公司法全文（英文版）

ChapterTwo:IncorporationandOrganizationalStructureofaLimitedLiabilityCompany.6

SectionOneIncorporation.6

SectionTwoOrganizationalStructure.9

SectionThreeSpecialProvisionsonOne-PersonLimitedLiabilityCompanies.14

SectionFourSpecialProvisionsonWhollyState-ownedCompanies.15

ChapterThree:ShareTransferofaLimitedLiabilityCompany.16

ChapterFour:EstablishmentandOrganizationalStructureofaJointStockLimitedCompany.18

SectionOneEstablishment18

SectionTwoGeneralMeetingofShareholders.23

SectionThreeBoardofDirectorsandGeneralManager25

SectionFourBoardofSupervisors.27

ChapterFiveIssueandTransferofSharesofJointStockLimitedCompanies.28

SectionOneIssueofShares.28

SectionTwoAssignmentOfShares.31

ChapterSix:QualificationsandObligationsofDirectors,SupervisorsandSeniorOfficers.32

ChapterSeven:CompanyBonds.35

ChapterEight:FinancialandAccountingAffairsofCompany.36

ChapterNine:MergerandDivisionofCompany,IncreaseandDecreaseofRegisteredCapital38

ChapterTen:DissolutionandLiquidationofCompany.40

ChapterEleven:BranchofForeignCompany.42

ChapterTwelve:LegalLiabilities.43

ChapterThirteen:SupplementaryProvisions.47

ChapterOne:GeneralProvisions[page]

Article1

ThisLawisenactedinordertostandardizetheorganizationandactivitiesofcompanies,toprotectthelegitimaterightsandinterestsofcompanies,shareholdersandcreditors,tomaintainthesocio-economicorderandtopromotethedevelopmentofthesocialistmarketeconomy.

Article2

Article3

Acompanyisanenterpriselegalpersonthatshallenjoytherighttotheentireindependentpropertyofthelegalperson.Acompanyshallbeliableforitsdebtstotheextentofallitsassets.Inthecaseofalimitedliabilitycompany,shareholdersshallassumeliabilitytowardsthecompanytotheextentoftheirrespectivecapitalcontributions.Inthecaseofajointstocklimitedcompany,shareholdersshallassumeliabilitytowardsthecompanytotheextentoftheirrespectiveshareholdings.

Article4

Theshareholdersofacompanyshallenjoysuchrightsasbenefitingfromassetsofthecompany,makingmajordecisionsandselectingmanagerialpersonnelinaccordancewiththelaw.

Article5

Inconductingitsbusiness,acompanymustabidebylawsandadministrativerulesandregulations,observesocialmoralsandbusinessethics,conductbusinessesingoodfaith,subjectitselftothesupervisionofthegovernmentandthepublicandfulfillsocialresponsibilities.

Article6

Acompanyshallapplytothecompanyregistrationauthorityforestablishmentregistration.CompaniesmeetingtheconditionssetbythisLawshallberegisteredaslimitedliabilitycompaniesorjointstocklimitedcompanies;whilecompaniesfailingtomeettheconditionssetbythisLawshallnotberegisteredaslimitedliabilitycompaniesorjointstocklimitedcompanies.[page]

Wherelaws,administrativerulesandregulationsprovidethatincorporationofcompaniesmustbesubjecttoexaminationandapproval,theproceduresofexaminationandapprovalshallbecompletedaccordingtolawpriortotheregistrationofsuchcompanies.

Thepublicmayinquireaboutregistrationitemsfromthecompanyregistrationauthority.Thecompanyregistrationauthorityshallprovidesuchinquiryservice.

Article7

Thecompanyregistrationauthorityshallgrantregistrationandissueabusinesslicensetoacompanythatisestablishedinaccordancewiththelaw.Thedateoftheissuanceofthecompanybusinesslicenseshallbethedateoftheincorporationofthecompany.

Thebusinesslicenseshallspecifythenameanddomicileofthecompany,registeredcapital,paid-incapital,businessscope,thenameofthelegalrepresentative,etc.Intheeventofanychangetotheregistrationitemofthebusinesslicense,acompanyshallundergoalterationregistrationprocedureswiththecompanyregistrationauthorityinaccordancewiththelaw,afterwhichanewbusinesslicenseshallbeissuedtothecompany.

Article8

Article9

Ifalimitedliabilitycompanyistobeconvertedintoajointstocklimitedcompany,itshallsatisfytherequirementsforajointstocklimitedcompanystipulatedbythisLaw.Ifajointstocklimitedcompanyistobeconvertedintoalimitedliabilitycompany,itshallsatisfytherequirementsforalimitedliabilitycompanystipulatedbythisLaw.Wherealimitedliabilitycompanyisconvertedintoajointstocklimitedcompanyorviceversa,theclaimsanddebtsoftheoriginalcompanyshallbesucceededtobythecompanyintowhichitisconverted.[page]

Article10

Article11

Article12

Article13

Thelegalrepresentativeofacompanymayberepresentedbythechairman,executivedirectorormanagerofacompanyincompliancewithitsarticlesofassociationandregisteredinaccordancewiththelaw.Intheeventofanychangeofthelegalrepresentativeofacompany,suchchangeshallberegisteredinaccordancewiththelaw.

Article14

Acompanymayestablishbranches.Thecompany,inestablishingitsbranch(es),shallconductestablishmentregistrationprocedureswiththecompanyregistrationauthorityandobtainthebusinesslicense(s).Thebranchesshallnotpossessthestatusofenterpriselegalpersonsandwhosecivilliabilitiesshallbebornebythecompany.

Acompanymayestablishsubsidiaries,whichshallpossessthestatusofenterpriselegalpersons,andshallindependentlybearcivilliabilitiesinaccordancewiththelaw.

Article15

Acompanymayinvestinotherenterprises,however,unlessotherwisestipulatedbythelaw,thecompanymakingsuchinvestmentshallnotbearjointandseveralliabilityforthedebtsoftheenterpriseinwhichthecompanyinvests.[page]

Article16

Investmentsinotherenterprisesorprovisionsofsecuritybyacompanyshallbedeterminedbyitsboardofdirectors,shareholdersmeetingorgeneralmeetingofshareholdersincompliancewithitsarticlesofassociation.Wherethelimitoftheaggregateamountofinvestmentorsecurityextendedbyacompanyor,theamountofinvestmentorsecurityextendedineachcaseissetoutinthearticlesofassociation,theactualamountofinvestmentorsecurityshallnotexceedsuchlimit.Securityprovidedbyacompanytoitsshareholdersoractualcontrollershallbedeterminedbytheshareholdersmeetingorthegeneralmeetingofshareholdersofthecompany.

Theshareholdersdescribedintheprecedingparagraphortheshareholdersdominatedbytheactualcontrollerdescribedintheprecedingparagraphshallnotparticipateinthevotingprocessonthemattersdescribedintheprecedingparagraph.Thevoteonsuchmattersshallbeadoptedbymorethanhalfofalltheothershareholdersattendingthemeeting.

Article17

Companiesmustprotectthelawfulrightsandinterestsoftheirstaffandworkers,signlaborcontractswiththemandcoverthemwithsocialinsurancesinaccordancewiththelaw,andstrengthenlaborprotectionsoastoachievesafetyinproduction.

Companiesshallapplyvariousformstostrengthenprofessionaleducationandon-the-jobtrainingoftheirstaffandworkerssoastoimprovetheirskillsandcapabilities.

Article18

Companiesshall,throughthecongressoftheworkersandstaffmembersorotherforms,practicedemocraticmanagementinaccordancewiththeprovisionsoftheConstitutionandrelevantlaws.

Acompanyshallseekadvicesfromitstradeunionwhendiscussinganddecidinguponimportantissuesontherestructuringoroperationofthecompany,orformulatingimportantrulesandregulationsandshall,throughthecongressoftheworkersandstaffmembersorotherforms,seekadviceandsuggestionsfromitsstaffandworkers.

Article19

TheorganizationsoftheCommunistPartyofChinamaybeestablishedincompaniesandcarryouttheiractivitiesinaccordancewiththeConstitutionoftheCommunistPartyofChina.CompaniesshallprovidetheorganizationsoftheCommunistPartyofChinawithconditionsnecessaryforcarryingouttheiractivities.

Article20

Theshareholdersofacompanyshallexercisetheirshareholders’rightsincompliancewithlaws,administrativerulesandregulationsaswellasthearticlesofassociationofthecompany,shallnotabusetheirshareholders’rightstoinjuretheinterestsofthecompanyorothershareholders,ortakeadvantageofthecompany’sindependentstatusorthelimitedliabilityofshareholderstoinjuretheinterestsofthecompany’screditors.

Wheretheabuseofshareholders’rightscausesanylosstothecompanyorothershareholders,suchabusiveshareholdershallbeliableforcompensationinaccordancewiththelaw.

Whereshareholdersofacompanytakeadvantageofthecompany’sindependentstatusorthelimitedliabilityofshareholderstodisregarddebtsandseriouslyinjurestheinterestsofthecompany’screditors,suchshareholdersshallbearjointandseveralliabilityforthedebtsofthecompany.

Article21

Thecontrollingshareholders,actualcontrollers,directors,supervisorsorseniorofficersofacompanyshallnottakeadvantageoftheiraffiliationswithothersinanattempttoharmthecompany’sinterestsand,whereanylossesareincurredinviolationhereof,shallbeliableforcompensation.[page]

Article22

Anyresolutionagainstlawsandadministrativerulesandregulationsthatisadoptedbytheshareholdersmeeting,thegeneralmeetingofshareholdersortheboardofdirectorsofacompanyshallbenullandvoid.

Wheretheconveningofshareholdersmeeting,generalmeetingofshareholdersorboardofdirectorsofacompanyorthevotingmethodviolateslaws,administrativerulesandregulationsorthearticlesofassociationofthecompany,ortheresolutionthereofcontravenesthearticlesofassociationofthecompany,shareholdersmay,withinsixty(60)daysoftheresolution,applytothepeople’scourtforrevocation.

Whereshareholdersfilesuitinaccordancewiththeprovisionsoftheprecedingparagraph,apeople’scourtmay,atthecompany’srequest,ordertheshareholderstoproviderelevantsecurity.

Wherethecompanyhaseffectedalterationregistrationaccordingtotheresolutionofshareholdersmeeting,generalmeetingofshareholdersorboardofdirectors,thecompanyshall,afterthepeople’scourtdeclaressuchresolutionnullandvoidorrevokesthesame,shallapplytothecompanyregistrationauthorityforcancellationofitsalterationregistration.

ChapterTwo:IncorporationandOrganizationalStructureofaLimitedLiabilityCompany

SectionOneIncorporation

Article23

Thefollowingconditionsshallbefulfilledfortheincorporationofalimitedliabilitycompany:

(1)Thenumberofshareholdersconformstothestatutoryquorum;

(2)Thecapitalcontributionsoftheshareholdersreachthestatutoryminimumamountofcapital;

(3)Theshareholdershavejointlyformulatedthearticlesofassociationofthecompany;

(4)Thecompanyhasanameandanorganizationalstructureestablishedincompliancewiththerequirementsforalimitedliabilitycompany;and

(5)Thecompanyhasadomicile.[page]

Article24

Alimitedliabilitycompanyshallbeincorporatedbynotmorethanfifty(50)shareholders.

Article25

Thearticlesofassociationofalimitedliabilitycompanyshallspecifythefollowingparticulars:

(1)thenameanddomicileofthecompany;

(2)thescopeofbusinessofthecompany;

(3)theregisteredcapitalofthecompany;

(4)thenamesortitlesoftheshareholders;

(5)themethod,amountandtimeofcapitalcontributionsbytheshareholders;

(6)theorganizationofthecompany,itsmethodofcreation,functionsandpowersandthe

rulesofprocedure;

(7)thelegalrepresentativeofthecompany;

(8)otheritemswhichtheshareholdersdeemnecessarytobespecified.Shareholdersshallsignandexecutethearticleofassociationofthecompany.

Article26

Theregisteredcapitalofalimitedliabilitycompanyshallbetheamountofthepaid-upcapitalcontributionsofallitsshareholdersasregisteredwiththecompanyregistrationauthority.Theamountoftheinitialinvestmentcontributedbyallshareholdersshallnotbelowerthantwentypercent(20%)oftheregisteredcapitalortheminimumamountprescribedbythelaw,theremainingofwhichshallbefullypaidupwithintwoyearsoftheestablishmentofthecompany.Inthecaseofaninvestmentcompany,theremainingamountoftheregisteredcapitalmaybepaidupwithinfiveyearsoftheestablishmentofthecompany.TheminimumamountoftheregisteredcapitalofalimitedliabilitycompanyshallbeRMB30,000.Wherelawsandadministrativeregulationsprovideformorethantheminimumamount,suchprovisionsshallapply.

Article27

Exceptforassetsforbiddentobeusedascontributionbylawsandadministrativeregulations,ashareholdermaymakeitscapitalcontributionstoacompanyincurrencyorbycontributingsuchnon-currencypropertyasmaterialobjects,intellectualpropertyrightsandland-userightsthatcanbeevaluatedintheformofcurrencyandtransferredinaccordancewiththelaw.[page]

Thenon-currencypropertytobecontributedascapitalshallundergoanassetvaluationandverification,andshallnotbeovervaluedorundervalued.Wherethereareotherprovisionsoflawsandadministrativeregulationsonthevaluationandverificationofnon-currencyproperty,suchprovisionsshallapply.

Theamountofthecapitalcontributionsincurrencyshallnotbelowerthanthirtypercent(30%)oftheamountoftheregisteredcapitalofthelimitedliabilitycompany.

Article28

Eachshareholdershallmakeinfulltheamountofthecapitalcontributionsubscribedforunderthearticlesofassociationofthecompany.Whereashareholdermakesitscapitalcontributionincurrency,itshalldepositthefullamountofsuchcapitalcontributionincurrencyinthebankaccountopenedbythelimitedliabilitycompanytobeestablished.Whereashareholdermakesitscapitalcontributionintheformofnon-currencyproperty,thepropertyrightsthereinshallbetransferredinaccordancewithlegallyprescribedprocedures.

Shareholdersfailingtomakefullcapitalcontributionstheyhavesubscribedforinaccordancewiththeprecedingparagraphshall,theyshall,inadditiontomakingthecontributionsinfull,beliableforbreachofcontracttowardstheshareholderswhohavemadefullcapitalcontributions.

Article29

Afterallshareholdershavemadetheircapitalcontributionsinfull,suchcontributionsmustbeverifiedbyastatutorycapitalverificationinstitutionwhichshallissuecapitalverificationcertificates.

Article30

Aftertheinitialcapitalcontributionsoftheshareholdershavebeenverifiedbyastatutorycapitalverificationinstitution,applicationshallbemadetothecompanyregistrationauthorityforregistrationoftheincorporationofthecompanybyarepresentativedesignatedbyalltheshareholdersorbyanagentjointlyentrustedbythem,whoshallsubmitsuchdocumentsasanapplicationforregistration,thearticlesofassociationandthecapitalverificationcertificate.[page]

Article31

Where,aftertheincorporationofalimitedliabilitycompany,itisdiscoveredthattheactualvalueofthenon-currencypropertycontributedascapitalisnotablylessthanthevaluestatedinthearticlesofassociation,theshareholdersthatmadesuchcontributionsshallmakeupthedifference.Thosewhoareshareholdersatthetimeoftheincorporationofthecompanyshallbearjointandseveralliabilitytherefor.

Article32

Afteralimitedliabilitycompanyhasbeenincorporated,itshallissuecapitalcontributioncertificatestoitsshareholders.

Acapitalcontributioncertificatesshallspecifythefollowingitems:

(1)thenameofthecompany;

(2)theregistrationdateofthecompany;

(4)thenameortitleoftheshareholder,theamountanddateofitscapitalcontribution;

(5)theserialnumberofthecapitalcontributioncertificateandthedateofitsverificationandissuance.Acapitalcontributioncertificateshallbearthesealofthecompanyonit.

Article33

Alimitedliabilitycompanyshallpreparearosterofitsshareholderswiththefollowingitemstherein:

(1)thenamesortitlesanddomicilesoftheshareholders;

(2)theamountsofcapitalcontributionsoftheshareholders;and

(3)theserialnumbersofthecapitalcontributioncertificates.

Theshareholdersrecordedintherosterofshareholdersmayclaimandexercisetherightofshareholdersonthestrengthoftherosterofshareholders.

Thecompanyshallregisterthenamesofshareholdersandtheamountofcapitalcontributionsoftheshareholderswiththecompanyregistrationauthorityand,intheeventofanychangethereof,applyforalterationregistration.Unlessdulyregistered,theabove-mentioneditemsandanychangesthereofshallnotbeadefenseagainstathirdparty.[page]

Article34

Ashareholdershallhavetherighttoviewthearticlesofassociation,theminutesofshareholdersmeetings,resolutionsofboardofdirectorsandboardofsupervisorsandthefinancialandaccountingreportsofthecompany.

Article35

Unlessotherwiseagreeduponbyallshareholders,shareholdersshalldrawdividendsinproportiontotheiractualcapitalcontributionsand,whereacompanyincreasescapital,shallhavepriorityinsubscriptionfornewsharesinproportiontotheiractualcontributions.

Article36

Onceacompanyisregistered,itsshareholdersshallnotwithdrawtheircapitalcontributions.

SectionTwoOrganizationalStructure

Article37

Theshareholdersmeetingofalimitedliabilitycompanyshallbecomposedofalltheshareholders.TheshareholdersmeetingshallbetheorganofpowerofthecompanyandshallexerciseitsfunctionsandpowersinaccordancewiththisLaw.

Article38

Theshareholdersmeetingshallexercisethefollowingfunctionsandpowers:

(1)todecideonthebusinesspolicyandinvestmentplanofthecompany;

(2)toelectandrecalldirectorsandsupervisorswhosepostsarenottakenbytherepresentativesofthestaffandworkers,andtodecideonmattersconcerningtheremunerationofdirectorsandsupervisors;[page]

(3)toexamineandapprovereportsoftheboardofdirectors;

(4)toexamineandapprovereportsofthesupervisoryboardorsupervisors;

(5)toexamineandapprovetheannualfinancialbudgetplanandfinalaccountsplanofthecompany;

(6)toexamineandapproveplansforprofitdistributionofthecompanyandplansformakinguplosses;

(7)toadoptresolutionsontheincreaseorreductionoftheregisteredcapitalofthecompany;

(8)toadoptresolutionsontheissuanceofcompanybonds;

(9)toadoptresolutionsonmatterssuchasthemerger,division,transformation,dissolutionandliquidationofthecompany;

(10)toamendthearticlesofassociationofthecompany;

(11)toexerciseotherfunctionsandpowersprovidedforinthearticlesofassociation.

Whereaunanimousconsentonthemattersdescribedaboveisachievedinwritingbyshareholders,thecompanymaydirectlymakedecisionsthatshallbesignedandexecutedbyallshareholdersinsteadofconveningashareholdersmeeting.

Article39

ThefirstmeetingoftheshareholdersofacompanyshallbeconvenedandpresidedoverbytheshareholderwhohasmadethebiggestcapitalcontributiontothecompanyandshallexerciseitsfunctionsandpowersinaccordancewiththisLaw.

Article40

Shareholdersmeetingsshallbedividedintoregularmeetingsandinterimmeetings.Regularshareholdersmeetingsshallbeconvenedontimeasstipulatedbythearticlesofassociationofthecompany.Interimshareholdersmeetingsmaybeconveneduponproposalmadebyshareholdersrepresentingmorethanone-tenthofvotingrightsorbymorethanone-thirdofdirectors,orattherequestofboardofsupervisorsorthesupervisorsofacompanyabsentaboardofsupervisors.

Article41

Wherealimitedliabilitycompanyhasaboardofdirectors,itsshareholdersmeetingshallbeconvenedbytheboardofdirectorsandpresidedoverbythechairmanoftheboard.Wherethechairmanoftheboardisunabletoordoesnotperformhisfunction,themeetingshallbepresidedoverbyavice-chairman.Wherethevice-chairmanisunabletoordoesnotperformhisfunction,themeetingshallbepresidedoverbyadirectorjointlynominatedbymorethanhalfofthedirectors.[page]

Wherealimitedliabilitycompanydoesnotformaboardofdirectors,theshareholdersmeetingsshallbeconvenedandpresidedoverbytheexecutivedirector.

Wheretheboardofdirectorsorexecutivedirectorcannotordoesnotperformitsfunction,theshareholdersmeetingshallbeconvenedandpresidedoverbytheboardofsupervisorsorthesupervisorintheabsenceofaboardofsupervisors.Wheretheboardofsupervisorsorsupervisorcannotordoesnotperformitsfunction,themeetingshallbeconvenedandpresidedoverbyshareholdersrepresentingmorethanone-tenthofthevotingrights.

Article42

Allshareholdersshallbenotifiedfifteen(15)dayspriortotheconveningofashareholdersmeeting,unlessotherwisestipulatedbythearticlesofassociationoragreeduponbyallshareholders.

Theshareholdersmeetingshallprepareminutesregardingthedecisionsonmattersconsideredatthemeeting,whichshallbesignedbytheshareholderspresentatthemeeting.

Article43

Shareholdersshallexercisetheirvotingrightsattheshareholdersmeetinginproportiontotheircapitalcontributions,unlessotherwisestipulatedbythearticlesofassociation.

Article44

ExceptasprovidedforinthisLaw,therulesofdeliberationandvotingproceduresoftheshareholdersmeetingshallbestipulatedbythearticlesofassociationofthecompany.

Resolutionsoftheshareholdersmeetingontheincreaseorreductionoftheregisteredcapital,thedivision,merger,dissolution,ortransformationofthecompanymustbeadoptedbyshareholdersofthecompanyrepresentingtwo-thirdsormoreofthevotingrights.

Article45

ExceptasotherwiseprovidedforinArticle51ofthisLaw,alimitedliabilitycompanyshallhaveaboardofdirectors,whichshallbecomposedofthreetothirteenmembers.ThemembersoftheboardofdirectorsofalimitedliabilitycompanyinvestedinandestablishedbytwoormoreState-ownedenterprises,orbytwoormoreotherState-ownedinvestmententitiesshallincluderepresentativesofthestaffandworkersofthecompany.Themembersoftheboardofdirectorsofotherlimitedliabilitycompaniesmayalsoincluderepresentativesofthestaffandworkers.Suchrepresentativesofthestaffandworkersshallbedemocraticallyelectedbytheworkersandstaffmembersofthecompanythroughthecongressesorassembliesofthestaffandworkersorotherforms.Aboardofdirectorsshallhaveachairmanandmayhaveavice-chairman.Themethodforthecreationofthechairmanandvice-chairmenshallbestipulatedinthearticlesofassociationofthecompany.[page]

Article46

Thetermofthedirectorsshallbeprescribedbythearticlesofassociation,providedthateachtermmaynotexceedthree(3)years.Adirectormaycontinuetoservehispostifheisre-electedupontheexpirationofhisterm.Whereanewelectisnotyetavailableuponexpirationofadirector’sterm,orthenumberofthedirectorsontheboardislessthanthequorumduetotheresignationofadirectorwithinhisterm,suchdirector,beforethenewelecttakeshisoffice,shallcontinuetheperformanceofhisdutiesinaccordancewithlaws,administrativeregulationsandthearticlesorassociation.

Article47

Theboardofdirectorsisaccountabletotheshareholdersmeetingandshallexercisethefollowingpowers:

(1)beingresponsibleforconveningshareholdersmeetingsandpresentingreportsthereto;

(2)implementingresolutionsadoptedbytheshareholdersmeeting;

(4)preparingannualfinancialbudgetplansandfinalaccountingplansofthecompany;

(5)preparingprofitdistributionplansandplanstocovercompanylosses;

(6)preparingplansforincreasingorreducingregisteredcapitalofthecompanyorissuingcompanybonds;

(7)draftingplansformerger,division,changeofcorporateformordissolutionofthecompany;

(10)formulatingthebasicmanagementschemeofthecompany;

(11)exercisingotherpowersstipulatedbythearticlesofassociation.

Article48

Ameetingoftheboardofdirectorsshallbeconvenedandpresidedoverbythechairman.Wherethechairmanisunabletoordoesnotperformhisduties,themeetingshallbeconvenedandpresidedoverbythevice-chairman.Wherethevice-chairmanisunabletoordoesnotperformhisduties,themeetingshallbeconvenedandpresidedoverbyadirectorjointlynominatedbymorethanhalfofthedirectors.[page]

Article49

ExceptasotherwiseprovidedforinthisLaw,therulesofdeliberationandvotingproceduresatthemeetingofboardofdirectorsshallbestipulatedbythearticlesofassociationofthecompany.

Theboardshallprepareminutesrelatingtothedecisionsonmattersconsideredatthemeeting,whichshallbesignedbythedirectorspresentatthemeeting.

Inthevotingprocess,onedirectorshallrepresentonevote.

Article50

Alimitedliabilitycompanyshallhaveageneralmanager,tobeappointedorremovedbytheboardofdirectors.Thegeneralmanagerisaccountabletotheboardandshallexercisethefollowingpowers:

(2)organizingtheimplementationofannualoperatingplansandinvestmentprogramsofthecompany;

(4)preparingthebasicmanagementschemeofthecompany;

(5)formulatingdetailedcompanyrules;

(6)recommendingtheappointmentorremovalofadeputymanagerandtheofficerinchargeoffinance;

(7)appointingandremovingofficersofthecompanyotherthanthosetobeappointedorremovedbytheboardofdirectors;

(8)exercisingotherpowersdelegatedbytheboardofdirectors.

Wherethearticlesofassociationstipulateotherwiseinrespectofthemanager’spowers,suchstipulationsshallprevail.Thegeneralmanagershallbepresentatboardmeetings.

Article51

Asmall-scaledlimitedliabilitycompanyoralimitedliabilitycompanywithonlyafewshareholdersmayhaveanexecutivedirectorwithoutestablishingaboardofdirectors.Theexecutivedirectormayserveconcurrentlyasthegeneralmanagerofthecompany.

Thepowersoftheexecutivedirectorshallbeprescribedinthearticlesofassociation.[page]

Article52

Adirectorandaseniorofficerofthecompanyshallnotserveconcurrentlyasasupervisor.

Article53

Eachtermofasupervisorshallbethree(3)years,andasupervisormaycontinuetoservehispostuponexpirationofhistermifheisre-elected.

Whereanewelectisnotyetavailableuponexpirationofasupervisor’sterm,orthenumberofthesupervisorsontheboardislessthanthequorumduetotheresignationofasupervisorwithinhisterm,suchsupervisor,beforethenewelecttakeshisoffice,shallcontinuetheperformanceofhisdutiesinaccordancewithlaws,administrativeregulationsandthearticlesorassociation.

Article54

Theboardofsupervisorsorthesupervisor,asthecasemaybe,shallexercisethefollowingauthorities:[page]

(1)reviewingthefinancialaffairsofthecompany;

(2)monitoringtheactsofthedirectorsortheseniorofficersinthecourseofperformanceoftheirduties,andproposerecallofthedirectororseniorofficerinviolationoflaws,administrativeregulationsorthearticlesofassociation;

(3)requiringthedirectorsortheseniorofficerstomakerectificationwhenanyactthereofcausesharmtocompanyinterests;

(4)proposingforinterimmeetingsofshareholdersmeetings,conveneandpresideoverthemeetingwhentheboardofdirectorsdoesnotperformitsfunctiontoconveneandpresideoverashareholdersmeetingassetforthinthisLaw;

(5)submittingproposalsattheshareholdersmeeting;

(6)filingsuitagainstthedirectorsorseniorofficersofthecompanyinaccordancewiththeprovisionsofArticle152inthisLaw;

(7)exercisingotherauthoritiesprescribedbythearticlesofassociation.

Article55

Thesupervisorsmayattendboardmeetings,presentinquiryorproposalwithregardstotheissuestobedeterminedbytheboardofdirectors.

Theboardofsupervisorsorthesupervisorsofacompanythatdoesnothavetheboardmayconductinvestigationsupondiscoveryofanyunusualoperationsofthecompanyand,wherenecessary,engageanaccountingfirmtoassistinsuchinvestigationsattheexpenseofthecompany.

Article56

Theboardofsupervisorsshallhaveameetingatleastonceayear.Aninterimmeetingmaybeconvenedattherequestofsupervisors.

ExceptasprovidedforinthisLaw,therulesofdeliberationandvotingproceduresatthemeetingofboardofdirectorsshallbestipulatedbythearticlesofassociationofthecompany.

Theresolutionoftheboardofsupervisorsshallbeadoptedbymorethanhalfofallthesupervisors.Theboardshallprepareminutesrelatingtothedecisionsonmattersconsideredatthemeeting,whichshallbesignedbythesupervisorspresentatthemeeting.[page]

Article57

Reasonableexpensesnecessaryfortheboardofsupervisorsorsupervisorsofacompanythatdoesnothavetheboardtoperformtheirdutiesshallbebornebythecompany.

SectionThreeSpecialProvisionsonOne-PersonLimitedLiabilityCompanies

Article58

Theprovisionsunderthissectionshallgoverntheformationandtheorganizationalstructureofone-personlimitedliabilitycompanies.Wheretherearemattersthatarenotcoveredbythissection,theprovisionsofthefirsttwosectionsunderChapterOneshallapply.

Aone-personlimitedliabilitycompanyreferredtohereinmeansalimitedliabilitycompanywithasoleshareholderofeitheranaturalpersonoralegalperson.

Article59

Theminimumamountoftheregisteredcapitalofaone-personlimitedliabilitycompanyshallbeRMB100,000whichmustbefullypaidatthetimeofincorporation.

Naturalpersonsarepermittedtosetuponlyonesuchcompanyandthatcompanyisnotallowedtoinvestinotherone-personcompanies.

Article60

Inapplyingforregistrationofaone-personlimitedliabilitycompany,theproposedcompanyshallindicatewhethertheinvestorisanaturalpersonoralegalperson,andspecifyitinitsbusinesslicense.

Article61

Thearticlesofassociationofaone-personlimitedliabilitycompanyshallbeformulatedbyitsshareholder.

Article62

Aone-personlimitedliabilitycompanydoesnothaveshareholdersmeetings.TheshareholdershallmakethedecisionsetforthinArticle38(1)inwrittenform,signandmaintainitatthecompany’spremises.

Article63

Aone-personlimitedliabilitycompanyshallprepareitsfinancialandaccountingreportsattheendofeachfiscalyear,whichshallbereviewedbyanaccountingfirm.

Article64

Wheretheshareholderofaone-personlimitedliabilitycompanycannotprovethatthecompany’sassetsisindependentfromhisownproperty,suchshareholdershallbearjointandseveralliabilityforthedebtsofthecompany.[page]

SectionFourSpecialProvisionsonWhollyState-ownedCompanies

Article65

Theprovisionsunderthissectionshallgoverntheformationandtheorganizationalstructureofwhollystate-ownedcompanies.Wheretherearemattersthatarenotcoveredbythissection,theprovisionsofthefirsttwosectionsunderChapterOneshallapply.

Awhollystate-ownedcompanyreferredtohereinmeansalimitedliabilitycompanyestablishedthroughtheState’ssoleinvestmentbythestate-ownedassetssupervisionandadministrationauthorityentrustedbytheStateCouncilorlocalpeople’sgovernmenttoperformthecapitalcontributionfunctions.

Article66

Thearticlesofassociationofawhollystate-ownedcompanymaybeformulatedbythestate-ownedassetssupervisionandadministrationauthorityormaybepreparedbyitsboardofdirectorsandsubmittedtothestate-ownedassetssupervisionandadministrationauthorityforapproval.

Article67

Awhollystate-ownedcompanydoesnothaveshareholdersmeetings,andthestate-ownedassetssupervisionandadministrationauthorityshallexercisetheauthoritiesoftheshareholdersmeeting.Thestate-ownedassetssupervisionandadministrationauthoritymayauthorizetheboardofdirectorstoexercisepartoftheauthoritiesoftheshareholdersmeetingtodecideonmajorissuesofthecompany,providedthatmatterssuchasmerger,divisionordissolutionofthecompany,capitalincreaseorreductionbythecompany,andissueofcompanybondsmustbedecidedbythestate-ownedassetssupervisionandadministrationauthority.Themerger,division,dissolutionorapplicationforbankruptcyofkeywhollystate-ownedcompaniesshall,afterexaminationandverificationbythestate-ownedassetssupervisionandadministrationauthority,besubmittedtothepeople’sgovernmentatthesamelevelforapproval.Thekeywhollystate-ownedcompaniesreferredtohereinshallbedefinedinaccordancewiththeprovisionsoftheStateCouncil.[page]

Article68

Awhollystate-ownedcompanyshallhaveaboardofdirectors,whichshallexerciseitspowersandperformitsdutiesinaccordancewiththeprovisionsofArticle47andArticle67hereof.Thetermofthedirectorsshallnotexceedthree(3)years.Thereshallberepresentativesofthestaffandworkersontheboard.Themembersoftheboardshallbedesignatedbythestate-ownedassetssupervisionandadministrationauthority.However,representativesofthestaffandworkersontheboardshallbedemocraticallyelectedthroughthecongressesoftheworkersandstaffmembers.Theboardofdirectorsshallhaveachairmanandmayhaveavice-chairman.Thechairmanandvice-chairmanshallbeappointedbythestate-ownedassetssupervisionandadministrationauthorityfromamongtheboardmembers.

Article69

Awhollystate-ownedcompanyshallhaveageneralmanager,tobeappointedorremovedbytheboardofdirectors.ThegeneralmanagershallexercisehispowersandperformhisdutiesinaccordancewiththeprovisionsofArticle50hereof.Withtheapprovalofthestate-ownedassetssupervisionandadministrationauthority,aboardmembermayserveconcurrentlyasthegeneralmanager.

Article70

Absentapprovalbythestate-ownedassetssupervisionandadministrationauthority,thechairman,vice-chairman,adirector,oraseniorofficermaynotserveconcurrentlyforanyotherlimitedliabilitycompany,jointstocklimitedcompanyoranyotherbusinessorganization.

Article71

Theboardofsupervisorsofawhollystate-ownedcompanyshallhavenolessthanfive(5)members,andthenumberofthestaffandworker’srepresentativesontheboardshallbenolessthanonethirdoftheboardmembers,thespecificpercentageofwhichshallbedeterminedinthearticlesofassociation.

Thesupervisorsshallbedesignatedbythestate-ownedassetssupervisionandadministrationauthority,however,thestaffandworker’srepresentativesontheboardshallbedemocraticallyelectedthroughthecongressesofworkersandstaffmembers.Thechairmanoftheboardofsupervisorsshallbeappointedbythestate-ownedassetssupervisionandadministrationauthorityfromamongtheboardmembers.TheboardofsupervisorsshallexercisethepowersprescribedinArticle54(1),(2)and(3)hereofandotherpowersstipulatedbytheStateCouncil.[page]

ChapterThree:ShareTransferofaLimitedLiabilityCompany

Article72

Shareholdersofalimitedliabilitycompanymaytransferinwholeorparttheirrespectivesharesamongstthemselves.

Whereashareholdertransfershissharestoapersonotherthanashareholder,theconsentofmorethanhalfofallshareholdersshallberequired.Theshareholderwhointendstotransferhissharesshallnotifytheothershareholdersinwritingandseektheirapproval.Failurebythoseshareholderstomakeanyresponsewithinthirty(30)daysofthereceiptofthewrittennoticeshallbedeemedtobetheirconsenttosuchtransfer.Wheremorethanhalfoftheothershareholdersdonotconsenttothetransfer,suchshareholdersshallpurchasethesharestobetransferred.Failurebythoseshareholderstomakesuchpurchaseshallbedeemedtobetheirconsenttosuchtransfer.Wheretheshareholdersconsenttothesharetransfer,othershareholdersshallhavethepreemptiverighttopurchasethesharestobetransferredonequaltermsandconditions.Twoormoreoftheshareholdersexercisingthepreemptiverightofpurchaseshallnegotiateanddeterminetheproportionofthesharestobepurchasedrespectively.Failingsuch,thesharesshallbepurchasedinproportiontotheircapitalcontributionsatthetimeofsuchtransfer.

Wherethearticlesofassociationstipulateotherwise,suchstipulationsshallapply.

Article73

Thepeople’scourt,wherethesharesheldbyashareholderistransferredthroughenforcementproceduresprescribedbylaw,shallinformthecompanyandallofitsshareholders.Othershareholdersshallhavethepreemptiverighttopurchasesuchsharesonequaltermsandconditions.Failurebythoseshareholderstoexercisetherightoffirstrefusalwithintwenty(20)daysofthedateofcourtnoticeshallbedeemedtobeawaiverofthepreemptiverightofpurchase.

Article74

Thecompany,afterthesharetransferiscompletedpursuanttoArticle72andArticle73hereof,shallcancelthecapitalcontributioncertificateoftheoriginalshareholder,issuenewcertificatetothenewshareholderand,amendtherecordoftheshareholderandhiscapitalcontributioninthearticlesofassociationandtherosterofshareholders.Suchamendmentstothearticlesofassociationneednotbevotedforbyshareholdersmeetings.[page]

Article75

Theshareholdervotingagainstthedecisionoftheshareholdersmeetinginrespectofanyoneofthefollowingcircumstancesmayrequestthecompanytopurchasehissharesatreasonableprices:

(1)thecompanywillnotdistributedividendsforfiveconsecutiveyearsthoughthecompanyhasmadeprofitovertheseyearsandhasmetthedistributionrequirementsprescribedinthisLaw;

(2)intheeventofmerger,divisionorassignmentofthecompany’smajorassets;

(3)intheeventofexpiryofthecompanyoranyothercausesfordissolutionprescribedinthearticlesofassociation,theshareholdersmeetinghasadoptedaresolutiontoamendthearticlesofassociationtorenewthecompany.

Wheretheshareholdercannotreachasharepurchaseagreementwiththecompanywithinsixty(60)daysofthedateoftheresolution,theshareholdermayfilesuittothepeople’scourtwithinninety(90)daysofthedateoftheresolution.

Article76

Whereanaturalpersonshareholderdeceases,hisshareholder’sstatusmaybeinheritedbyhislegalheirunlessotherwisestipulatedinthearticlesofassociation.

ChapterFour:EstablishmentandOrganizationalStructureofaJointStockLimitedCompany

SectionOneEstablishment

Article77

Theestablishmentofajointstocklimitedcompanyissubjecttothefollowingconditions:

(1)Thenumberofsponsorsmeetslegalrequirement;

(2)Theamountofcapitalstockssubscribedforbythesponsorsandpubliclyplacedreachesthelegally-prescribedminimumcapitallevel;

(3)Theissueofitssharesandthepreparationforitsestablishmentcomplywiththelaw;

(4)Thesponsorspreparethearticlesofassociation,andsucharticlesofassociationofacompanyestablishedbypublicshareoffershallbeadoptedbytheestablishmentmeeting;

(5)Thereisacompanyname,andtheorganscomplyingwiththerequirementsforajointstocklimitedcompanyareestablished;[page]

(6)Thecompanyhasadomicile.

Article78

Ajointstocklimitedcompanymaybeestablishedeitherbysponsorshiporpublicshareoffer.

Establishmentbysponsorshipmeansestablishmentofthecompanythroughsubscriptionbythesponsorsforallthesharestobeissuedbythecompany.

Establishmentbypublicshareoffermeansestablishmentofthecompanythroughsubscriptionbysponsorsforpartofthesharestobeissuedbythecompany,andpublicortargetedplacementoftheremainingshares.

Article79

Inordertoestablishajointstocklimitedcompany,thereshallbenotfewerthantwobutnomorethantwohundredsponsors,halfofwhomshallbedomiciledinChina.

Article80

Sponsorsofajointstocklimitedcompanyshallberesponsibleforthepreparationoftheestablishmentofthecompanyandenterintoasponsor’sagreementtoclarifytherightsandobligationsduringtheincorporationofthecompany.

Article81

Theregisteredcapitalofajointstocklimitedcompanyestablishedbypublicshareoffershallbethetotalamountofsharecapitalsubscribedforbyallthesponsorsandregisteredwiththecompanyregistrationauthority.Theinitialcapitalcontributionofallthesponsorsshallnotbelessthantwentypercent(20%)oftheregisteredcapital,theremainingofwhichshallbepaidinfullwithintwo(2)yearsoftheestablishmentofthecompany.Intheeventofaninvestmentcompany,theremainingpartoftheregisteredcapitalmaybefullypaidwithinfive(5)yearsoftheestablishmentofthecompany.Priortoafullcontributiontotheregisteredcapital,sponsorsshallnotofferthesharestoothers.

Theregisteredcapitalofajointstocklimitedcompanyestablishedbysponsorshipshallbetheactualtotalamountofsharecapitalthatispaidupandregisteredwiththecompanyregistrationauthority.TheminimumamountoftheregisteredcapitalofajointstocklimitedcompanyshallbeRMB5,000,000.Wherethereisahigherleveloftheminimumamountstipulatedbylawsandadministrativeregulations,suchstipulationsshallapply.[page]

Article82

Thearticlesofassociationofajointstocklimitedcompanyshallsetforththefollowing:

(1)itsnameanddomicile;

(2)itsbusinessscope;

(3)themethodforitsestablishment;

(4)thetotalnumberofsharesofthecompany,thevalueofeachshare,andtheregisteredcapitalofthecompany;

(5)thenamesofthesponsors,thenumberofsharestheyhavesubscribedfor,theformandtimeofcapitalcontribution;

(6)thecompositionoftheboardofdirectors,itsauthorities,term,andrulesofconductingbusiness;

(7)itslegalrepresentative;

(8)thecompositionoftheboardofsupervisors,itsauthorities,term,andrulesofconductingbusiness;

(9)themethodforcompanyprofitdistribution;

(10)thecausesforitsdissolutionandthemethodforitsliquidation;

(11)themethodforgivingnoticeandmakingpublicannouncement;

(12)othermatterswhichthegeneralmeetingofshareholdersdeemsnecessarytoprovidefor.

Article83

TheprovisionsofArticle27hereinshallapplytotheformofsponsor’scapitalcontribution.

Article84

Intheeventofestablishingajointstocklimitedcompanybysponsorship,thesponsorsshallfullysubscribeinwritingforthesharestobeissuedasprescribedinthearticlesofassociation.Intheeventofalumpsumpayment,theinvestmentshallbefullypaidupinduetime.Intheeventofpaymentininstallments,theinitialcontributionshallbepaidupinduetime.Intheeventofcontributionsinformofnon-currencyproperty,thepropertyrightsthereinshallbetransferredinaccordancewithlegallyprescribedprocedures.

Sponsorsfailingtomakethecapitalcontributionpursuanttotheprecedingparagraphshallbearthebreachliabilityinaccordancewiththesponsor’sagreement.

Upontheinitialcontributionofthesharecapitalwhichthesponsorshavesubscribedfor,theyshallelectmemberstotheboardofdirectorsandtheboardofsupervisors,andtheboardofdirectorsshallapplyforestablishmentregistrationbysubmittingthearticlesofassociation,thecapitalverificationcertificateissuedbyalegallyestablishedcapitalinspectionorganizationandotherdocumentsrequiredbylawsandadministrativeregulationstothecompanyregistrationauthority.[page]

Article85

Inthecaseofestablishingajointstocklimitedcompanybypublicshareoffer,thesharessubscribedforbythesponsorsshallbenotlessthanthirtyfivepercent(35%)ofthetotalsharesofthecompany.Wherelawsandadministrativeregulationsstipulateotherwise,suchstipulationsshallapply.

Article86

Inapublicshareoffer,thesponsorsshallmaketheprospectusavailabletothepublicandpreparethesharesubscriptionform.ThesharesubscriptionformshallcontaintheitemslistedinArticle87,andasubscribershallfillinthefollowing:thenumberofsharessubscribedfor,theamountofshareproceeds,andhisorherdomicile,andshallsignorimpresshischopontheform.Asubscribershallpaytheshareproceedsaccordingtothenumberofshareshehassubscribedfor.

Article87

Theprospectusshallbeaccompaniedwiththearticlesofassociationpreparedbythesponsors,andshallsetforththefollowing:

(1)thenumberofsharessubscribedforbythesponsors;

(2)theparvalueandissuingpriceofeachshare;

(3)thetotalnumberofbearersharecertificatesissued;

(4)thepurposeofthefundraised;

(5)therightsandobligationsofthesubscribers;

(6)thecommencingtimeandexpirationtimeoftheshareoffer,andastatementthatintheeventtheshareshavenotbeplacedinfullupontheexpirationtime,thesubscribersmayrevoketheirsharesubscriptions.

Article88

Article89

Whenconductingpublicshareoffer,thesponsorsshallexecuteanagreementwithabankfordepositofshareproceeds.

Thedepositorybankshallcollectandholdtheshareproceedsinaccordancewiththeagreement,andissuereceiptstosubscriberswhohavepaidtheirshareproceeds,andisobligatedtoprovidetotherelevantauthorityacertificateforreceiptofshareproceeds.[page]

Article90

Aftertheproceedsfromissueofthesharesarepaidinfull,thesharecapitalshallbeverifiedbyalegally-prescribedcapitalverificationinstitutionandacertificateshallbeissuedthereby.Withinthirty(30)days,thesponsorsshallconveneandpresideovertheestablishmentmeeting,whichiscomposedofthesubscribers.

Iftheissuedsharesarenotfullyplaceduponexpirationofthetimelimitprescribedintheprospectus,orthesponsorsfailtoholdtheestablishmentmeetingwithinthirty(30)daysoffullpaymentoftheproceedsfromissueoftheshares,thesubscribersmaydemandthatthesponsorsreturntheshareproceeds.

Article91

Thesponsorsshallnotifyeachsubscriberofthedateoftheestablishmentmeetingormakeapublicannouncementforsuchmeetingfifteen(15)daysinadvance.Theestablishmentmeetingmaynotbeheldunlessattendedbysubscribersrepresentingatleasthalfoftheshares.

Theestablishmentmeetingshallexercisethefollowingauthorities:

(1)consideringthereportonpre-establishmentactivitiespreparedbythesponsors;

(2)adoptingthearticlesofassociation;

(3)electingmembersoftheboardofdirectors;

(4)electingmembersoftheboardofsupervisors;

(5)verifyingexpensesincurredfortheestablishmentofthecompany;

(6)verifyingthevalueoftheassetscontributedbythesponsorsinlieuofshareproceeds;

Aresolutionadoptedattheestablishmentmeetingonanyofthemattersmentionedintheprecedingparagraphrequiresaffirmativevotesbysubscriberspresentatthemeetingrepresentingmorethanhalfofthevotingrights.

Article92

Uponpaymentoftheshareproceedsordeliveryoftheitemsascontributionofsharecapitalinlieuofshareproceeds,thesponsorsandsubscribersmaynotwithdrawtheirsharecapital,exceptwherethesharesissuedarenotfullyplacedintime,thesponsorsfailtoholdtheestablishmentmeetingintime,ortheestablishmentmeetingadoptsaresolutionnottoestablishthecompany.[page]

Article93

Withinthirty(30)daysofthecompletionoftheestablishmentmeeting,theboardofdirectorsshallapplyforestablishmentregistrationbysubmittingtothecompanyregistrationauthoritythefollowing:

(1)thecompanyregistrationapplication;

(2)theminutesoftheestablishmentmeeting;

(3)thearticlesofassociation;

(4)thecapitalverificationcertificate;

(5)theengagementlettersandidentitycertificatesofthelegalrepresentative,directorsandsupervisors;

(6)thelegalperson’squalificationcertificateofsponsorsoridentitycertificateofnaturalpersons;

(7)thecompany’scertificateofdomicile.

TheverificationdocumentsissuedbythesecuritiesregulatorydepartmentundertheStateCouncilshallbesubmittedtothecompanyregistrationauthorityintheeventofpublicshareofferbyajointstocklimitedcompanyestablishedbypublicshareoffer.

Article94

Sponsorsfailingtocontributeinfullaftertheestablishmentofajointstocklimitedcompanyshallmakeuptherestofthecontribution.Othersponsorsshallbearjointandseveralliabilityforsuchcontribution.

Wheretheactualvalueofthenon-currencypropertycontribution,aftertheestablishmentofajointstocklimitedcompany,isfoundtobeobviouslylowerthantheamountprescribedinthearticlesofassociationofthecompany,thesponsormakingsuchcontributionshallmakeupthebalanceandothersponsorsshallbearjointandseveralliabilitytherefor.

Article95

Thesponsorsofajointstocklimitedcompanyshallbearliabilitiesasfollows:

(1)intheeventoffailuretoestablishthecompany,beingjointlyandseverallyliableforthedebtsandexpensesincurredasaresultofthepre-establishmentactivities;

(2)intheeventoffailuretoestablishthecompany,beingjointlyandseverallyliableforthereturnofshareproceedspaidbythesubscribers,togetherwiththeinterestthereonasiftheyhavebeendepositedinabankforalikeperiod.[page]

Article96

Article97

Article98

SectionTwoGeneralMeetingofShareholders

Article99

Article100

TheprovisionssetforthinArticle38(2)withregardstothefunctionsoftheshareholdersmeetingofalimitedliabilitycompanyshallapplytothegeneralmeetingofshareholdersofajointstocklimitedcompany.

Article101

Thegeneralmeetingofshareholdersshallholdanannualmeetingeachyear.Aninterimgeneralmeetingoftheshareholdersshallbeheldwithintwo(2)monthsupontheoccurrenceofanyofthefollowingcircumstances:[page]

(1)Thenumberofdirectorsfallsbelowthenumberprescribedhereinorbelowtwo-thirdsofthenumberprescribedinthearticlesofassociation;

(4)Theboardofdirectorsdeemsnecessary;

(5)Theboardofsupervisorsproposesforsuchameeting;

(6)Othercircumstancesprovidedforinthearticlesofassociation.

Article102

Ageneralmeetingofshareholdersshallbeconvenedbytheboardofdirectorsandshallbepresidedoverbythechairmanoftheboard.Wherethechairmanisunabletoordoesnotperformhisduties,themeetingshallbepresidedoverbythevice-chairman.Wherethevicechairmanisunabletoordoesnotperformhisduties,themeetingshallbepresidedoverbyadirectorjointlyappointedbyamajorityofallthedirectors.

Wheretheboardofdirectorsisunabletoordoesnotperformthedutiestoconveneageneralmeetingofshareholders,themeetingshallbecalledandpresidedoverbytheboardofsupervisorsinatimelymanner.Wheretheboardofsupervisorsisunabletoordoesnotperformthedutiestocallandpresideoverageneralmeetingofshareholders,theshareholdersindividuallyorjointlyholdingtenpercent(10%)ofthesharesofthecompanyforconsecutiveninety(90)daysormoremay,atitsowndiscretion,conveneandpresideoverageneralmeetingofshareholders.

Article103

Inordertoholdageneralmeetingofshareholders,noticeconcerningthetime,venueandmatterstobeconsideredatthemeetingshallbegiventoeachshareholdertwentydaysinadvance.Intheeventofaninterimmeetingofshareholders,thenoticemaybegivenfifteendaysinadvance.Wherethecompanyhasissuedbearersharecertificates,apublicnoticeconcerningthetime,venueandmatterstobeconsideredatthemeetingshallbemadethirtydayspriortothemeeting.[page]

Shareholdersindividuallyorjointlyholdingthreepercent(3%)ofthesharesofthecompanymay,tendayspriortothegeneralmeetingofshareholders,submitatemporarywrittenproposaltotheboardofdirectors.Theboardofdirectorsshall,withintwodaysafterreceiptoftheproposal,informothershareholdersandsubmittheproposaltothegeneralmeetingofshareholdersfordeliberation.Theitemscontainedintheproposalshallfallwithinthescopeofpowersexercisedbythegeneralmeetingofshareholdersandcleartopicandspecificmatterstobeconsideredshallbeincluded.Thegeneralmeetingofshareholdersshallnotdecideonanymattersthatarenotspecifiedinaforesaidnotices.Wheretheholdersofbearersharesattendthegeneralmeetingofshareholders,theyshalldeposittheshareswiththecompanyfive(5)daysearlierbeforethedateofthemeetinguptilltheclosingdateofthemeeting.

Article104

Whenashareholderattendsthegeneralmeetingofshareholders,eachshareheholdsisentitledtoonevote.However,theshareheldbythecompanyitselfshallnothavethevotingright.Aresolutionadoptedbythegeneralmeetingofshareholdersrequiresaffirmativevotesbyamajorityofthevotesheldbyshareholdersattendingthemeeting.Theresolutionwithregardstoamendmenttothearticlesofassociation,increaseordecreaseofregisteredcapital,merger,divisionordissolutionofthecompanyorchangeoftheformofthecompanyrequiresaffirmativevotesbyatleasttwo-thirdsofthevotesheldbyshareholdersattendingthemeeting.

Article105

WhereitisstipulatedinthisLaworthearticlesofassociationthattheassignmentorreceiptofthecompany’smajorassetsorprovisionofsecurityshallbedeterminedatthegeneralmeetingofshareholders,theboardofdirectorsshall,inatimelymanner,convenethegeneralmeetingofshareholdersthatwillvoteonaforesaidmatters.

Article106[page]

Thegeneralmeetingofshareholdersshalladoptaccumulativevotingsystemwhenvotingontheelectionofdirectorsorsupervisorsinaccordancewiththearticlesofassociationortheresolutionadoptedbytheshareholders’generalmeeting.Theaccumulativevotingsystemreferredtohereinmeansthatintheelectionofthedirectorsorsupervisorsatthegeneralmeeting,thenumberofvotesattachedtoeachshareheldbya

shareholdershallbeequaltothenumberofcandidates.Ashareholdercanmultiplyhisvotingsharesbythenumberofcandidatesandvotethemallforonepersonfordirectororsupervisor.

Article107

Ashareholdermayattendageneralmeetingofshareholdersbyproxy,theproxyholdershallpresenttheproxystatementissuedbytheshareholdertothecompany,andshallexercisehisvotingrightstotheextentauthorizedbytheproxy.

Article108

Thegeneralmeetingofshareholdersshallprepareminutesregardingthedecisionsonmattersconsideredatthemeeting,whichshallbesignedbythechairmanofthemeetinganddirectorsattendingthemeeting.Theminutesshallbemaintainedtogetherwiththerecordcontainingsignaturesoftheshareholdersattendingthemeetingandtheproxystatements.

SectionThreeBoardofDirectorsandGeneralManager

Article109

Ajointstocklimitedcompanyshallhaveaboardofdirectors,whichshallbecomposedofnotfewerthanfivebutnotmorethannineteenmembers.

Themembersoftheboardofdirectorsshallincluderepresentativesofthestaffandworkersofthecompany.Suchrepresentativesofthestaffandworkersshallbedemocraticallyelectedbythestaffandworkersofthecompanythroughthecongressesorassembliesoftheworkersandstaffmembersorotherforms.

TheprovisionsofArticle46onthetermofdirectorsofalimitedliabilitycompanyshallapplytothatofthedirectorsofajointstocklimitedcompany.[page]

TheprovisionsofArticle47onthefunctionsandpowersoftheboardofdirectorsofalimitedliabilitycompanyshallapplytothatoftheboardofdirectorsofajointstocklimitedcompany.

Article110

Theboardofdirectorsshallhaveachairman,andmayhaveoneortwovice-chairmen.Thechairmanandvice-chairmanshallbeelectedbytheboardofdirectorsthroughaffirmativevotesbymorethanhalfofallthedirectors.

Thechairmanshallconveneandpresideovermeetingsoftheboardofdirectorsandsupervisetheimplementationofresolutionsadoptedbytheboardofdirectors.Thevice-chairmanshallassistthechairmaninhiswork.Wherethechairmanisunabletoordoesnotexercisehisauthorities,thevice-chairmanappointedbythechairmanshallexercisesuchauthoritiesinhiscapacity.Wherethevicechairmanisunabletoordoesnotexercisehisauthorities,adirectorjointlynominatedbymorethanhalfofallthedirectorsshallexercisesuchauthorities.

Article111

Theboardofdirectorsshallholdmeetingsatleasttwiceayear,andnoticeshallbegiventoalldirectorsandsupervisorstendaysinadvance.Shareholdersrepresentingonetenthofvotingrights,oronethirdormoreofallthedirectorsorsupervisorsmayproposetohaveaninterimmeetingoftheboard.TheChairman,withintendaysafterreceiptofsuchproposal,mayconveneandpresideoverameetingoftheboard.Whereaninterimmeetingoftheboardofdirectorsistobeheld,themethodandtimelimitfornotificationforconveningtheinterimmeetingmaybeprescribedseparately.

Article112

Ameetingoftheboardofdirectorsmaynotbeheldunlessattendedbymorethanhalfofthedirectors.Aresolutionadoptedbytheboardofdirectorsrequiresaffirmativevotesbymorethanhalfofallthedirectors.

Inthevotingprocedures,onedirectorshallrepresentonevote.

Article113

[page]

Ameetingoftheboardofdirectorsshallbeattendedbyeachdirectorinperson.Whereadirectorisunabletoattendthemeetingforcause,hemayissueawrittenproxyentrustinganotherdirectortoattendonhisbehalf,andtheproxyshallsetforththescopeofauthorization.

Theboardofdirectorsshallprepareminutesregardingthedecisionsonmattersconsideredatthemeeting,whichshallbesignedbythedirectorsattendingthemeetingandthepersonpreparingtheminutes.

Thedirectorsshallberesponsibleforresolutionsadoptedbytheboardofdirectors.Wherearesolutionoftheboardviolatesanynationalstatutes,administrativeregulationsorthearticlesofassociation,andcausesthecompanytoincurseriousloss,thosedirectorsparticipatingintheadoptionoftheresolutionareliabletothecompanyfordamages.Provided,however,ifadirectorisproventohavedissentedatthevoteadoptingsuchresolutionandsuchdissensionwasnotedintheminutes,thenthedirectormaybeexemptfromliability.

Article114

Ajointstocklimitedcompanyshallhaveageneralmanager,tobeappointedorremovedbytheboard.

TheprovisionsofArticle50onthefunctionsandpowersofthemanagerofalimitedliabilitycompanyshallapplytothemanagerofajointstocklimitedcompany.

Article115

Theboardofdirectorsofthecompanymaydecidethataboardmemberistoserveconcurrentlyasthegeneralmanager.

Article116

Ajointstocklimitedcompanymustnotdirectly,orthroughitsaffiliatecompanies,borrowmoneyfromitsdirectors,supervisorsorseniorofficers.

Article117

Ajointstocklimitedcompanyshalldiscloseonregularbasistheremunerationofitsdirectors,supervisorsandseniorofficers.

SectionFourBoardofSupervisors

Article118

Ajointstocklimitedcompanyshallhaveaboardofsupervisors,whichshallbecomposedofnotfewerthanthree(3)members.[page]

Adirectorandaseniorofficermaynotserveconcurrentlyasasupervisor.

TheprovisionsofArticle52onthetermofthesupervisorofalimitedliabilitycompanyshallapplytothesupervisorofajointstocklimitedcompany.

Article119

TheprovisionsofArticle54andArticle55onthefunctionsandpowersoftheboardofsupervisorsofalimitedliabilitycompanyshallapplytotheboardofthesupervisorsofajointstocklimitedcompany.

Reasonableexpensesnecessaryforsupervisorstoperformancetheirdutiesshallbebornebythecompany.

Article120

Theboardofsupervisorsshallconveneameetingatleasteverysixmonths.Aninterimmeetingoftheboardmaybecalledattherequestofsupervisors.

Therulesofdeliberationandvotingproceduresfortheboardofsupervisorsshallbestipulatedbythearticlesofassociationofthecompany.

Theboardofsupervisorsshallprepareaminuteofthemeetingsignedbyallsupervisorsattendingthemeeting.[page]

SectionFourSpecialProvisionsontheStructureofaListedCompany

Article121

Alistedcompanyreferredtohereinmeansajointstocklimitedcompanywhosesharesarelistedandtradedonasecuritiesexchange.

Article122

Anypurchaseorsaleofmajorassetswithinoneyearorprovisionofasecurityinanamountinexcessofthirtypercent(30%)ofthetotalassetsbyalistedcompanyshallbedeliberatedanddeterminedatageneralmeetingofshareholdersandtheresolutionadoptedbysuchameetingrequiresaffirmativevotesbyshareholdersrepresentingtwo-thirdsofthevotingrights.

Article123

AlistedcompanyshallhaveindependentdirectorsthespecificmethodofwhichshallbedeterminedbytheStateCouncil.

Article124

Alistedcompanyshallhaveasecretaryoftheboardofdirectorswhoseresponsibilitiesincludethepreparationofthegeneralmeetingofshareholdersandmeetingsoftheboardofdirectors,maintenanceofdocuments,sharemanagementaswellasrelevantmattersconcerninginformationdisclosure.

Article125

Thedirectorofalistedcompanyaffiliatedwiththeenterpriseinvolvedinthemattersdiscussedbytheboardofdirectorsshallnotexercisehisown,orrepresentotherdirectorstoexercisevotingrightforsuchmatters.Themeetingoftheboardofdirectorsmaybeheldoncemorethanhalfoftheunaffiliateddirectorswillbepresent.Theresolutionmadebythemeetingoftheboardshallbeadoptedbymorethanhalfofallsuchdirectors.Wheretherearenotmorethanthree(3)unaffiliateddirectors,therelevantmattersshallbeforwardedtothegeneralmeetingofshareholdersfordeliberation.

ChapterFiveIssueandTransferofSharesofJointStockLimitedCompanies

SectionOneIssueofShares

Article126

Thecapitalofajointstocklimitedcompanyshallbedividedintoshares,andallthesharesshallbeofequalvalue.[page]

Sharesofthecompanyarerepresentedbysharecertificates.Asharecertificateisacertificateissuedbythecompanycertifyingtheshareheldbyashareholder.

Article127

Whensharesareissued,theprinciplesofopenness,fairness,andequityshallbefollowed,andeachshareinthesameclassmusthavethesamerightsandreceivethesameinterests.

Forsharesissuedatthesametime,eachshareshallbeissuedonthesameconditionsandatthesameprice.Allentitiesorindividualssubscribingforsharesshallpaythesamepriceforeachshare.

Article128

Theissuingpricepersharemaybeatparvalue,oraboveparvalue,butmaynotbebelowparvalue.

Article129

AsharecertificateshallbeinpaperformorinotherformsprescribedbythesecuritiesregulatoryauthorityundertheStateCouncil.

Asharecertificateshallsetforththefollowingmajoritems:

(3)theclassandparvalueofthesharesandthenumberofsharesrepresented;

(4)theserialnumberofthesharecertificate.

Article130

Sharecertificatesissuedbythecompanymaybeintheformofeitherregisteredsharecertificatesorbearersharecertificates.

Sharecertificatesissuedbythecompanytoitssponsorsorlegalpersonsshallberegisteredsharecertificatesbearingthenamesofsuchsponsorsorlegalpersons,andmaynotberegisteredunderanyothernamesorinthenamesoftheirlegalrepresentatives.

Article131

Acompanyissuingregisteredsharecertificatesshallmaintainarecordofshareholders,whichshallsetforththefollowing:[page]

(1)thenameanddomicileofeachshareholder;

(2)thenumberofsharesheldbyeachshareholder;

(3)theserialnumbersofsharecertificatesheldbyeachshareholder;

(4)thedateonwhicheachshareholderacquiredhisshares.

Acompanyissuingbearersharecertificatesshallrecordthenumberofsuchsharecertificates,theirserialnumbersandtheirissuingdates.

Article132

Article133

Uponregistrationandestablishment,ajointstocklimitedcompanyshallpromptlydeliverthesharecertificatestoitsshareholdersofficially.Priortoregistrationandestablishment,thecompanymaynotdeliveranysharecertificatetoitsshareholders.

Article134

Whereacompanyistoissuenewshares,thegeneralmeetingofshareholdersortheboardofdirectorsshalladoptaresolutionconcerningthefollowinginaccordancewiththearticlesofassociation:

(1)theclassesandnumberofthenewshares;

(2)theissuingpriceofthenewshares;

(3)thecommencingandendingdatesofissuanceofthenewshares;

(4)theclassesandnumberofnewsharesissuedtotheexistingshareholders.

Article135

WhenacompanyisapprovedbythesecuritiessupervisionandadministrationdepartmentundertheStateCounciltoissuenewsharestothepublic,itshallmakepublictheprospectusfortheissueofnewshares,itsfinancialandaccountingstatements,andshallpreparethesubscriptionform.

TheprovisionsofArticle88andArticle89shallapplytotheissueofnewshares.

Article136

Inissuingnewshares,acompanymaydeterminethepricingschemeinlightofthebusinessoperationandfinancialconditionsofthecompany.

Article137[page]

SectionTwoAssignmentOfShares

Article138

Sharesheldbyashareholdermaybeassignedinaccordancewiththelaw.

Article139

AssignmentofsharesbyashareholdermustbecarriedoutatalawfullyestablishedsecuritiesexchangeorinothermannersstipulatedbytheStateCouncil.

Article140

Alterationregistrationfortherecordofshareholdersreferredtointheprecedingparagraphshallnotbecarriedoutforaperiodoftwentydayspriortotheholdingofageneralmeetingofshareholders,orfivedayspriortotherecorddateforthepurposeofdividenddistributiondeterminedbythecompany.However,wheresuchchangeofshareholdersisotherwisestipulatedbythelaw,suchstipulationsshallapply.

Article141

Assignmentofbearersharecertificatestakeseffectupondeliverythereofbytheshareholdertotheassignee.

Article142

Article143

Acompanymaynotpurchaseitsownshares,exceptinthefollowingcases:

(2)mergingwithanothercompanyholdingsharesofthecompany;

(3)grantingincentivesharestothestaffandworkersofthecompany;

(4)requestingthecompanytopurchaseitsownshareswhereshareholdersofthecompanyopposethedecisiononmergeordivisionofthecompanymadeatageneralmeetingofshareholders.

Aresolutionshallbeadoptedbyageneralmeetingofshareholdersintheeventofapurchaseasdescribedintheaboveitemsfrom(1)through(3).Theoriginalshares,afterthecompanyhaspurchaseditsownsharesinthecaseasdescribedinitem(1),shallbecancelledwithintendaysofsuchpurchase.Inthecasesasdescribedinitem(2)and(4),thesharesshallbetransferredorcanceledwithinsixmonthsofsuchpurchase.

Thesharesofthecompanypurchasedbyitselfinthecaseasdescribedinitem(3)shallnotexceedfivepercent(5%)ofthetotalsharesissuedbythecompany.Thefundforsuchpurchaseshallbepaidoutoftheafter-taxprofitsofthecompanyandthesharespurchasedshallbetransferredtothestaffandworkerswithinoneyearofsuchpurchase.

Thecompanymaynotacceptitsownsharesasthecollateralunderasecurityarrangement.

Article144

Article145

Thesharesofacompanyapprovedforlistingshallbelistedinaccordancewithlaws,administrativeregulationsandtradingrulessetforthbyastockexchange.[page]

Article146

Alistedcompanyshallmakepublicitsfinancialconditionsandoperatingconditionsinaccordancewiththerelevantlawsandadministrativeregulations,andshallmakepublicitsfinancialandaccountingreportssemiannuallyineachfiscalyear.

ChapterSix:QualificationsandObligationsofDirectors,SupervisorsandSeniorOfficers

Article147

Apersoninanyofthefollowingcategoriesmaynotserveasadirector,supervisor,orthegeneralmanagerofacompany:

(1)withoutcivilcapacityorwithlimitedcivilcapacity;

(2)havingbeensentencedtoprisonforthefollowingcrimes,andcompletionofthesentencebeinglessthanfiveyearsago:embezzlement,bribery,conversionofproperty,misappropriationofproperty,sabotageofsocialeconomicorder;orhavingbeendeprivedofpoliticalrightsasaresultofacriminalconviction,andcompletionofsuchsanctionbeinglessthanfiveyearsago;

(3)havingservedasadirector,thefactorychief,orthegeneralmanagerofacompanyorenterprisewhichunderwentbankruptcyliquidationasaresultofmismanagement,andbeingpersonallyresponsibleforsuchbankruptcy,andcompletionofthebankruptcyliquidationbeinglessthanthreeyearsago;

(4)havingservedasthelegalrepresentativeofacompanyorenterprisewhosebusinesslicensewasrevokedduetoitsviolationoflaw,andbeingpersonallyresponsibleforsuchrevocation,andsuchrevocationoccurringlessthanthreeyearsago;

(5)indefaultofpersonaldebtofasignificantamount.

Ifthecompanyelectsorappointsadirectororsupervisororemploystheseniorofficerinviolationoftheaboveparagraph,suchelection,appointmentoremploymentisinvalid.Thecompanyshallremovethedirector,supervisororseniorofficeroncethecircumstancesdescribedinitem(1)occur.

Article148

Adirector,supervisor,orthegeneralmanagershallabidebylaws,administrativeregulationsandarticlesofassociationofthecompanyandshallhavethefiduciaryanddiligentdutiestothecompany.[page]

Adirector,supervisor,ortheseniorofficermaynotabusetheirauthoritiesbyacceptingbribesorgeneratingotherillegalincome,andmaynotconvertcompanyproperty.

Article149

Thedirectorandseniorofficer:

(1)maynotmisappropriatecompanyfunds;

(3)maynotloancompanyfundstootherpeopleorgivecompanyassetsassecurityforthedebtofanyotherindividualwithouttheapprovaloftheshareholdersmeeting,generalmeetingofshareholdersortheboardofdirectorsinviolationofthearticlesofassociation;

(4)maynotexecuteanycontractorengageinanytransactionwiththecompanyinviolationofthearticlesofassociationorwithouttheapprovaloftheshareholdersmeetingorthegeneralmeetingofshareholders;

(6)maynotacceptandpossessthecommissionspaidbyothersfortransactionsconductedwiththecompany;

(7)maynotdisclosecompanyconfidentialinformationwithoutauthorization;

(8)maynotengageinotheractivitiesinviolationofhisfiduciaryduties.

Article150

Ifadirector,supervisorortheseniorofficercausesdetrimenttothecompanywhileperforminghisdutiesinviolationoflaws,administrativeregulationsorthearticlesofassociation,heshallbeliableforthelosssocaused.

Article151

Wheretheshareholdersmeetingorthegeneralmeetingofshareholdersrequiresadirector,supervisorortheseniorofficertobepresentatmeetings,theyshallbepresentatmeetingsandanswertheinquiriesofshareholders.[page]

Adirectororseniorofficershallprovidetheboardofsupervisorsorthesupervisorsofalimitedliabilitycompanywithoutaboardofsupervisorswithgenuinedocumentsandinformationandshallnotobstructtheboardofsupervisorsorsupervisorsfromperformingduties.

Article152

WhereadirectororseniorofficerisinvolvedinthecircumstanceasdescribedinArticle150,theshareholdersofalimitedliabilitycompanyorajointstocklimitedcompanythatindividuallyorjointlyholdonepercent(1%)ofthetotalsharesforconsecutive180daysmayrequestinwritingtheboardofsupervisorsorthesupervisorsofalimitedliabilitycompanywithoutaboardofsupervisorstofilesuitbeforeapeople’scourt.WhereasupervisorisinvolvedinthecircumstanceasdescribedinArticle150,aforesaidshareholdersmayrequestinwritingtheboardofdirectorsortheexecutivedirectorofalimitedliabilitycompanywithoutaboardofdirectorstofilesuitbeforeapeople’scourt.

Wheretheboardofsupervisorsorthesupervisorsofalimitedliabilitycompanywithoutaboardofsupervisors,ortheboardofdirectorsortheexecutivedirectorrefusestofilesuitafterreceiptofthewrittenrequestmentionedabove,ordoesnotfilesuitwithinthirtydaysofthereceiptofthesame,orcomesacrossanemergencywhere,ifnoimmediateactionsaretaken,thecompany’sinterestsshallbeincurablyimpaired,thentheshareholdersmay,fortheinterestofthecompanyandontheirownbehalf,directlyfilesuitbeforeapeople’scourt.

Wherethecompany’slegalrightsandinterestsareviolatedbyothersandintheeventofanylossesincurred,theshareholdersdefinedinthefirstprecedingparagraphmayfilesuitbeforeapeople’scourtinaccordancewiththefirsttwoprecedingparagraphs.

Article153

Whereadirectororseniorofficerviolateslaws,administrativeregistrationsorthearticlesofassociation,orinfringesupontherightsandinterestsoftheshareholders,theshareholdersmayfilesuitbeforeapeople’scourt.[page]

ChapterSeven:CompanyBonds

Article154

Companybondsreferredtohereinmeansaformofsecuritywhichisissuedbyacompanyinaccordancewithlegallyprescribedprocedure,andwhichprovidesthattheprincipalthereofandinterestthereonshallbepaidatspecifiedtimes.TheissueofcompanybondsshallmeettherequirementssetforthbytheSecuritiesLawofthePeople’sRepublicofChina.

Article155

UponapprovalofanapplicationforcompanybondsissuegrantedbytherelevantdepartmentauthorizedbytheStateCouncil,theplanforcompanybondsoffershallbemadepublic.Theplanforcompanybondsoffershallsetforththefollowingmajoritems:

(2)thepurposeofthefundraised;

(3)thetotalvalueofthebondsandtheparvalueofeachbond;

(4)thedeterminationmethodoftherateofinterestonthebonds;

(5)thetimelimitandmethodforpaymentoftheprincipalofandinterestonthebonds;

(6)thesecurityinformationconcerningthebonds;

(7)theprice,thecommencingandendingdateofthebondsissue;

(8)thenetassetsvalueofthecompany;

(9)thetotalvalueofissuedandoutstandingcompanybonds;

(10)theunderwriterofthecompanybonds.

Article156

Article157

Companybondsmaybeclassifiedaseitherregisteredbondsorbearerbonds.

Article158

Ifacompanyhasissuedbonds,itshallmaintainarecordofbondholders.

(1)thenameanddomicileofeachbondholder;

(2)thedatesonwhichthebondholdersacquiredthebondsandtheserialnumbersofthebondcertificates;

(3)thetotalvalueofthebonds,theparvalueofeachbond,theinterestthereon,thetermthereofandmethodforpaymentofprincipalandinterest;

(4)thedateofissueofthebonds.

Article159

Intheeventofregisteredbonds,securitiesregistrationandsettlementorganizationsshallestablishrelevantrulesandregulationsforthebondsregistration,deposit,interestpaymentandbondredemption.

Article160

Companybondsmaybeassigned,thepriceofwhichshallbeagreeduponbetweentheassignorandtheassignee.

Wherethecompanybondsarelistedandtradedatasecuritiesexchange,theassignmentofthebondsshallbeconductedinaccordancewiththetradingrulesofthesecuritiesexchange.

Article161

Assignmentofbearerbondstakeseffectupondeliverythereofbythebondholdertotheassigneeatalawfullyestablishedsecuritiesexchange.

Article162

Article163

Whereconvertiblecompanybondsareissued,thecompanyshallexchangeitssharesforthebondsheldbythebondholdersusingtheprescribedmethodofconversion,providedthatthebondholdershavetheoptiononwhetherornottoconverttheirbonds.

ChapterEight:FinancialandAccountingAffairsofCompany

Article164

Acompanyshallestablishitsfinancialandaccountingsysteminaccordancewiththerelevantnationalstatutes,administrativeregulationsandthestipulationsofthefinanceauthorityundertheStateCouncil.

Article165

Acompanyshallprepareitsfinancialandaccountingreportsattheendofeachfiscalyear,whichshallbeauditedbyanaccountingfirminaccordancewiththelaw.Thefinancialandaccountingreportsshallbecompliedpursuanttorelevantlaws,administrativeregulationsandrelevantregulationssetforthbythefinanceauthorityundertheStateCouncil.

Article166

Alimitedliabilitycompanyshalldeliveritsfinancialandaccountingreportstoeachshareholderwithinthetimelimitprescribedbythearticlesofassociation.

Ajointstocklimitedcompanyestablishedthroughpublicshareoffershallmakepublicitsfinancialandaccountingreports.

Article167

Afterallocationtothestatutoryreservefundhasbeenmadefromtheafter-taxprofitofthecompany,anduponadoptionofaresolutionbytheshareholdersmeetingorthegeneralmeetingofshareholders,allocationmaybemadetothediscretionaryreservefund.

Afterthecompanyhascovereditslosses,andmadeallocationtothereservefunds,theremainderoftheprofitshallbedistributedtotheshareholdersinaccordancewiththeprovisionsofArticle35inthecaseofalimitedliabilitycompany,andinproportiontotheirshareholdingsinthecaseofajointstocklimitedcompanyunlessotherwisestipulatedinitsarticlesofassociation.

Iftheshareholdersmeeting,thegeneralmeetingofshareholdersortheboardofdirectors,inviolationoftheprecedingparagraph,distributesprofittotheshareholdersbeforecoveringcompanylossesandmakingallocationtocompanystatutoryreservefund,theprofitsodistributedmustbereturnedtothecompany.Thesharesofthecompanyheldbythecompanyitselfshallnotbegrantedprofitdistribution.

Article168

Thepremiumreceivedbyajointstocklimitedcompanythroughissuanceofsharesatpricesaboveparvalue,aswellasotherincomestobeallocatedtothecapitalreservefundasstipulatedbythefinanceauthorityundertheStateCouncil,shallbeallocatedtothecapitalreservefund.

Article169

Uponconversionofstatutoryreservefundintocapital,theamountremaininginthestatutoryreservefundmaynotfallbelowtwenty-fivepercent(25%)oftheregisteredcapital.

Article170

Engagementordismissalofanaccountingfirmtoberesponsiblefortheauditofthefinancialandaccountingreportsofacompanyshallbedeterminedbytheshareholdersmeeting,thegeneralmeetingofshareholdersortheboardofdirectorsinaccordancewiththearticlesofassociation.[page]

Whentheshareholdersmeeting,thegeneralmeetingofshareholdersortheboardofdirectorsvotesonthematterofdismissalofanaccountingfirm,thesaidfirmshallbegiventhechancetostateitsopinions.

Article171

Thecompanyshallprovidetheaccountingfirmwithtrueandcompleteaccountingcertificates,books,financialandaccountingreportsandotheraccountingmaterialsandmustnotrefusetoprovideorconcealsuchdocuments,orreportdeceitfully.

Article172

ChapterNine:MergerandDivisionofCompany,IncreaseandDecreaseofRegisteredCapital

Article173

Companiesmaybemergedbyabsorptionandmergerbyconsolidation.

Onecompanyabsorbinganothercompanyismergerbyabsorption,andthecompanybeingabsorbedshallbedissolved.Mergeroftwoormorecompaniesthroughestablishmentofanewcompanyisaconsolidation,andthecompaniesbeingconsolidatedshallbedissolved.

Article174

Inamergerofcompanies,thecompaniesshallexecuteamergeragreement,andpreparetheirrespectivebalancesheetsandschedulesofassets.Thecompaniesshallnotifytheircreditorswithintendaysofadoptionofmergerresolutions,andshallpublishanoticeinanewspaperwithinthirtydays.Creditorsareentitledtoclaimfullpaymentofthedebtsofthecompaniesorrequiretheprovisionofappropriateassuranceswithinthirtydaysofreceiptofthenotice,orwithinforty-fivedaysofpublicationofthefirstnoticeifsuchcreditorsdidnotreceivethenotice.

Article175

Article176

Whereacompanyistoundergodivision,itsassetsshallbedividedaccordingly.

Individingthecompany,abalancesheetandascheduleofassetsshallbeprepared.Thecompanyshallnotifyitscreditorswithintendaysofadoptionofadivisionresolution,andshallpublishanoticeinanewspaperwithinthirtydays.

Article177

Thecompanyresultingfromthedivisionshallbearjointliabilitiesforthedebtsofthecompanypriortoitsdivisionexceptotherwisestipulatedinawrittenagreementconcludedbeforethedivisionbyandbetweenthecompanyanditscreditor.

Article178

Whereacompanyneedstoreduceitsregisteredcapital,abalancesheetandascheduleofassetsmustbeprepared.

Article179

Whenalimitedliabilitycompanyistoincreaseitsregisteredcapital,aftersubscriptionforthenewlyincreasedcapital,theshareholdersshallmakecapitalcontributioninaccordancewiththeprovisionshereofconcerningcapitalcontributionfortheestablishmentofalimitedliabilitycompany.

Article180

Inthecaseofmergerordivisionofacompany,whereanyregistereditemrequireschange,amendmentregistrationshallbecarriedoutwiththecompanyregistrationauthorityinaccordancewiththelaw;wherethecompanyisdissolved,companyde-registrationshallbecarriedoutinaccordancewiththelaw;whereanewcompanyisestablished,establishmentregistrationshallbecarriedoutinaccordancewiththelaw.

Whereacompanyistoincreaseorreduceitsregisteredcapital,aamendmentregistrationshallbecarriedoutwiththecompanyregistrationauthorityinaccordancewiththelaw.

ChapterTen:DissolutionandLiquidationofCompany

Article181Acompanymaybedissolvedforanyoneofthefollowingreasons:

(2)theshareholdersmeetingorthegeneralmeetingofshareholdershasadoptedaresolutionfordissolution;

(3)dissolutionisrequiredduetomergerordivisionofthecompany;

(4)thebusinesslicenseofthecompanyisrevokedbylaw,orthecompanyisorderedtoterminateorcancelled;

(5)thecompanyisdissolvedbythepeople’scourtinaccordancewiththeprovisionsofArticle183.

Article182

WhereacompanyisinvolvedinthecircumstancedescribedintheaboveArticle181(1),thecompanymayamenditsarticlesofassociationtocontinueitsexistence.Theamendmenttothearticlesofassociationshallbeadoptedbytwothirdsormoreofallvotingshareholdersinthecaseofalimitedliabilitycompany.Intheeventofajointstocklimitedcompany,theamendmentrequiresaffirmativevotesbyatleasttwo-thirdsofthevotesheldbyshareholdersattendingthegeneralmeetingofshareholders.

Article183

Wherethereareseriousdifficultiesintheoperationofacompanyandthecompany’scontinuancewilldefinitelycausesignificantlossestoshareholders’interests,however,suchscenariocannotbesolvedthroughotherchannels,then,shareholdersrepresenting10%ofallthevotesmayrequestthepeople’scourttodissolvethecompany.[page]

Article184

Article185

Theliquidationcommitteeshallexercisethefollowingauthoritiesinthecourseofliquidation:

(2)notifyingcreditorsthroughnoticeorpublicannouncement;

(4)makingfullpaymentoftaxesowedandthetaxesincurredduringliquidation;

(6)disposingoftheremainingassetsafterfullpaymentofcompanydebts;

(7)participatingincivilactionsonbehalfofthecompany.

Article186

Article187

Afterpaymentofliquidatingexpenses,paymentofwagesandexpensesforlaborinsuranceoftheworkers,paymentoftaxesowed,andpaymentofcompanydebtsaremade,theremainingassetsshallbedistributedtotheshareholdersinproportiontotheirsharesofcapitalcontributioninthecaseofalimitedliabilitycompany,andinproportiontotheirshareholdingsinthecaseofajointstocklimitedcompany.Inthecourseofliquidation,thecompanycontinuesitsexistencebutshallnotconductanybusinessactivitiesirrelevanttotheliquidation.Beforepaymentshavebeenmadeinaccordancewiththeprecedingregulations,theassetsofthecompanyshallnotbedistributedtotheshareholders.

Article188

Article189

Article190

Membersoftheliquidationcommitteeshallfaithfullyperformtheirdutiesandcarryouttheirliquidatingobligationsinaccordancewiththelaw.

Membersoftheliquidationcommitteemaynotabusetheirauthoritiesbyacceptingbribesorreceivingotherillegalincome,andmaynotmisappropriatecompanyassets.

Acommitteememberwhocauseslosstothecompanyoritscreditorsduetohisintentionalmisconductorgrossnegligenceshallbeliablefordamages.

Article191

ChapterEleven:BranchofForeignCompany

Article192

AforeigncompanyreferredtohereinmeansacompanyregisteredandestablishedoutsideChinaunderforeignlaws.

Article193

InordertoestablishabranchwithinChina,aforeigncompanymustsubmitanapplicationtotheChineseauthorityincharge,togetherwiththerelevantdocumentssuchasitsarticlesofassociation,thecompanyregistrationcertificateissuedinitshomecountry,etc.Uponapproval,itshallcarryoutregistrationwiththecompanyregistrationauthorityandbeissuedabusinesslicense.

TheexaminationandapprovalprocedureforbranchesofforeigncompaniesshallbeseparatelyprescribedbytheStateCouncil.

Article194

InordertoestablishabranchwithinChina,aforeigncompanymustappointarepresentativeoragentinchargeofsuchbranchwithinChina,andfunditsbranchasappropriateinlightofthenatureofitsintendedbusiness.Whereoperationofcertainbranchesofforeigncompaniesissubjecttoaminimumleveloffunding,suchlevelshallbeprescribedbytheStateCouncilseparately.

Article195

Thebranchofaforeigncompanyshallidentifythenationalityandformofliabilityinitsname.[page]

Thebranchofaforeigncompanyshallmaintainthearticlesofassociationofsuchforeigncompanyonitspremises.

Article196

Aforeigncompanyisaforeignlegalperson,anditsbranchestablishedwithinChinadoesnothavethestatusofaChineselegalperson.

AforeigncompanyshallbearcivilliabilitiesinrespectofthebusinessconductedbyitsbranchwithinChina.

Article197

WhileconductingbusinesswithinChina,thebranchofaforeigncompanyestablishedafterapprovalmustabidebyChineselaw,andmaynotharmthepublicinterestofChina,anditslawfulrightsandinterestsareprotectedbyChineselaw.

Article198

WhenaforeigncompanycancelsitsbranchwithinChina,suchcompanymustfullyrepaythedebtsthereofinaccordancewiththelawandcarryoutliquidationinaccordancewiththeprovisionshereofconcerningcompanyliquidationprocedure.Thecompanymaynottransfertheassetsofsuchbranchabroadpriortofullrepaymentofitsdebts.

ChapterTwelve:LegalLiabilities

Article199

Inthecaseofcompanyregistration,whereanapplicantobtainscompanyregistrationinviolationhereofbymakingfalsestatementofregisteredcapital,submittingfalsecertificatesorbyconcealingmaterialfactsthroughotherfraudulentmeans,thecompanyshallbeorderedtomakerectification,andintheeventfalsestatementsofregisteredcapitalweremade,thecompanyshallbefinednotlessthanfivepercent(5%)butnotmorethanfifteenpercent(15%)oftheamountofregisteredcapitalfalselystated;thecompanysubmittingfalsecertificatesorconcealingmaterialfactsshallbefinednotlessthanRMB50,000butnotmorethanRMB500,000;wherethecircumstancesareserious,thecompanyregistrationshallberevokedorthebusinesslicenseofthecompanyshallbecancelled.

Article200

Wherethesponsorsorshareholdersfalsifycapitalcontributionbyfailingtopaymoney,todeliverordelayinthedeliveryofcurrencyornon-currencyproperty,theyshallbeorderedbythecompanyregistrationauthoritytomakerectification,andsuchpersonsshallbefinednotlessthanfivepercent(5%)butnotmorethanfifteenpercent(15%)oftheamountofcapitalcontributionfalsified.[page]

Article201

Wherethesponsorsorshareholdersofacompanywithdrawtheircapitalcontributionaftertheestablishmentofthecompany,theyshallbeorderedbythecompanyregistrationauthoritytomakerectification,andsuchpersonsshallbefinednotlessthanfivepercent(5%)butnotmorethanfifteenpercent(15%)oftheamountofcapitalcontributionwithdrawn.

Article202

Whereacompany,inviolationhereof,establishesanothersetofaccountingbooksbesidesthoseprescribedbylaw,itshallbeorderedbythecompanyregistrationauthoritytomakerectification,andthecompanyshallbefinednotlessthanRMB50,000butnotmorethanRMB500,000.

Article203

Whereacompanyprovidestoitsshareholdersandthepublicfinancialandaccountingreportswhicharefalseorwhichconcealmaterialfacts,afineofnotlessthanRMB30,000butnotmorethanRMB300,000shallbeimposedbyrelevantauthorityonthesupervisordirectlyinchargeandtheotherperson(s)directlyresponsible.

Article204

Whereacompanyfailstomakeallocationtothestatutoryreservefundinaccordanceherewith,suchcompanyshallbeorderedbythefinanceauthorityofthepeople’sgovernmentatthelevelofcountyorhighertomakefullallocationtotherequiredfunds,andafineofnotmorethanRMB200,000maybeleviedonthecompany.

Article205

Whereacompanyfailstonotifycreditorsthroughnoticeorpublicannouncementinaccordanceherewithwhilecarryingoutmerger,division,reductionofregisteredcapital,orliquidation,itshallbeorderedbythecompanyregistrationauthoritytomakerectification,andthecompanyshallbefinednotlessthanRMB10,000butnotmorethanRMB100,000.

Whereinthecourseofliquidation,thecompanyconcealsitsassets,makesfalsestatementsinitsbalancesheetorscheduleofassets,ordistributescompanyassetspriortofullrepaymentofcompanydebts,itshallbeorderedtomakerectification,andthecompanyshallbefinednotlessthanfivepercent(5%)butnotmorethantenpercent(10%)ofthevalueoftheconcealedassets,orthevalueoftheassetsdistributedpriortofullrepaymentofcompanydebts.AfineofnotlessthanRMB10,000butnotmorethanRMB100,000shallbeimposedonthesupervisordirectlyinchargeandtheotherperson(s)directlyresponsible.Wheresuchactionconstitutesacrime,criminalliabilityshallbeimposedinaccordancewiththelaw.[page]

Article206

Wherethecompanyengagesinanybusinessactivitiesunrelatedtotheliquidation,itshallbewarnedbythecompanyregistrationauthorityanditsincomederivedtherefromshallbeconfiscated.

Article207

Wheretheliquidationcommitteefailstosubmittheliquidatingreporttothecompanyregistrationauthorityinaccordanceherewith,orconcealsanymaterialfactormakesanymaterialomissionintheliquidatingreportsubmitted,itshallbeorderedbythecompanyregistrationauthoritytomakerectification.

Whereamemberoftheliquidationcommitteeabuseshisauthoritytoengageinfraudulentactivityforprivategain,toobtainillegalincomeorconvertcompanyassets,suchmembershallbeorderedtoreturnthecompanyassets,andtheillegalincomeshallbeconfiscated,andsuchmembermaybefinednotlessthantwotimesbutnotmorethanfivetimestheillegalincome.

Article208

Whereaninstitutionconductingassetsappraisal,capitalverification,ortestingandverificationprovidesafalsecertificate,theillegalincomesoderivedshallbeconfiscated,andafineofnotlessthantwotimesbutnotmorethanfivetimestheillegalincomeshallbeimposed,andtherelevantauthorityinchargemayordersuchinstitutiontoceaseoperation,andrevokethequalificationcertificatesofthepersonsdirectlyresponsible.Wheresuchactionconstitutesacrime,criminalliabilityshallbeimposedinaccordancewiththelaw.

Whereaninstitutionconductingassetsappraisal,capitalverificationortestingandverificationprovidesareportwithmaterialomissionduetoitsnegligence,itshallbeorderedtomakerectification,andwherethecircumstanceisrelativelyserious,afineofnotlessthantwotimesbutnotmorethanfivetimestheincomesoderivedshallbeimposed,andtherelevantauthorityinchargemayordersuchinstitutiontoceaseoperation,andrevokethequalificationcertificatesofthepersonsdirectlyresponsible.[page]

Wheretheappraisalreport,capitalverificationreportorverificationissuedbyaninstitutionconductingassetsappraisal,capitalverificationortestingandverificationdoesnotcomplywiththefactwhichhascausedlossestothecompany’screditors,theinstitutionconductingassetsappraisal,capitalverificationortestingandverificationshall,unlesstheycanprovetheyhavenofault,makecompensationswithintherangeofamountindiscordwiththefact.

Article209

Wherethecompanyregistrationauthoritygrantsregistrationtoanapplicationwhichfailstomeettherequirementsprescribedhereinor,refusestograntregistrationtoanapplicationwhichmeetstherequirementsprescribedherein,administrativepenaltyshallbeimposedonthesupervisordirectlyinchargeandtheotherperson(s)directlyresponsibleinaccordancewiththelaw.

Article210

Wherethedepartmentinchargeofthecompanyregistrationauthoritycompelsittograntregistrationtoanapplicationwhichfailstomeettherequirementsprescribedherein,orengagesincoverupforanillegalregistration,administrativepenaltyshallbeimposedonthesupervisordirectlyinchargeandtheotherperson(s)directlyresponsibleinaccordancewiththelaw.

Article211

Whereanentitypassesitselfoffasalimitedliabilitycompanyorjointstocklimitedcompanywhilenotregisteredassuchinaccordancewiththelaw,oranentitypassesitselfoffasabranchcompanyofalimitedliabilitycompanyorjointstocklimitedcompanywhilenotregisteredassuchinaccordancewiththelaw,itshallbeorderedbythecompanyregistrationauthoritytomakerectificationorsuchentityshallbecloseddown,andafineofnotmorethanRMB100,000maybeimposed.

Article212

Whereacompanyfailstocommenceoperationformorethan6monthswithoutpropercause,orsuspendsoperationonitsownwithoutpropercauseformorethan6consecutivemonthsaftercommencementofoperation,thecompanyregistrationauthorityshallrevokeitscompanybusinesslicense.[page]

Wherethecompanyfailstocarryoutamendmentregistrationinaccordanceherewithwhenaregistereditemofthecompanyhaschanged,itshallbeorderedtoregisterwithinaprescribedtimelimit,andwherethecompanyhasnotcarriedoutregistrationafterexpirationofthetimelimit,afineofnotlessthanRMB10,000butnotmorethanRMB100,000shallbeimposed.

Article213

Where,inviolationhereof,aforeigncompanyestablishesabranchwithinChinawithoutapproval,itshallbeorderedtomakerectification,orsuchbranchshallbeorderedtoterminate,andafineofnotlessthanRMB50,000butnotmorethanRMB200,000maybeimposed.

Article214

Whereacompanyconductsillegalactivitiesjeopardizingthenationalsecurityandsocialpublicinterests,thebusinesslicenseofsuchcompanyshallberevoked.

Article215

WhereacompanyviolatesofthisLaw,andisthereforeliableforcivildamagesaswellasforanadministrativefineorcriminalfine,anditsassetsarenotsufficienttocoverboth,itsassetsshallfirstbeusedtocoverthecivilliabilityfordamages.

Article216

WhereanyviolationofthisLawconstitutesacrime,criminalliabilityshallbeimposedinaccordancewiththelaw.

ChapterThirteen:SupplementaryProvisions

Article217

ForthepurposeofthisLaw,thedefinitionsofthefollowingtermsare:

(1)SeniorOfficerreferredtohereinmeansthemanager,deputymanager,personinchargeoffinancialaffairs,secretaryoftheboardofdirectorsofalistedcompanyoranyotherpersonnelsoappointedinthearticleofassociationofthecompany.

(2)ControllingShareholderreferredtohereinmeanstheshareholderwhichamountofcapitalcontributionaccountsformorethanfiftypercent(50%)ofthetotalamountofcapitalofalimitedliabilitycompanyor,theshareholderwithmorethanfiftypercent(50%)ofthetotalamountofsharecapitalofajointstocklimitedcompanyor,theshareholderofeitheralimitedliabilitycompanyorajointstocklimitedcompanywhich,byvirtueofitsvotingrightrepresentedbyitscapitalcontributionorshareholding,hasasignificantimpactonthedecisionofshareholdersmeetingorthegeneralmeetingofshareholdersregardlessofapercentagelowerthanfiftypercentasaforementioned.[page]

(3)ActualControllerreferredtohereinmeansapersonwhoisnotashareholderofthecompanybuthasvirtualcontrolovercorporateactionsthroughinvestmentin,agreementorotherarrangementswiththecompany.

(4)Affiliationreferredtohereinmeanstheconnectionbetweenacontrollingshareholder,actualcontroller,director,supervisororseniorofficerofacompanyandtheenterprisescontrolledbythem,directlyorindirectly,oranyotherkindsofrelationshipsthatarelikelytocausediversionofthecompany’sinterests.Notwithstandingtheforegoing,companieswhichmajorityofsharesarecontrolledbythestatearenotnecessarilyaffiliatedwithoneanothersimplybecausethemajorityoftheirsharesarecommonlycontrolledbythestate.

Article218

ThisLawshallbeapplicabletoforeign-investedlimitedliabilitycompaniesandjointstocklimitedcompanies.Wherethelawsonenterpriseswithforeigninvestmentprovideotherwise,suchprovisionsshallapply.

Article219

ThisLawshallbecomeeffectiveonJanuary1,2006.

SectionFourSpecialProvisionsonWhollyState-ownedCompanies.15[page]

ChapterOne:GeneralProvisions

Acompanyisanenterpriselegalpersonthatshallenjoytherighttotheentireindependentpropertyofthelegalperson.Acompanyshallbeliableforitsdebtstotheextentofallitsassets.Inthecaseofalimitedliabilitycompany,shareholdersshallassumeliabilitytowardsthecompanytotheextentoftheirrespectivecapitalcontributions.Inthecaseofajointstocklimitedcompany,shareholdersshallassumeliabilitytowardsthecompanytotheextentoftheirrespectiveshareholdings.[page]

Acompanyshallapplytothecompanyregistrationauthorityforestablishmentregistration.CompaniesmeetingtheconditionssetbythisLawshallberegisteredaslimitedliabilitycompaniesorjointstocklimitedcompanies;whilecompaniesfailingtomeettheconditionssetbythisLawshallnotberegisteredaslimitedliabilitycompaniesorjointstocklimitedcompanies.

Thebusinesslicenseshallspecifythenameanddomicileofthecompany,registeredcapital,paid-incapital,businessscope,thenameofthelegalrepresentative,etc.Intheeventofanychangetotheregistrationitemofthebusinesslicense,acompanyshallundergoalterationregistrationprocedureswiththecompanyregistrationauthorityinaccordancewiththelaw,afterwhichanewbusinesslicenseshallbeissuedtothecompany.[page]

Ifalimitedliabilitycompanyistobeconvertedintoajointstocklimitedcompany,itshallsatisfytherequirementsforajointstocklimitedcompanystipulatedbythisLaw.Ifajointstocklimitedcompanyistobeconvertedintoalimitedliabilitycompany,itshallsatisfytherequirementsforalimitedliabilitycompanystipulatedbythisLaw.Wherealimitedliabilitycompanyisconvertedintoajointstocklimitedcompanyorviceversa,theclaimsanddebtsoftheoriginalcompanyshallbesucceededtobythecompanyintowhichitisconverted.

Thelegalrepresentativeofacompanymayberepresentedbythechairman,executivedirectorormanagerofacompanyincompliancewithitsarticlesofassociationandregisteredinaccordancewiththelaw.Intheeventofanychangeofthelegalrepresentativeofacompany,suchchangeshallberegisteredinaccordancewiththelaw.[page]

Acompanymayinvestinotherenterprises,however,unlessotherwisestipulatedbythelaw,thecompanymakingsuchinvestmentshallnotbearjointandseveralliabilityforthedebtsoftheenterpriseinwhichthecompanyinvests.

Companiesmustprotectthelawfulrightsandinterestsoftheirstaffandworkers,signlaborcontractswiththemandcoverthemwithsocialinsurancesinaccordancewiththelaw,andstrengthenlaborprotectionsoastoachievesafetyinproduction.[page]

Theshareholdersofacompanyshallexercisetheirshareholders’rightsincompliancewithlaws,administrativerulesandregulationsaswellasthearticlesofassociationofthecompany,shallnotabusetheirshareholders’rightstoinjuretheinterestsofthecompanyorothershareholders,ortakeadvantageofthecompany’sindependentstatusorthelimitedliabilityofshareholderstoinjuretheinterestsofthecompany’screditors.[page]

Thecontrollingshareholders,actualcontrollers,directors,supervisorsorseniorofficersofacompanyshallnottakeadvantageoftheiraffiliationswithothersinanattempttoharmthecompany’sinterestsand,whereanylossesareincurredinviolationhereof,shallbeliableforcompensation.

Wherethecompanyhaseffectedalterationregistrationaccordingtotheresolutionofshareholdersmeeting,generalmeetingofshareholdersorboardofdirectors,thecompanyshall,afterthepeople’scourtdeclaressuchresolutionnullandvoidorrevokesthesame,shallapplytothecompanyregistrationauthorityforcancellationofitsalterationregistration.[page]

(5)Thecompanyhasadomicile.

Theregisteredcapitalofalimitedliabilitycompanyshallbetheamountofthepaid-upcapitalcontributionsofallitsshareholdersasregisteredwiththecompanyregistrationauthority.Theamountoftheinitialinvestmentcontributedbyallshareholdersshallnotbelowerthantwentypercent(20%)oftheregisteredcapitalortheminimumamountprescribedbythelaw,theremainingofwhichshallbefullypaidupwithintwoyearsoftheestablishmentofthecompany.Inthecaseofaninvestmentcompany,theremainingamountoftheregisteredcapitalmaybepaidupwithinfiveyearsoftheestablishmentofthecompany.TheminimumamountoftheregisteredcapitalofalimitedliabilitycompanyshallbeRMB30,000.Wherelawsandadministrativeregulationsprovideformorethantheminimumamount,suchprovisionsshallapply.[page]

Exceptforassetsforbiddentobeusedascontributionbylawsandadministrativeregulations,ashareholdermaymakeitscapitalcontributionstoacompanyincurrencyorbycontributingsuchnon-currencypropertyasmaterialobjects,intellectualpropertyrightsandland-userightsthatcanbeevaluatedintheformofcurrencyandtransferredinaccordancewiththelaw.

Afterallshareholdershavemadetheircapitalcontributionsinfull,suchcontributionsmustbeverifiedbyastatutorycapitalverificationinstitutionwhichshallissuecapitalverificationcertificates.[page]

Aftertheinitialcapitalcontributionsoftheshareholdershavebeenverifiedbyastatutorycapitalverificationinstitution,applicationshallbemadetothecompanyregistrationauthorityforregistrationoftheincorporationofthecompanybyarepresentativedesignatedbyalltheshareholdersorbyanagentjointlyentrustedbythem,whoshallsubmitsuchdocumentsasanapplicationforregistration,thearticlesofassociationandthecapitalverificationcertificate.

(3)theserialnumbersofthecapitalcontributioncertificates.[page]

Thecompanyshallregisterthenamesofshareholdersandtheamountofcapitalcontributionsoftheshareholderswiththecompanyregistrationauthorityand,intheeventofanychangethereof,applyforalterationregistration.Unlessdulyregistered,theabove-mentioneditemsandanychangesthereofshallnotbeadefenseagainstathirdparty.

Theshareholdersmeetingofalimitedliabilitycompanyshallbecomposedofalltheshareholders.TheshareholdersmeetingshallbetheorganofpowerofthecompanyandshallexerciseitsfunctionsandpowersinaccordancewiththisLaw.[page]

(2)toelectandrecalldirectorsandsupervisorswhosepostsarenottakenbytherepresentativesofthestaffandworkers,andtodecideonmattersconcerningtheremunerationofdirectorsandsupervisors;

Shareholdersmeetingsshallbedividedintoregularmeetingsandinterimmeetings.Regularshareholdersmeetingsshallbeconvenedontimeasstipulatedbythearticlesofassociationofthecompany.Interimshareholdersmeetingsmaybeconveneduponproposalmadebyshareholdersrepresentingmorethanone-tenthofvotingrightsorbymorethanone-thirdofdirectors,orattherequestofboardofsupervisorsorthesupervisorsofacompanyabsentaboardofsupervisors.[page]

Wherealimitedliabilitycompanyhasaboardofdirectors,itsshareholdersmeetingshallbeconvenedbytheboardofdirectorsandpresidedoverbythechairmanoftheboard.Wherethechairmanoftheboardisunabletoordoesnotperformhisfunction,themeetingshallbepresidedoverbyavice-chairman.Wherethevice-chairmanisunabletoordoesnotperformhisfunction,themeetingshallbepresidedoverbyadirectorjointlynominatedbymorethanhalfofthedirectors.

Resolutionsoftheshareholdersmeetingontheincreaseorreductionoftheregisteredcapital,thedivision,merger,dissolution,ortransformationofthecompanymustbeadoptedbyshareholdersofthecompanyrepresentingtwo-thirdsormoreofthevotingrights.[page]

ExceptasotherwiseprovidedforinArticle51ofthisLaw,alimitedliabilitycompanyshallhaveaboardofdirectors,whichshallbecomposedofthreetothirteenmembers.ThemembersoftheboardofdirectorsofalimitedliabilitycompanyinvestedinandestablishedbytwoormoreState-ownedenterprises,orbytwoormoreotherState-ownedinvestmententitiesshallincluderepresentativesofthestaffandworkersofthecompany.Themembersoftheboardofdirectorsofotherlimitedliabilitycompaniesmayalsoincluderepresentativesofthestaffandworkers.Suchrepresentativesofthestaffandworkersshallbedemocraticallyelectedbytheworkersandstaffmembersofthecompanythroughthecongressesorassembliesofthestaffandworkersorotherforms.Aboardofdirectorsshallhaveachairmanandmayhaveavice-chairman.Themethodforthecreationofthechairmanandvice-chairmenshallbestipulatedinthearticlesofassociationofthecompany.

Ameetingoftheboardofdirectorsshallbeconvenedandpresidedoverbythechairman.Wherethechairmanisunabletoordoesnotperformhisduties,themeetingshallbeconvenedandpresidedoverbythevice-chairman.Wherethevice-chairmanisunabletoordoesnotperformhisduties,themeetingshallbeconvenedandpresidedoverbyadirectorjointlynominatedbymorethanhalfofthedirectors.

Alimitedliabilitycompanyshallhaveageneralmanager,tobeappointedorremovedbytheboardofdirectors.Thegeneralmanagerisaccountabletotheboardandshallexercisethefollowingpowers:[page]

Thepowersoftheexecutivedirectorshallbeprescribedinthearticlesofassociation.

Theboardofsupervisorsorthesupervisor,asthecasemaybe,shallexercisethefollowingauthorities:

Theboardofsupervisorsorthesupervisorsofacompanythatdoesnothavetheboardmayconductinvestigationsupondiscoveryofanyunusualoperationsofthecompanyand,wherenecessary,engageanaccountingfirmtoassistinsuchinvestigationsattheexpenseofthecompany.[page]

Theresolutionoftheboardofsupervisorsshallbeadoptedbymorethanhalfofallthesupervisors.Theboardshallprepareminutesrelatingtothedecisionsonmattersconsideredatthemeeting,whichshallbesignedbythesupervisorspresentatthemeeting.

Wheretheshareholderofaone-personlimitedliabilitycompanycannotprovethatthecompany’sassetsisindependentfromhisownproperty,suchshareholdershallbearjointandseveralliabilityforthedebtsofthecompany.