Chapter I General Provisions

Article 1 The Company Law of the People's Republic of China (Revised in 2013) (hereinafter referred to as the "Law") is enacted for the purposes of regulating the organization and activities of companies, protecting the legitimate rights and interests of companies, shareholders and creditors, maintaining the social economic order, and promoting the development of the socialist market economy.

Article 2 For the purpose of the Law, the term "company" refers to a limited liability company or a joint stock limited company established within the territory of the People's Republic of China in accordance with the Law.

Article 3 A company is an enterprise legal person which has independent legal person property and enjoys legal person property rights. A company shall be liable for its debts to the extent of all its assets.
A shareholder of a limited liability company is liable to the company to the extent of its/his respective capital contribution. A shareholder of a joint stock limited company is liable to the company to the extent of the shares it/he has subscribed for.

Article 4 Shareholders of a company are entitled to enjoy the return on equity, participate in important decision-making, select managers and enjoy other rights in accordance with the law.

Article 5 In conducting its business operations, a company shall abide by laws and administrative regulations, observe social ethics and business ethics, act in good faith, accept the supervision of the government and the general public, and bear social responsibility.
The legitimate rights and interests of a company shall be protected by law and shall not be violated.

Article 6 To establish a company, an application for registration shall be filed with the company registration authority in accordance with the law. Where the application meets the establishment requirements of the Law, the company registration authority shall register the company as a limited liability company or joint stock limited company. Where the application does not meet the establishment requirements of the Law, it shall not be registered as a limited liability company or joint stock limited company.
Where any law or administrative regulation provides that the establishment of a company is subject to the approval, the relevant approval formalities shall be gone through in accordance with the law prior to the registration of the company.
The public may apply to the company registration authority for inquiring about the registration details of any company, and the company registration authority shall provide the public with such inquiry services.

Article 7 A lawfully established company shall be issued with a company business license by the company registration authority. The date of issuance of the company business license shall be the date of establishment of the company.
The company business license shall state the company's name, domicile, registered capital, business scope, name of the legal representative and other information.
In the event of any change in the details recorded in the company business license, the company shall go through the formalities for registration of changes in accordance with the law and the company registration authority shall reissue the company business license.

Article 8 A limited liability company established in accordance with the Law shall include the words "limited liability company" or "limited company" in its name.
A joint stock limited company established in accordance with the Law shall include the words "joint stock limited company" or "joint stock company" in its name.

Article 9 A limited liability company that seeks to be converted into a joint stock limited company shall satisfy the conditions prescribed in the Law for joint stock limited companies. A joint stock limited company that seeks to be converted into a limited liability company shall satisfy the conditions prescribed in the Law for limited liability companies.
In either of the aforesaid cases, the claims and debts of the company prior to the conversion shall be succeeded by the company after the conversion.

Article 10 A company shall regard its main office as its domicile.

Article 11 A company shall formulate its articles of association in accordance with the law. The articles of association shall be binding on the company and its shareholders, directors, supervisors and senior officers.

Article 12 A company's business scope shall be defined in its articles of association and shall be registered in accordance with the law. A company may change its business scope by amending its articles of association, provided that it shall go through the formalities for registration of changes.
Where the business scope of a company includes any item subject to approval pursuant to any law or administrative regulation, the approval shall be obtained in accordance with the law.

Article 13 The legal representative of a company shall be the chairman of its board of directors, its executive director or its manager in accordance with the articles of association of the company, and shall be registered as such in accordance with the law. In the event of a change of the legal representative of the company, the company shall go through the formalities for registration of the change.

Article 14 A company may set up branches. To set up a branch, the company shall file a registration application with the company registration authority to obtain a business license. A branch shall not enjoy the status of a legal person and its civil liabilities shall be borne by the company.
A company may establish subsidiaries which enjoy the status of legal persons and shall independently bear their own civil liabilities in accordance with the law.

Article 15 A company may invest in other enterprises. However, unless otherwise provided for in any law, a company shall not become a capital contributor that shall be jointly and severally liable for the debts of an enterprise so invested in.

Article 16 Where a company intends to invest in any other enterprise or provide a guaranty for any other person, a resolution shall be passed, pursuant to the company's articles of association, by the company's board of directors, board of shareholders or general meeting. Where the articles of association prescribe any limit on the total amount of investments or guaranties allowed, or on the amount of a single investment or guaranty allowed, the said total amount or amount shall not exceed the limits prescribed.
Where a company intends to provide a guaranty for any shareholder or actual controller of the company, a resolution shall be passed by the board of shareholders or general meeting.
No shareholder referred to in the preceding paragraph or under the control of the actual controller referred to in the preceding paragraph shall participate in voting on any matter described in the preceding paragraph. Any such resolution shall be passed by a majority vote from the other shareholders attending the meeting.

Article 17 A company shall protect the legitimate rights and interests of its employees, enter into employment contracts with its employees in accordance with the law, purchase social insurance for employees, and strengthen labor protection so as to ensure work safety.
A company shall, through various means, enhance the professional education and in-service training of its employees so as to improve their quality as employees.

Article 18 The employees of a company shall, in accordance with the Labor Union Law of the People's Republic of China, organize a labor union, which shall carry out labor union activities and safeguard the legitimate rights and interests of the employees. The company shall provide the necessary conditions for its labor union to carry out its activities. The labor union shall, on behalf of the employees, enter into collective contracts with the company with respect to matters such as remuneration, working hours, welfare, insurance, and work safety and sanitation of the employees in accordance with the law.
In accordance with the Constitution and other relevant laws, a company shall practice democratic management through the employee representatives' assembly or otherwise.
When making a decision on company restructuring or any important issue relating to its business operations, or formulating any important rule or regulation, a company shall take into account the opinions of its labor union, and the opinions and proposals of its employees through the employee representatives' assembly or otherwise.

Article 19 Organizations of the Communist Party of China shall, in accordance with the Constitution of the Communist Party of China, be set up in companies and shall carry out Party activities. Companies shall provide the necessary conditions to facilitate the Party activities.

Article 20 The shareholders of a company shall abide by laws, administrative regulations and articles of association and exercise shareholders' rights in accordance with the law. They shall neither damage the interests of the company or other shareholders by abusing shareholders' rights nor damage the interests of any creditor of the company by abusing the company's independent status as a legal person or the limited liability of shareholders.
Any shareholder of a company who causes any loss to the company or to other shareholders by abusing shareholders' rights shall be liable for compensation in accordance with the law.
Where any of the shareholders of a company evades the payment of debts by abusing the company's independent status as a legal person or the limited liability of shareholders, thereby seriously damaging the interests of any creditor of the company, it shall be jointly and severally liable for the debts of the company.

Article 21 No controlling shareholder, actual controller, director, supervisor or senior officer of a company may damage the interests of the company by taking advantage of his/its insider connection.
Any person who causes any loss to the company by violating the preceding paragraph shall be liable for compensation.

Article 22 Any resolution of the board of shareholders or general meeting, or board of directors of a company that violates any law or administrative regulation shall be null and void.
Where the procedures for calling a meeting of the board of shareholders or general meeting, or a meeting of the board of directors, or the voting method used therein violates any law, administrative regulation or the company's articles of association, or where any resolution violates the company's articles of association, the shareholders may, within 60 days as of the date on which the resolution is passed, petition a people's court to nullify it.
Where the shareholders initiate a lawsuit under the preceding paragraph, the people's court may, at the request of the company, require the shareholders to provide a corresponding guaranty.
Where a company has, according to a resolution of the board of shareholders or general meeting, or board of directors, gone through the formalities for registration of changes, and a people's court declares the resolution null and void or strikes out the resolution, the company shall file an application with the company registration authority for cancellation of the change registration.

Chapter II Establishment and Organizational Structure of a Limited Liability Company

Section 1 Establishment

Article 23 To establish a limited liability company, the following conditions shall be met:
1. the number of shareholders constitutes a quorum;
2. the company has capital contributions in compliance with the articles of association of the related company which are subscribed for by all shareholders;
3. the articles of association are formulated collectively by shareholders;
4. the company has a name and an organizational structure that complies with the requirements for limited liability companies; and
5. the company has a domicile.

Article 24 A limited liability company shall be funded and established by no more than 50 shareholders.

Article 25 The articles of association of a limited liability company shall include the following items:
1. the name and domicile of the company;
2. the business scope of the company;
3. the registered capital of the company;
4. the names of the shareholders;
5. the forms, amounts and dates of capital contributions made by the shareholders;
6. the institutions of the company and their establishment, functions and powers and rules of procedure;
7. the legal representative of the company; and
8. any other matter deemed necessary by the board of shareholders of the company.
The shareholders shall affix their signatures or seals on the articles of association of the company.

Article 26 The registered capital of a limited liability company shall be the total capital contributions subscribed for by all the shareholders as registered with the company registration authority.
Where the paid-in registered capital and the minimum registered capital for limited liability companies are otherwise provided for in any other laws, administrative regulations and decisions of the State Council, the relevant provisions shall prevail.

Article 27 A shareholder may contribute capital in cash, in kind or with intellectual property rights, land use rights or other non-monetary assets the value of which may be assessed in financial terms and the ownership of which may be transferred in accordance with the law, except for those assets that shall not be used as capital contributions under any other law or administrative regulation.
The value of any non-financial asset used as capital contribution shall be assessed and verified, and shall not be overestimated or underestimated. Any law or administrative regulation that provides for the assessment of values shall be followed.

Article 28 Each shareholder shall within the prescribed time limit fully pay in the capital contribution it subscribes for as stipulated in the articles of association. A shareholder making capital contribution in cash shall deposit the capital contribution in full in a bank account opened by the limited liability company. A shareholder making capital contribution with non-monetary assets shall complete the transfer procedures for the relevant property rights in accordance with the law.
Where any shareholder fails to make a capital contribution in the manner as specified in the preceding paragraph, the relevant shareholder shall not only make full payment to the company but shall also be liable for breach of contract to shareholders who have paid their capital contributions in full on time.

Article 29 After shareholders subscribe for the full amount of capital contributions as provided for by the articles of association, the representative designated by the shareholders or the agent appointed by the shareholders shall submit such documents as a company registration application and articles of association to the company registration authority for registration of establishment.

Article 30 After the incorporation of a limited liability company, in the event that the actual value of non-monetary assets as capital contributions for its incorporation is found to be notably lower than the value specified in the articles of association of the company, the shortfall shall be made up for by the shareholder or shareholders who contributed that capital, and the other shareholders of the company at the time of incorporation shall be jointly and severally liable therefor.

Article 31 Following the incorporation of a limited liability company, each shareholder shall be issued with a capital contribution certificate, which shall specify the following items:
1. the name of the company;
2. the date of incorporation of the company;
3. the registered capital of the company;
4. the name of the shareholder, and the amount and date of its capital contribution; and
5. the serial number and date of issue of the capital contribution certificate.
The capital contribution certificate shall bear the seal of the company.

Article 32 A limited liability company shall prepare a register of members, which shall record the following items:
1. the name and domicile of each shareholder;
2. the capital contribution made by each shareholder; and
3. the serial number of each capital contribution certificate.
The shareholders recorded in the register of members may, pursuant to the register of members, claim and exercise shareholders' rights.
A company shall register the name of each shareholder with the company registration authority. The company shall handle the registration of change in the event of any change in the registered details. Any registration detail that fails to be registered or amended shall not be valid against any third party.

Article 33 Any shareholder is entitled to consult and copy the articles of association, minutes of meetings of the board of shareholders, resolutions of meetings of the board of directors, resolutions of meetings of the board of supervisors and financial reports.
Any shareholder may request to consult the accounting books of the company. Where a shareholder requests to consult the accounting books of the company, a written request shall be submitted to the company, stating the purpose thereof. Where the company, for any justifiable reason, considers that the shareholder's request for consultation of the accounting books is made for any improper purpose and may impair the legitimate interests of the company, the company may decline the shareholder's request and shall, within 15 days as of the date on which the shareholder submits the written request, issue the shareholder with a written reply, stating the reasons therefor. Where a company declines the request of any shareholder for consultation of the company's accounting books, the shareholder may request a people's court to require the company to allow the consultation sought.

Article 34 Shareholders shall draw dividends in proportion to their actual capital contributions and when a company increases its capital, shall have a pre-emptive right to subscribe for the increased capital in proportion to their actual capital contributions, unless otherwise agreed by the shareholders.


Article 35 No shareholder shall withdraw its capital contribution following the incorporation of the company.


Section 2 Organizational Structure

Article 36 The board of shareholders of a limited liability company shall consist of all its shareholders. The board of shareholders is the highest authoritative body of the company and shall exercise its functions and powers in accordance with the Law.


Article 37 The board of shareholders shall exercise the following functions and powers:
1. determine the company's operational guidelines and investment plans;
2. elect and replace non-employee representative directors and supervisors and determine matters relating to their remunerations;
3. deliberate on and approve reports of the board of directors;
4. deliberate on and approve reports of the board of supervisors or of the supervisor(s);
5. deliberate on and approve annual budgets and final accounts of the company;
6. deliberate on and approve the company's profit distribution plans and loss recovery plans;
7. make resolutions on any increase or reduction of the company's registered capital;
8. make resolutions on the issuance of corporate bonds;
9. make resolutions on any combination, division, dissolution, liquidation or transformation of the company;
10. revise the articles of association of the company; and
11. any other function or power specified in the articles of association.
In respect of any of the matters listed in the preceding paragraph, where the shareholders have unanimously agreed in writing, a decision may be made directly without convening a meeting of the board of shareholders and the decision document shall bear the signatures or seals of all the shareholders.


Article 38 The first meeting of the board of shareholders shall be convened and presided over by the shareholder with the largest capital contribution, and shall exercise its functions and powers in accordance with the Law.
(Relevant articles: Corporate overview 1 Practical materials 1)>

Article 39 Meetings of the board of shareholders shall be classified into regular meetings and interim meetings.
Regular meetings shall be held on time as prescribed in the company's articles of association. An interim meeting shall be held where it is proposed by shareholders representing one tenth or more of the voting rights, by one third or more of the directors or by the board of supervisors or, where there is no board of supervisors, by a supervisor of the company.
(Relevant articles: Corporate overview 1 Practical materials 1)>

Article 40 Where a limited liability company has established the board of directors, a meeting of the board of shareholders shall be convened by the board of directors and presided over by the chairman of the board of directors. Where the chairman is unable or fails to perform his duties, the deputy chairman of the board of directors shall preside over the meeting. Where the deputy chairman of the board of directors is unable or fails to perform his duties, a director shall be nominated by a majority of the directors to preside over the meeting.
Where a limited liability company has no board of directors, meetings of the board of shareholders shall be convened and presided over by the executive director.
Where the board of directors or the executive director is unable or fails to fulfill its or his duty to convene a meeting of the board of shareholders, the board of supervisors or, where there is no board of supervisors, a supervisor of the company shall convene and preside over the meeting. Where the board of supervisors or supervisor does not convene or preside over such a meeting, shareholders representing one tenth or more of the voting rights may convene and preside over the meeting on their own initiative.
(Relevant articles: Corporate overview 1 Practical materials 1)>

Article 41 Unless otherwise specified in the articles of association or otherwise agreed by all shareholders, a notice of the meeting of the board of shareholders shall be given to shareholders 15 days in advance of the meeting.
Minutes shall be taken of decisions made on matters discussed at the meeting of the board of shareholders and shall be signed by shareholders who attend the meeting.


Article 42 Unless otherwise specified in a company's articles of association, shareholders shall exercise their voting rights at meetings of the board of shareholders in proportion to their respective capital contributions.


Article 43 Unless otherwise provided in the Law, methods of deliberation and voting procedures of the board of shareholders shall be specified by a company's articles of association.
Any resolution made at the meeting of the board of shareholders on any revision to the company's articles of association, any increase or reduction of its registered capital, or any combination, division, dissolution or transformation of the company must be passed by shareholders representing two thirds or more of the voting rights.
(Relevant articles: Precedents 3 Corporate overview 4)>

Article 44 Except otherwise provided in Article 50 of the Law, the board of directors of a limited liability company shall comprise three to 13 members.
Where a limited liability company is established by two or more state-owned enterprises or two or more other state-owned investment entities, the board of directors shall include employee representatives of the company. The board of directors of any other limited liability company may include employee representatives of the company. Employee representatives to serve as members of the board of directors shall be democratically elected by the employees of the company through the employee representatives' assembly, the employees' assembly or otherwise.
The board of directors shall have a chairman and may have deputy chairmen. The method of appointment of the chairman and deputy chairmen shall be specified by the articles of association.


Article 45 The term of office of directors shall be specified by the articles of association, but in any case shall not exceed three years. Any director may, upon the expiration of his term of office, hold the directorship in consecutive terms if re-elected.
Where the re-election of directors is not held in time after the term of office of the existing directors has expired, or where the number of members of the board of directors falls below the quorum due to the resignation of any director during his term of office, the original director shall, before the newly-elected director assumes his post, carry out duties as a director in accordance with the laws, administrative regulations and articles of association.


Article 46 The board of directors shall be responsible to the board of shareholders and shall exercise the following functions and powers:
1. convene meetings of the board of shareholders and report to the board of shareholders on its work;
2. execute resolutions of the board of shareholders;
3. determine the company's operational plans and investment plans;
4. formulate the company's annual budgets and final accounts;
5. formulate the company's profit distribution plans and loss recovery plans;
6. formulate the company's plans on the increase or reduction of its registered capital and on the issuance of corporate bonds;
7. formulate the company's plans on the combination, division, dissolution or transformation of the company;
8. make decisions on the establishment of the company's internal management departments;
9. make decisions on the appointment or dismissal of the company's manager and his remuneration, and, according to the nomination by the manager, make decisions on the appointment or dismissal of any deputy manager and financial principal and their remunerations;
10. develop the company's basic management system; and
11. any other function or power specified in the articles of association.


Article 47 A meeting of the board of directors shall be convened and presided over by the chairman of the board of directors. Where the chairman of the board of directors is unable or fails to perform his duties, the meeting shall be convened and presided over by the deputy chairman of the board of directors. Where the deputy chairman of the board of directors is unable or fails to perform his duties, the meeting shall be convened and presided over by a director nominated by a majority of the directors.

Article 48 Unless otherwise provided in the Law, methods of deliberation and voting procedures of the board of directors shall be specified by the company's articles of association.
The board of directors shall take minutes of decisions made on matters discussed at its meetings. Directors who attend the meeting shall sign on the minutes.
Each director shall have one vote for voting on resolutions of the board of directors.


Article 49 A limited liability company may have a manager, who shall be appointed or dismissed by its board of directors. The manager shall be responsible to the board of directors and shall exercise the following functions and powers:
1. oversee the production and business operations of the company and organize the implementation of the resolutions of the board of directors;
2. organize the implementation of the company's annual operational plans and investment plans;
3. draw up plans on the establishment of the company's internal management departments;
4. draw up the company's basic management system;
5. formulate the company's specific rules and regulations;
6. propose the appointment or dismissal of the company's any deputy manager and financial principal;
7. decide on the appointment or dismissal of executive personnel other than those whose appointment or dismissal is to be decided by the board of directors; and
8. any other function or power conferred on the manager by the board of directors.
Where the functions and powers of the manager are otherwise provided in the articles of association, the articles of association shall prevail.
The manager shall attend meetings of the board of directors as a non-voting attendee.


Article 50 Limited liability companies with a smaller number of shareholders or those of a smaller scale may have an executive director without setting up the board of directors. The executive director may concurrently hold the post of a company manager.
The functions and powers of the executive director shall be specified by the articles of association.


Article 51 A limited liability company shall have the board of supervisors composed of no less than three members. Limited liability companies with a smaller number of shareholders or those of a smaller scale may have one to two supervisors without setting up the board of supervisors.
The board of supervisors shall include shareholders' representatives and an appropriate proportion of employee representatives which shall not be less than one third of the members of the board of supervisors, the specific proportion of which shall be prescribed by the articles of association. Employee representatives to serve as members of the board of supervisors shall be democratically elected by the employees of the company through the employee representatives' assembly, the employees' assembly or otherwise.
The board of supervisors shall have a chairman, who shall be elected by a majority of the supervisors. The chairman of the board of supervisors shall convene and preside over meetings of the board of supervisors. Where the chairman of the board of supervisors is unable or fails to perform his duties, a supervisor nominated by a majority of the supervisors shall convene and preside over meetings of the board of supervisors.
No director or senior officer of the company may concurrently serve as a supervisor.
(Relevant articles: Precedents 1)>

Article 52 The term of office of a supervisor shall be three years. Any supervisor may, upon the expiration of his term of office, hold the supervisor's post in consecutive terms if re-elected.
Where the re-election of a supervisor is not held in time after the expiration of the term of office of the existing supervisor, or where the number of members of the board of supervisors falls below the quorum due to the resignation of any supervisor during his term of office, the original supervisor shall, before the newly-elected supervisor assumes his post, carry out duties as a supervisor in accordance with the relevant laws, administrative regulations and articles of association.


Article 53 The board of supervisors or, where there is no board of supervisors, the supervisor(s) of a company shall exercise the following functions and powers:
1. inspect the financial affairs of the company;
2. supervise performance of the directors and senior officers of their respective company duties and propose the removal of any director or senior officer who violates any law, administrative regulation, the articles of association or any resolution of the board of shareholders;
3. require any director or senior officer to take corrective action where his actions damage the interests of the company;
4. propose the holding of interim meetings of the board of shareholders and convene and preside over meetings of the board of shareholders where the board of directors does not exercise its duties in this regard as prescribed in the Law;
5. put forward proposals at meetings of the board of shareholders;
6. initiate lawsuits against a director or senior officer in accordance with Article 151 of the Law; and
7. any other function or power specified in the articles of association.


Article 54 Supervisors may attend meetings of the board of directors as non-voting attendees, and may raise questions or put forward suggestions about matters to be decided by the board of directors.
The board of supervisors or, where there is no board of supervisors, the supervisors of a company find that the company is running abnormally, they may commence an investigation. Where necessary, they may, at the company's expense, hire an accounting firm to assist with the investigation.


Article 55 The board of supervisors shall hold at least one meeting a year. Any supervisor may propose an interim meeting of the board of supervisors.
Unless otherwise specified in the Law, the methods of deliberation and voting procedures of the board of supervisors shall be specified by the articles of association.
A resolution of the board of supervisors shall be passed by a majority of supervisors.
The board of supervisors shall take minutes of decisions made on matters discussed at its meetings, and the minutes shall be signed by the supervisors attending the meetings.


Article 56 All expenses necessarily incurred by the board of supervisors or, where there is no board of supervisors, supervisor(s) of a company in the performance of their functions and powers shall be borne by the company.


Section 3 Special Provisions on Single Shareholder Limited Liability Companies

Article 57 The provisions of this Section shall apply to the establishment and organizational structure of a single shareholder limited liability company. Any matter not covered by this Section shall be governed by the provisions of Sections 1 and 2 of this Chapter.
For the purpose of the Law, the term "single shareholder limited liability company" refers to a limited liability company with only one natural or legal person as a shareholder.

Article 58 Any natural person may only establish one single shareholder limited liability company. Such single shareholder limited liability company shall not establish a new single shareholder limited liability company.

Article 59 The company registration and business license of a single shareholder limited liability company shall both clearly indicate whether the company is funded by a natural or legal person.

Article 60 The articles of association of a single shareholder limited liability company shall be formulated by the shareholder.

Article 61 A single shareholder limited liability company shall have no board of shareholders. Where the shareholder makes a decision on any of the matters listed in Paragraph 1 of Article 37 of the Law, it shall be recorded in writing, signed by the shareholder and kept in the company.

Article 62 The financial reports of a single shareholder limited liability company shall be prepared at the end of each financial year and shall be audited by an accounting firm.

Article 63 Where the shareholder of a single shareholder limited liability company is unable to prove that the property of the company is independent of the shareholder's own property, the shareholder shall be jointly and severally liable for the debts of the company.

Section 4 Special Provisions on Wholly State-owned Companies

Article 64 The provisions of this Section shall apply to the establishment and organizational structure of wholly state-owned companies. Any matter not covered by this Section shall be governed by the provisions of Sections 1 and 2 of this Chapter.
For the purpose of the Law, the term "wholly state-owned company" refers to a limited liability company solely invested in by the State and for which the State Council or the local people's government has authorized the state-owned assets supervision and administration institution of the people's government at the same level to act as capital contributor.

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

Article 66 Wholly state-owned companies shall have no board of shareholders. The state-owned assets supervision and administration institution shall exercise the functions and powers of the board of shareholders. The state-owned assets supervision and administration institution may authorize the company's board of directors to exercise some of the functions and powers of the board of shareholders and decide important matters of the company, other than those relating to the combination, division or dissolution of the company, the increase or reduction of its registered capital or the issuance of corporate bonds, which must be decided by the state-owned assets supervision and administration institution. Specifically, the combination, division, dissolution or petition for bankruptcy of an important wholly state-owned company shall be examined by the state-owned assets supervision and administration institution and shall then be submitted to the people's government at the same level for approval.
For the purpose of the preceding paragraph, the term "important wholly state-owned company" shall be determined in accordance with the State Council's provisions.


Article 67 A wholly state-owned company shall have a board of directors, which shall exercise its functions and powers in accordance with Articles 46 and 66 of the Law. The term of office of its directors shall not exceed three years. The board of directors shall include employee representatives of the company.
The members of the board of directors shall be appointed by the state-owned assets supervision and administration institution, except for employee representatives, who shall be elected through the employee representatives' assembly of the company.
The board of directors shall have a chairman and may have deputy chairmen. The chairman and deputy chairmen shall be designated by the state-owned assets supervision and administration institution from among the members of the board of directors.

Article 68 A wholly state-owned company shall have a manager, who shall be appointed or dismissed by the board of directors. The manager shall exercise his functions and powers in accordance with Article 49 of the Law.
Subject to the consent of the state-owned assets supervision and administration institution, a member of the board of directors may concurrently hold the post of a manager.

Article 69 The chairman and deputy chairmen of the board of directors, directors and senior officers of a wholly state-owned company are prohibited from holding concurrent posts in other limited liability companies, joint stock limited companies or business entities unless with the consent of the state-owned assets supervision and administration institution.

Article 70 The board of supervisors of a wholly state-owned company shall comprise at least five members. Specifically, employee representatives shall constitute no less than one third, the specific proportion of which shall be prescribed by the company's articles of association.
Other than employee representatives who shall be elected through the employee representatives' assembly of the company, the members of the board of supervisors shall be appointed by the state-owned assets supervision and administration institution. The chairman of the board of supervisors shall be designated by the state-owned assets supervision and administration institution from among the members of the board of supervisors.
The board of supervisors shall exercise the functions and powers set out in Items 1 to 3 of Article 53 of the Law and any other function or power prescribed by the State Council.

Chapter III Transfer of Stock Rights in Limited Liability Companies

Article 71 Stock rights of the shareholders in a limited liability company may be transferred among the shareholders in whole or in part.
Where any shareholder proposes transferring his/its stock rights to any person other than the shareholders, any such proposal shall be subject to the consent of a majority of the other shareholders. The relevant shareholder shall give the other shareholders a written notice of the details of the proposed transfer of stock rights and seek their consent. Any of the other shareholders who fails to respond within 30 days upon receipt of the written notice shall be deemed to have consented to the transfer. Where a majority of the other shareholders whose consent is sought disagree with the proposed transfer, the shareholders who disagree with the proposed transfer shall purchase the stock rights to be transferred. In the event that they refuse to purchase the stock rights in question, they shall be deemed to have consented to the transfer.
Under the same conditions, the other shareholders shall have the right of first refusal for the purchase of the stock rights to be transferred upon their consent. Where two or more shareholders exercise such a right of first refusal, they shall determine their respective purchase percentages by negotiation, failing which they shall exercise the right of first refusal in proportion to their respective capital contributions at the time of transfer.
Where there any provisions regarding the transfer of stock rights in the articles of association, such provisions shall prevail.


Article 72 Where a people's court transfers the stock rights of a shareholder pursuant to a mandatory enforcement procedure provided by law, it shall notify the company and all shareholders of the right of first refusal enjoyed by other shareholders under the same conditions. Any other shareholder's failure to exercise such a right of first refusal within 20 days upon receipt of a notice from the court shall be deemed as a waiver of the right of first refusal.

Article 73 Where any transfer of stock rights is made in accordance with Article 71 or 72 of the Law, the company shall cancel the capital contribution certificate of the original shareholder, issue a capital contribution certificate to the new shareholder and modify its records of shareholders and their capital contributions in the articles of association and register of members. No vote of the board of shareholders is required to modify the articles of association due to such a transfer of stock rights.

Article 74 Under any of the following circumstances, any shareholder who votes against the relevant resolution of the board of shareholders may require the company to purchase his/its stock rights at a reasonable price:
1. where the company has not distributed any profits to the shareholders for five consecutive years but has made profits during such period and conforms to the profit distribution requirements of the Law;
2. in the event of any combination, division, or transfer of the principal assets of the company; or
3. where the business term specified in the articles of association expires or any of the other grounds for dissolution prescribed in the articles of association is satisfied, and the meeting of the board of shareholders makes the company continue exist by modifying the articles of association through adopting a resolution.
Where the relevant shareholder and the company fail, within 60 days of the date on which the relevant resolution is adopted at the meeting of the board of shareholders, to reach an agreement on the purchase of stock rights, the shareholder may initiate a legal action in the people's court within 90 days of the date on which the resolution is adopted at the meeting of the board of shareholders.

Article 75 Unless otherwise provided for in the articles of association, the lawful successor of a natural person may assume the qualifications of shareholders following that person's death.


Chapter IV Establishment and Organizational Structure of a Joint Stock Limited Company

Section 1 Establishment

Article 76 A joint stock limited company shall:
1. have the minimum number of promoters required by law;
2. have total share capital or total paid-in capital subscribed for and raised by all promoters in compliance with the articles of association;
3. issue its shares and make preparations according to the law;
4. have its articles of association formulated by its promoters and adopted at the establishment meeting of the company in case of a joint stock limited company founded by stock floatation;
5. have a name and organization structure that complies with that of a joint stock limited company; and
6. have a corporate domicile.

Article 77 A joint stock limited company may be established either by way of promotion or by way of stock flotation.
Establishment of a company by way of promotion refers to that the promoters establish a company by subscribing for all the shares to be issued by the company.
Establishment of a company by way of stock flotation refers to that the promoters establish a company by subscribing for some of the shares to be issued by the company and offer the remaining shares to the general public or to particular classes of investor.

Article 78 A joint stock limited company shall have no less than two and no more than 200 promoters, of whom a majority shall be domiciled within the territory of China.

Article 79 The promoters of a joint stock limited company shall carry out all necessary preliminary procedures relating to the establishment of the company.
The promoters shall conclude a promoters' agreement clarifying their respective rights and obligations during the course of establishing the company.

Article 80 Where a joint stock limited company is established by way of promotion, its registered capital shall be the total share capital subscribed for by all of its promoters as recorded in the company registration authority. No shares shall be offered to any other person before the shares subscribed for by the promoters are paid up.
Where a joint stock limited company is established by way of stock flotation, its registered capital shall be the total paid-in capital as recorded in the company registration authority.
Where otherwise provided for in any other laws, administrative regulations and decisions of the State Council in respect of the actual paid-in registered capital and the minimum registered capital for joint stock limited companies, the provisions thereof shall prevail.


Article 81 The articles of association of a joint stock limited company shall specify the following matters:
1. the name and address of the company;
2. the business scope of the company;
3. the form of company establishment;
4. the total number of shares, the par value per share, and the amount of registered capital of the company;
5. the name of each promoter, the number of shares each promoter has subscribed for, and the form and date of capital contributions made;
6. the rules relating to the composition, functions and powers and rules of procedure of the board of directors;
7. the legal representative of the company;
8. the composition, functions and powers and rules of procedure of the board of supervisors;
9. the procedures for the distribution of company profits;
10. the grounds for dissolution of the company and liquidation procedures;
11. the procedures for issuing company notices or public announcements; and
12. any other matter deemed necessary by the general meeting.

Article 82 The form of capital contributions made by promoters shall be governed by the provisions of Article 27 of the Law.


Article 83 Where a joint stock limited company is established by way of promotion, the promoters shall fully subscribe in writing for the shares and pay the corresponding capital provided for in its articles of association. In the case of capital contributions made with non-monetary assets, the promoters shall go through the relevant procedures for the transfer of property rights in accordance with the law.
Any promoter who fails to make capital contributions in accordance with the provisions of the preceding paragraph shall be liable for breach of contract in accordance with the promoters' agreement.
After promoters subscribe for all the capital contributions as provided for by the articles of association of the company, they shall elect the board of directors and the board of supervisors. The board of directors shall submit such documents as the articles of association and any other documents provided for by laws and administrative regulations to the company registration authority for registration of establishment.


Article 84 The promoters of a joint stock limited company established by way of stock flotation shall subscribe for no less than 35% of the total shares unless otherwise required by any law or administrative regulation.

Article 85 In any public offer of shares, the promoters shall issue a prospectus and prepare application for shares. The application for shares shall include the items listed in Article 86, and a subscriber shall indicate the number of and total consideration to be paid for the shares he subscribes for, and shall note his address and affix his signature or seal thereon. A subscriber shall pay for the number of shares he has subscribed for.


Article 86 Any prospectus issued shall be accompanied by the articles of association as formulated by the promoters and shall include the following details:
1. the number of shares subscribed for by the promoters;
2. the par value and issue price per share;
3. the total number of bear shares issued;
4. the purposes of proceeds;
5. the rights and obligations of subscribers; and
6. the offer period and a statement that subscribers may withdraw their subscriptions in the event that the offer is under-subscribed at the close of the offer period.

Article 87 A public offer of shares shall be underwritten by a lawfully established securities company and an underwriting agreement shall be concluded thereon.


Article 88 The promoters of any public offer of shares shall sign an agreement with a bank on the collection of payments for shares on behalf of the company.
The receiving bank appointed shall receive and hold as agent payments made for shares in accordance with the agreement, issue receipts to subscribers who make payments, and shall be obliged to produce evidence demonstrating the receipt of payments to the relevant departments.


Article 89 Where full payment has been made for any public offer of shares, the subscriptions shall be verified and certified by a lawfully established capital verification institution. The promoters shall hold a company establishment meeting composed of the promoters and subscribers within 30 days of receipt of all subscriptions.
In the event that shares offered to the public are not fully subscribed for within the offer period disclosed in the prospectus, or the promoters fail to hold an establishment meeting within 30 days of receipt of all subscriptions, the subscribers may require the promoters to refund their subscriptions and pay interest calculated at the bank deposit interest rate for the relevant period.

Article 90 The promoters shall notify each subscriber of or publicly announce the date of the establishment meeting no less than 15 days in advance of the establishment meeting. The establishment meeting may not be held unless promoters and subscribers representing a majority of the total shares attend. The establishment meeting shall:
1. deliberate the report on pre-establishment activities prepared by the promoters;
2. adopt the Articles of association;
3. elect members of the board of directors;
4. elect members of the board of supervisors;
5. verify expenses incurred in establishing the company;
6. verify the value of any asset contributed by the promoters by way of capital contribution; and
7. in the event of any force majeure or material change in operating conditions that may affect the establishment of the company, consider adopting a resolution not to establish the company.
Any resolution made at the establishment meeting on any of the matters described in the previous paragraph requires an affirmative vote passed by subscribers representing a majority of the votes of those attending the meeting.


Article 91 Promoters and subscribers shall not withdraw any share capital after they paid the stock capital or made contributions for setting off the stock capital unless the offer is not fully subscribed for within the offer period; the promoters fail to convene the establishment meeting within the relevant time limit, or the establishment meeting has resolved not to establish the company.

Article 92 The board of directors shall, within 30 days of the conclusion of the establishment meeting, submit the following documents to the company registration authority to apply for registration:
1. an application for company registration;
2. the minutes of the establishment meeting;
3. the articles of association;
4. a capital verification certificate;
5. the appointment documents and identification of the legal representative, directors and supervisors;
6. documents evidencing the legal person or natural person status of the promoters; and
7. proof of the corporate domicile.
A joint stock limited company established by way of stock flotation that makes a public offer of its stock shall, in addition to the documents referred to above, submit to the company registration authority the approval documents issued by the securities regulatory institution under the State Council.


Article 93 Following the establishment of a joint stock limited company, any promoter who fails to make full payment for capital contributions as stipulated in the articles of association shall pay the outstanding amount, failing which, other promoters shall be jointly and severally liable for the shortfall.
Following the establishment of a joint stock limited company, where it is found that the actual value of any non-financial asset used as a capital contribution for the establishment of the company is clearly lower than its value as stipulated in the articles of association, the promoter who made the capital contribution shall make up the shortfall, failing which, other promoters shall be jointly and severally liable for the shortfall.

Article 94 The promoters of a joint stock limited company shall be liable as follows:
1. in the event that the company is not established, the promoters shall be jointly and severally liable for the debts and expenses incurred in pre-establishment activities;
2. in the event that the company is not established, the promoters shall be jointly and severally liable for refunding the paid-in capital of the subscribers plus interest thereon calculated at the bank interest rate for the relevant period; and
3. where, in the course of establishing the company, its interests are damaged due to the negligence of the promoters, the promoters shall be liable to compensate the company.


Article 95 Where a limited liability company is changed into a joint stock limited company, the total amount of paid-in capital shall be no less than its net assets, and any offer of shares to the public for the purpose of increasing the capital of the company shall be made in accordance with the law.


Article 96 A joint stock limited company shall prepare and maintain on company premises its articles of association, register of members, corporate bond receipts, minutes of general meetings, minutes of meetings of the board of directors, minutes of meetings of the board of supervisors, and financial reports.

Article 97 Shareholders shall be entitled to inspect the articles of association, register of members, corporate bond receipts, minutes of general meetings, minutes of meetings of the board of directors, minutes of meetings of the board of supervisors, and financial reports, and may put forward proposals and raise questions about the business operations of the company.

Section 2 General Meeting

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


Article 99 The provisions of the Paragraph 1 of Article 37 of the Law prescribing the functions and powers of the board of shareholders of a limited liability company shall apply to the general meeting of a joint stock limited company.


Article 100 A general meeting shall be held annually. Under any of the following circumstances, an interim general meeting shall be held within two months:
1. where the number of directors falls below two thirds of the minimum number of directors as required by the Law or as specified in the articles of association;
2. where the bad debts of the company reach one third of its total paid-in capital;
3. where it is requested by a shareholder who holds or by shareholders who together hold 10% or more of the company's shares;
4. where the board of directors deems necessary;
5. on the request of the board of supervisors; or
6. any other circumstances specified in the articles of association.


Article 101 A general meeting shall be convened by the board of directors and shall be presided over by the chairman of the board of directors. Where the chairman is unable or fails to perform his duties, the meeting shall be presided over by the deputy chairman of the board of directors. Where the deputy chairman of the board of directors is unable or fails to perform his duties, the meeting shall be presided over by a director nominated by a majority of the directors.
Where the board of directors is unable or fails to fulfill its obligations to convene a general meeting, the board of supervisors shall convene and preside over the meeting. Where the board of supervisors does not convene or preside over the meeting, a shareholder who holds or shareholders who together hold 10% or more of the company's shares for 90 consecutive days or more may convene and preside over the meeting on his or their own initiative.

Article 102 Shareholders shall be notified no less than 20 days in advance of a general meeting of the time and place of the meeting and the matters to be considered at the meeting. Shareholders shall be notified no less than 15 days in advance of an interim general meeting. Holders of bearer shares shall be notified by way of public announcement no less than 30 days in advance of any general meeting of the time and place of the meeting and the matters to be considered at the meeting.
Any shareholder who holds or shareholders who together hold 3% or more of the shares of the company may put forward an interim proposal and submit to the board of directors for the proposal in writing ten days in advance of a general meeting. The board of directors shall notify other shareholders of the interim proposal within two days as of the receipt thereof and submit the proposal to the general meeting for consideration. Any interim proposal put forward shall fall within the purview of the general meeting and shall have clear discussion points and matters to be decided.
The general meeting shall not make any resolution on any matter not listed in a notice as stipulated in either of the preceding two paragraphs.
Shares of holders of bearer shares who attend the general meeting shall be kept in the company during the period from five days prior to the meeting until the meeting is closed.

Article 103 Other than shares registered in the name of the company, which shall have no voting rights attached, each share shall have one vote at a general meeting.
Any resolution proposed at a general meeting shall be adopted by an affirmative vote of shareholders representing a majority of the voting rights of shareholders present; however, provided that resolutions proposing any modification to the articles of association, or any increase or decrease of registered capital, or any resolution about any proposed combination, division, dissolution or transformation of the company shall be adopted by shareholders representing two thirds or more of the voting rights of shareholders present.

Article 104 The board of directors shall promptly call a general meeting to decide any important matter within the purview of the general meeting either in accordance with the Law or in accordance with the articles of association, such as any transfer of company assets, taking an assignment of any significant asset or acting as guarantor for any other person.

Article 105 The general meeting may adopt a cumulative voting s