the people's court; if the supervisors have the circumstances specified in Article 150 of this law, the aforementioned shareholders may request the board of directors or the executive director of limited liability companies without a board of directors in writing to file a lawsuit with the people's court.

If the board of supervisors, supervisors of limited liability companies without a board of supervisors, board of directors, or executive directors refuse to file a lawsuit after receiving the written request from shareholders as stipulated in the preceding paragraph, or fail to file a lawsuit within thirty days from the date of receipt, or if the situation is urgent and failure to file immediately will cause irreparable damage to the company's interests, the shareholders specified in the preceding paragraph have the right to file a lawsuit directly with the people's court in their own name for the benefit of the company.

If others infringe on the company's legitimate rights and interests and cause losses to the company, the shareholders specified in the first paragraph of this article may file a lawsuit with the people's court in accordance with the provisions of the preceding two paragraphs.

Article 152 If directors or senior management personnel violate laws, administrative regulations, or the company's articles of association and damage shareholders' interests, shareholders may file a lawsuit with the people's court.

Chapter 7 Company Bonds

Article 153 Company bonds referred to in this law are securities issued by companies in accordance with legal procedures, with agreed principal and interest repayment within a certain period.

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

Article 154 After the application for issuing company bonds is approved by the department authorized by the State Council, the company bond issuance plan shall be announced.

The company bond issuance plan shall specify the following main matters:

(1) Company name;

(2) The use of the bond raised funds;

(3) The total amount of bonds and the face value of the bonds;

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

(5) The term and method of principal and interest repayment;

(6) The bond guarantee situation;

(7) The bond issue price and the start and end dates of issuance;

(8) The company's net asset value;

(9) The total amount of company bonds issued but not yet matured;

(10) The underwriting institutions of the company bonds.

Article 155 When a company issues company bonds in physical certificate form, the bonds must indicate the company name, bond face value, interest rate, repayment term, and other matters, and be signed by the legal representative and stamped with the company seal.

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

Article 157 Companies issuing company bonds shall prepare a company bond stub book.

When issuing registered company bonds, the following matters shall be recorded in the company bond stub book:

(1) The name or designation and address of the bondholder;

(2) The date the bondholder acquired the bond and the bond number;

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

(4) The issuance date of the bonds.

When issuing bearer corporate bonds, the total amount, interest rate, repayment term and method, issuance date, and bond number shall be recorded in the corporate bond stub book.

Article 158 The registration and settlement institution for registered corporate bonds shall establish relevant systems for bond registration, custody, interest payment, redemption, etc.

Article 159 Corporate bonds can be transferred, and the transfer price is agreed upon by the transferor and transferee.

Corporate bonds listed and traded on a stock exchange shall be transferred according to the trading rules of the stock exchange.

Article 160 Registered corporate bonds shall be transferred by the bondholder through endorsement or other methods prescribed by laws and administrative regulations; after transfer, the company shall record the transferee's name or designation and domicile in the corporate bond stub book.

The transfer of bearer corporate bonds takes effect once the bondholder delivers the bond to the transferee.

Article 161 A listed company may issue corporate bonds convertible into stocks upon resolution of the shareholders' meeting and specify the specific conversion methods in the bond issuance plan. The issuance of convertible corporate bonds by a listed company shall be approved by the securities regulatory authority under the State Council.

Convertible corporate bonds shall be marked as such on the bonds and the amount of convertible corporate bonds shall be recorded in the corporate bond stub book.

Article 162 For the issuance of convertible corporate bonds, the company shall exchange stocks to bondholders according to the conversion methods, but bondholders have the option to convert or not convert the bonds into stocks.

Chapter 8 Company Finance and Accounting

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

Article 164 The company shall prepare financial accounting reports at the end of each fiscal year and have them audited by an accounting firm according to law.

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

Article 165 Limited liability companies shall deliver financial accounting reports to each shareholder within the period stipulated in the articles of association.

Financial accounting reports of joint stock companies shall be prepared and made available for shareholders to review at least twenty days before the annual shareholders' meeting; joint stock companies with publicly issued shares must disclose their financial accounting reports.

Article 166 When distributing the after-tax profits of the current year, the company shall allocate 10% of the profits to the company's statutory reserve fund. If the accumulated statutory reserve fund reaches more than 50% of the company's registered capital, further allocation is not required.

If the company's statutory reserve fund is insufficient to cover previous years' losses, the current year's profits shall be used to cover the losses before allocating to the statutory reserve fund as stipulated in the preceding paragraph.

After allocating to the statutory reserve fund from after-tax profits, the company may also allocate discretionary reserve funds from after-tax profits upon resolution of the shareholders' meeting or shareholders' general meeting.

The remaining after-tax profits after covering losses and allocating reserve funds shall be distributed by limited liability companies according to Article 35 of this law; joint stock companies shall distribute according to the proportion of shares held by shareholders, except as otherwise provided in the articles of association.

If the shareholders' meeting, shareholders' general meeting, or board of directors distributes profits to shareholders before covering losses and allocating statutory reserve funds as stipulated in the preceding paragraph, shareholders must return the improperly distributed profits to the company.

Shares held by the company itself shall not be entitled to profit distribution.

Article 167 The premium obtained from issuing shares of a joint stock company at a price exceeding the par value of the shares, as well as other income stipulated by the financial department of the State Council to be included in capital reserves, shall be recorded as the company's capital reserve.

Article 168 The company's reserve funds shall be used to cover losses, expand production and operation, or increase company capital. However, capital reserves shall not be used to cover losses.

When statutory reserve funds are converted into capital, the retained reserve funds shall not be less than 25% of the company's registered capital before the increase.

Article 169 The hiring and dismissal of accounting firms undertaking the company's audit business shall be decided by the shareholders' meeting, shareholders' general meeting, or board of directors in accordance with the company's articles of association.

When the shareholders' meeting, shareholders' general meeting, or board of directors votes on dismissing an accounting firm, the accounting firm shall be allowed to present its opinions.

Article 170 The company shall provide the hired accounting firm with true and complete accounting vouchers, accounting books, financial accounting reports, and other accounting materials, and shall not refuse, conceal, or falsify them.

Article 171 The company shall not establish accounting books other than the statutory accounting books.

No accounts shall be opened in the name of any individual for company assets.

Chapter 9 Company Merger, Division, Capital Increase, and Capital Reduction

Article 172 Company mergers may be conducted by absorption merger or new establishment merger.

In an absorption merger, one company absorbs another and the absorbed company is dissolved. In a new establishment merger, two or more companies merge to establish a new company and all merging parties are dissolved.

Article 173 In a company merger, the merging parties shall sign a merger agreement and prepare a balance sheet and property list. The company shall notify creditors within ten days from the date of the merger resolution and announce it in a newspaper within thirty days. Creditors may request the company to repay debts or provide corresponding guarantees within thirty days of receiving the notice, or within forty-five days from the announcement if no notice is received.

Article 174 In a company merger, the rights and obligations of the merging parties shall be assumed by the surviving or newly established company.

Article 175 In a company division, the property shall be divided accordingly.

When a company is split, it shall prepare a balance sheet and an inventory of assets. The company shall notify creditors within ten days from the date of the resolution on the split and announce it in a newspaper within thirty days.

Article 176 The debts before the company split shall be jointly and severally borne by the companies after the split. However, this does not apply if there is a written agreement between the company and the creditor regarding debt repayment before the split.

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

The company shall notify creditors within ten days from the date of the resolution to reduce registered capital and announce it in a newspaper within thirty days. Creditors have the right to request the company to repay debts or provide corresponding guarantees within thirty days from receiving the notice, or within forty-five days from the announcement if no notice is received.

Article 178 When a limited liability company increases its registered capital, the shareholders' contributions to the newly subscribed capital shall be made in accordance with the relevant provisions for capital contributions in the establishment of limited liability companies under this law.

When a joint stock company issues new shares to increase registered capital, shareholders subscribing to the new shares shall pay the share capital in accordance with the relevant provisions for the establishment of joint stock companies under this law.

Article 179 When a company merges or splits and the registration matters change, it shall apply for change registration with the company registration authority according to law; when a company dissolves, it shall apply for company cancellation registration according to law; when establishing a new company, it shall apply for company establishment registration according to law.

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

Chapter 10 Company Dissolution and Liquidation

Article 180 A company shall dissolve for the following reasons:

(1) The business term stipulated in the company’s articles of association expires or other dissolution reasons stipulated in the articles of association occur;

(2) The shareholders' meeting or shareholders' general meeting resolves to dissolve;

(3) Dissolution is required due to company merger or split;

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

(5) The people's court dissolves the company in accordance with Article 182 of this law.

Article 181 A company with the circumstances described in Article 180(1) of this law may continue by amending the articles of association.

Amendments to the articles of association under the preceding paragraph require approval by shareholders holding more than two-thirds of the voting rights in a limited liability company, and approval by shareholders holding more than two-thirds of the voting rights present at the shareholders' meeting in a joint stock company.

Article 182 When a company faces serious operational difficulties and continuing would cause significant losses to shareholders' interests, and other means cannot resolve the issue, shareholders holding more than ten percent of the total voting rights may request the people's court to dissolve the company.

Article 183 When a company dissolves due to the reasons specified in Article 180(1), (2), (4), and (5) of this law, a liquidation team shall be established within fifteen days from the occurrence of the dissolution reason to begin liquidation. The liquidation team of a limited liability company shall be composed of shareholders, and that of a joint stock company shall be composed of directors or personnel determined by the shareholders' meeting. If the liquidation team is not established within the time limit, creditors may apply to the people's court to appoint relevant personnel to form a liquidation team. The people's court shall accept the application and promptly organize the liquidation team to carry out liquidation.

Article 184 During liquidation, the liquidation team shall exercise the following powers:

(1) Clear company assets and separately prepare a balance sheet and an inventory of assets;

(2) Notify and announce to creditors;

(3) Handle unfinished business related to liquidation;

(4) Pay outstanding taxes and taxes arising during liquidation;

(5) Clear debts and credits;

(6) Handle the remaining assets after the company repays debts;

(7) Represent the company in civil litigation activities.

Article 185 The liquidation team shall notify creditors within ten days from its establishment and announce it in a newspaper within sixty days. Creditors shall declare their claims to the liquidation team within thirty days from receiving the notice, or within forty-five days from the announcement if no notice is received.

Creditors declaring claims shall specify relevant matters of the claims and provide supporting documents. The liquidation team shall register the claims.

During the claim declaration period, the liquidation team shall not repay creditors.

Article 186 After clearing company assets and preparing the balance sheet and inventory of assets, the liquidation team shall formulate a liquidation plan and submit it to the shareholders' meeting, shareholders' general meeting, or people's court for confirmation.

After paying liquidation expenses, employees' wages, social insurance fees, statutory compensation, outstanding taxes, and company debts, the remaining assets of a limited liability company shall be distributed according to shareholders' capital contributions, and those of a joint stock company shall be distributed according to shareholders' shareholding proportions.

During liquidation, the company continues to exist but shall not engage in business activities unrelated to liquidation. Company assets shall not be distributed to shareholders before repayment according to the preceding paragraph.

Article 187 If the liquidation team finds that company assets are insufficient to repay debts after clearing assets and preparing the balance sheet and inventory, it shall apply to the people's court for bankruptcy declaration according to law.

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

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

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

Members of the liquidation team shall not use their powers to accept bribes or other illegal income, nor shall they embezzle company assets.

Members of the liquidation team who cause losses to the company or creditors due to intentional or gross negligence shall bear compensation liability.

Article 190 When a company is declared bankrupt according to law, bankruptcy liquidation shall be carried out in accordance with relevant enterprise bankruptcy laws.

Chapter 11 Branches of Foreign Companies

Article 191 A foreign company referred to in this law means a company established outside China in accordance with foreign laws.

Article 192 A foreign company establishing a branch within China must apply to the competent Chinese authorities and submit relevant documents such as its articles of association and the company registration certificate of its country of origin. After approval, it shall register with the company registration authority according to law and obtain a business license.

The approval measures for branches of foreign companies shall be separately stipulated by the State Council.

Article 193 A foreign company establishing a branch within China must designate a representative or agent responsible for the branch within China and allocate funds appropriate to the business activities conducted by the branch.

If a minimum amount of operating funds is required for branches of foreign companies, it shall be separately stipulated by the State Council.

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

The branch of a foreign company shall keep the articles of association of the foreign company on its premises.

Article 195 A branch established by a foreign company within China does not have Chinese legal person status.

The foreign company shall bear civil liability for the business activities conducted by its branch within China.

Article 196 A foreign company branch approved to be established and conducting business activities within China must comply with Chinese laws, shall not harm China's social public interests, and its lawful rights and interests are protected by Chinese law.

Article 197 When a foreign company cancels its branch within China, it must settle debts according to law and carry out liquidation in accordance with the relevant company liquidation procedures of this law. Before debts are settled, the branch's assets shall not be transferred outside China.

Chapter 12 Legal Liability

Article 198 Whoever violates the provisions of this law by falsely reporting registered capital, submitting false materials, or using other fraudulent means to conceal important facts to obtain company registration shall be ordered by the company registration authority to make corrections. Companies that falsely report registered capital shall be fined between 5% and 15% of the falsely reported amount; companies that submit false materials or use other fraudulent means to conceal important facts shall be fined between 50,000 yuan and 500,000 yuan; if the circumstances are serious, the company registration shall be revoked or the business license canceled.

Article 199 If the company's promoters or shareholders make false contributions, fail to deliver, or fail to deliver monetary or non-monetary assets as capital contributions on time, the company registration authority shall order corrections and impose a fine between 5% and 15% of the false contribution amount.

Article 200 If the company's promoters or shareholders withdraw their contributions after the company is established, the company registration authority shall order corrections and impose a fine between 5% and 15% of the withdrawn amount.

Article 201 If a company establishes accounting books other than the statutory accounting books, the financial department of the people's government at or above the county level shall order corrections and impose a fine between 50,000 yuan and 500,000 yuan.

Article 202 If a company makes false records or conceals important facts in financial accounting reports or other materials provided to relevant competent departments according to law, the competent department shall impose a fine between 30,000 yuan and 300,000 yuan on the directly responsible supervisors and other directly responsible personnel.

Article 203 If a company fails to allocate the statutory reserve fund according to this law, the financial department of the people's government at or above the county level shall order the company to make up the amount in full and may impose a fine of up to 200,000 yuan.

Article 204 When a company merges, splits, reduces registered capital, or undergoes liquidation, if it fails to notify or announce creditors according to this law, the company registration authority shall order corrections and impose a fine between 10,000 yuan and 100,000 yuan on the company.

When a company is liquidating, if it conceals assets, makes false records on the balance sheet or property list, or distributes company assets before debts are settled, the company registration authority shall order corrections and impose a fine between 5% and 10% of the concealed assets or the amount of assets distributed before debts are settled on the company; the directly responsible supervisors and other directly responsible personnel shall be fined between 10,000 yuan and 100,000 yuan.

Article 205 If a company conducts business activities unrelated to liquidation during the liquidation period, the company registration authority shall issue a warning and confiscate illegal gains.

Article 206 If the liquidation team fails to submit the liquidation report to the company registration authority according to this law, or submits a report that conceals important facts or has major omissions, the company registration authority shall order corrections.

If members of the liquidation team abuse their powers for personal gain, seek illegal income, or embezzle company property, the company registration authority shall order the return of company property, confiscate illegal gains, and may impose a fine of one to five times the illegal gains.

Article 207 If institutions responsible for asset evaluation, capital verification, or validation provide false materials, the company registration authority shall confiscate illegal gains, impose a fine of one to five times the illegal gains, and the relevant competent departments may order the institution to suspend operations, revoke the qualification certificates of directly responsible personnel, and revoke the business license according to law.

If institutions responsible for asset evaluation, capital verification, or validation negligently provide reports with major omissions, the company registration authority shall order corrections; if the circumstances are serious, a fine of one to five times the income may be imposed, and the relevant competent departments may order the institution to suspend operations, revoke the qualification certificates of directly responsible personnel, and revoke the business license according to law.

If institutions responsible for asset evaluation, capital verification, or validation issue false evaluation results or verification certificates causing losses to company creditors, they shall bear compensation liability within the scope of the false evaluation or certification amount unless they can prove no fault.

Article 208 If the company registration authority registers applications that do not meet the conditions stipulated by this law, or refuses to register applications that meet the conditions stipulated by this law, the directly responsible supervisors and other directly responsible personnel shall be subject to administrative sanctions according to law.

If the superior department of the company registration authority forces the registration authority to register applications that do not meet the conditions stipulated by this law, or refuses to register applications that meet the conditions stipulated by this law, or covers up illegal registrations, the directly responsible supervisors and other directly responsible personnel shall be subject to administrative sanctions according to law.

Article 210 Whoever uses the name of a limited liability company or joint stock limited company without being legally registered as such, or uses the name of a branch of a limited liability company or joint stock limited company without legal registration, shall be ordered by the company registration authority to make corrections or be banned, and may be fined up to 100,000 yuan.

Article 211: If a company fails to commence business without a valid reason for more than six months after its establishment, or if it voluntarily suspends business for more than six consecutive months after commencement, the company registration authority may revoke its business license.

When changes occur in the company's registration matters, if the relevant change registration is not handled in accordance with the provisions of this law, the company registration authority shall order registration within a time limit; if registration is not completed within the time limit, a fine of not less than 10,000 yuan and not more than 100,000 yuan shall be imposed.

Article 212: Foreign companies that violate the provisions of this law by establishing branches within China without authorization shall be ordered by the company registration authority to make corrections or close down, and may be fined not less than 50,000 yuan and not more than 200,000 yuan.

Article 213: If a company uses its name to engage in serious illegal activities that endanger national security or public interests, its business license shall be revoked.

Article 214: If a company violates the provisions of this law and should bear civil compensation liability and pay fines or penalties, but its property is insufficient to cover the payments, it shall first bear the civil compensation liability.

Article 215: Those who violate the provisions of this law and constitute a crime shall be held criminally responsible according to law.

Chapter 13: Supplementary Provisions

Article 216: The meanings of the following terms in this law are:

(1) Senior management personnel refer to the company's manager, deputy manager, financial officer, secretary of the board of directors of a listed company, and other personnel stipulated in the company's articles of association.

(2) Controlling shareholder refers to a shareholder whose capital contribution accounts for more than 50% of the total capital of a limited liability company or whose shares account for more than 50% of the total share capital of a joint stock company; even if the proportion of capital contribution or shares held is less than 50%, the voting rights enjoyed by the capital contribution or shares held are sufficient to have a significant impact on the resolutions of the shareholders' meeting or general meeting of shareholders.

(3) Actual controller refers to a person who is not a shareholder of the company but can actually control the company's behavior through investment relationships, agreements, or other arrangements.

(4) Related relationships refer to the relationships between the company's controlling shareholders, actual controllers, directors, supervisors, senior management personnel and the enterprises they directly or indirectly control, as well as other relationships that may lead to the transfer of company interests. However, enterprises controlled by the state do not have related relationships solely because they are both state-controlled.

Article 217: Limited liability companies and joint stock companies with foreign investment shall apply this law; if there are other legal provisions regarding foreign investment, those provisions shall apply.

Article 218: This law shall come into effect on January 1, 2006.