中华人民共和国公司法
Company Law of the People's Republic of China

主席令第十六号
（Adopted at the Fifth session of the Standing Committee of the Eighth National People's Congress on December 29， 1993）
时效性：已被修正　 颁布日期：19931229 　实施日期：19940701 　失效日期：19991225 　颁布单位：全国人大常委会

Chapter 1 General Provisions

Article 1 This Law is formulated in accordance with the Constitution in order to adapt to the needs to establish a modem enterprise system， standardize the organization and activities of companies， protect the legitimate rights and interests of companies， shareholders and creditors， safeguard social and economic order and promote the development of the socialist market economy.

Article 2 In this Law， the term “company” refers to a limited liability company or a company limited by shares established within Chinese territory in accordance with this Law.

Article 3 All limited liability companies and companies limited by shares are enterprise legal persons.

In the case of a limited liability company， a shareholder is liable to the company to the extent of the amount of the shareholder's capital contribution. A limited liability company is liable for the debts of the company with all its assets.

In the case of a company limited by shares， its entire capital is divided into shares of equal value and shareholders shall be liable to the company to the extent of the shares held by them. A company limited by shares is liable for the debts of the company with all its assets.

Article 4 The shareholders of a company， as capital contributors， have the right to enjoy the benefits of the assets of the company， make major decisions， choose managers etc. in accordance with the amount of capital they have invested in the company.

A company enjoys all legal person property rights constituted by the shareholders' investment， enjoys civil rights and assumes civil liabilities in accordance with law.

Ownership of the State-owned assets in a company belongs to the state.

Article 5 With respect to all its corporate property， a company conducts its business autonomously in accordance with law and is responsible for its own profits and losses.

Under the state's macro regulation and control adjustment， a company organizes its production and operations autonomously according to market demand with the objectives of raising economic efficiency and labour productivity and preserving and increasing the value of assets.

Article 6 A company implements an internal management structure with a clear division of rights and responsibilities， scientific management and combined incentives and restrictions.

Article 7 A state owned enterprise which is being reorganized as a company shall replace its system of operation， gradually and systematically take inventory of its assets and verify its capital， determine property rights， clear creditors' rights and indebtedness， value assets and set up a standardized internal management structure in accordance with the law and conditions and requirements of administrative regulations.

Article 8 The establishment of a limited liability company or a company limited by shares shall comply with the conditions set out in this Law. A company complying with the conditions of this Law is registered as a limited liability company or a company limited by shares. A Company which does not comply with the conditions set out in this Law shall not be registered as a limited liability company or a company limited by shares.

Where the law or administrative regulations require that the establishment of a company be submitted for examination and approval， the procedures for such examination and approval are carried out before the company is registered.

Article 9 A limited liability company established in accordance with this Law shall have the words “limited liability company” in its name.

A company limited by shares established in accordance with this Law shall have the words “company limited by shares” in its name.

Article 10 The domicile of a company is the place where its principal place of business is located.

Article 11 In establishing a company， the company's articles of association shall prepared in accordance with this Law. The articles of association are binding on the company， the shareholders， directors， supervisors and managers.

A company's business scope is specified in its articles of association and registered in accordance with the law. For items in a company's business scope which are restricted by law or administrative regulations， approval shall be obtained in accordance with the law.

A company shall conduct business activities within its registered business scope. A company may change its business scope by amendments to its articles of association in accordance with procedures provided by law and after changing its registration with the company registration authority.

Article 12 A company may invest in other limited liability companies or companies limited by shares and be liable to the companies which it has invested in to the extent of the amount of capital invested in such companies.

Except for investment companies and holding companies specified by the State Council， where a company invests in other limited liability companies or companies limited by shares， the aggregate amount of investment shall not exceed fifty per cent of the net assets of the company， not including any increase in the capital of the other limited liability companies or companies limited by shares in which the company invests arising from any conversion of profits of these companies into capital following such investment.

Article 13 A company may set up branches. Branches of a company do not have the status of enterprise legal persons and the company assumes the civil liabilities of its branches.

A company may set up subsidiaries. Subsidiaries of a company have the status of enterprise legal persons and assume civil liabilities independently in accordance with the law.

Article 14 In conducting its business activities， a company shall abide by the law and by business ethics， strengthen the construction of socialist spiritual civilization and accept the supervision of the government and the public.

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

Article 15 A company shall protect the legitimate rights and interests of its staff and workers， strengthen labour protection and bring about production safety.

A company should use various means to enhance vocational education and on-the-job training for staff and workers to increase their work quality.

Article 16 The staff and workers of a company organize a trade union in accordance with the law to carry out union activities and protect the lawful rights and interests of the staff and workers. A company shall provide the necessary conditions for activities of the trade union of the company.

Limited liability companies established with investment by a wholly state-owned company and those established with investment by two or more state-owned enterprises or two or more other state-owned investment entities practice democratic management in accordance with the provisions of the Constitution and of relevant laws through the representative conferences of the staff and workers and otherwise.

Article 17 The activities of the base-level organizations of the Communist Party of China in the company are dealt with in accordance with the Charter of the Communist Party of China.

Article 18 The Law applies to limited liability companies with foreign investment. Where the laws on Sino-foreign equity joint venture enterprises， Sino-foreign co-operative joint venture enterprises and wholly-owned foreign enterprises otherwise provide， the provisions of such laws apply.

Chapter 2 Establishment and Organizational Structure of A Limited Liability Company

Section 1 Establishment

Article 19 Establishment of a limited liability company shall be subject to fulfillment of the following conditions；

（1） the number of shareholders meets the requirements of the law；

（2） the investment contributed by shareholders meets the minimum amount of capital required by law；

（3） the company's articles of association are formulated jointly by the shareholders；

（4） there is a company name， and an organizational structure complying with the requirements for establishing a limited liability company； and

（5） there is a fixed site for production and operations and the necessary conditions for production and operations.

Article 20 A limited liability company is established by capital contributions made jointly by at least two and no more than fifty shareholders.

A state-authorized investment institution or a department authorized by the state may invest on its own to establish a wholly state-owned limited liability company.

Article 21 A state-owned enterprise established before the implementation of this Law which fulfills the conditions for the establishment of a limited liability company under this Law may be reorganized as a wholly state-owned limited liability company in the case of an investment entity with a single investor， or as a limited liability company as provided in the first paragraph of the preceding Article in the case of an investment entity with many investors.

Implementing procedures and specific means for the reorganization of state-owned enterprises into companies are specified by the State Council in separate provisions.

Article 22 The articles of association of a limited liability company shall set out the following：

（1） the company's name and domicile；

（2） the company's business scope；

（3） the company's registered capital；

（4） shareholders' names or titles；

（5） shareholders' rights and obligations；

（6） the form and amount of shareholders' capital contributions；

（7） conditions for shareholders' transfer of capital contributions；

（8） the company's organs and the method of establishing them， their powers and rules of procedure for discussion；

（9） the company's legal representative；

（10） grounds for the dissolution of the company and method for its liquidation； and

（11） other matters which the shareholders consider necessary to provide for.

The shareholders shall sign and seal the company's articles of association.

Article 23 A limited liability company's registered capital is the capital actually contributed by all the shareholders and registered with the company registration authorities.

The registered capital of a limited liability company shall not be less than the following minimum amounts：

（1） for a company engaging principally in production operations， RMB 500，000 yuan；

（2） for a company engaging principally in wholesaling commodities， RMB 500，000 yuan；

（3） for a company engaging principally in commercial retailing， RMB 300，000 yuan；

（4） for a company engaging principally in technology development， consultancy and services， RMB 100，000 yuan.

Requirements for the minimum amount of registered capital for a limited liability company in a particular line of business to be higher than the amount stated in the preceding paragraphs are provided for in separate laws or administrative regulations.

Article 24 Shareholders may make capital contributions in currency， or may invest in kind， use industrial property， non-patented technology or land use rights to make capital contributions based on their appraised value. For investment in kind， industrial property， non-patented technology or land use rights which are capital contributions， a valuation shall be carried out and the property contributed verified， without overvaluation or under valuation. The valuation of land use rights is to be dealt with in accordance with the provisions of laws and administrative regulations.

The amount of industrial property or non-patented technology contributed as capital based on its appraised value shall not exceed twenty percent of the registered capital of a company， except as otherwise specified by the state for the use of the results of new and high technology.

Article 25 Shareholders shall pay in full their respective subscribed capital contributions specified in the article of association. If a shareholder makes its contribution in currency， the currency contribution shall be deposited in full into a temporary account established with a bank by the proposed limited liability company； if the contribution is to be made in investment in kind， industrial property， non-patented technology or land use rights， procedures for transfer of the property rights shall be dealt with in accordance with the law.

If a shareholder does not pay its subscribed capital contribution in accordance with the provisions of the preceding paragraph， such shareholder shall be liable for default to the other shareholders who have fully paid their capital contributions.

Article 26 After the shareholders have paid in full their subscribed capital contributions a legally authorized investment verification authority must verify the investment and issue certificate.

Article 27 Upon verification by a legally authorized investment verification authority of all capital contributions of shareholders， a designated representative or jointly appointed agent of all the shareholders applies to the company registration authority to register the establishment of the company， submitting the company registration application， the company's article of association， investment verification certificate and other documents.

If examination and approval from relevant departments is required in accordance with any law or administrative regulation， the approval documents shall be submitted when applying to register the establishment of the company.

Where the conditions required by this Law are met， the company registration authority registers the company and issues a company business licence. Where the conditions of this Law are not met， the company is not registered.

The date of issue of the business licence is the date of establishment of a limited liability company.

Article 28 After the establishment of a limited liability company， if the actual values of the investment in kind， industrial property， non-patented technology or land use rights are obviously lower than the values set in the articles of association， the difference shall be made up by the shareholder（s） who contributed such investment， and other shareholders at the time of the establishment of the company shall be jointly liable for the difference.

Article 29 If a branch or branches of a limited liability company is established at the same time a limited liability company is established， application for the registration of the branch（es） shall be made to the company registration authority to obtain the business licence（s）。

If a branch or branches of a limited liability company are established after the establishment of the company， application for registration shall be made by the legal representative of the company to the company registration authority to obtain the business licence（s）。

Article 30 An investment certificate shall be issued to each of the shareholders upon the establishment of a limited liability company.

An investment certificate shall set out the following：

（1） the company's name；

（2） the company's date of registration；

（3） the company's registered capital；

（4） the shareholder's name and the amount and date of payment of capital contribution； and

（5） the number and date of issue of the investment certificate.

An investment certificate is sealed with the company's seal.

Article 31 A limited liability company shall establish a register of shareholders setting out the following：

（1） the shareholders' names and domiciles；

（2） the shareholders' amounts of capital contributions； and

（3） the numbers of the investment certificates.

Article 32 Shareholders have the right to examine the minutes of shareholders' meetings and the company's financial and accounting reports.

Article 33 Shareholders are entitled to receive dividends in accordance with the proportions of their capital contributions. Shareholders have a preemptive right to subscribe capital when a company increases its capital.

Article 34 Shareholders shall not withdraw their capital contributions after the registration of a company.

Article 35 Shareholders may transfer among themselves all or part of their capital contributions.

Where a shareholder transfers its capital contribution to a person other than a shareholder， the consent of more than half of all shareholders shall be required. A shareholder objecting to such transfer shall purchase the capital contribution to be transferred and such shareholder is deemed to have agreed to the transfer if he does not purchase the capital contribution.

For a transfer of capital contribution which is transferred with the consent of the shareholders， other shareholders have a pre-emptive right to purchase it on the same conditions.

Article 36 After a shareholder transfers its capital contribution in accordance with the law， the company records in the register of shareholders the name of the transferee， its domicile and the amount of the capital contribution transferred.

Section 2 Organizational Structure

Article 37 The shareholder's meetings of a limited liability company are made up of all shareholders. The shareholders' meeting is the company's authoritative organization， exercising its powers in accordance with this Law.

Article 38 The shareholders' meeting exercises the following powers：

（1） to decide on the company's operational policies and investment plans；

（2） to elect and replace directors and decide on matters relating to the remuneration of directors；

（3） to elect and replace the supervisors who are representatives of the shareholders， and decide on matters relating to the remuneration of supervisors；

（4） to examine and approve reports of the board of directors；

（5） to examine and approve reports of the board of supervisors or any supervisor（s）；

（6） to examine and approve the company's proposed annual financial budget and final accounts；

（7） to examine and approve the company's plans for profit distribution and recovery of losses；

（8） to decide on increases in or reductions of the company's registered capital；

（9） to decide on the issue of bonds by the company；

（10） to decide on transfers of capital contribution by shareholders to a person other than a shareholder；

（11） to decide on issue such as merger， division， change in corporate form or dissolution and liquidation of the company； and

（12） to amend the company's articles of association.

Article 39 Except as otherwise provided in this Law， methods of discussion and voting procedures for shareholders' meetings are specified in the company's articles of association.

A resolution for an increase in or reduction of registered capital， division， merger， dissolution or change in corporate form of the company shall be passed by shareholders representing two-thirds or more of the voting rights.

Article 40 A company may amend its articles of association. A resolution to amend the company's articles of association shall be passed by shareholders representing two-thirds or more of the voting rights.

Article 41 Shareholders shall exercise voting rights at shareholders' meetings in accordance with the proportions of their capital contribution.

Article 42 The first shareholders' meeting is convened and presided over by the shareholder whose capital contribution is the largest. Such shareholder exercises its rights in accordance with this Law.

Article 43 Shareholders' meetings are divided into regular meetings and interim meetings.

Regular meeting shall be convened on time in accordance with the provisions of the articles of association. Shareholders representing one-fourth or more of the voting rights or one-third or more of the directors or supervisors may request that an interim meeting be convened.

Where a limited liability company has a board of directors， shareholders' meetings are convened by the board of directors and presided over by the chairman of the board of directors. If the chairman of the board of directors is unable to perform his duties for a particular reason， the vice-chairman or another director designated by the chairman presides over the meeting.

Article 44 When convening a shareholders' meeting， notice shall be given to all shareholders fifteen days before the meeting is convened.

Shareholders' meetings shall keep minutes of the decisions made on matters discussed. The minutes shall be signed by the shareholders present at the meeting.

Article 45 A limited liability company has a board of directors with three to thirteen members.

For a limited liability company established with the investment of two or more state-owned enterprises or two or more state-owned investment entities， members of its board of directors shall include representatives of the staff and workers of the company. Representatives of staff and workers on the board of directors are chosen by the company's staff and workers by democratic election.

The board of directors has one chairman and may have one or two vice-chairmen. The method of election of the chairman and vice-chairmen is specified in the articles of association.

The chairman of the board of directors is the legal representative of the company.

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

（1） to be responsible for convening shareholders' meetings and accountable to the shareholders' meeting；

（2） to implement the resolutions of the shareholders' meeting；

（3） to decide on the operational plans and investment plan of the company；

（4） to formulate the company's proposed annual financial budget and final accounts；

（5） to formulate plans for profit distribution and recovery of losses；

（6） to formulate plans for increases in or reductions of the company's registered capital；

（7） to prepare plans for merger， division， change in corporate form and dissolution of the company；

（8） to decide on the set up of the company's internal management structure；

（9） to appoint or dismiss the company's manager （general manager） （the “manager”） and pursuant to the manager's nominations to appoint or dismiss the deputy manager and the financial officers of the company and decide upon their remuneration； and

（10） to formulate the company's basic management system.

Article 47 The term of office of the directors is as provided in the company's articles of association， provided that each term shall not be longer than three years. At the end of a director's term， the director may serve another term if re-elected.

The shareholders' meeting shall not without reason remove a director from office before the expire of that director's term.

Article 48 Meetings of the board of directors are convened and presided over by the chairman. When the chairman is unable to perform his duties for a particular reason， the vice-chairman or another director designated by the chairman convenes and presides over the meetings. One-third or more of the directors may request that an interim meeting be convened.

Article 49 Except as otherwise provided in this Law， methods of discussion and voting procedures for the board of directors are provided for in the company's articles of association.

When convening a meeting of the board of directors， notice of the meeting shall be given to all directors ten days before the meeting is convened.

The board of directors shall keep minutes of the decisions made on matters discussed. Such minutes shall be signed by the directors present at the meeting.

Article 50 A limited liability company has a manager who is appointed or dismissed by the board of directors. The manager is responsible to the board of directors and exercises the following powers：

（1） to be in charge of the company's production， operations and management and organize the implementation of the resolutions of the board of directors；

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

（3） to propose plans for the putting in place of the company's internal management structure；

（4） to propose the company's basic management system；

（5） to formulate specific rules and regulations for the company；

（6） to propose the appointment or dismissal of the company's deputy manager（s） and financial officers；

（7） to appoint or dismiss management officers other than those required to be appointed or dismissed by the board of directors； and

（8） other powers conferred by the company's articles of association and the board of directors.

The manager is present at meetings of the board of directors.

Article 51 A limited liability company with a relatively small number of shareholders and of a relatively small scale may have one executive director and no board of directors. The executive director may also be the company's manager.

The powers of the executive director shall be specified in the company's articles of association with reference to the provisions of Article 46 of this Law.

Where a limited liability company has no board of directors， the executive director is the legal representative of the company.

Article 52 A limited liability company with a relatively large scale of operations shall have a board of supervisors with not less than three members. The board of supervisors elects a convener from among its members.

The board of supervisors is made up of representatives of shareholders and a reasonable proportion of representatives from the company's staff and workers， the specific proportion to be provided in the company's articles of association. Representatives of the staff and workers on the board of supervisors are chosen by the company's staff and workers by democratic election.

A limited liability company with a relatively small number of shareholders and of a small scale may have one to two supervisors.

The directors， manager and financial officers of the company shall not act concurrently as supervisors.

Article 53 The term of office of the supervisors is three years. At the end of a supervisor's term， the supervisor may serve another term， if reelected.

Article 54 The board of supervisors as supervisor （s） exercises the following powers：

（1） to inspect the company's financial situation；

（2） to exercise supervision over the acts of the directors and manager carried out while performing their corporate functions which violate laws， regulations or the company's articles of association；

（3） to demand remedies from a director or manager when the acts of such director or manager are harmful to the company's interests；

（4） to propose the convening of an interim shareholders' meeting； and

（5） other powers specified in the company's articles of association.

The supervisors are present at meetings of the board of directors.

Article 55 When considering and deciding on the wages， welfare and production safety of the staff and workers and labour protection， labour insurance and other issues involving the personal interests of the staff and workers， the company shall first solicit and consider the opinions of the company's trade union and staff and workers， and shall invite representatives from the trade union and the staff and workers to attend the relevant meetings.

Article 56 When considering and deciding on major issues relating to the company's production and operations and formulating important rules and regulations， the company shall solicit and consider the opinions and proposals of the company's trade union and staff and workers.

Article 57 Any of the following persons shall not serve as a director， supervisor or manager of a company：

（1） persons without civil capacity or with restricted civil capacity；

（2） persons who have committed the offences of corruption， bribery， infringement of property， misappropriation of property or sabotaging the socioeconomic order， and have been sentenced to criminal penalties， where less than five years have elapsed since the date of completion of the sentence； or persons who have been deprived of their political rights due to criminal offences， where less than five years have elapsed since the date of the completion of implementation of this deprivation；

（3） persons who are former directors， factory directors or managers of a company or enterprise which has become bankrupt and been liquidated as a result of mismanagement and are personally liable for the bankruptcy of such company or enterprise， where less than three years have elapsed since the date of the completion of the bankruptcy and liquidation of the company or enterprise；

（4） persons who were legal representatives of a company or enterprise which had its business licence revoked due to a violation of the law and who are personally liable， where less than three years have elapsed since the date of the revocation of the business licence； or

（5） persons who have a relatively large amount of debts due and outstanding.

Where a company elects， nominates or appoints any director or supervisor or employs a manager contrary to the provisions of the preceding clause， such election， appointment or employment is ineffective.

Article 58 State civil servants shall not act concurrently as a company's director， supervisor or manager.

Article 59 The directors， supervisors or managers shall abide by the company's articles of association， faithfully execute their official duties and protect the company's interests. They shall not exploit their position and power in the company to advance their own private interests.

The directors， supervisors or managers of a company shall not exploit their position to accept bribes or other illegal income or wrongfully take over company property.

Article 60 The directors or managers shall not misappropriate company funds or loan such funds to others.

The directors or managers shall not open accounts in their own names or in the names of other individuals for the deposit of the company's assets.

The directors or managers shall not provide a guarantee for debts of a shareholder of the company or other individual（s） with the company's assets.

Article 61 The directors or managers shall not engage on their own behalf or on behalf of others in any business similar to the business of the company in which they hold office or in activities harmful to the company's interests. The proceeds from such business or activities shall belong to the company.

Unless otherwise provided in the company's articles of association or with the consent of a shareholders' meeting， a director or manager shall not enter into any contracts or transactions with the company.

Article 62 The directors， supervisors or managers shall not disclose the secrets of the company except in accordance with the provisions of the law or with the consent of a shareholders' meeting.

Article 63 Where a director， supervisor or manager of a company violates the law， administrative regulations or the company's articles of association while performing his official corporate duties resulting in harm to the company， such director， supervisor or manager shall be liable for damages.

Section 3 Wholly State-Owned Companies

Article 64 “A wholly state-owned company” in this Law refers to a limited liability company in which a state-authorized investment institution or a state-authorized department is the sole investor and which is established solely by a state-authorized investment institution or by a state-authorized department.

A company designated by the State Council for the production of special products or belonging to a specified trade shall be established in the form of a wholly state-owned company.

Article 65 The articles of association of a wholly state-owned company are formulated in accordance with this Law by the state-authorized investment institution or the state-authorized department or formulated by the board of directors， and reported to the state-authorized investment institution or the state-authorized department for approval.

Article 66 A wholly state-owned company does not have shareholders' meetings. The company's board of directors is authorized by the state-authorized investment institution or the state-authorized department to exercise part of the powers of the shareholders' meetings， decide on the major issues of the company， provided that decisions on merger， division， dissolution of the company， increase or decrease in capital and issue of corporate bonds shall be decided by the state-authorized investment institution or the state-authorized department.

Article 67 The state-authorized investment institution or the state-authorized department shall exercise supervision and management over the state-owned assets of a wholly state-owned company in accordance with the provisions of law and administrative regulations.

Article 68 A wholly state-owned company shall have a board of directors which carries out its duties in accordance with the provisions of Article 46 and Article 66 of this Law. The term of office of the board of directors is three years.

The board of directors has three to nine members， appointed or replaced by the state-authorized investment institution or the state-authorized department in accordance with the board of directors' terms. Members of the board of directors shall include representatives of the staff and workers of the company. Representatives of the staff and workers on the board of directors are chosen by the company's staff and workers by democratic election.

The board of directors has a chairman and may have one vice-chairman if necessary. The chairman and the vice-chairman are designated from among the directors by the state-authorized investment institution or the state-authorized department.

The chairman of the board of directors is the legal representative of the company.

Article 69 A wholly state-owned company shall have a manager who is appointed or dismissed by the board of directors. The manager exercises his powers in accordance with the provisions of Article 50 of this Law.

With the consent of the state-authorized investment institution or the state-authorized department， members of the board of directors may act concurrently as manager.

Article 70 The chairman and vice-chairman of the board of directors， directors and the manager of a wholly state-owned company shall not act concurrently as officers of other limited liability companies， companies limited by shares or other economic organizations without the consent of the state-authorized investment institution or the state-authorized department.

Article 71 To transfer assets of a wholly state-owned company， in accordance with the provisions of law and administration regulations， examination and approval and procedures for transfer of property rights are handled by the state-authorized investment institution or the state-authorized department.

Article 72 Large-scale wholly state-owned companies with a sound system of operation and management and whose operational situation is relatively good may be authorized by the State Council to exercise rights as the owner of the assets.

Chapter 3 Establishment and Organizational Structure of A Company Limited by Shares

Section 1 Establishment

Article 73 Establishment of a company limited by shares shall be subject to the fulfillment of the following conditions：

（1） the number of promoters meets the requirement of the law；

（2） the share capital subscribed by the promoters and by public offer meets the minimum amount of capital required by law；

（3） the issue of shares and related preliminary matters comply with the provisions of law；

（4） articles of association are formulated by the promoters and adopted by the founding meeting；

（5） there is a company name and the establishment of an organizational structure complying with the requirements for the establishment of a company limited by shares； and

（6） there is a fixed site for production and operations and the necessary conditions for production and operations.

Article 74 A limited liability company may be established by means of promotion or offer.

Establishment by the promoter method means the establishment of a company by the subscription by the promoters for all the shares to be issued by the company.

Establishment by the offer method means establishment of a company by the subscription by the promoters of part of the shares to be issued by a company and a public offer of the remaining part of the shares.

Article 75 The establishment of a company limited by shares shall have at least five promoters including more than half of the promoters with domiciles within Chinese territory.

When a state-owned enterprise is reorganized into a company limited by shares， there may be less than five promoters， but the offer method shall be adopted for its establishment.

Article 76 The promoters of a company limited by shares shall subscribe for shares for which they are required to subscribe in accordance with this Law and shall be responsible for the preparation of the establishment of the company.

Article 77 The establishment of a company limited by shares shall be approved by the department authorized by the State Council or by the provincial-level people's government.

Article 78 The registered capital of a company limited by share is the total share capital which has been registered with the company registration authority and which has been actually received.

The minimum amount of the registered capital of a company limited by shares is RMB 10，000，000. Requirements for the minimum amount of the registered capital of a company limited by shares to be higher than the above amount are provided for in separate laws or administrative regulations.

Article 79 The articles of association of a company limited by shares shall set out the following：

（1） the company's name and domicile；

（2） the company's scope of business；

（3） the company's method of establishment；

（4） the total shares， value per share and registered capital of the company；

（5） the names of the promoters and the number of shares subscribed by them；

（6） the rights and obligations of the shareholders；

（7） the composition， powers， term of office and rules of procedure for discussion of the board of directors；

（8） the company's legal representative；

（9） the composition， powers， term of office and rules of procedure for discussion of the board of supervisors；

（10） the company's method of profit distribution；

（11） grounds for the dissolution of the company and method for its liquidation；

（12） procedures for company notices and announcements； and

（13） other matters which the shareholders' general meeting considers necessary to specify.

Article 80 The promoters may make capital contributions in currency， or may invest in kind， use industrial property， non-patented technology or land use rights to make capital contributions based on their appraised value.

For investment in kind， industrial property， non-patented technology or land use rights which are capital contributions， a valuation shall be carried out， the property contributed， verified and conversion into shares made， without over valuation or under valuation. The valuation of land use rights is to be dealt with in accordance with the provisions of laws and administration regulations.

The amount of industrial property or non-patented technology contributed as capital based on its appraised value shall not exceed twenty percent of the registered capital of a company.

Article 81 When a state-owned enterprise is reorganized into a company limited by shares， it is strictly prohibited to under value state-owned assets for conversion into shares， sell them at prices below their value， or distribute them without compensation to individuals.

Article 82 Where a company limited by shares is to by established by the promoter method， the promoters shall pay the full amount for the shares immediately after they have subscribed in writing for all shares which the articles of association provide to be issued. If investment in kind， industrial property， non-patented technology or land use rights are used as payment for the shares， procedures for the transfer of the property rights shall be dealt with in accordance with the law.

The board of directors and the board of supervisors shall be elected after the promoters have paid all capital contributions. The board of directors submits to the company registration authority the approval document（s）， the company's articles of association， the investment verification certificate and other documents for the establishment of the company and applies to register the establishment of the company.

Article 83 Where a company limited by shares is to be established by the offer method， the shares subscribed for by the promoters shall not be less than thirty-five percent of the total number of shares of the company. The remaining portion shall be offered to the public.

Article 84 When the promoters offer shares to the public， and application for the offer shall be submitted to the securities administration authorities of the State Council together with the following major documents：

（1） document（s） approving the establishment of the company；

（2） the company's articles of association；

（3） the operating budget；

（4） the promoters' names， the number of shares subscribed by the promoters， the type（s） of capital contribution and investment verification certificate；

（5） the prospectus；

（6） the names and addresses of the receiving bankers； and

（7） the names of the underwriters and relevant agreements.

The promoters shall not offer any shares to the public without prior approval of the securities administration authorities of the State Council.

Article 85 Subject to the approval of the securities administration authorities of the State Council， promoters may publicly offer shares to investors outside China. The concrete procedures for such offers are set out in specific regulations of the State Council.

Article 86 The securities administration authorities of the State Council grant approval to applications for offers which comply with the conditions provided in this Law. If the applications do not comply with the conditions provided in this Law， no approval is granted.

If， after the approval has been granted， the offer is found not to comply with the provisions of this Law， approval shall be revoked. If shares have not been offered， the offer will not be carried out. If shares have already been offered， the subscribers may demand that the promoters refund their payments for shares with interest at the bank's rate for a deposit of the same term.

Article 87 The articles of association formulated by the promoters shall be attached to the prospectus which shall set out the following：

（1） the number of shares subscribed by the promoters；

（2） the par value per share and issue price for each share；

（3） the total number of non-registered shares issued；

（4） the rights and obligations of the subscribers； and

（5） the duration of the offer and explanation that subscribers may revoke their subscription to shares if the offer is under-subscribed at the close of the offer.

Article 88 In making a public offer of shares， promoters shall publish a prospectus and prepare share subscription applications. Share subscription applications shall set out the items stated in the preceding article.

Subscribers fill in the number of shares subscribed， the amount of payment and their domiciles， and sign and seal the share subscription application.

Subscribers make payment for shares according to the number of shares they have subscribed.

Article 89 A public offer of shares by promoters shall be underwritten by securities institutions. established in accordance with the law， and an underwriting agreement shall be entered into.

Article 90 In making a public offer of shares， the promoters shall enter into a agreement with the receiving bankers.

The receiving bankers shall receive and hold as agents the payments for shares， issue receipts to subscribers making payments， and shall be obliged to issue evidence of receipt of payments to the relevant departments.

Article 91 After payment in full has been made for the shares issued， an authorized investment verification authority shall verify the investments and issue an investment verification certificate. The promoters shall convene a founding meeting within thirty days. The founding meeting is made up of the subscribers.

If the shares issued are not fully subscribed after the closing date specified in the prospectus； or if the promoters do not convince the founding meeting within thirty days of payment in full having been made for the shares offered， the subscribers may demand that the promoters refund their payments for shares plus interest at the bank's rate for a deposit of the same term.

Article 92 The promoters shall give notice to all subscribers or make an announcement of the date of the founding meeting fifteen days before the meeting. The founding meeting shall be held only if subscribers representing half or more of the total shares are present.

The founding meeting exercises the following powers：

（1） to examine the report of the promoters on preparations for the establishment of the company；

（2） to adopt the company's articles of association；

（3） to elect the members of the board of directors；

（4） to elect the members of the board of supervisors；

（5） to examine and verify the expenses incurred for the establishment of the company；

（6） to examine and verify the valuation of the property used by promoters as payments for shares； and；

（7） in the case of the occurrence of force major or substantial changes to operating conditions which have a direct effect on the establishment of the company， a resolution not to establish the company may be made.

A resolution at the founding meeting on any of the matters set out above requires the approval of subscribers with more than half of the voting rights present at the meeting.

Article 93 The promoters and subscribers shall not withdraw their share capital after making payments for shares or making their contribution of capital as payment for shares， except where the shares have not been fully subscribed within the offer period， the promoters have not convened the founding meeting within the period specified， or a resolution not to establish the company is adopted at the founding meeting.

Article 94 Within 30 days of the conclusion of the founding meeting， the board of directors shall submit to the company registration authority the following documents and shall apply to register the establishment of the company：

（1） approval document from the relevant supervising departments；

（2） minutes of the founding meeting；

（3） the company's articles of association；

（4） the auditors' report on financial matters relating to the preparation of the establishment of the company；

（5） investment verification certificate；

（6） the names and domiciles of members of the board of directors and board of supervisors； and

（7） the name and domicile of the legal representative.

Article 95 The company registration authority shall， within thirty days from the date of receipt of an application to register the establishment of a company limited by shares decide whether or not to grant registration. Registration is granted and a business licence issued if all the conditions set out in this Law are met. Registration is not granted if the conditions set out in this Law are not met.

The date of issue of the business licence is the date of establishment of a company limited by shares. After the company is established， a public announcement shall be made.

After the registration and establishment of a company limited by shares， in the case of establishment by the offer method， a report on the offer of shares shall be filed with the securities administration authorities of the State Council for the record.

Article 96 Where a branch or branches are to be set up at the same time as the establishment of a company limited by shares， application shall be made to the company registration authority to register it or them and obtain business licence（s）。

Where a branch or branches are to be set up after the establishment of a company limited by shares， the legal representative of the company shall apply to the company registration authority to register it or them and obtain business licence（s）。

Article 97 Promoters of a company limited by shares shall assume the following responsibilities：

（1） to be jointly liable for the debts and expenses arising from actions to establish the company， if the company can not be established；

（2） to be jointly liable to refund subscribers' payments for shares plus interest at the bank's rate for a deposit of the same term， if the company cannot be established； and

（3） to be responsible for compensating the company for damages to the interests of the company arising from negligence of the promoters during the process of establishing the company.

Article 98 A limited liability company being converted into a company limited by shares shall meet the conditions for a company limited by shares set out in this Law， and procedures for the establishment of a company limited by shares shall be carried out in accordance with this Law.

Article 99 When a limited liability company is converted into a company limited by shares in accordance with the law and with approval， the total amount of shares into which conversion is made shall be equivalent to the amount of the company's net assets. When a limited liability company is converted into a company limited by shares and increases its capital by public offer of shares， the provisions of this Law concerning public offer of shares shall be followed.

Article 100 Where a limited liability company is being converted into a company limited by shares， the creditors' rights and indebtedness of the original limited liability company are assumed by the company limited by shares after the conversion.

Article 101 A company limited by shares shall deposit its articles of association， register of shareholders， minutes of shareholders' general meetings and financial and accounting reports at the company.

Section 2 Shareholders' General Meeting

Article 102 A company limited by shares shall have a shareholders' general meeting made up of all shareholders. The shareholders' general meeting is the company's authoritative organization which exercises its powers in accordance with this Law.

Article 103 The shareholders' general meeting exercises the following powers：

（1） to decide on the company's operational policies and investment plans；

（2） to elect and replace directors and decide on matters relating to the remuneration of directors；

（3） to elect and replace the supervisors who are representatives of the shareholders and decide on matters relating to the remuneration of supervisors；

（4） to examine and approve reports of the board of directors；

（5） to examine and approve reports of the board of supervisors；

（6） to examine and approve the company's proposed annual financial budget and final accounts；

（7） to examine and approve the company's profit distribution plan and plan for recovery of losses；

（8） to decide on increases in or reductions of the company's registered capital；

（9） to decide on the issue of bonds by the company；

（10） to decide on issue such as merger， division， dissolution and liquidation of the company and other matters； and

（11） to amend the company's articles of association.

Article 104 Shareholders' general meetings shall be held once every year. An interim shareholders' general meeting shall be held within two months under any of the following circumstances：

（1） the number of directors is less than tow-thirds of the number of directors required by this Law or of the number of directors specified in the company's articles of association；

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

（3） upon request by shareholders holding ten per cent or more of the shares of the company；

（4） when deemed necessary by the board of directors； and

（5） when the board of supervisors proposes convening it.

Article 105 Convening shareholders' general meetings is the responsibility of the chairman of the board of directors in accordance with the provisions of this Law and such meetings are presided over by the chairman. If the chairman is unable to perform his duties for a particular reason， the vice-chairman or another director designated by the chairman presides over the meeting. When convening a shareholders' general meeting， notice shall be given to all shareholders thirty days before the meeting， stating the matters to be considered at the meeting. An interim shareholders' general meeting shall not adopt resolutions on matters not stated in the notice.

Where bearer shares are issued， a public announcement shall be made about the matters in the preceding paragraph forty-five days before the meeting.

Where shareholders of bearer shares are present at a shareholders' general meeting， their shares shall be deposited with the company from five days prior to the opening of the meeting until the adjournment of the meeting.

Article 106 Shareholders present at a shareholders' general meeting have one vote for each share they hold.

Resolutions of the shareholders' general meeting shall be adopted with half or more of the voting rights held by shareholders present at the meeting. Resolutions of the shareholders' general meeting on merge， division or dissolution of a company shall be adopted by shareholders with two-thirds or more of the voting rights present at the meeting.

Article 107 Amendments to the articles of association of the company must be adopted by shareholders with two-thirds or more of the voting rights present at the meeting.

Article 108 Shareholders may appoint proxies to attend shareholders' general meetings. A proxy shall present to the company a power of attorney from the shareholder and shall exercise his voting rights within the scope of his authorization.

Article 109 Minutes of decision made on matters discussed by the shareholders' general meeting shall be kept and signed by the shareholders present at the meetings. The minutes shall be kept together with the signed register of shareholders in attendance and the powers of attomey of shareholders who attended by proxy.

Article 110 shareholders have the right to examine the company's articles of association， minutes of shareholders' general meetings and financial and accounting reports， and to make proposals or inquiries in respect of the company's operations.

Article 111 If any resolution adopted by a shareholders' general meeting or the board of directors violates any law or administrative regulation or infringes the lawful rights and interests of shareholders， shareholders have the right to initiate proceedings in the people's court to require that such acts of violation or infringement be stopped.

Section 3 Board of Directors， Manager

Article 112 A company limited by shares has a board of directors with five to nineteen members.

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

（1） to be responsible for convening the shareholders' general meeting and reporting on its work to the shareholders' general meeting；

（2） to implement the resolutions of the shareholders' general meetings；

（3） to decide on the company's business plans and investment plans；

（4） to formulate the company's proposed annual financial budget and final accounts；

（5） to formulate the company's profit distribution plan and plan for recovery of losses；

（6）to formulate proposals for increases in or reductions of the company's registered capital and the issue of corporate bonds；

（7） to prepare plans for the merger， division or dissolution of the company；

（8） to decide on the putting in place of the company's internal management structure；

（9） to appoint or dismiss the company's manager， and pursuant to the manager's nominations to appoint or dismiss the deputy general manager and financial officers of the company and decide on their remuneration； and

（10） to formulate the company's basic management system.

Article 113 The board of directors has one chairman and may have one or two vice-chairmen. The chairman and vice-chairmen are elected from the directors with the approval of more than half of all the directors.

The chairman of the board of directors is the legal representative of the company.

Article 114 The chairman of the board of directors exercises the following powers：

（1） to preside over shareholders' general meetings and convene and preside over meetings of the board of directors；

（2） to check on the implementation of resolutions of the board of directors； and

（3） to sign the company's share certificates and bonds.

The vice-chairmen assist the chairman in his work. When the chairman is unable to perform his duties， the vice-chairman designated by the chairman performs his duties on his behalf.