The People's Republic of China Company Law

Chapter I General Provisions

Chapter II Establishment and Organization of Limited Liability Companies

Section 1 Establishment

Section 2 Organizational Structure

Section 3 Special Provisions for One-person Limited Liability Company

Section 4 Special Provisions on Wholly State-owned Companies

Chapter III Equity Transfer of Limited Liability Companies

Chapter IV Establishment and Organization of a Joint Stock Limited Company

Section 1 Establishment

Section 2 General Meeting of Shareholders

Section 3 Board of Directors and Manager

Section 4 Board of Supervisors

Section 5 Special Provisions on the Organization of Listed Companies

Chapter V Issuance and Transfer of Shares of a Joint Stock Limited Company

Section 1 Issuance of Shares

Section 2 Transfer of Shares

CHAPTER VI QUALIFICATION AND OBLIGATIONS OF THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF THE COMPANY

Chapter VII Corporate Bonds

Chapter VIII Corporate Finance and Accounting

Chapter IX Merger, Division, Capital Increase and Capital Reduction of a Company

Chapter X Dissolution and Liquidation of the Company

Chapter XI Branches of Foreign Companies

Chapter XII Legal Liability

Chapter XIII Supplementary Provisions

Chapter I General Provisions

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

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

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

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

Article 4 The shareholders of a company shall enjoy the rights of asset income, participation in major decision-making and selection of managers in accordance with the law.

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

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

Article 6 To establish a company, an application for registration of establishment shall be filed with the company registration authority in accordance with law. If it meets the conditions for establishment stipulated in this Law, it shall be registered as a limited liability company or a joint stock limited company by the company registration authority; if it does not meet the conditions for establishment stipulated in this Law, it shall not be registered as a limited liability company or a joint stock limited company.

Where laws and administrative regulations stipulate that the establishment of a company must be submitted for approval, the approval procedures shall be completed in accordance with the law before the company is registered.

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

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

The company's business license shall state the company's name, domicile, registered capital, paid-in capital, business scope, and the name of the legal representative.

If the matters recorded in the company's business license are changed, the company shall register the change in accordance with the law, and the company registration authority shall issue a new business license.

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

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

Article 9 Where a limited liability company is to be changed into a joint stock limited company, it shall meet the conditions for joint stock limited companies as prescribed in this Law. If a joint stock limited company is to be changed into a limited liability company, the conditions for a limited liability company as prescribed in this Law shall be met.

If a limited liability company is changed to a joint stock limited company, or a joint stock limited company is changed to a limited liability company, the creditor's rights and debts of the company before the change shall be inherited by the company after the change.

Article 10 The domicile of a company shall be the place where its principal office is located.

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

Article 12 The business scope of a company shall be specified in its articles of association and shall be registered in accordance with the law. The company may amend its articles of association and change its business scope, but it shall register the change.

The business scope of the company shall be subject to approval according to laws and administrative regulations.

Article 13 The legal representative of a company shall, in accordance with the provisions of the articles of association, be the chairman of the board of directors, executive director or manager, and shall be registered in accordance with the law. If the legal representative of the company changes, the change registration shall be carried out.

Article 14 A company may establish branch companies. To establish a branch, it shall apply to the company registration authority for registration and obtain a business license. A branch does not have legal personality and its civil liability is borne by the company.

The company may establish subsidiaries, which have legal personality and independently bear civil liability in accordance with the law.

Article 15 A company may invest in other enterprises; however, unless otherwise provided by law, it may not become a contributor that is jointly and severally liable for the debts of the enterprise in which it invests.

Article 16 The company's investment in other enterprises or the provision of guarantees for others shall be resolved by the board of directors or the shareholders' meeting or the general meeting of shareholders in accordance with the provisions of the company's articles of association; if the company's articles of association stipulate a limit on the total amount of investment or guarantee and the amount of a single investment or guarantee, it shall not exceed the prescribed limit.

Where a company provides a guarantee for the shareholders or actual controllers of the company, it must be resolved by the shareholders' meeting or the general meeting of shareholders.

The shareholders specified in the preceding paragraph or the shareholders controlled by the actual controller specified in the preceding paragraph shall not participate in the voting on the matters specified in the preceding paragraph. The vote shall be passed by a majority of the voting rights held by other shareholders present at the meeting.

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

The company shall adopt various forms to strengthen the vocational education and on-the-job training of the company's employees and improve the quality of the employees.

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

In accordance with the provisions of the Constitution and relevant laws, the company shall practice democratic management through the staff and workers' congress or other forms.

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

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

Article 20 The shareholders of a company shall abide by the laws, administrative regulations and the articles of association of the company, exercise the rights of shareholders in accordance with the law, and shall not abuse the rights of shareholders to harm the interests of the company or other shareholders; they shall not abuse the independent status of the company as a legal person and the limited liability of shareholders to harm the interests of the company's creditors.

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

If the shareholders of the company abuse the independent status of the company as a legal person and the limited liability of shareholders to evade debts and seriously harm the interests of the company's creditors, they shall bear joint and several liability for the debts of the company.

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

Anyone who violates the provisions of the preceding paragraph and causes losses to the company shall be liable for compensation.

Article 22 The resolutions of the shareholders' meeting, the general meeting of shareholders and the board of directors of the company shall be null and void if the contents of the resolutions violate laws and administrative regulations.

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

Where a shareholder brings an action in accordance with the provisions of the preceding paragraph, the people's court may, at the request of the company, require the shareholder to provide a corresponding guarantee.

If the company has gone through the change registration in accordance with the resolution of the shareholders' meeting, the shareholders' meeting or the board of directors, after the people's court declares the resolution invalid or revokes the resolution, the company shall apply to the company registration authority to cancel the change registration.

Chapter II Establishment and Organization of Limited Liability Companies

Section 1 Establishment

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

the number of (I) shareholders meets the quorum;

(II) shareholders' capital contribution reaches the statutory minimum capital limit;

(III) shareholders to jointly formulate the articles of association;

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

(V) have company domicile.

Article 24 A limited liability company shall be established by not more than 50 shareholders.

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

Name and domicile of the (I) company;

Business scope of the (II) company;

(III) the registered capital of the company;

the name of the (IV) shareholder;

The method, amount and time of capital contribution of the (V) shareholders;

The organization of the (VI) company and the method for its establishment, powers and rules of procedure;

The legal representative of the (VII) company;

(VIII) other matters deemed necessary by the shareholders' meeting.

The shareholders shall sign and seal the articles of association.

Article 26 The registered capital of a limited liability company shall be the amount of capital contribution paid by all shareholders registered with the company registration authority. The initial capital contribution of all shareholders of the company shall not be less than 20% of the registered capital, nor shall it be less than the statutory minimum amount of registered capital, and the rest shall be paid up by the shareholders within two years from the date of establishment of the company.

The minimum amount of registered capital of a limited liability company is RMB 30,000. Where laws and administrative regulations have higher provisions on the minimum registered capital of a limited liability company, such provisions shall be followed.

Article 27 Shareholders may make capital contributions in currency, or in kind, intellectual property rights, land use rights and other non-monetary property that can be valued in currency and can be transferred in accordance with the law; however, except for property that may not be used as capital contributions as stipulated by laws and administrative regulations.

The value of non-monetary property as a capital contribution shall be assessed, the property shall be verified, and the price shall not be overvalued or undervalued. Where laws and administrative regulations provide for valuation, such provisions shall apply.

The amount of monetary capital contribution of all shareholders shall not be less than 30% of the registered capital of the limited liability company.

Article 28 Shareholders shall pay in full and on time the amount of capital contributions they have paid as stipulated in the articles of association of the company. Where a shareholder makes a capital contribution in currency, the full amount of the capital contribution in currency shall be deposited in the bank account opened by the limited liability company; where the capital contribution is made in non-monetary property, the transfer of its property rights shall be handled in accordance with the law.

If a shareholder fails to pay the capital contribution in accordance with the provisions of the preceding paragraph, he shall, in addition to paying the full amount to the company, be liable for breach of contract to the shareholders who have paid the capital contribution in full and on time.

Article 29 After the shareholders have paid their capital contributions, they must go through a capital verification institution established in accordance with the law to verify the capital and issue a certificate.

Article 30 After the initial capital contribution of shareholders has been verified by the capital verification institution established in accordance with the law, the representative designated by all shareholders or the agent jointly entrusted by all shareholders shall submit the company registration application, the company's articles of association, the capital verification certificate and other documents to the company registration authority to apply for establishment registration.

Article 31 If, after the establishment of a limited liability company, it is found that the actual value of the non-monetary property contributed as capital for the establishment of the company is significantly lower than the amount priced in the articles of association, the shareholder who delivered the capital contribution shall make up the difference; other shareholders at the time of the establishment of the company shall bear joint and several liability.

Article 32 After the establishment of a limited liability company, a certificate of capital contribution shall be issued to the shareholders.

The capital contribution certificate shall state the following:

Name of the (I) company;

Date of establishment of the (II) company;

(III) the registered capital of the company;

The name or title of the (IV) shareholder, the amount of capital contribution paid and the date of capital contribution;

(V) the number and date of issuance of the certificate of contribution.

The capital contribution certificate shall be sealed by the company.

Article 33 A limited liability company shall keep a register of shareholders, which shall record the following matters:

the name and domicile of the (I) shareholder;

Capital contribution of (II) shareholders;

No. of (III) capital contribution certificate.

Shareholders recorded in the register of shareholders may claim to exercise their rights in accordance with the register of shareholders.

The company shall register the names or names of the shareholders and their capital contributions with the company registration authority; if the registration items are changed, the change registration shall be carried out. If the registration is not registered or the registration is changed, it shall not be used against a third party.

Article 34 Shareholders shall have the right to consult and copy the articles of association, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports.

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

Article 35 Shareholders shall share dividends in accordance with the proportion of capital contributions paid in; when the company adds new capital, shareholders shall have the right to pay capital contributions in accordance with the proportion of capital contributions paid in. However, unless all shareholders agree not to share dividends in proportion to their capital contributions or not to give priority to their capital contributions in proportion to their capital contributions.

Article 36 After the establishment of a company, shareholders may not withdraw their capital contributions.

Section 2 Organizational Structure

Article 37 The shareholders' meeting of a limited liability company shall consist of all shareholders. The shareholders' meeting shall be the organ of authority of the company and shall exercise its functions and powers in accordance with this Law.

Article 38 The shareholders' meeting shall exercise the following functions and powers:

(I) determine the company's business policies and investment plans;

The (II) elects and replaces directors and supervisors not held by employee representatives, and decides on matters concerning the remuneration of directors and supervisors;

(III) review and approve the reports of the Board of Directors;

(IV) review and approve the reports of the board of supervisors or supervisors;

(V) review and approve the company's annual financial budget plan and final accounts plan;

(VI) review and approve the company's profit distribution plan and loss recovery plan;

The (VII) shall make a resolution on the increase or decrease of the registered capital of the company;

The (VIII) makes resolutions on the issuance of corporate bonds;

The (IX) shall make resolutions on the merger, division, dissolution, liquidation or change of corporate form of the Company;

(X) amending the articles of association;

(11) other functions and powers stipulated in the articles of association.

If the shareholders unanimously agree in writing on the matters listed in the preceding paragraph, they may make a decision directly without convening a meeting of the shareholders, and all shareholders shall sign and seal the decision document.

Article 39 The first shareholders' meeting 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 provisions of this Law.

Article 40 The meetings of the shareholders' meeting shall be divided into regular meetings and interim meetings.

Regular meetings shall be held on time in accordance with the provisions of the articles of association. An interim meeting shall be convened if the shareholders representing one-tenth or more of the voting rights, 1/3 or more of the directors, the board of supervisors or the supervisors of a company without a board of supervisors propose to convene an interim meeting.

Article 41 where a limited liability company has a board of directors, the meeting of the shareholders' meeting shall be convened by the board of directors and presided over by the chairman of the board; if the chairman of the board is unable or fails to perform his duties, the meeting shall be presided over by the vice-chairman; if the vice-chairman is unable or fails to perform his duties, a director jointly elected by more than half of the directors shall preside over the meeting.

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

If the board of directors or the executive director is unable to perform or fails to perform the duty of convening the shareholders' meeting, the board of supervisors or the supervisor of the company without the board of supervisors shall convene and preside over the meeting; if the board of supervisors or the supervisor does not convene and preside over the meeting, the shareholders representing more than one tenth of the voting rights may convene and preside over the meeting by themselves.

Article 42 When a meeting of shareholders is held, all shareholders shall be notified 15 days before the meeting is held, unless otherwise provided in the company's articles of association or otherwise agreed by all shareholders.

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

Article 43 Shareholders shall exercise their voting rights at shareholders' meetings in proportion to their capital contributions, except as otherwise provided for in the articles of association.

Article 44 The methods of discussion and voting procedures of the shareholders' meeting shall be prescribed by the articles of association of the company, unless otherwise provided for in this Law.

Resolutions made at the shareholders' meeting to amend the articles of association of the company, increase or decrease the registered capital, as well as resolutions on the merger, division, dissolution or change of corporate form of the company must be passed by shareholders representing 2/3 or more voting rights.

Article 45 A limited liability company shall have a board of directors, which shall be composed of three to thirteen members, except as otherwise provided for in Article 51 of this Law.

A limited liability company established with the investment of two or more state-owned enterprises or two or more other state-owned investment entities shall have representatives of the company's employees on its board of directors; other limited liability companies may have representatives of the company's employees on their board of directors. The representatives of the staff and workers on the board of directors shall be democratically elected by the staff and workers of the company through the staff and workers' congress or other forms.

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

Article 46 The term of office of the directors shall be prescribed by the articles of association, but each term shall not exceed three years. Upon expiration of the term of office, a director may be re-elected.

If a director is not re-elected in time at the expiration of his term of office, or if the number of members of the board of directors falls below the quorum due to the resignation of a director during his term of office, the original director shall still perform his duties as a director in accordance with the provisions of laws, administrative regulations and the articles of association before the re-elected director takes office.

Article 47 The board of directors shall be responsible to the shareholders' meeting and exercise the following functions and powers:

(I) convene the shareholders' meeting and report to the shareholders' meeting;

(II) implement the resolutions of the shareholders' meeting;

(III) determine the company's business plans and investment plans;

(IV) and formulate the company's annual financial budget plan and final accounts plan;

(V) formulating the company's profit distribution plan and loss recovery plan;

(VI) formulate plans for the company to increase or decrease its registered capital and issue corporate bonds;

(VII) formulate plans for the merger, division, dissolution or change of corporate form of the Company;

(VIII) determine the establishment of the company's internal management structure;

The (IX) decides on the appointment or dismissal of the manager of the Company and his remuneration, and decides on the appointment or dismissal of the deputy manager and the person in charge of finance of the Company and his remuneration in accordance with the manager's nomination;

(X) formulate the basic management system of the company;

(11) other functions and powers stipulated in the articles of association.

Article 48 the meeting of the board of directors shall be convened and presided over by the chairman of the board of directors; if the chairman of the board of directors is unable to perform his duties or fails to perform his duties, the meeting shall be convened and presided over by the vice chairman; if the vice chairman is unable to perform his duties or fails to perform his duties, a director shall be jointly elected and presided over by more than half of the directors.

Article 49 The method of discussion and voting procedures of the board of directors shall be prescribed by the articles of association of the company, unless otherwise provided for in this Law.

The board of directors shall make minutes of the decisions on the matters under discussion, and the directors present at the meeting shall sign the minutes of the meeting.

The voting on the resolution of the board of directors shall be one person, one vote.

Article 50 A limited liability company may have a manager, who shall be appointed or dismissed by the board of directors. The manager shall be responsible to the board of directors and exercise the following functions and powers:

(I) preside over the production and operation management of the Company and organize the implementation of the resolutions of the Board of Directors;

(II) organize the implementation of the company's annual business plan and investment plan;

(III) formulate the company's internal management organization setup plan;

(IV) formulate the basic management system of the company;

(V) formulate specific regulations of the Company;

The (VI) requests the appointment or dismissal of the deputy manager and the person in charge of finance of the Company;

The (VII) decides to appoint or dismiss the responsible management personnel other than those that should be appointed or dismissed by the board of directors;

(VIII) other powers granted by the board of directors.

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

The manager shall attend the meeting of the board of directors.

Article 51 A limited liability company with a relatively small number of shareholders or a relatively small scale may have one executive director and no board of directors. The executive director may concurrently serve as the manager of the company.

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

Article 52 A limited liability company shall have a board of supervisors, which shall have no less than three members. A limited liability company with a small number of shareholders or a small scale may have one or two supervisors and no board of supervisors.

The board of supervisors shall include representatives of shareholders and an appropriate proportion of representatives of the company's employees, of which the proportion of employee representatives shall not be less than 1/3, and the specific proportion shall be stipulated in the company's articles of association. The employee representatives on the board of supervisors shall be democratically elected by the employees of the company through the employee representative assembly, the employee assembly or other forms.

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

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

Article 53 The term of office of the supervisors shall be three years. Upon expiration of the term of office of a supervisor, the supervisor may be re-elected.

If a supervisor is not re-elected in time at the expiration of his term of office, or if the number of members of the board of supervisors falls below the quorum due to the resignation of a supervisor during his term of office, the original supervisor shall still perform his duties as a supervisor in accordance with the provisions of laws, administrative regulations and the articles of association of the company before the newly elected supervisor takes office.

Article 54 The board of supervisors and the supervisors of a company without a board of supervisors shall exercise the following functions and powers:

(I) check the company's financial affairs;

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

(III) require directors and senior managers to correct their actions when they harm the interests of the company;

The (IV) proposes to convene an interim shareholders' meeting, and convenes and presides over the shareholders' meeting when the board of directors fails to perform the duties of convening and presiding over the shareholders' meeting as prescribed in this Law;

(V) put forward proposals to the shareholders' meeting;

The (VI) shall, in accordance with the provisions of Article 152 of this Law, initiate legal proceedings against the directors and senior managers;

(VII) other powers specified in the articles of association.

Article 55 A supervisor may attend the meeting of the board of directors as nonvoting delegates and raise questions or suggestions on the matters decided by the board of directors.

The board of supervisors and the supervisors of a company without a board of supervisors may conduct an investigation if they find that the company's business conditions are abnormal; if necessary, they may hire an accounting firm to assist them in their work, and the expenses shall be borne by the company.

Article 56 The board of supervisors shall meet at least once a year, and the supervisors may propose to convene an interim meeting of the board of supervisors.

The method of discussion and voting procedures of the board of supervisors shall be prescribed by the articles of association of the company, unless otherwise provided for in this Law.

The resolution of the board of supervisors shall be adopted by more than half of the supervisors.

The Supervisory Board shall make minutes of the decisions on the matters under discussion, and the supervisors present at the meeting shall sign the minutes of the meeting.

Article 57 The expenses necessary for the board of supervisors and the supervisors of a company without a board of supervisors to exercise their functions and powers shall be borne by the company.

Section 3 Special Provisions for One-person Limited Liability Company

Article 58 The provisions of this Section shall apply to the establishment and organizational structure of a one-person limited liability company; where there are no provisions in this Section, the provisions of Sections 1 and 2 of this Chapter shall apply.

The term "one-person limited liability company" as mentioned in this Law refers to a limited liability company with only one natural person shareholder or one legal person shareholder.

Article 59 The minimum registered capital of a one-person limited liability company shall be RMB 100,000 yuan. Shareholders shall pay in full the amount of capital contribution stipulated in the articles of association at one time.

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

Article 60 A one-person limited liability company shall indicate in the company registration whether it is wholly owned by a natural person or wholly owned by a legal person, which shall be stated in the company's business license.

Article 61 The articles of association of a one-person limited liability company shall be formulated by the shareholders.

Article 62 A one-person limited liability company shall not set up a shareholders' meeting. When a shareholder makes a decision as listed in the first paragraph of Article 38 of this Law, it shall be in writing and shall be signed by the shareholder and kept in the company.

Article 63 A one-person limited liability company shall prepare a financial accounting report at the end of each fiscal year and be audited by an accounting firm.

Article 64 If the shareholders of a one-person limited liability company cannot prove that the company's property is independent of the shareholders' own property, they shall be jointly and severally liable for the debts of the company.

Section 4 Special Provisions on Wholly State-owned Companies

Article 65 The provisions of this Section shall apply to the establishment and organizational structure of a wholly state-owned company; if there are no provisions in this Section, the provisions of Sections 1 and 2 of this Chapter shall apply.

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

Article 66 The articles of association of a wholly state-owned company shall be formulated by the state-owned assets supervision and administration institution, or formulated by the board of directors and submitted to the state-owned assets supervision and administration institution for approval.

Article 67 A wholly state-owned company shall not have a shareholders' meeting, and the state-owned assets supervision and administration institution shall exercise the functions and powers of the shareholders' meeting. The state-owned assets supervision and administration institution may authorize the board of directors of the company to exercise part of the functions and powers of the shareholders' meeting and decide on major matters of the company, but the merger, division, dissolution, increase or decrease of registered capital and issuance of corporate bonds of the company must be decided by the state-owned assets supervision and administration institution; among them, the merger, division, dissolution or application for bankruptcy of an important wholly state-owned company shall be examined by the state-owned assets supervision and administration institution, report to the people's government at the corresponding level for approval.

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

Article 68 A wholly state-owned company shall have a board of directors, which shall exercise its functions and powers in accordance with the provisions of Articles 47 and 67 of this Law. The term of office of a director shall not exceed three years. The members of the board of directors shall include representatives of the employees of the company.

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

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

Article 69 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 the provisions of Article 50 of this Law.

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

Article 70 The chairman, vice-chairman, directors and senior managers of a wholly state-owned company shall not hold concurrent positions in other limited liability companies, joint stock limited companies or other economic organizations without the consent of the state-owned assets supervision and administration institution.

Article 71 The board of supervisors of a wholly state-owned company shall have no less than five members, and the proportion of employee representatives shall not be less than 1/3, and the specific proportion shall be stipulated in the company's articles of association.

The members of the board of supervisors shall be appointed by the state-owned assets supervision and administration institution; however, the staff and workers' representatives among the members of the board of supervisors shall be elected by the staff and workers' congress of the company. 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 specified in Items (I) to (III) of Article 54 of this Law and other functions and powers specified by the State Council.

Chapter III Equity Transfer of Limited Liability Companies

Article 72 The shareholders of a limited liability company may transfer all or part of their equity to each other.

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

Other shareholders shall have the preemptive right to purchase the shares transferred with the consent of the shareholders under the same conditions. If two or more shareholders claim to exercise the right of first refusal, they shall negotiate to determine their respective purchase ratios; if they fail to negotiate, they shall exercise the right of first refusal in accordance with their respective proportions of capital contribution at the time of transfer.

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

Article 73 When the people's court transfers a shareholder's equity in accordance with the enforcement procedures prescribed by law, it shall notify the company and all shareholders, and other shareholders shall have the right of first refusal under the same conditions. If other shareholders do not exercise the preemptive right at the expiration of 20 days from the date of notification by the people's court, they shall be deemed to have waived the preemptive right.

Article 74 After the transfer of equity in accordance with Articles 72 and 73 of this Law, the company shall cancel the certificate of capital contribution of the original shareholders, issue a certificate of capital contribution to the new shareholders, and amend the records of the relevant shareholders and their capital contributions in the articles of association and the register of shareholders accordingly. The amendment to the articles of association does not need to be voted on by the shareholders' meeting.

Article 75 Under any of the following circumstances, a shareholder who votes against the resolution of the shareholders' meeting may request the company to purchase its equity at a reasonable price:

(I) the company has not distributed profits to shareholders for five consecutive years, and the company has made profits for the five consecutive years and meets the conditions for distribution of profits stipulated in this Law;

Merger, division or transfer of main property of the (II) company;

(III) the term of business as stipulated in the articles of association expires or other reasons for dissolution as stipulated in the articles of association arise, the shareholders' meeting passes a resolution to amend the articles of association so that the company continues to exist.

Within 60 days from the date of adoption of the resolution of the shareholders' meeting, if the shareholders and the company cannot reach an equity purchase agreement, the shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the shareholders' meeting.

Article 76 After the death of a natural person shareholder, his legal heir may inherit the shareholder's qualifications; however, unless otherwise provided for in the articles of association of the company.

Chapter IV Establishment and Organization of a Joint Stock Limited Company

Section 1 Establishment

Article 77 The establishment of a joint stock limited company shall meet the following conditions:

(I) the number of promoters meets the quorum;

(II) the share capital subscribed and raised by the promoters reaches the statutory minimum capital limit;

(III) the issue of shares and the matters of preparation are in conformity with the provisions of the law;

Formulation of articles of association by the (IV) promoters, which are established by means of public offering and approved by the founding meeting;

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

(VI) have company domicile.

Article 78 A joint stock limited company may be established by means of initiation or by share offer.

Initiation means the establishment of a company by the promoter subscribing for all the shares to be issued by the company.

The establishment of a public offering refers to the establishment of a company by the promoter subscribing for a portion of the shares to be issued by the company, and the remaining shares are raised to the public or to a specific target.

Article 79 For the establishment of a joint stock limited company, there shall be not less than two but not more than two hundred promoters, of whom more than half shall have domiciles within the territory of China.

Article 80 The promoters of a joint stock limited company shall undertake the preparations for the establishment of the company.

The promoters shall sign a promoter's agreement to clarify their respective rights and obligations in the process of establishing the company.

Article 81 Where a company limited by shares is established by way of initiation, the registered capital shall be the total amount of share capital subscribed by all the promoters registered with the company registration authority. The initial capital contribution of all promoters of the company shall not be less than 20% of the registered capital, and the remaining part shall be paid in full by the promoters within two years from the date of establishment of the company; among them, the investment company may pay in full within five years. No shares may be offered from others until they have been paid up.

Where a company limited by shares is established by way of public offering, the registered capital shall be the total amount of paid-in share capital registered with the company registration authority.

The minimum amount of registered capital of a joint stock limited company shall be RMB 5 million. Where laws and administrative regulations have higher provisions on the minimum registered capital of a joint stock limited company, such provisions shall be followed.

Article 82 The articles of association of a joint stock limited company shall specify the following:

Name and domicile of the (I) company;

Business scope of the (II) company;

the manner in which the (III) company is established;

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

The name or title of the (V) promoter, the number of shares subscribed for, the method and time of capital contribution;

(VI) the composition, powers and rules of procedure of the Board of Directors;

The legal representative of the (VII) company;

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

(IX) the profit distribution method of the company;

(X) the reasons for dissolution and liquidation of the company;

(11) the measures for the notice and public announcement of the company;

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

Article 83 The method of capital contribution by promoters shall be governed by the provisions of Article 27 of this Law.

Article 84 Where a company limited by shares is established by way of initiation, the promoters shall recognize in writing the shares subscribed for by the articles of association of the company. If the capital is made of non-monetary property, the transfer of its property rights shall be handled in accordance with the law.

If the promoter does not pay the capital contribution in accordance with the provisions of the preceding paragraph, it shall bear the liability for breach of contract in accordance with the promoter's agreement.

After the first payment of capital contributions by the promoters, the board of directors and the board of supervisors shall be elected, and the board of directors shall submit to the company registration authority the articles of association of the company, the capital verification certificate issued by the capital verification institution established in accordance with the law and other documents prescribed by laws and administrative regulations to apply for establishment registration.

Article 85 Where a joint stock limited company is established by means of subscription, the shares subscribed by the promoters shall not be less than 35% of the total number of shares of the company; however, if laws and administrative regulations provide otherwise, such provisions shall prevail.

Article 86 When a promoter raises shares to the public, it must announce the prospectus and make a share recognition form. The subscription form shall contain the matters listed in Article 87 of this Law, and the subscriber shall fill in the number of shares subscribed, the amount of money and the domicile, and shall sign and seal it. The subscriber shall pay the shares in accordance with the number of shares subscribed.

Article 87 The prospectus shall be accompanied by the articles of association formulated by the promoters and shall contain the following:

the number of shares subscribed for by the (I) promoters;

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

the total number of bearer shares issued in the (III);

the use of the funds raised by the (IV);

(V) rights and obligations of subscribers;

(VI) the start and end period of this offering and the statement that the subscriber may withdraw the shares subscribed when the subscription is overdue.

Article 88 The shares raised by the promoters to the public shall be underwritten by a securities company established in accordance with the law and an underwriting agreement shall be signed.

Article 89 When the promoter raises shares to the public, it shall sign an agreement with the bank on the collection of shares.

The bank that receives the share funds shall collect and preserve the share funds in accordance with the agreement, issue the collection documents to the subscribers who pay the share funds, and shall be obliged to issue the collection certificates to the relevant departments.

Article 90 After the shares issued have been paid in full, they must be verified and certified by a capital verification institution established in accordance with the law. The promoters shall preside over the founding meeting of the company within 30 days from the date of full payment of the shares. The founding meeting is composed of promoters and subscribers.

If the shares issued have not been fully raised beyond the deadline stipulated in the prospectus, or if the promoter has not convened the founding meeting within 30 days after the payment of the shares issued, the shareholder may, in accordance with the amount paid and plus the interest on the bank's deposits for the same period, require the promoter to return the shares.

Article 91 The promoters shall notify the subscribers of the date of the founding meeting or make a public announcement 15 days before the meeting. The founding meeting shall be held only if the promoters and subscribers representing more than half of the total number of shares are present.

The Founding Assembly shall exercise the following powers:

(I) review the report of the promoters on the preparation of the company;

(II) the adoption of the articles of association;

(III) elect the members of the Board of Directors;

(IV) election of members of the board of supervisors;

(V) review the establishment expenses of the company;

The (VI) reviews the valuation of the property used by the promoter to offset the share funds;

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

The resolution of the founding meeting on the matters listed in the preceding paragraph must be adopted by more than half of the voting rights held by the subscribers present at the meeting.

Article 92 After the promoters and subscribers have paid their share funds or have paid their capital contributions as share funds, they shall not withdraw their share capital, except in the case of failure to raise full shares on time, the promoters fail to convene the founding meeting on time, or the founding meeting resolves not to establish the company.

Article 93 The board of directors shall, within 30 days after the conclusion of the founding meeting, submit the following documents to the company registration authority to apply for registration of establishment:

Application for registration of a (I) company;

Minutes of the Founding Conference of the (II);

(III) the articles of association;

(IV) verification certificate;

The appointment documents and identification certificates of the legal representatives, directors and supervisors of the (V);

The legal person qualification certificate or natural person identity certificate of the (VI) promoter;

Proof of domicile of the (VII) company.

If a joint stock limited company is established by means of public offering to issue shares, the approval documents of the securities regulatory authority under the State Council shall also be submitted to the company registration authority.

Article 94 After the establishment of a joint stock limited company, if the promoters fail to make full payment of the capital contribution in accordance with the provisions of the articles of association of the company, they shall make up the payment; the other promoters shall bear joint and several liability.

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

Article 95 The promoters of a joint stock limited company shall bear the following responsibilities:

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

In the event that a (II) company cannot be established, it shall be jointly and severally liable for the return of the shares paid by the subscribers and for the addition of interest on bank deposits for the same period;

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

Article 96 When a limited liability company is changed into a joint stock limited company, the total amount of the converted paid-in share capital shall not be higher than the amount of the company's net assets. When a limited liability company is changed into a joint stock limited company and publicly issues shares in order to increase its capital, it shall be handled in accordance with the law.

Article 97 A company limited by shares shall keep its articles of association, register of shareholders, corporate bond stubs, minutes of general meetings of shareholders, minutes of meetings of the board of directors, minutes of meetings of the board of supervisors and financial and accounting reports on the Company.

Article 98 Shareholders shall have the right to consult the articles of association, the register of shareholders, the stubs of corporate bonds, the minutes of the general meeting of shareholders, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports, and to make suggestions or inquiries about the operation of the company.

Section 2 General Meeting of Shareholders

Article 99 The general meeting of shareholders of a joint stock limited company shall consist of all shareholders. The general meeting of shareholders is the organ of authority of the company and shall exercise its functions and powers in accordance with this Law.

Article 100 The provisions of the first paragraph of Article 38 of this Law on the functions and powers of the shareholders' meeting of a limited liability company shall apply to the shareholders' meeting of a joint stock limited company.

Article 101 The shareholders' general meeting shall be held once a year. Under any of the following circumstances, an interim shareholders' meeting shall be held within two months:

When the number of (I) directors is less than 2/3 of the number specified in this Law or the number specified in the articles of association;

When the uncompensated loss of the (II) company reaches 1/3 of the total paid-in share capital;

At the request of (III) shareholders who individually or collectively hold more than 10% of the company's shares;

(IV) the Board of Directors deems it necessary;

When the Board of Supervisors of the (V) proposes to convene;

(VI) other circumstances specified in the articles of association.

Article 102 The meeting of the general meeting of shareholders shall be convened by the board of directors and presided over by the chairman; if the chairman is unable to perform his duties or fails to perform his duties, the vice-chairman shall preside over the meeting; if the vice-chairman is unable to perform his duties or fails to perform his duties, more than half of the directors shall jointly elect a director to preside over the meeting.

If the board of directors is unable to perform or fails to perform the duty of convening the general meeting of shareholders, the board of supervisors shall convene and preside over the meeting in a timely manner; if the board of supervisors fails to convene and preside over the meeting, the shareholders who alone or collectively hold more than 10% of the shares of the company for more than 90 consecutive days may convene and preside over the meeting on their own.

Article 103 When convening a general meeting of shareholders, the time, place and matters to be considered shall be notified to all shareholders 20 days before the meeting; the extraordinary general meeting of shareholders shall notify all shareholders 15 days before the meeting; the issuance of bearer shares In the case of the meeting, the time, place and matters to be considered shall be announced 30 days before the meeting.

Shareholders who individually or collectively hold more than 3% of the company's shares may submit an interim proposal and submit it in writing to the board of directors ten days before the general meeting of shareholders; the board of directors shall notify other shareholders within two days after receiving the proposal, and submit the interim proposal to the general meeting of shareholders for deliberation. The contents of the provisional proposal shall fall within the terms of reference of the general meeting of shareholders and shall have clear topics and specific resolutions.

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

If a bearer shareholder attends a meeting of the general meeting of shareholders, he shall deposit his shares with the company five days before the meeting and when the general meeting is closed.

Article 104 When a shareholder attends a general meeting of shareholders, he shall have one vote for each share he holds. However, the shares of the Company held by the Company do not have voting rights.

A resolution of a general meeting of shareholders must be passed by more than half of the voting rights held by the shareholders present at the meeting. However, the resolution of the general meeting of shareholders to amend the articles of association, increase or decrease the registered capital, as well as the resolution of the merger, division, dissolution or change of the form of the company, must be passed by more than 2/3 of the voting rights held by the shareholders present at the meeting.

Article 105 Where this Law and the Articles of Association of the Company stipulate that matters such as the transfer or transfer of material assets or the provision of guarantees to the outside world must be resolved by the general meeting of shareholders, the Board of Directors shall promptly convene a meeting of the general meeting of shareholders, which shall vote on the above matters.

Article 106 The election of directors and supervisors at the general meeting of shareholders may adopt a cumulative voting system in accordance with the provisions of the company's articles of association or the resolutions of the general meeting of shareholders.

The cumulative voting system referred to in this Law means that when a general meeting of shareholders elects directors or supervisors, each share has the same voting rights as the number of directors or supervisors to be elected, and the voting rights owned by shareholders may be used in a centralized manner.

Article 107 A shareholder may entrust a proxy to attend the meeting of the general meeting of shareholders, and the proxy shall submit a power of attorney to the company and exercise voting rights within the scope of authorization.

Article 108 The general meeting of shareholders shall make minutes of the decisions on the matters under discussion, and the presiding officer and the directors present at the meeting shall sign the minutes of the meeting. The minutes of the meeting shall be kept together with the signature of the shareholders present and the power of attorney for the attendance.

Section 3 Board of Directors and Manager

Article 109 A joint stock limited company shall have a board of directors, which shall be composed of five to nineteen members.

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

The provisions of Article 46 of this Law on the term of office of directors of a limited liability company shall apply to the directors of a joint stock limited company.

The provisions of Article 47 of this Law on the functions and powers of the board of directors of a limited liability company shall apply to the board of directors of a joint stock limited company.

Article 110 The board of directors shall have a chairman and may have a vice-chairman. The chairman and vice-chairman shall be elected by the board of directors by a majority of all directors.

The chairman of the board of directors convenes and presides over the meetings of the board of directors and inspects the implementation of the resolutions of the board of directors. The vice-chairman assists the chairman in his work. If the chairman is unable to perform his duties or fails to perform his duties, the vice-chairman shall perform his duties; if the vice-chairman is unable to perform his duties or fails to perform his duties, more than half of the directors shall jointly elect a director to perform his duties.

Article 111 the board of directors shall hold at least two meetings a year, and each meeting shall notify all directors and supervisors ten days before the meeting.

Shareholders representing more than one tenth of the voting rights, 1/3 or more directors or the board of supervisors may propose to convene an interim meeting of the board of directors. The chairman of the board of directors shall convene and preside over the meeting of the board of directors within ten days after receiving the proposal.

When the board of directors convenes an interim meeting, the method and time limit of notification for convening the board of directors may be determined separately.

Article 112 A meeting of the board of directors shall be held only when more than half of the directors are present. A resolution of the board of directors must be passed by a majority of all directors.

The voting on the resolution of the board of directors shall be one person, one vote.

Article 113 the meeting of the board of directors shall be attended by the directors themselves; if the directors are unable to attend for some reason, they may entrust other directors in writing to attend on their behalf, and the scope of authorization shall be specified in the power of attorney.

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

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

Article 114 A joint stock limited company shall have a manager, who shall be appointed or dismissed by the board of directors.

The provisions of Article 50 of this Law on the functions and powers of the manager of a limited liability company shall apply to the manager of a joint stock limited company.

Article 115 The board of directors of a company may decide that a member of the board of directors shall concurrently serve as the manager.

Article 116 A company shall not provide loans to directors, supervisors or senior managers directly or through subsidiaries.

Article 117 A company shall regularly disclose to its shareholders the remuneration received by its directors, supervisors and senior managers from the company.

Section 4 Board of Supervisors

Article 118 A joint stock limited company shall have a board of supervisors, which shall be composed of not less than three members.

The board of supervisors shall include representatives of shareholders and an appropriate proportion of representatives of the company's employees, of which the proportion of employee representatives shall not be less than 1/3, and the specific proportion shall be stipulated in the company's articles of association. The employee representatives on the board of supervisors shall be democratically elected by the employees of the company through the employee representative assembly, the employee assembly or other forms.

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

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

The provisions of Article 53 of this Law on the term of office of the supervisors of a limited liability company shall apply to the supervisors of a joint stock limited company.

Article 119 The provisions of Articles 54 and 55 of this Law on the functions and powers of the board of supervisors of a limited liability company shall apply to the board of supervisors of a joint stock limited company.

The expenses necessary for the board of supervisors to exercise its functions and powers shall be borne by the company.

Article 120 The board of supervisors shall meet at least once every six months. The supervisor may propose to convene an interim meeting of the board of supervisors.

The method of discussion and voting procedures of the board of supervisors shall be prescribed by the articles of association of the company, unless otherwise provided for in this Law.

The resolution of the board of supervisors shall be adopted by more than half of the supervisors.

The Supervisory Board shall make minutes of the decisions on the matters under discussion, and the supervisors present at the meeting shall sign the minutes of the meeting.

Section 5 Special Provisions on the Organization of Listed Companies

Article 121 The term "listed company" as mentioned in this Law refers to a joint stock limited company whose shares are listed and traded on a stock exchange.

Article 122 Where a listed company purchases or sells major assets or the amount of guarantees exceeds the 30% of the total assets of the company within one year, a resolution shall be made by the general meeting of shareholders and approved by more than 2/3 of the voting rights held by the shareholders present at the meeting.

Article 123 A listed company shall have independent directors, the specific measures of which shall be formulated by the State Council.

Article 124 A listed company shall have a secretary of the board of directors, who shall be responsible for the preparation of the general meeting of shareholders and the meeting of the board of directors, the custody of documents, the management of the information of the shareholders of the company, and the handling of information disclosure affairs.

Article 125 If a director of a listed company is related to the enterprise involved in the resolution of the board of directors, he shall not exercise the right to vote on the resolution, nor shall he exercise the right to vote on behalf of other directors. The meeting of the board of directors may be held by the presence of more than half of the unrelated directors, and the resolution made at the meeting of the board of directors shall be passed by more than half of the unrelated directors. If the number of unrelated directors present at the board of directors is less than three, the matter shall be submitted to the general meeting of shareholders of the listed company for consideration.

Chapter V Issuance and Transfer of Shares of a Joint Stock Limited Company

Section 1 Issuance of Shares

Article 126 The capital of a joint stock limited company shall be divided into shares, each of which shall be equal in amount.

The shares of the company take the form of shares. A share certificate is a certificate issued by a company to certify the shares held by a shareholder.

Article 127 The issuance of shares shall be based on the principles of fairness and impartiality, and each share of the same class shall have the same rights.

Shares of the same class issued at the same time shall be issued on the same terms and at the same price per share, and the same price shall be paid for each share subscribed by any entity or individual.

Article 128 The issue price of shares may be based on the par value, or may exceed the par value, but may not be less than the par value.

Article 129 The shares shall be in paper form or in other forms prescribed by the securities regulatory authority under the State Council.

A stock shall contain the following main items:

Name of the (I) company;

Date of establishment of the (II) company;

(III) the type of stock, par value and number of shares represented;

The number of the (IV) stock.

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

The shares of the promoter shall be marked with the words "promoter's stock.

Article 130 The shares issued by a company may be registered shares or bearer shares.

The shares issued by the company to the promoter or legal person shall be registered shares, and the name or name of the promoter or legal person shall be recorded, and no other account name shall be established or the name of the representative shall be recorded.

Article 131 Where a company issues registered shares, it shall keep a register of shareholders, which shall record the following matters:

the name and domicile of the (I) shareholder;

the number of shares held by each shareholder of the (II);

the number of shares held by each shareholder of the (III);

The date on which each shareholder of the (IV) acquired the shares.

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

Article 132 The State Council may make separate provisions on the issuance of shares by companies of classes other than those provided for in this Law.

Article 133 Upon the establishment of a joint stock limited company, the shares shall be formally delivered to the shareholders. A company may not deliver shares to its shareholders prior to its establishment.

Article 134 When a company issues new shares, the general meeting of shareholders shall make resolutions on the following matters:

the type and amount of new shares (I);

(II) the issue price of new shares;

The start and end dates of the issuance of new shares in the (III);

The type and amount of new shares issued by the (IV) to the existing shareholders.

Article 135 When a company issues new shares to the public with the approval of the securities regulatory authority under the State Council, it must announce the prospectus and financial accounting reports of the new shares, and make a subscription form.

The provisions of Articles 88 and 89 of this Law shall apply to the public issuance of new shares by a company.

Article 136 When a company issues new shares, it may determine its pricing plan in accordance with the company's operating and financial conditions.

Article 137 After a company issues new shares to raise enough shares, it must register the change with the company registration authority and make a public announcement.

Section 2 Transfer of Shares

Article 138 The shares held by shareholders may be transferred in accordance with law.

Article 139 The transfer of shares by a shareholder shall be carried out at a securities exchange established in accordance with law or in other ways as prescribed by the State Council.

Article 140 The registered shares shall be transferred by the shareholders by endorsement or by other means prescribed by laws and administrative regulations; after the transfer, the company shall record the name and domicile of the transferee in the register of shareholders.

No change in the register of shareholders as provided for in the preceding paragraph shall be registered within 20 days prior to the general meeting of shareholders or within five days prior to the base date on which the company decides to distribute dividends. However, if the law provides otherwise for the registration of changes in the register of shareholders of listed companies, such provisions shall prevail.

Article 141 The transfer of bearer shares shall take effect as soon as the shareholders deliver the shares to the transferee.

Article 142 The shares of the Company held by the promoters shall not be transferred within one year from the date of establishment of the Company. The shares issued by the company before the public offering of shares shall not be transferred within one year from the date of listing and trading of the company's shares on the stock exchange.

The directors, supervisors and senior managers of the company shall report to the company the shares they hold and their changes, and the shares transferred each year during their term of office shall not exceed 25% of the total number of shares of the company held by them; the shares held by the company shall not be transferred within one year from the date of listing and trading of the company's shares. The above-mentioned personnel shall not transfer the shares of the company held by them within half a year after leaving their posts. The articles of association of the company may make other restrictive provisions on the transfer of the shares of the company held by the directors, supervisors and senior managers of the company.

Article 143 A company may not purchase its own shares. However, any of the following circumstances shall be excluded:

(I) reduction of the company's registered capital;

(II) merger with other companies holding shares in the Company;

The (III) awards the shares to the employees of the Company;

(IV) shareholder requests the company to purchase its shares because he disagrees with the resolution on the merger or division of the company made by the general meeting of shareholders.

Where a company acquires its own shares for the reasons set out in Items (I) to (III) of the preceding paragraph, it shall be subject to a resolution of the general meeting of shareholders. After the company acquires its own shares in accordance with the provisions of the preceding paragraph, if it falls under the circumstances of item (I), it shall be canceled within ten days from the date of acquisition; if it falls under the circumstances of items (II) and (IV), it shall be transferred or canceled within six months.

The shares of the company purchased by the company in accordance with the provisions of item (III) of the first paragraph shall not exceed 5% of the total issued shares of the company; the funds used for the purchase shall be paid out of the company's after-tax profits; the shares purchased shall be transferred to the employees within one year.

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

Article 144 In the event that a registered share certificate is stolen, lost or destroyed, the shareholder may, in accordance with the procedure of public notice for claiming claims provided for in the the People's Republic of China Civil Procedure Law, request the people's court to declare the said share certificate invalid. After the people's court has declared the stock invalid, the shareholder may apply to the company for a replacement stock.

Article 145 The shares of a listed company shall be listed and traded in accordance with the relevant laws, administrative regulations and the trading rules of the stock exchange.

Article 146 A listed company must, in accordance with the provisions of laws and administrative regulations, make public its financial position, business situation and major litigation, and publish its financial and accounting reports semi-annually in each fiscal year.

CHAPTER VI QUALIFICATION AND OBLIGATIONS OF THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF THE COMPANY

Article 147 A person under any of the following circumstances shall not serve as a director, supervisor or senior manager of a company:

(I) incapacity or limited capacity for civil conduct;

(II) for embezzlement, bribery, embezzlement of property, misappropriation of property, or disruption of the socialist market economic order, and the sentence is not more than five years after the expiration of the term of execution, or is deprived of political rights for crime, and the sentence is not more than five years after the expiration of the term of execution;

If a (III) is a director, factory director or manager of a company or enterprise that has been liquidated and is personally responsible for the bankruptcy of the company or enterprise, three years have not elapsed since the date of completion of the bankruptcy liquidation of the company or enterprise;

If the (IV) is the legal representative of a company or enterprise whose business license has been revoked and whose closure has been ordered for violation of the law, and is personally liable, three years have not elapsed since the date of revocation of the business license of the company or enterprise;

A large amount of debt owed by a (V) individual is due and outstanding.

Where a company elects or appoints directors or supervisors or appoints senior managers in violation of the provisions of the preceding paragraph, such election, appointment or appointment shall be invalid.

The company shall remove a director, supervisor or senior manager from his post if any of the circumstances listed in the first paragraph of this Article occur during his term of office.

Article 148 Directors, supervisors and senior managers shall abide by laws, administrative regulations and the articles of association of the company, and shall have the duty of loyalty and diligence to the company.

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

Article 149 Directors and senior managers shall not commit any of the following acts:

(I) misappropriation of company funds;

(II) deposit company funds in their own name or in accounts opened in the name of other individuals;

The (III), in violation of the Articles of Association, lends the company's funds to others or provides security for others with the company's property without the consent of the shareholders' meeting, the shareholders' meeting or the board of directors;

The (IV) enters into a contract or conducts a transaction with the Company in violation of the Articles of Association or without the consent of the shareholders' meeting or the shareholders' general meeting;

(V), without the consent of the shareholders' meeting or the shareholders' general meeting, take advantage of their positions to seek business opportunities belonging to the company for themselves or others, and operate on their own or for others the same kind of business as that of the company they work;

(VI) accept as his own commission on transactions between others and the Company;

Unauthorized disclosure of company secrets by the (VII);

(VIII) other breach of the duty of loyalty to the Company.

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

Article 150 if a director, supervisor or senior manager violates the provisions of laws, administrative regulations or the articles of association when performing his duties, thus causing losses to the company, he shall be liable for compensation.

Article 151 where the shareholders' meeting or the general meeting of shareholders requires directors, supervisors or senior managers to attend the meeting as nonvoting delegates, the directors, supervisors or senior managers shall attend the meeting as nonvoting delegates and accept the questions of shareholders.

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

Article 152 Where a director or senior manager has the circumstances specified in Article 150 of this Law, a shareholder of a limited liability company or a joint stock limited company that alone or collectively holds more than 1% shares of the company for more than 180 consecutive days may request in writing the board of supervisors or the supervisor of a limited liability company that does not have a board of supervisors to bring a lawsuit to the people's court; the supervisor has the circumstances specified in Article 150 of this Law, the aforementioned shareholders may request in writing the board of directors or the executive director of a limited liability company without a board of directors to file a lawsuit in the people's court.

If the board of supervisors, the supervisor of a limited liability company without a board of supervisors, or the board of directors or the executive director refuses to file a lawsuit after receiving the written request from the shareholders specified in the preceding paragraph, or fails to file a lawsuit within 30 days from the date of receiving the request, or the situation is urgent, Failure to file a lawsuit immediately will cause irreparable damage to the company's interests, the shareholders specified in the preceding paragraph have the right to directly file a lawsuit in the people's court in their own name.

If another person infringes upon the legitimate rights and interests of the company and causes losses to the company, the shareholders specified in the first paragraph of this article may file a lawsuit in the people's court in accordance with the provisions of the preceding two paragraphs.

Article 153 If a director or senior manager violates the provisions of laws, administrative regulations or the company's articles of association and harms the interests of shareholders, the shareholders may file a lawsuit in the people's court.

Chapter VII Corporate Bonds

Article 154 The term "corporate bonds" as used in this Law refers to the securities issued by a company in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time.

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

Article 155 After the application for the issuance of corporate bonds has been approved by the department authorized by the State Council, the method for raising corporate bonds shall be announced.

The following main items shall be specified in the method for raising corporate bonds:

Name of the (I) company;

the use of the proceeds from the (II) bonds;

the total amount of (III) bonds and the face value of the bonds;

the manner in which interest rates on (IV) bonds are determined;

the term and manner of repayment of principal and interest by the (V);

(VI) bond guarantees;

The issue price of the (VII) bonds, the starting and ending dates of the issue;

the amount of net assets of the (VIII) company;

the total amount of outstanding corporate bonds issued by the (IX);

The underwriter of (X) corporate bonds.

Article 156 Where a company issues corporate bonds in the form of physical bonds, it must state the name of the company, the face value of the bonds, the interest rate, the repayment period and other matters on the bonds, which shall be signed by the legal representative and sealed by the company.

Article 157 Corporate bonds may be registered bonds or bearer bonds.

Article 158 A company issuing corporate bonds shall keep a corporate bond stub book.

Where registered corporate bonds are issued, the following items shall be stated in the corporate bond stub book:

the name or names and domicile of (I) bondholders;

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

(III) the total amount of the bonds, the coupon amount of the bonds, the interest rate, the term and manner of repayment of principal and interest;

The date of issuance of the (IV) bonds.

Where bearer corporate bonds are issued, the total amount of the bonds, the interest rate, the term and manner of repayment, the date of issue and the number of the bonds shall be stated in the corporate bond stub book.

Article 159 The registration and settlement institution of registered corporate bonds shall establish relevant systems for the registration, depository, interest payment and payment of bonds.

Article 160 Corporate bonds may be transferred at a price agreed upon by the transferor and the transferee.

Where corporate bonds are listed and traded on a stock exchange, they shall be transferred in accordance with the trading rules of the stock exchange.

Article 161 A registered corporate bond shall be transferred by the bondholder by endorsement or by other means prescribed by laws and administrative regulations; after the transfer, the company shall record the name or names and domicile of the transferee in the corporate bond stub book.

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

Article 162 A listed company may issue corporate bonds convertible into shares upon resolution of the general meeting of shareholders, and the specific conversion method shall be stipulated in the method for raising corporate bonds. The issuance of corporate bonds convertible into shares by a listed company shall be reported to the securities regulatory authority under the State Council for approval.

The issuance of corporate bonds that can be converted into stocks shall be marked with the words convertible corporate bonds, and the amount of convertible corporate bonds shall be stated in the corporate bond stub book.

Article 163 Where corporate bonds convertible into shares are issued, the company shall exchange shares with the bondholders in accordance with its conversion method, but the bondholders shall have the right to choose whether to convert the shares or not.

Chapter VIII Corporate Finance and Accounting

Article 164 A company shall establish its own financial and accounting systems in accordance with laws, administrative regulations and the provisions of the financial department of the State Council.

Article 165 A company shall prepare its financial and accounting reports at the end of each fiscal year and shall be audited by an accounting firm in accordance with the law.

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

Article 166 A limited liability company shall send its financial and accounting reports to its shareholders within the time limit specified in its articles of association.

The financial and accounting reports of a company limited by shares shall be made available to the Company for inspection by shareholders on the 20th day prior to the convening of the annual general meeting of shareholders; a company limited by shares that publicly issues shares must announce its financial and accounting reports.

Article 167 When a company distributes its after-tax profits for the year, it shall withdraw 10 percent of the profits and include them in the company's statutory provident fund. If the accumulated amount of the company's statutory provident fund is more than 50% of the company's registered capital, it may not be withdrawn.

If the statutory provident fund of the company is not sufficient to make up for the losses of the previous year, the profits of the current year shall be used to make up for the losses before the statutory provident fund is withdrawn in accordance with the provisions of the preceding paragraph.

After the company withdraws the statutory provident fund from the after-tax profits, it may also withdraw any provident fund from the after-tax profits by resolution of the shareholders' meeting or the general meeting of shareholders.

The after-tax profits remaining after the company has made up its losses and withdrawn its provident fund shall be distributed by a limited liability company in accordance with the provisions of Article 35 of this Law; a joint stock limited company shall be distributed in proportion to the shares held by its shareholders, except where the articles of association of a joint stock limited company stipulate that the distribution shall not be based on the proportion of shares held.

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

The shares of the Company held by the Company shall not be distributed as profits.

Article 168 The premium derived from the issuance of shares by a joint stock limited company at an issue price in excess of the par value of the shares and other income included in the capital provident fund as prescribed by the financial department of the State Council shall be included in the capital provident fund of the company.

Article 169 The company's provident fund shall be used to make up for the company's losses, expand the company's production and operation, or convert it to increase the company's capital. However, the capital reserve may not be used to cover the company's losses.

When the statutory provident fund is converted into capital, the amount of such provident fund retained shall not be less than 25% of the registered capital of the company before the conversion.

Article 170 The appointment and dismissal of the company's accounting firm that undertakes the company's audit business shall be decided by the shareholders meeting, the general meeting of shareholders or the board of directors in accordance with the provisions of the company's articles of association.

When the shareholders' meeting, the shareholders' general meeting or the board of directors of the company votes on the dismissal of the accounting firm, the accounting firm shall be allowed to state its opinions.

Article 171 A company shall provide true and complete accounting vouchers, accounting books, financial accounting reports and other accounting materials to the accounting firm it employs, and shall not refuse, conceal or make false statements.

Article 172 A company shall not set up an accounting book other than the statutory accounting books.

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

Chapter IX Merger, Division, Capital Increase and Capital Reduction of a Company

Article 173 The merger of a company may take the form of a merger by absorption or a merger by new establishment.

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

Article 174 In the event of a merger of a company, the parties to the merger shall sign a merger agreement and prepare a balance sheet and an inventory of property. The company shall notify its creditors within ten days from the date of making the merger resolution, and make a public announcement in a newspaper within 30 days. Within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if the notice is not received, the creditor may require the company to pay off its debts or provide corresponding guarantees.

Article 175 In the event of a merger of companies, the claims and debts of the parties to the merger shall be inherited by the surviving company or the newly established company after the merger.

Article 176 When a company is divided, its property shall be divided accordingly.

When a company is separated, a balance sheet and an inventory of property shall be prepared. The company shall notify its creditors within 10 days from the date of making the resolution on division, and make a public announcement in the newspaper within 30 days.

Article 177 The company after the division shall be jointly and severally liable for the debts of the company before the division. However, unless otherwise agreed in a written agreement between the company and its creditors on the settlement of debts prior to the division.

Article 178 When a company needs to reduce its registered capital, it must prepare a balance sheet and an inventory of its property.

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

The registered capital of the company after capital reduction shall not be less than the statutory minimum.

Article 179 When a limited liability company increases its registered capital, the shareholders' contribution to the additional capital shall be implemented in accordance with the relevant provisions of this Law on the payment of capital contributions for the establishment of a limited liability company.

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

Article 180 Where a company merges or splits and the registered items are changed, it shall register the change with the company registration authority in accordance with the law; where the company is dissolved, it shall register the cancellation of the company in accordance with the law; where a new company is established, it shall register the establishment of the company in accordance with the law.

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

Chapter X Dissolution and Liquidation of the Company

Article 181 The company is dissolved for the following reasons:

(I) the term of business as stipulated in the articles of association expires or any other cause for dissolution as stipulated in the articles of association occurs;

Dissolution by resolution of the (II) shareholders' meeting or general meeting;

The (III) needs to be dissolved due to the merger or division of the company;

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

The (V) People's Court shall dissolve the court in accordance with the provisions of Article 183 of this Law.

Article 182 Where a company is under the circumstances (I) in Article 181 of this Law, it may survive by amending its articles of association.

In accordance with the provisions of the preceding paragraph, a limited liability company must be approved by shareholders holding more than 2/3 voting rights, and a joint stock limited company must be approved by more than 2/3 of the voting rights held by shareholders present at the shareholders' meeting.

Article 183 If serious difficulties arise in the operation and management of the company, and the continued existence of the company will cause major losses to the interests of shareholders, which cannot be resolved through other means, shareholders holding more than 10% of the voting rights of all shareholders of the company may request the people's court to dissolve the company.

Article 184 where a company is dissolved due to the provisions of subparagraphs (I), (II), (IV) and (V) of Article 181 of this Law, a liquidation group shall be established within 15 days from the date of occurrence of the cause of dissolution to start liquidation. The liquidation group of a limited liability company shall be composed of shareholders, and the liquidation group of a joint stock limited company shall be composed of directors or persons determined by the general meeting of shareholders. If a liquidation group is not established within the time limit, the creditor may apply to the people's court to designate relevant personnel to form a liquidation group to carry out liquidation. The people's court shall accept the application and promptly organize a liquidation group to carry out liquidation.

Article 185 The liquidation group shall exercise the following powers during the liquidation period:

(I) to clean up the company's property, respectively, the preparation of balance sheets and property inventory;

Creditors (II) notice and public announcement;

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

(IV) the payment of taxes owed and taxes arising in the course of liquidation;

(V) liquidation of claims and debts;

(VI) the disposal of the remaining property of the company after the liquidation of its debts;

(VII) represent the company in civil litigation activities.

Article 186 The liquidation group shall notify the creditors within 10 days from the date of its establishment, and make a public announcement in the newspaper within 60 days. Creditors shall, within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if they fail to receive the notice, declare their claims to the liquidation group.

When filing a claim, a creditor shall explain the relevant matters of the claim and provide supporting materials. The liquidation group shall register the claims.

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

Article 187 After liquidating the company's property and preparing the balance sheet and property inventory, the liquidation group shall formulate a liquidation plan and submit it to the shareholders' meeting, the shareholders' meeting or the people's court for confirmation.

The remaining property of the company after paying the liquidation expenses, the wages of the employees, the social insurance expenses and the statutory compensation, paying the taxes owed and paying off the debts of the company shall be distributed by the limited liability company according to the proportion of the capital contribution of the shareholders, and the limited liability company shall be distributed according to the proportion of the shares held by the shareholders.

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

Article 188 If the liquidation team finds that the company's property is insufficient to pay off its debts after liquidating the company's property, preparing the balance sheet and property inventory, it shall apply to the people's court for bankruptcy in accordance with the law.

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

Article 189 After the liquidation of a company is completed, the liquidation group shall prepare a liquidation report, which shall be submitted to the shareholders' meeting, the shareholders' general meeting or the people's court for confirmation, and shall be submitted to the company registration authority to apply for cancellation of the company's registration and announce the termination of the company.

Article 190 The members of the liquidation group shall be devoted to their duties and perform their liquidation obligations in accordance with the law.

Members of the liquidation group shall not take advantage of their functions and powers to accept bribes or other illegal income, and shall not embezzle the property of the company.

If a member of the liquidation group causes losses to the company or its creditors intentionally or through gross negligence, he shall be liable for compensation.

Article 191 Where a company is declared bankrupt in accordance with the law, it shall be liquidated in accordance with the laws relating to enterprise bankruptcy.

Chapter XI Branches of Foreign Companies

Article 192 The term "foreign company" as mentioned in this Law refers to a company established outside the territory of China in accordance with foreign laws.

Article 193 When a foreign company establishes a branch within the territory of China, it must submit an application to the competent Chinese authority and submit its articles of association, the company registration certificate of the country to which it belongs and other relevant documents. After approval, it shall register with the company registration authority in accordance with the law and obtain a business license.

Measures for the examination and approval of branches of foreign companies shall be separately prescribed by the State Council.

Article 194 When a foreign company establishes a branch in China, it must appoint a representative or agent in charge of the branch in China and allocate to the branch funds appropriate to the business activities it is engaged in.

Where it is necessary to set a minimum amount for the operating funds of a branch of a foreign company, it shall be separately prescribed by the State Council.

Article 195 A branch of a foreign company shall indicate in its name the nationality and form of liability of the foreign company.

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

Article 196 A branch established in China by a foreign company does not have the status of a Chinese legal person.

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

Article 197 A branch of a foreign company established upon approval shall, in conducting business activities within the territory of China, abide by the laws of China and shall not harm the social and public interests of China, and its lawful rights and interests shall be protected by Chinese laws.

Article 198 When a foreign company revokes its branch within the territory of China, it must pay off its debts in accordance with the law and carry out liquidation in accordance with the provisions of this Law on company liquidation procedures. The property of its branches shall not be moved outside China before the debts are paid off.

Chapter XII Legal Liability

Article 199 Any company that, in violation of the provisions of this Law, falsely reports its registered capital, submits false materials or conceals important facts by other fraudulent means to obtain company registration shall be ordered by the company registration authority to make corrections, and the company that falsely reports its registered capital shall be imposed a fine of not less than 5% but not more than 15%; the company that submits false materials or conceals important facts by other fraudulent means shall be fined not less than 50,000 yuan but not less than 500,000 yuan; if the circumstances are serious, the company registration shall be revoked or the business license shall be revoked.

Article 200 If the promoters or shareholders of a company make false capital contributions, and fail to deliver or fail to deliver the currency or non-monetary property as capital contributions on time, the company registration authority shall order corrections and impose a fine of not less than 5% but not more than 15% the amount of false capital contributions.

Article 201 If the promoters or shareholders of a company withdraw their capital contributions after the establishment of the company, the company registration authority shall order them to make corrections and impose a fine of not less than 5% but not more than 15% the amount of funds withdrawn.

Article 202 If a company, in violation of the provisions of this Law, sets up an accounting book in addition to the statutory accounting books, the financial department of the people's government at or above the county level shall order it to make corrections and impose a fine of not less than 50,000 yuan but not more than 500,000 yuan.

Article 203 If a company makes false records or conceals important facts in the financial and accounting reports and other materials provided to the relevant competent departments in accordance with the law, the relevant competent departments shall impose a fine of not less than 30000 yuan and not more than 300000 yuan on the directly responsible person in charge and other directly responsible persons.

Article 204 if a company fails to withdraw the statutory provident fund in accordance with the provisions of this Law, the financial department of the people's government at or above the county level shall order it to make up the amount that should be withdrawn, and may impose a fine of not more than 200000 yuan on the company.

Article 205 If a company fails to notify or announce its creditors in accordance with the provisions of this Law when it merges, divides, reduces its registered capital or goes into liquidation, the company registration authority shall order it to make corrections and impose a fine of not less than 10,000 yuan but not more than 100,000 yuan on the company.

If a company conceals property during liquidation, makes false records on the balance sheet or property list, or distributes the company's property before paying off its debts, the company registration authority shall order it to make corrections, and impose a penalty on the company for concealing property or distributing the company's property before paying off the debts. A fine of not less than 5% and not more than 10% of the amount; a fine of not less than 10,000 yuan but not more than 100,000 yuan shall be imposed on the directly responsible for the person in charge and other persons.

Article 206 Where a company conducts business activities unrelated to liquidation during the liquidation period, the company registration authority shall give a warning and confiscate the illegal income.

Article 207 Where a liquidation group fails to submit a liquidation report to the company registration authority in accordance with this Law, or submits a liquidation report that conceals important facts or contains material omissions, the company registration authority shall order it to make corrections.

If a member of the liquidation group takes advantage of his power to practice favoritism, seek illegal income or misappropriate the company's property, the company registration authority shall order the return of the company's property, confiscate the illegal income, and may impose a fine of not less than one time but not more than five times the illegal income.

Article 208 Where an institution undertaking asset evaluation, capital verification or verification provides false materials, the company registration authority shall confiscate the illegal income and impose a fine of not less than one time and not more than five times the illegal income, and the relevant competent department may order the institution to suspend business, revoke the qualification certificate of the person directly responsible, and revoke the business license.

If an institution responsible for asset evaluation, capital verification or verification provides a report with major omissions due to negligence, the company registration authority shall order it to make corrections. If the circumstances are serious, it shall impose a fine of not less than one time but not more than five times the income earned, and the relevant competent department may order the institution to suspend business, revoke the qualification certificate of the person directly responsible, and revoke the business license.

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

Article 209 Where the company registration authority registers an application for registration that does not meet the conditions specified in this Law, or refuses to register an application for registration that meets the conditions specified in this Law, the person in charge directly responsible and other persons directly responsible shall be subject to administrative sanctions in accordance with the law.

Article 210 Where the superior department of the company registration authority orders the company registration authority to register the registration application that does not meet the conditions specified in this Law, or refuses to register the registration application that meets the conditions specified in this Law, or covers up the illegal registration, the directly responsible person in charge and other directly responsible persons shall be given administrative sanctions according to law.

Article 211 Whoever falsely uses the name of a limited liability company or a joint stock limited company without being registered as a limited liability company or a joint stock limited company according to law, or falsely uses the name of a branch of a limited liability company or a joint stock limited company without being registered as a limited liability company or a joint stock limited company according to law, the company registration authority shall order it to make corrections or ban it, and may concurrently impose a fine of not more than 100,000 yuan.

Article 212 If a company fails to start business for more than six months after its establishment without justifiable reasons, or suspends its business for more than six consecutive months after its opening, the company registration authority may revoke its business license.

If a company fails to register the change in accordance with the provisions of this Law when the company's registered items are changed, the company registration authority shall order it to register within a time limit; if it fails to register within the time limit, it shall be fined not less than 10,000 yuan but not more than 100,000 yuan.

Article 213 Where a foreign company, in violation of the provisions of this Law, establishes a branch within the territory of China without authorization, the company registration authority shall order it to make corrections or close down, and may also impose a fine of not less than 50,000 yuan but not more than 200,000 yuan.

Article 214 Where a company engages in serious illegal acts endangering national security or social public interests in the name of the company, its business license shall be revoked.

Article 215 If a company violates the provisions of this Law and shall bear civil liability for compensation and pay fines or fines, if its property is insufficient to pay, it shall first bear civil liability for compensation.

Article 216 Whoever violates the provisions of this Law and constitutes a crime shall be investigated for criminal responsibility according to law.

Chapter XIII Supplementary Provisions

Article 217 The meanings of the following terms used in this Law:

(I) 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 specified in the company's articles of association.

(II) 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 limited company; although the capital contribution or the proportion of shares held is less than 50%, the voting rights enjoyed by the capital contribution or the shares held are sufficient to have a significant impact on the resolutions of the shareholders' meeting or the general meeting of shareholders.

The actual controller of the (III) refers to the person who is not a shareholder of the company, but can actually control the company's behavior through investment relationship, agreement or other arrangement.

(IV) relationship refers to the relationship between the controlling shareholders, actual controllers, directors, supervisors and senior managers of the company and the enterprises directly or indirectly controlled by them, as well as other relationships that may lead to the transfer of interests of the company. However, state-controlled enterprises are not only related to each other because they are controlled by the state.

Article 218 This Law shall apply to limited liability companies and joint stock limited companies with foreign investment; where there are other provisions in the laws relating to foreign investment, such provisions shall apply.

Article 219 This Law shall enter into force as of January 1, 2006.