Company Law of the People's Republic of China (Revised in 2023) 中华人民共和国公司法（2023修订）Issuing time:2024-08-17 20:47 Company Law of the People's Republic of China (Revised in 2023) 中华人民共和国公司法（2023修订）
The Company Law of the People's Republic of China, adopted upon revision at the 7th Session of the Standing Committee of the Fourteenth National People's Congress of the People's Republic of China on December 29, 2023, is hereby promulgated, effective July 1, 2024. Xi Jinping President of the People's Republic of China December 29, 2023 Company Law of the People's Republic of China (Adopted at the 5th Session of the Standing Committee of the Eighth National People's Congress on December 29, 1993; Chapter I General Provisions Article 1 Article 2 Article 3 The lawful rights and interests of the company shall be protected by law, which shall not be infringed upon. Article 4 The shareholders of a company is entitled to such rights as deriving proceeds from assets of the company, participating in making important decisions and selecting managers of the company according to law. Article 5 Article 6 The right to name of a company shall be protected by law. Article 7 A joint stock limited company established in accordance with this Law shall indicate the words "joint stock limited company" or "joint stock company" in its name. Article 8 Article 9 Where any item within the business scope of a company is subject to approval as stipulated by any law or administrative regulation, the approval shall be obtained in accordance with the law. Article 10 Where the director or manager who serves as the legal representative resigns, he/she shall be deemed to have resigned from the position of the legal representative at the same time. Where the legal representative resigns, the company shall appoint a new legal representative within 30 days after the date of his/her resignation. Article 11 Any restrictions on the functions and powers of the legal representative imposed by the articles of association or the shareholders' meeting shall not be asserted against a bona fide third party. Where the legal representative of a company causes damage to others while performing his/her duties, the company shall assume the civil liability. After assuming the civil liability, the company may, in accordance with the provisions of law or the articles of association of the company, claim indemnification against the legal representative who is at fault. Article 12 In the case of conversion from a limited liability company into a joint stock limited company or vice versa, the claims and debts of the company prior to the conversion shall be assumed by the company after the conversion. Article 13 A company may set up branches which do not have the corporate capacity and whose civil liability shall be borne by the company. Article 14 If it is prescribed by any law that a company shall not become a capital contributor that shall bear the joint and several liability for the debts of the enterprises it invests in, such provisions shall prevail. Article 15 Where a company provides a guaranty for any shareholder or actual controller of the company, it shall be subject to a resolution of the shareholders' meeting. The shareholder as mentioned in the preceding paragraph or the shareholder controlled by the actual controller as set forth in the preceding paragraph shall not participate in voting on any matter as prescribed in the preceding paragraph. Such matter shall be adopted by more than half of the voting rights held by other shareholders present at the meeting. Article 16 The company shall adopt various forms to strengthen the vocational education and on-the-job training of its employees so as to improve their quality. Article 17 A company shall, according to the Constitution and other related laws, establish and improve a democratic management system with the employees' representative congress as the basic form and carry out democratic management through the employees' representative congress or by any other means. When making a decision on restructuring, dissolution, application for bankruptcy or any other major issue in the respect of business operation, or formulating any important regulation, a company shall solicit the opinions of its trade union and listen to the opinions and proposals of the employees through the employees' representative congress or by any other means. Article 18 Article 19 Article 20 The State encourages companies to take part in public welfare activities and release their social responsibility reports. Article 21 Where any shareholder of a company causes any loss to the company or any other shareholder by abusing the shareholder's rights, it shall be liable for compensation. Article 22 Whoever causes any loss to the company by violating the provisions of the preceding paragraph shall be liable for compensation. Article 23 Where a shareholder commits any of the acts as mentioned in the preceding paragraph by using two or more companies under its control, each company shall be jointly and severally liable for the debts of any company. In the case of any company with only one shareholder, if the shareholder is unable to prove that the property of the company are independent of its own property, it shall be jointly and severally liable for the debts of the company. Article 24 Article 25 Article 26 Any shareholder who fails to be notified to attend the shareholders' meeting may, within 60 days as of the day when it knows or ought to know that the resolution of the shareholders' meeting is made, request the people's court to cancel the resolution. If the right of cancellation is not exercised within one year as of the date when the resolution is made, it shall be extinguished. Article 27 (I) the resolution fails to be made at any shareholders' meeting or meeting of the board of directors; (II) the shareholders' meeting or meeting of the board of directors fails to vote on the resolution; (III) the number of persons attending the meeting or the number of the voting rights held by them does not reach the number as prescribed by this Law or the articles of association; (IV) the number of persons consenting to the resolution or the number of the voting rights held by them fails to reach the number as prescribed by this Law or the articles of association. Article 28 Where a resolution of the shareholders' meeting or the board of directors is declared null and void, cancelled or confirmed to be invalid by the people's court, the civil legal relationship formed between the company and any bona fide third party according to the said resolution shall not be affected. Chapter II Registration of Companies Article 29 Where it is prescribed by any law or administrative regulation that the establishment of a company shall be submitted for approval, the approval formalities shall be gone through according to law prior to the registration of the company. Article 30 If the application materials are incomplete or do not satisfy the statutory form, the company registration authority shall inform the applicant once for all of the materials to be supplemented and corrected. Article 31 Article 32 (I) name; (II) domicile; (III) registered capital; (IV) business scope; (V) name of the legal representative; (VI) names of the shareholders of a limited liability company or of the promoters of a joint stock limited company. The company registration authority shall make public the company registration items as prescribed in the preceding paragraph through the National Enterprise Credit Information Publicity System. Article 33 The business license shall state the name, domicile, registered capital, business scope, name of the legal representative and other items of the company. The company registration authority may issue an electronic business license to the company. Both electronic business license and paper business license shall be equally authentic. Article 34 Failure to make registration or modification registration of any registered item of a company may not be asserted against any bona fide third party. Article 35 Where the item of modification registration of the company involves the amendment of its articles of association, the amended articles of association shall be submitted. Where the legal representative of a company is changed, the written application form for modification registration shall be signed by the legal representative after change. Article 36 Article 37 Article 38 Article 39 Article 40 (I) the amounts of capital contributions subscribed for and actually paid by the shareholders of a limited liability company, and the method and date of capital contributions; (II) the information on the change of equity or shares of the shareholders of a limited liability company or of the promoters of a joint stock limited company; (III) the information on approval, modification or deregistration of administrative licensing; (IV) other information prescribed by any law or administrative regulation. The company shall ensure that the information released in the preceding paragraph is authentic, accurate and complete. Article 41 The market regulatory department under the State Council shall, according to the present Law and the provisions of relevant laws and administrative regulations, formulate specific measures for company registration. Chapter III Establishment and Organizational Structure of a Limited Liability Company Section 1 Establishment Article 42 Article 43 Article 44 If the company fails to be established, the legal consequences incurred shall be undertaken by the shareholders at the time of the establishment of the company. If there are two or more shareholders at the time of the establishment, they shall enjoy the claims and assume the debts jointly and severally. If a shareholder at the time of the establishment of the company engages in the civil activities in its own name for the purpose of establishing the company, the third party has the right to request the company or such shareholder to assume the civil liability incurred. Where a shareholder at the time of the establishment of a company causes any damage to any other person due to fulfilling the duties for the establishment of the company, the company or the shareholder who is not at fault may, after making compensations, claim the compensation from the shareholder who is at fault. Article 45 Article 46 (I) name and domicile of the company; (II) business scope of the company; (III) registered capital of the company; (IV) name or title of the shareholders; (V) amount, method and date of capital contributions made by the shareholders; (VI) organizations of the company and their formation, functions and rules of procedure; (VII) method of appointment and alteration of the legal representative of the company; (VIII) other matters to be specified by the shareholders' meeting. The shareholders shall affix their signatures or seals on the articles of association of the company. Article 47 Where it is otherwise provided for in any law, administrative regulation or decision of the State Council on the actual payment of registered capital, the minimum amount of registered capital and the time limit for capital contributions by shareholders of a limited liability company, such provisions shall prevail. Article 48 The non-monetary property as capital contributions shall be assessed and verified, which may not be overvalued or undervalued. If there are provisions on the assessment of value in any law or administrative regulation, such provisions shall prevail. Article 49 If a shareholder makes its capital contributions in currency, it shall deposit the full amount of monetary capital contributions into a bank account opened by the limited liability company. If the capital contributions are made in non-monetary property, the procedures for the transfer of the property rights therein shall be gone through according to law. If a shareholder fails to make its capital contributions on schedule and in full amount, it shall, apart from making full amount capital contributions to the company, be liable for compensation for the losses it causes to the company. Article 50 Article 51 Where any loss is caused to the company due to failure to fulfill the obligations as prescribed in the preceding paragraph in a timely manner, the responsible director shall make compensation. Article 52 The forfeited equities in accordance with the provisions of the preceding paragraph shall be transferred according to law, or the registered capital thereof shall be reduced, and the equities shall be written off. If the equities are not transferred or written off within 6 months, other shareholders of the company shall make corresponding capital contributions in full amount in proportion to their capital contributions. If the shareholder has any dissent to the forfeiture of rights, it shall file a lawsuit with the people's court within 30 days as of the receipt of the notice of forfeiture. Article 53 In the case of violation of the provisions of the preceding paragraph, the shareholder shall return the capital contributions withdrawn. If it causes any loss to the company, the responsible directors, supervisors and senior executives shall bear the joint and several liability with the shareholder. Article 54 Article 55 (I) name of the company; (II) date of establishment of the company; (III) registered capital of the company; (IV) name of the shareholder, amount of capital contributions subscribed for and actually paid, method and date of capital contributions; (V) serial number and date of issuance of the capital contribution certificate. The capital contribution certificate shall bear the signature of the legal representative and the seal of the company. Article 56 (I) name and domicile of each shareholder; (II) amount of capital contributions subscribed for and actually paid by shareholders, the form and date of capital contributions; (III) serial number of the capital contribution certificate; (IV) date for obtaining or losing the shareholder's qualifications. The shareholders recorded in the register of shareholders may, in light of the register of shareholders, claim to exercise the shareholders' rights. Article 57 The shareholders may request to consult the accounting books and accounting vouchers of the company. Where a shareholder requests to access the accounting books or accounting vouchers of the company, it shall make a written request and state the purposes therefor. If the company, with justifiable reasons, considers that the shareholder's request to consult the accounting books or accounting vouchers has any improper purpose and may damage the lawful rights and interests of the company, it may reject the request of the shareholder, and shall, within 15 days as of the day when the shareholder makes the written request, give the shareholder a written reply and state the reasons therefor. If the company refuses to provide access, the shareholder may bring a lawsuit to a people's court. To consult the materials as mentioned in the preceding paragraph, a shareholder may entrust such intermediaries as an accounting firm or law firm to do so. When the shareholder and the accounting firm, law firm or other intermediaries entrusted thereby consult or copy the relevant materials, they shall comply with the laws and administrative regulations on protecting state secrets, trade secrets, personal privacy, personal information, etc. Where a shareholder requests to consult or copy the relevant materials of the wholly-owned subsidiaries of the company, the provisions of the preceding 4 paragraphs shall apply. Section 2 Organizational Structure Article 58 Article 59 (I) electing and replacing directors and supervisors and deciding on their remunerations; (II) deliberating on and approving the reports of the board of directors; (III) deliberating on and approving the reports of the board of supervisors; (IV) deliberating on and approving the plans for profit distribution and making up losses of the company; (V) making resolutions on the increase or decrease of the registered capital of the company; (VI) making resolutions on the issuance of corporate bonds; (VII) making resolutions on the merger, split-up, dissolution, liquidation or change of corporate form of the company; (VIII) amending the articles of association; (IX) other functions and powers as prescribed in the articles of association. The shareholders' meeting may authorize the board of directors to make resolutions on the issuance of corporate bonds. If the shareholders unanimously agree in writing to the matters as set forth in the first paragraph of this Article, they may directly make a decision without convening the shareholders' meeting, and all the shareholders shall affix their signatures or seals to the decision documents. Article 60 Article 61 Article 62 The regular meetings shall be held on time according to the provisions of the articles of association. Where it is proposed by the shareholders representing one tenth or more of the voting rights, or by one third or more of the directors, or by the board of supervisors, an interim meeting shall be held. Article 63 If the board of directors is unable or fails to perform the duty of convening the shareholders' meeting, the meeting shall be convened and presided over by the board of supervisors. If the board of supervisors does not convene or preside over such a meeting, the shareholders representing one tenth or more of the voting rights may convene and preside over such a meeting by themselves. Article 64 The shareholders' meeting shall prepare meeting minutes for the decisions on the matters discussed. The shareholders present at the meeting shall affix their signatures or seals to the meeting minutes. Article 65 Article 66 A resolution made by the shareholders' meeting shall be adopted by the shareholders representing more than half of the voting rights. A resolution made by the shareholders' meeting on modifying the articles of association, increasing or decreasing the registered capital, as well as merger, division, dissolution or change of corporate form of the company shall be adopted by the shareholders representing two thirds or more of the voting rights. Article 67 The board of directors shall exercise the following functions and powers: (I) convening the shareholders' meeting and reporting its work to the shareholders' meeting; (II) executing the resolutions of the shareholders' meeting; (III) deciding the business plans and investment scheme of the company; (IV) formulating the plans for profit distribution and making up for loss of the company; (V) formulating the plan for increasing or decreasing the registered capital, as well as the plan for issuance of corporate bonds; (VI) formulating the plan for merger, division, dissolution, or change of corporate form of the company; (VII) deciding the establishment of the internal management body of the company; (VIII) deciding the appointment or dismissal of the manager of the company and the remuneration thereof, and, according to the nomination of the manager, deciding on hiring or dismissing deputy managers and financial director of the company as well as their remuneration; (IX) formulating the basic management rules of the company; (X) other functions and powers specified in the articles of association or granted by the shareholders' meeting. Any restrictions on the functions and powers of the board of directors set out in the articles of association may not be asserted against any bona fide third party. Article 68 The board of directors shall have one chairman and may have deputy chairmen. The measures for election of the chairman and deputy chairmen shall be prescribed in the articles of association. Article 69 Article 70 Where a director is not reelected timely upon expiration of the term of office, or the resignation of any director during his/her term of office results in the number of members of the board of directors being less than the quorum, the original director shall, before a newly elected director takes office, perform his/her duties as a director according to the laws, administrative regulations and the articles of association. Where a director resigns, he/she shall notify the company in written form, and the resignation shall become effective on the day when the company receives the notice. However, under any of the circumstances as mentioned in the preceding paragraph, the director shall continue performing his/her duties. Article 71 Where a director is removed prior to the expiration of term of office without any justifiable reason, the director may require the company to make compensation. Article 72 Article 73 No meeting of the board of directors may be held unless more than half of the directors are present. When the board of directors makes a resolution, it shall require the affirmative votes of more than half of all the directors. For the voting on a resolution of the board of directors, each director shall have one vote. The board of directors shall prepare minutes regarding the decisions on the matters discussed at the meeting, which shall be affixed with the signatures of the directors present at the meeting. Article 74 The manager shall be responsible to the board of directors and exercise his/her functions and powers according to the articles of association or the authorization of the board of directors. The manager shall attend the meetings of the board of directors as a non-voting member. Article 75 Article 76 There are three or more members in the board of supervisors. The members of the board of supervisors shall include shareholders' representatives and an appropriate proportion of employees' representatives, and the proportion of the employees' representatives shall be no less than one third of the total number of the members, the specific proportion of which shall be provided for in the articles of association. The employees' representatives in the board of supervisors shall be democratically elected by the employees through the employees' representative congress, the employees' congress or by other means. The board of supervisors shall have one chairman, who shall be elected by more than half of all the supervisors. The chairman of the board of supervisors shall convene and preside over the meetings of the board of supervisors. If the chairman of the board of supervisors is unable or fails to implement his/her duties, the meeting of the board of supervisors shall be convened and presided over by a supervisor jointly elected by more than half of the supervisors. Any director or senior executive shall not concurrently act as a supervisor. Article 77 If a supervisor fails to be reelected timely upon expiration of the term of office, or the resignation of a supervisor during term of office results in the number of the members of the board of supervisors being less than the quorum, the original supervisor shall, before a newly elected supervisor takes office, continue to exercise the duties of the supervisor according to the law, administrative regulations and the articles of association. Article 78 (I) examining the financial affairs of the company; (II) supervising the acts of the directors and senior executives in the performance of their duties, and proposing the removal of the directors and senior executives who have violated laws, administrative regulations, the articles of association or the resolutions of the shareholders' meeting; (III) requiring the directors and senior executives to correct their acts if such acts damage the interests of the company; (IV) proposing to convene interim shareholders' meetings, and convening and presiding over the shareholders' meeting when the board of directors fails to implement the duties to convene and preside over the shareholders' meeting as prescribed in this Law; (V) presenting proposals to the shareholders' meetings; (VI) initiating lawsuits against the directors and senior executives according to Article 189 hereof; (VII) other functions and powers provided for in the articles of association. Article 79 If the board of supervisors finds any abnormality in the operation of the company, it may carry out an investigation. If necessary, it may hire an accounting firm to assist in its work at the expense of the company. Article 80 The directors and senior executives shall truthfully provide relevant information and materials to the board of supervisors, none of them may impede the exercise of powers by the board of supervisors or supervisors. Article 81 The discussion methods and voting procedures of the board of supervisors shall be specified in the articles of association, unless it is otherwise provided for by this Law. The resolution of the board of supervisors shall be adopted by more than half of all the supervisors. For the voting on a resolution of the board of supervisors, each supervisor shall have one vote. The board of supervisors shall prepare minutes for the decisions regarding the matters discussed, which shall be signed by the supervisors present at the meeting. Article 82 Article 83 Chapter IV Transfer of Equities of a Limited Liability Company Article 84 Where a shareholder transfers its equities to a person who is not a shareholder of the company, it shall notify other shareholders in writing of the quantity of equities to be transferred, transfer price, payment method and the term of the transfer. The other shareholders shall have a right of first refusal under the equivalent conditions. Where any shareholder fails to respond within thirty days after the receipt of the written notice, it shall be deemed to have waived the right of first refusal. If two or more shareholders exercise the right of first refusal, they shall determine the purchase percentage through negotiation. If no agreement is reached upon negotiation, they shall exercise the right of first refusal in proportion to their respective capital contributions at the time of equity transfer. If the equity transfer is otherwise provided for in the articles of association, such provisions shall prevail. Article 85 Article 86 Where any equity is transferred, the transferee may claim to the company for exercising the shareholder's rights as of the time when it is recorded into the register of shareholders. Article 87 Article 88 If a shareholder, who fails to make capital contribution on the date of capital contribution as prescribed in the articles of association, or whose actual value of the non-monetary property used as capital contribution is clearly lower than the amount of capital contribution subscribed for, transfers its equities, the transferor and transferee shall bear joint and several liability to the extent of the insufficient capital contribution. If the transferee is not aware and ought not to know about the existence of the aforesaid circumstances, the corresponding liability shall be assumed by the transferor. Article 89 (I) the company has not distributed any profit to the shareholders for five consecutive years, though the company has made profits for five consecutive years and meets the profit distribution requirements as prescribed in this Law; (II) the company is merged, split-up or transfers the main property; (III) the term of business operation as prescribed in the articles of association expires or any other cause for dissolution as prescribed in the articles of association occurs, or the shareholders' meeting makes the company continue existing by adopting a resolution to modify the articles of association. Where the shareholder and the company fail to reach an agreement on the purchase of equities within 60 days after the resolution is made by the shareholders' meeting, such shareholder may lodge a lawsuit to the people's court within 90 days after the resolution is made by the shareholders' meeting. Where any controlling shareholder of the company abuses its shareholder's right and seriously damages the interests of the company or other shareholders, other shareholders have the right to require the company to purchase their equities at a reasonable price. The equities purchased by the company under any of the circumstances as mentioned in the first or third paragraph of this Article shall be legally transferred or deregistered within 6 months. Article 90 Chapter V Establishment and Organizational Structure of a Joint Stock Limited Company Section 1 Establishment Article 91 The term "establishment by means of promotion" means that the promoters establish a company by subscribing for all the shares that shall be issued at the time of establishment. The term "establishment by means of stock floatation" means that the promoters establish a company by subscribing for some of the shares that shall be issued at the time of establishment and offering the remaining shares to specific objects or to the general public. Article 92 Article 93 The promoters shall conclude an agreement of promoters so as to specify their respective rights and obligations during the process of establishing the company. Article 94 Article 95 (I) name and domicile of the company; (II) business scope of the company; (III) method of establishment; (IV) registered capital, the number of issued shares and the number of issued shares at the time of establishment of the company, and the amount per share of par value share; (V) number of shares of each classified share and the rights and obligations if classified shares are issued; (VI) names of the promoters, the number of shares subscribed for, and the form of capital contributions; (VII) composition, powers and rules of procedure of the board of directors; (VIII) method for the appointment and alteration of the legal representative of the company; (IX) composition, powers and rules of procedure of the board of supervisors; (X) method for the profit distribution of the company; (XI) causes of dissolution of the company and liquidation method; (XII) methods for notices or public announcements of the company; (XIII) other matters that the shareholders' meeting believes necessary to be specified. Article 96 Where there is any provision on the minimum amount of the registered capital of a joint stock limited company in any law, administrative regulation or decision of the State Council, such provision shall prevail. Article 97 If a joint stock limited company is to be established by means of stock floatation, the promoters shall subscribed for not less than 35% of the total shares that shall be issued at the time of the establishment of the company as provided for in the articles of association; Article 98 The capital contributions by promoters shall be governed by the provisions of Article 48 and paragraph 2 of Article 49 hereof on the capital contributions by the shareholders of a limited liability company. Article 99 Article 100 Article 101 Article 102 (I) name and domicile of each shareholder; (II) class and number of shares subscribed for by each shareholder; (III) serial number of shares if the shares are issued in paper form; (IV) date for each shareholder to obtain shares. Article 103 Where a joint stock limited company is established by means of promotion, the convening and voting procedures for the establishment meeting shall be prescribed by the articles of association of the company or the agreement of the promoters. Article 104 (I) deliberating on the report on the preparations for establishment of the company by promoters; (II) adopting the articles of association; (III) electing directors and supervisors; (IV) reviewing the expenses for the establishment of the company; (V) reviewing the valuations of the non-monetary property contributed by the promoters; (VI) where any force majeure or any major change of business conditions directly affects the establishment of the company, the resolution of not establishing the company may be made. The resolutions made at the establishment meeting about the matters as mentioned in the preceding paragraph shall be adopted by the subscribers present at the meeting who represent more than half of the voting rights. Article 105 The promoters and subscribers may not withdraw their share capital after they have made payment for the shares or delivered non-monetary property as capital contributions, except that the shares have not been fully subscribed for within the time limit, the promoters fail to hold the establishment meeting on schedule, or the establishment meeting decides not to establish the company. Article 106 Article 107 Article 108 Article 109 Article 110 Where the shareholders who separately or aggregately hold 3% or more of the company's shares for 180 consecutive days or more request to consult the accounting books or accounting vouchers of the company, the provisions of Paragraphs 2 through 4 of Article 57 hereof shall apply. Where the articles of association prescribe a relatively lower proportion of shareholding, such provisions shall prevail. Where the shareholders request to consult or copy the relevant materials of a wholly-owned subsidiary of the company, the provisions of the preceding two paragraphs shall apply. When consulting or copying the relevant materials, shareholders of a listed company shall comply with the Securities Law of the People's Republic of China and other laws and administrative regulations. Section 2 Shareholders' Meeting Article 111 Article 112 The provision in Article 60 hereof that a limited liability company with only one shareholder may not establish a shareholders' meeting shall apply to a joint stock limited company with sole shareholder. Article 113 (I) where the number of directors is less than two thirds of the number as provided for by this Law or the articles of association; (II) where the unrecovered losses of the company reach one third of the total capital stock; (III) where the shareholders who separately or aggregately hold 10% or more of the company's shares so request; (IV) where the board of directors deems it necessary; (V) where the board of supervisors so proposes; (VI) other circumstances as provided for in the articles of association. Article 114 If the board of directors is unable or fails to perform the duties of convening the shareholders' meeting, the board of supervisors shall timely convene and preside over the meeting. If the board of supervisors fails to convene and preside over the meeting, shareholders who separately or aggregately hold 10% or more of the shares of the company for 90 or more consecutive days may convene and preside over the meeting by themselves. If the shareholders who separately or aggregately hold 10% or more of the shares of the company request to convene an interim shareholders' meeting, the board of directors and the board of supervisors shall, within 10 days after the receipt of such request, decide whether to hold an interim shareholders' meeting and reply to the shareholders in writing. Article 115 The shareholders who separately or aggregately hold 1% or more of the shares of the company may, 10 days before a shareholders' meeting is held, submit an interim proposal in writing to the board of directors. The interim proposal shall contain a clear topic for discussion and specific matters for resolution. The board of directors shall, within 2 days after it receives such a proposal, notify other shareholders and submit the interim proposal to the shareholders' meeting for deliberation, unless the interim proposal is in violation of any law, administrative regulation or the articles of association or fails to fall into the scope of functions of the shareholders' meeting. The company shall not raise the shareholding proportion of the shareholder who brings forward any interim proposal. A company offering shares to the public shall make the notices as mentioned in the preceding 2 paragraphs by way of announcement. The shareholders' meeting shall not make any resolution on any matter not specified in the notice. Article 116 A resolution made at the shareholders' meeting shall be adopted by more than half of the voting rights held by the shareholders who attend the meeting. A resolution made at the shareholders' meeting on modifying the articles of association, increasing or reducing the registered capital as well as merger, split-up, dissolution or change of the corporate form shall be adopted by two thirds or more of the voting rights held by the shareholders who attend the meeting. Article 117 For the purpose of this Law, the "cumulative voting system" means that when the shareholders' meeting elects the directors or supervisors, each shareholder is entitled to one vote per share, multiplied by the number of candidates and uses them all for one candidate for director or supervisor. Article 118 Article 119 Section 3 Board of Directors and Managers Article 120 The provisions of Article 67, Paragraph 1 of Article 68, Article 70, Article 71 hereof shall apply to joint stock limited companies. Article 121 The audit committee shall be composed of at least 3 members, and more than half of the members shall not assume any position other than the director in the company and shall not have any relationship with the company that may affect their independent and objective judgments. Among the members of the board of directors of the company, an employees' representative may become a member of the audit committee. A resolution made by the audit committee shall be adopted by more than half of the members thereof. For voting on a resolution of the audit committee, each member shall have one vote. The discussion methods and voting procedures of the audit committee shall be prescribed in the articles of association, unless it is otherwise provided for by this Law. A company may set up other committees in the board of directors under the articles of association. Article 122 The chairman shall convene and preside over the meetings of the board of directors and check the implementation of the resolutions of the board of directors. The deputy chairman shall assist the chairman in work. If the chairman is unable or fails to perform his/her duties, the deputy chairman shall perform such duties. If the deputy chairman is unable or fails to perform his/her duties, a director jointly elected by more than half of the directors shall perform such duties. Article 123 The shareholders representing one tenth or more of the voting rights, one third or more of the directors, or the board of supervisors may propose to convene an interim meeting of the board of directors. The chairman of the board of directors shall, within 10 days upon receipt of such a proposal, convene and preside over a meeting of the board of directors. If the board of directors holds an interim meeting, it may separately decide the method and time limit for the notification on convening meetings of the board of directors. Article 124 For voting on a resolution of the board of directors, each director shall have one vote. The board of directors shall prepare minutes regarding the decisions on the matters discussed at the meetings, which shall be signed by the directors present. Article 125 The directors shall be responsible for the resolutions made by the board of directors. Where a resolution of the board of directors is in violation of any law, administrative regulation, article of association or resolution of the shareholders' meeting and causes any serious loss to the company, the directors who participate in adopting such resolution shall be liable for compensation to the company. If a director is proved to have expressed his/her objection to the voting on such resolution and such objection has been recorded in the minutes, he/she may be exempted from liability. Article 126 The manager shall be responsible to the board of directors and exercise his/her functions and powers according to the articles of association or the authorization of the board of directors. The manager shall attend the meetings of the board of directors as a non-voting member. Article 127 Article 128 Article 129 Section 4 Board of Supervisors Article 130 The board of supervisors shall comprise 3 members or more. The members of the board of supervisors shall include shareholders' representatives and an appropriate proportion of employees' representatives of the company, among which the proportion of the employees' representatives shall not be lower than one third, and the concrete proportion shall be specified in the articles of association. The employees' representatives who serve as members of the board of supervisors shall be democratically elected by employees through the employees' representative congress, employees' congress or by other means. The board of supervisors shall have one chairman and may have deputy chairmen. The chairman and deputy chairmen of the board of supervisors shall be elected by more than half of all the supervisors. The chairman of the board of supervisors shall convene and preside over the meetings of the board of supervisors. If the chairman of the board of supervisors is unable or fails to perform his/her duties, the deputy chairman of the board of supervisors shall convene and preside over the meeting. If the deputy chairman is unable or fails to perform his/her duties, a supervisor jointly elected by more than half of the supervisors shall convene and preside over such meeting. No director or senior executive may concurrently hold the post of supervisor. The provisions of Article 77 hereof on the term of office of supervisors of a limited liability company shall apply to that of the supervisors of a joint stock limited company. Article 131 The expenses necessary for the board of supervisors to exercise its functions and powers shall be borne by the company. Article 132 The discussion methods and voting procedures of the board of supervisors shall be prescribed in the articles of association, unless it is otherwise provided for by this Law. Resolutions made by the board of supervisors shall be adopted by more than half of all the supervisors. For voting on a resolution by the board of supervisors, each supervisor shall have one vote. The board of supervisors shall prepare minutes for the decisions on the matters discussed at the meeting, which shall be signed by the supervisors present. Article 133 Section 5 Special Provisions on the Organizational Structure of a Listed Company Article 134 Article 135 Article 136 The articles of association of a listed company shall not only specify the matters as prescribed in Article 95 hereof, but also specify the matters such as the composition and functions and powers of the ad hoc committees of the board of directors, as well as the remuneration and appraisal mechanism for directors, supervisors and senior executives according to the relevant laws and administrative regulations. Article 137 (I) hiring or removing the accounting firm that undertakes the audit engagements of the company; (II) appointing or removing the financial director; (III) disclosing the financial and accounting reports; (IV) any other matter as prescribed by the securities regulatory authority of the State Council. Article 138 Article 139 Article 140 It is prohibited to hold the stocks of any listed company on an agency basis in violation of laws and administrative regulations. Article 141 In case any subsidiary controlled by a listed company holds the shares of the listed company due to the merger of the company or exercise of pledge right, it shall not exercise the voting right corresponding to the shares it holds and timely dispose of the relevant shares of the listed company. Chapter VI Issuance and Transfer of Shares of a Joint Stock Limited Company Section 1 Issuance of Shares Article 142 The company may, according to the articles of association, convert all the issued par value shares into no par value shares, or vice versa. Where no par value shares are adopted, more than half of the proceeds from the issuance of the shares shall be included in the registered capital. Article 143 Shares of the same class in the same issue shall be issued at the same price and on same conditions. The same price shall be paid for each share subscribed for by a subscriber. Article 144 (I) shares with priority or inferior rights to profits or remaining property in distribution; (II) shares with more or less voting rights per share than those of the common shares; (III) shares whose transfer is subject to the consent of the company and other restrictions; (IV) other classified shares provided for by the State Council. A company making a public offering of shares shall not issue any of the classified shares as prescribed in Items (II) and (III) of the preceding paragraph, except those issued prior to the public offering. Where a company issues the classified shares as mentioned in Item (II) of Paragraph 1 of the present Article, the number of voting rights per classified share shall be the same as that of the common share for the election and replacement of the supervisors or the members of the audit committee. Article 145 (I) the sequence for the distribution of profits or remaining property of the classified shares; (II) the number of voting rights of the classified shares; (III) the restriction on the transfer of classified shares; (IV) measures for protecting the rights and interests of minority shareholders; (V) other matters that the shareholders' meeting believes necessary to be specified. Article 146 Other matters that need to be decided at the classified shareholders' meeting may be provided for in the articles of association of the company. Article 147 The shares issued by a company shall be registered shares. Article 148 Article 149 A stock in paper form shall state the following main items: (I) the name of the company; (II) the date of establishment of the company or the time for the issuance of the stocks; (III) the class and par value of the stock, and the number of shares it represents; A stock in paper form shall also state the serial number of the stock, which shall be signed by the legal representative and sealed by the company. Stocks issued to promotors in paper form shall bear the words "promoter's stocks". Article 150 Article 151 (I) the class and amount of the new stocks; (II) the issuing price of the new stocks; (III) the beginning and ending dates for the issuance of the new stocks; (IV) the class and amount of the new stocks to be issued to the original shareholders; (V) if any no par value stock is issued, the proceeds from the issuance of the new stocks shall be included into the registered capital. Where a company issues new stocks, it may make the pricing plan in light of its business operations and financial status. Article 152 Where the board of directors decides to issue shares pursuant to the preceding paragraph, and thus results in a change in the registered capital or the number of issued shares of the company, the voting at the shareholders' meeting may not be needed to revise such item set forth in the articles of association of the company. Article 153 Article 154 The prospectus shall be attached with the articles of association and state the following matters: (I) the total number of shares to be issued; (II) the par value and issuance price of the par value stocks, or the issuance price of the no par value stocks; (III) the purposes of proceeds; (IV) the rights and obligations of subscribers; (V) the varieties of the shares and the rights and obligations thereof; (VI) the beginning and ending dates of the current offering and a statement that the subscribers may withdraw shares subscribed for if the shares are not fully offered within the time limit. Where the shares are issued at the time of establishment of a company, the number of shares subscribed for by the promoters shall also be stated. Article 155 Article 156 The bank entrusted to collect the share capital shall, under the agreement, collect and keep the share capital on behalf of the company, issue receipts to the subscribers who have made the payments, and shall be obliged to issue certification of receipt of payments to the relevant authorities. After the share capital is raised by a company making offering of shares, an announcement shall be made. Section 2 Transfer of Shares Article 157 Article 158 Article 159 The register of shareholders shall not be modified within 20 days before any shareholders' meeting is held, or within 5 days prior to the benchmark date decided by the company for the distribution of dividends. Where it is otherwise provided for in any law, administrative regulation or by the securities regulatory authority of the State Council for the modification of the register of shareholders of a listed company, such provisions shall prevail. Article 160 The directors, supervisors and senior executives of the company shall declare to the company the shares they hold and the changes thereof. During the term of office as determined when they assume the posts, the shares transferred each year shall not exceed 25% of the total shares they hold of the company. The shares of the company held by them shall not be transferred within 1 year as of the day when the stocks of the company are listed and traded on the stock exchange. Any of the aforesaid persons shall not transfer the shares of the company held within six months after he/she leaves office. Any other restrictions on the transfer of company shares held by directors, supervisors or senior executives may be specified in the articles of association. Where the shares are pledged within the time limit for restricted transfer as provided for by laws and administrative regulations, the pledgee may not exercise the pledge right within such restricted period. Article 161 (I) the company has not distributed any profit to the shareholder for 5 consecutive years, though the company has made profits for five consecutive years and meets the profit distribution requirements as prescribed in this Law; (II) the company has transferred its main property; (III) the business operation term as prescribed in the articles of association expires or any other cause for dissolution as prescribed in the articles of association occurs, and the shareholders' meeting makes the company continue existing by adopting a resolution to modify the articles of association. Where the shareholder fails to reach a share purchase agreement with the company within 60 days as of the day when the resolution is made by the shareholders' meeting, it may, within 90 days as of the day when the resolution is made by the shareholders' meeting, lodge a lawsuit in the people's court. The shares purchased by the company itself under any of the circumstances as mentioned in the first paragraph of the present Article shall be transferred or deregistered according to law within 6 months. Article 162 (I) where the company's registered capital is reduced; (II) where it merges with another company holding its shares; (III) where its shares are used for employee stock ownership plan or equity incentives; (IV) where any shareholder, who raises objections to the resolution of the shareholders' meeting on the merger or split-up of the company, requests the company to purchase its shares; (V) where its shares are used for converting the corporate bonds into convertible stocks issued by the company; (VI) it is necessary for a listed company to maintain its company value and its shareholders' equity. Where a company purchases its own shares under any of the circumstances as mentioned in Items (I) or (II) of the preceding paragraph, a resolution of the shareholders' meeting shall be adopted. Where a company purchases its own shares under any of the circumstances as mentioned in Items (III), (V) or (VI) of the preceding paragraph, a resolution shall be adopted at the meeting of the board of directors with the attendance of not less than two thirds of the directors, according to the articles of association or the shareholders' meeting of the company. After the company purchases its own shares according to the first paragraph of this Article, the shares purchased shall be written off within ten days as of the purchase date under the circumstance as mentioned in Item (I); Where a listed company purchases its own shares, it shall perform its obligation of information disclosure according to the provisions of the Securities Law of the People's Republic of China. Where a listed company purchases its own shares due to any of the circumstances as mentioned in Items (III), (V) or (VI) of Paragraph 1 of this Article, such purchase shall be conducted by way of public centralized trading. No company may accept the shares of its own as the subject matter of pledge. Article 163 For the benefits of the company, the company may, upon a resolution by the shareholders' meeting or by the board of directors under the articles of association or the authorization of the shareholders' meeting, provide financial aids for others to obtain the shares of the company or the parent company thereof, provided that the total accumulative amount of the financial aids shall not exceed 10% of the total issued share capital. A resolution by the board of directors shall be adopted by two thirds of all the directors. Any director, supervisor or senior executive who is liable for any loss to the company due to violation of the provisions of the preceding two paragraphs shall make compensations. Article 164 Article 165 Article 166 Article 167 Chapter VII Special Provisions on the Organizational Structure of State-invested Companies Article 168 For the purpose of this Law, "state-invested companies" refer to the solely state-owned companies or state-owned capital holding companies invested by the state, including the limited liability companies and joint stock limited companies invested by the state. Article 169 The organs and departments that perform the contributor's duties on behalf of the people's governments at the corresponding level are hereinafter referred to collectively as the agencies that perform the contributor's duties. Article 170 Article 171 Article 172 Article 173 More than half of the members of the board of directors of a solely state-owned company shall be external directors and include employees' representatives of the company. The members of the board of directors shall be designated by the agency that performs the contributor's duties. However, the employees' representatives in the board of directors shall be elected through the employees' representative congress of the company. The board of directors shall have one chairman and may have deputy chairmen. The chairman and deputy chairmen shall be designated by the agency that performs the contributor's duties from among the members of the board of directors. Article 174 A member of the board of directors may concurrently serve as the manager subject to the consent of the agency that performs the contributor's duties. Article 175 Article 176 Article 177 Chapter VIII Qualifications and Obligations of Directors, Supervisors and Senior Executives of a Company Article 178 (I) having no capacity for civil conduct or having limited capacity for civil conduct; (II) having been sentenced to any criminal penalty due to an offence of corruption, bribery, encroachment of property, misappropriation of property or disrupting the order of the socialist market economy, or having been deprived of political rights due to a crime, where a five-year period has not elapsed since the expiration of execution period; (III) serving as a director, factory director or manager of a company or enterprise which has been bankrupt and liquidated and being personally liable for the bankruptcy of such company or enterprise, where a three-year period has not elapsed since the completion of the bankruptcy and liquidation; (IV) acting as the legal representative of a company or enterprise whose business license has been revoked or which was ordered to close down due to any violation of the law and being personally liable, where a three-year period has not elapsed since the date of revocation of business license or the order for closure; (V) being listed as a dishonest person subject to enforcement by the people's court due to his/her failure to pay off a relatively large amount of due debts. Where the election or appointment of any director or supervisor, or employment of any senior executive is in violation of the preceding paragraph, it shall be invalidated. Where any director, supervisor or senior executive, during his/her term of office, is under any of the circumstances set out in the first paragraph of this Article, the company shall remove him/her from office. Article 179 Article 180 The directors, supervisors and senior executives shall assume the duty of diligence to the company. When performing their duties, they shall, for the best interests of the company, exercise the reasonable care that shall be generally possessed by a manager. The provisions of the preceding two paragraphs shall apply to the controlling shareholder or actual controller of a company who does not serve as a director but actually executes the affairs of the company. Article 181 (I) embezzling the property or misappropriating the funds of the company; (II) depositing the funds of the company into an account opened in his/her own name or in the name of any other individual; (III) giving bribes or accepting any other illegal proceeds by taking advantage of his/her power; (IV) taking commissions from the transactions between the company and any other person into his/her own pocket; (V) unlawfully disclosing the confidential information of the company; (VI) other acts in violation of the obligation of loyalty to the company. Article 182 Where any of the near relatives of the directors, supervisors or senior executives, or any of the enterprises directly or indirectly controlled by the directors, supervisors or senior executives or any of their near relatives, or any of the related parties who has any other related-party relationship with the directors, supervisors or senior executives, concludes a contract or conducts a transaction with the company, the provisions of the preceding paragraph shall apply. Article 183 (I) where he/she has reported to the board of directors or the shareholders' meeting and has been approved by a resolution of the board of directors or the shareholders' meeting according to the articles of association; (II) where the company cannot make use of the business opportunity as stipulated by laws, administrative regulations or the articles of association. Article 184 Article 185 Article 186 Article 187 Article 188 Article 189 Where the board of supervisors or the board of directors refuses to initiate a lawsuit after it receives a written request of the shareholders as mentioned in the preceding paragraph, or fails to file a lawsuit within 30 days upon receipt of the request, or in an emergency, the failure to initiate a lawsuit immediately will cause irreparable damage to the interests of the company, the shareholders in the preceding paragraph shall have the right to directly initiate a lawsuit in the people's court in their own name for the interests of the company. If others infringe upon the legitimate rights and interests of a company and cause losses to the company, the shareholders stipulated in the first paragraph of this Article may initiate a lawsuit in the people's court in accordance with the provisions of the preceding two paragraphs. If a director, supervisor or senior executive of a wholly-owned subsidiary of the company is under the circumstance specified in the preceding Article, or if the legitimate rights and interests of a wholly-owned subsidiary of the company are impaired by any other person, thus causing any losses, the shareholders of a limited liability company or shareholders of a joint stock limited company separately or aggregately holding 1% or more of the total shares of the company for 180 consecutive days or more may request the board of supervisors or the board of directors of the wholly-owned subsidiary in written form to initiate a lawsuit in the people's court or directly files a lawsuit with the people's court in their own name. Article 190 Article 191 Article 192 Article 193 After the company purchases liability insurance or renews the insurance for the director, the board of directors shall report the insured amount, coverage and premium rate etc. of the liability insurance to the shareholders' meeting. Chapter IX Corporate Bonds Article 194 Corporate bonds can be issued publicly or non-publicly. The offering and trading of corporate bonds shall comply with the Securities Law of the People's Republic of China and other laws and administrative regulations. Article 195 The corporate bond prospectus shall state the major items as follows: (I) the company's name; (II) the purposes of use of bond proceeds; (III) the total amount and par value of the bond; (IV) the method for determining the interest rate of the bond; (V) the term and manner of debt service; (VI) bond guarantees; (VII) the offering price of the bond, beginning and ending dates of the offering; (VIII) net assets of the company; (IX) the total amount of outstanding corporate bonds; (X) underwriter of the corporate bond. Article 196 Article 197 Article 198 Where corporate bonds are issued, the following matters shall be stated in the register of bondholders of the company: (I) the name and domicile of the bondholders; (II) the dates on which the bondholder acquires the bonds and the serial number of the bonds; (III) the total amount of the bonds, par value, interest rate, time limit and method for repayment of principal plus interest; (IV) the date on which the bonds are issued. Article 199 Article 200 The transfer of corporate bonds shall comply with the provisions of laws and administrative regulations. Article 201 Article 202 The corporate bonds that can be converted into stock shall be marked with the words "convertible corporate bonds", and the number of convertible corporate bonds shall be specified in the register of holders of corporate bonds. Article 203 Article 204 Unless otherwise agreed in the corporate bond prospectus, the resolution of the bondholders' meeting shall be effective for all bondholders of the same issue. Article 205 Article 206 Where there is any conflict of interests between the bond trustee and the bondholders, which may damage the interests of the bondholders, the bondholders' meeting may make a resolution to replace the bond trustee. The bond trustee shall be liable for compensation if it violates laws, administrative regulations or a resolution of the bondholders' meeting to the detriment of the interests of the bondholders. Chapter X Financial Affairs and Accounting of a Company Article 207 Article 208 The financial accounting report shall be made in accordance with the laws, administrative regulations and the provisions of the financial department of the State Council. Article 209 The financial accounting report of a joint stock limited company shall be made available for inspection by the shareholders at the company not later than twenty days before the annual meeting of shareholders; Article 210 Where the accumulative amount of the company's statutory reserve is not enough to make up for the losses of the previous year, the current year's profits shall first be used to make up for the losses before the statutory reserve is accrued according to the provisions of the preceding paragraph. After having accrued statutory reserve from the after-tax profits, a company can also set aside discretionary reserve from the after-tax profits upon a resolution made by the shareholders' meeting. The residual after-tax profits after a company has made up its losses and accrued reserve shall be distributed by the company (in the case of a limited liability company) in proportion to the capital contribution paid up by its shareholders, except where all the shareholders have agreed not to distribute the profits in accordance with the proportion of the capital contribution; Profit shall not be distributed for a company's shares held by this company. Article 211 Article 212 Article 213 Article 214 Where the reserve of a company is used for making up losses, the discretionary reserve and statutory reserve shall be firstly used. If losses still cannot be made up, the capital reserve can be used according to the relevant provisions. Where the statutory reserve is converted to increase registered capital, the amount of such reserve retained shall not be less than 25% of the registered capital of the company prior to the conversion. Article 215 When a company's shareholders' meeting, board of directors or the board of supervisors votes on the dismissal of an accounting firm, the accounting firm shall be allowed to state its own opinions. Article 216 Article 217 No account shall be opened in the name of any individual for the deposit of a company's funds. Chapter XI A Merger of Companies, and Demerger, Capital Increase and Capital Reduction of a Company Article 218 In the case of a merger by absorption, a company absorbs another company and the absorbed company shall be dissolved. In the case of a merger by new establishment, two or more companies combine together for the establishment of a new one, and the pre-merger companies shall be dissolved. Article 219 If the price paid for the merger of the companies is not more than 10 % of the net assets of the company, it is not required to adopt a resolution at the shareholders' meeting, unless it is otherwise provided for in the articles of association of the company. For the merger of the companies as provided for in the preceding two paragraphs, a resolution of the board of directors shall be adopted instead of a resolution of the shareholders' meeting. Article 220 Article 221 Article 222 A company shall prepare a balance sheet and a list of its property if it is to be demerged. The company shall notify its creditors within ten days from the date of the resolution on demerger and make an announcement in the newspaper or the National Enterprise Credit Information Publicity System within thirty days. Article 223 Article 224 The company shall notify its creditors within ten days from the date of the resolution of the shareholders' meeting to reduce the registered capital and make an announcement in the newspaper or the National Enterprise Credit Information Publicity System within thirty days. The creditors have the right to demand the company to settle the debts or provide corresponding guarantees within thirty days from the date of receipt of the notice, or within forty-five days from the date of the announcement if the notice has not been received. Where a company reduces its registered capital, it shall reduce the amount of capital contribution or shares in proport to the capital contribution or shares held by the shareholders, unless it is otherwise prescribed by any law, or is agreed upon by all the shareholders of a limited liability company or is otherwise prescribed by the articles of association of a joint stock limited company. Article 225 If the registered capital is reduced in accordance with the provisions of the preceding paragraph, the provisions of the second paragraph of the preceding Article shall not apply, but the resolution to reduce the registered capital shall be made by the shareholders' meeting within thirty days from the date of the announcement in the newspapers or on the National Enterprise Credit Information Publicity System. After a company reduces its registered capital in accordance with the provisions of the preceding two paragraphs, it shall not distribute profits until the accumulated amount of statutory reserve and discretionary reserve reaches 50% of the company's registered capital. Article 226 Article 227 When a joint stock limited company issues new shares to increase its registered capital, its shareholders shall not have the preemptive right, unless it is otherwise provided in the company's articles of association or the shareholders' meeting resolves that the shareholders enjoy the preemptive right. Article 228 When a joint stock limited company issues new shares to increase its registered capital, the subscription for new shares by its shareholders shall be governed by the relevant provisions of this Law regarding the payment of stock capital for the establishment of a joint stock limited company. Chapter XII Dissolution and Liquidation of a Company Article 229 (I) the expiration of the business period stipulated in the company's articles of association or the occurrence of other causes of dissolution stipulated in the company's articles of association; (II) dissolution by a resolution of the shareholders' meeting; (III) dissolution due to merger or demerger of the company; (IV) suspension of the business license, being ordered to close down or being revoked in accordance with the law; (V) being dissolved by the People's Court in accordance with the provisions of Article 231 hereof. If any of the situations as mentioned in the preceding paragraph arises, a company shall publicize the situations through the National Enterprise Credit Information Publicity System within ten days. Article 230 To modify its articles of association or make a resolution of the shareholders' meeting according to the provisions of the preceding paragraph, the consent of the shareholders who hold two thirds or more of the voting rights is required in the case of a limited liability company, and the consent of two thirds or more of the voting rights of the shareholders who attend the meeting of the shareholders' meeting is required in the case of a joint stock limited company. Article 231 Article 232 The liquidation group shall be composed of the directors, unless it is otherwise provided for in the company's articles of association or it is otherwise elected by the shareholders' meeting. The liquidation obligors shall be liable for compensation if they fail to fulfill their obligations of liquidation in a timely manner, and thus any loss is caused to the company or the creditors. Article 233 Where a company is dissolved according to Item (IV) of Paragraph 1 of Article 229 hereof, the department or company registration authority that made the decision to revoke the company's business license, ordered the company to close down or dissolved the company may request the people's court to designate relevant persons to form a liquidation group for liquidation of the company. Article 234 (I) liquidating the property of the company, preparing a balance sheet and an inventory of property, respectively; (II) notifying the company's creditors by mail or public announcement; (III) handling and liquidating the unfinished business of the company; (IV) paying off the taxes overdue by the company and the taxes incurred in the process of liquidation; (V) liquidation of claims and debts; (VI) distributing the remaining property after all the debts of the company are paid off; (VII) representing the company in civil litigation activities. Article 235 When filing a proof of claim, the creditor shall describe the relevant matters of claim and provide the relevant evidentiary materials. The liquidation group shall register the proof of claim. During the period for filing proofs of claims, the liquidation group shall not pay off for any of the creditors. Article 236 After paying off the liquidation expenses, wages of employees, social insurance premiums and statutory compensations, the outstanding taxes and the debts of the company with the property of the company, the remaining assets may, in the case of a limited liability company, be distributed in proportion to capital contributions of the shareholders, and in the case of a joint stock limited company, distributed in proportion to the shares held by the shareholders. During the period of liquidation, the company survives, but shall not carry out any business operation unrelated to the liquidation. The property of the company shall not be distributed to the shareholders until it has been liquidated in accordance with the preceding paragraph. Article 237 After the people's court accepts the application for bankruptcy, the liquidation group shall hand over the liquidation matters to the bankruptcy administrator designated by the people's court. Article 238 Any member of the liquidation group who neglects to fulfill his/her liquidation duties, thus causing any loss to the company shall be liable for compensation, and any member of the liquidation group who cause any loss to any creditor due to his/her intentional or gross negligence shall be liable for compensation. Article 239 Article 240 The deregistration of a company under the summary procedures shall be announced through the National Enterprise Credit Information Publicity System for a period of no less than 20 days. If there is no objection after the expiry of the announcement period, the company may apply for deregistration of the company with the company registration authority within 20 days. For a company deregistered under the summary procedures, its shareholders shall be jointly and severally liable for the debts incurred before the deregistration if they have made an untrue commitment to the contents as described in Paragraph 1 of this Article. Article 241 The deregistration of a company according to the provisions of the preceding paragraph will not affect the liability of the original shareholders or liquidation obligors. Article 242 Chapter XIII Branches of Foreign Companies Article 243 Article 244 The measures for the approval of branches of foreign companies shall be provided by the State Council separately. Article 245 Where a minimum amount of operating funds is required for branches of foreign companies, it shall be provided by the State Council separately. Article 246 A branch of a foreign company shall make the articles of association of the foreign company available at its premises. Article 247 A foreign company shall bear civil liability for the business activities conducted by any of its branches within the territory of the People's Republic of China. Article 248 Article 249 Chapter XIV Legal Liability Article 250 Article 251 Article 252 Article 253 Article 254 (I) having any separate accounting books other than the statutory accounting books; (II) providing any financial accounting report with any false records or important facts concealed. Article 255 Article 256 Article 257 Any agency undertaking asset appraisal, capital verification, or certification that issues any untrue appraisal results or certificates of capital verification or certification, resulting in losses to any creditor of a company, shall be liable for compensation to the extent of the amount of the discrepancy from truth, unless it can prove no fault on its part. Article 258 Article 259 Article 260 Any company that fails to complete the relevant alteration registration in accordance with this Law for any changes in its registered particulars shall be ordered by the company registration authority to fulfill the procedure within a specific period, failing which it shall be imposed of a fine of not less than 10,000 yuan but not more than 100,000 yuan. Article 261 Article 262 Article 263 Article 264 Chapter XV Supplementary Provisions Article 265 (I) "Senior executives" refers to the company manager, deputy company manager, head of finance, secretary to the board of directors of a listed company, and any other persons as specified in the company's articles of association. (II) "Controlling shareholder" refers to a shareholder whose capital contribution exceeds 50% of the total capital in the case of a limited liability company, or a shareholder whose shares exceed 50% of the total share capital in the case of a joint stock limited company, or a shareholder whose capital contribution or share proportion is less than 50% of the total capital or share capital but whose voting rights are sufficient to exert a material influence on resolutions of the shareholders' meeting. (III) "Actual controller" refers to any person who can exert actual control over a company through any investment relationships, agreements, or other arrangements. (IV) "Related-party relationship" refers to any relationship between a controlling shareholder, actual controller, director, supervisor, or senior officer of a company and an enterprise directly or indirectly controlled by that person, as well as any other relationship that may result in the transfer of any interest in the company. However, state-controlled enterprises do not have a related-party relationship between them solely due to being controlled by the state. Article 266 For the companies already registered for establishment before this Law comes into force, if their capital contribution period exceeds the period stipulated herein, such period shall be gradually adjusted to within the period prescribed in this Law, unless otherwise provided by laws, administrative regulations or the State Council;
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