The Company Law of the People's Republic of China has been amended and adopted at the 18th session of the Standing Committee of the Tenth National People's Congress of the People's Republic of China on October 27, 2005. The amended Company Law of the People's Republic of China is promulgated hereby and shall go into effect as of January 1, 2006.

The President of the People's Republic of China Hu Jintao    October 27, 2005

The Company Law of the People's Republic of China    (revised in 2005)

(Adopted at the Fifth Session of the Standing Committee of the Eighth National People's Congress on December 29, 1993. Revised for the first time on December 25, 1999 in accordance with the Decision of the Thirteenth Session of the Standing Committee of the Ninth People's Congress on Amending the Company Law of the People's Republic of China. Revised for the second time on August 28, 2004 in accordance with the Decision of the 11th Session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on Amending the Company Law of the People's Republic of China. Revised for the third time at the 18th Session of the 10th National People's Congress of the People's Republic of China on October 27, 2005)

Contents

Chapter I General Provisions

Chapter II Incorporation and Organization of a Limited Liability Company

 Section 1 Incorporation

 Section 2 Organization

 Section 3 Special Provisions on One-person Limited Liability Companies

 Section 4 Special Provisions on wholly State-owned Companies

 Chapter III Transfer of Stock Right of a Limited Liability Company

 Chapter IV Incorporation and Organization of a Joint Stock Limited Company

 Section 1 Incorporation

 Section 2 Assembly of shareholders

 Section 3 Board of Directors, Managers

 Section 4 Board of Supervisors

 Section 5 Special Provisions on the Organization of a Listed Company

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

 Section 1 Issuance of Shares

 Section 2 Transfer of Shares

 Chapter VI Qualifications and Obligations of the Directors, Supervisors and Senior Managers of a Company

 Chapter VII Company Bonds

 Chapter VIII Financial Affairs and Accounting of a Company

 Chapter IX Merger and Division of a Company; Increase and Deduction of Registered Capital

 Chapter X Dissolution and Liquidation of a Company

 Chapter XI Branches of a Foreign Company

 Chapter XII Legal Liabilities Chapter XIII Supplementary Provisions

Chapter I General Provisions

 Article 1 This Law is formulated for the purposes of regulating the organization and operation of companies, protecting the legitimate rights and interests of companies, shareholders and creditors, maintaining the socialist economic order, and promoting the development of the socialist market economy

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

 Article 3 A company is an enterprise legal person, which has independent legal person property and enjoys the property right of the legal person. And it shall bear the liabilities for its debts with all its property. As for a limited liability company, the shareholders shall be responsible for the company to the extent of the capital contributions they have paid. As for a joint stock limited company, the shareholders shall be responsible for the company to the extent of the shares they have subscribed for.

 Article 4 The shareholders of a company shall be entitled to enjoy the capital proceeds, participate in making important decisions, choose managers, and so on.

 Article 5 When undertaking business operations, a company shall comply with the laws and administrative regulations, social morality and business morality. It shall act in good faith, accept the supervision of the government and the general public, and bear social responsibilities.

The legitimate rights and interests of a company shall be protected by laws and may not be infringed.

 Article 6 For the incorporation of a company, an application for incorporation shall be filed with the company registration authority. If the application meets the requirements of this Law, the company registration authority shall register the company as a limited liability company or a joint stock limited company. If the application fails to meet the requirements, it shall not be registered as a limited liability company or a joint stock limited company.

If any law or administrative regulation stipulates that the incorporation of a company shall be subject to approval, the relevant approval formalities shall be gone through prior to the registration of the company.

The general public may consult the relevant matters on company registration at company registration authority, who shall provide consulting services.

 Article 7 For a legally established company, the company registration authority shall issue the company business license to it, and the date of issuance of the company business license shall be the date of incorporation of the company. The company business license shall state the name, domicile, registered capital, paid-up capital, scope of business, the name of the legal representative and etc. If any of the items as stated in the business license is changed, the company shall apply for modification registration, and the company registration authority shall re new the business license.

 Article 8 For a limited liability company established according to this Law, it shall indicate in its name with the words "limited liability company" or "limited company". For a joint stock limited company established according to this Law, it shall indicate in its name the words "joint stock limited company" or "joint stock company".

 Article 9 The change of a limited liability company to a joint stock limited company shall satisfy the requirements as prescribed in this Law for joint stock limited companies. The change of a joint stock limited company to a limited liability company shall meet the conditions as prescribed in this Law for limited liability companies. Under any of the aforesaid circumstances, the creditor's rights and debts of the company prior to the change shall be succeeded by the company after the change.

 Article 10 A company shall regard the location of its principal office as its domicile.

 Article 11 The company established according to this law shall formulate its articles of association which are binding on the company, its shareholders, directors, supervisors and senior managers.

 Article 12 The company's scope of business shall be defined in its articles of association and shall be registered according to law. The company may change its scope of business by modifying its articles of association, but shall go through the modification registration. If the company’s scope of business covers any item subject to approval according to laws or administrative regulations, the approval shall be obtained beforehand.

 Article 13 The legal representative of a company shall, according to the provisions of its articles of association, be assumed by the chairman of the board of directors, executive director or manager, and shall be registered according to law. If the legal representative of the company is changed, the company shall go through the modification registration.

 Article 14 The company may set up branches. To set up a branch, the company shall file a registration application with the company registration authority, and shall obtain the business license. The branch shall not enjoy the status of an enterprise legal person, and its civil liabilities shall be born by the company.

The company may set up subsidiaries which enjoy the status of an enterprise legal person and shall be independently bear civil liabilities.

 Article 15 A company may invest in other enterprises. However, it shall not become a capital contributor that shall bear the joint liabilities for the debts of the enterprises it invests in, unless it is otherwise provided for by any law.

 Article 16 Where a company intends to invest in any other enterprise or provide guarantee for others, it shall, according to the provisions of its articles of association, be decided at the meeting of the board of directors or shareholders’s meeting or shareholders' assembly. If the articles of association prescribe any limit on the total amount of investments or guarantees, or on the amount of a single investment or guarantee, the aforesaid total amount or amount shall not exceed the responsive limited amount. If a company intends to provide guarantee to a shareholder or actual controller of the company, it shall make a resolution through the shareholder's meeting or shareholders' assembly.

The shareholder as mentioned in the preceding paragraph or the shareholder dominated by the actual controller as mentioned in the preceding paragraph shall not participate in voting on the matter as mentioned in the preceding paragraph. Such matter requires the affirmative votes of more than half of the other shareholders attending the meeting.

 Article 17 The company shall protect the lawful rights and interests of its employees, conclude employment contracts with the employees, buy social insurances, strengthen labor protection so as to realize safe production.

The company shall, in various forms, reinforce the vocational education and in-service training of its employees so as to improve their professional quality.

 Article 18 The employees of a company shall, according to the Labor Union Law of the People's Republic of China, organize a labor union, which shall carry out union activities and safeguard the lawful rights and interests of the employees. The company shall provide necessary conditions for its labor union to carry out activities. The labor union shall, on behalf of the employees, conclude the collective contract with the company with respect to the remuneration, working hours, welfare, insurance, operation safety and sanitation and other matters.

According to the Constitution and other relevant laws, a company shall implement democratic management in the form of meeting of the representatives of the employees or any other ways.

To make a decision on restructuring or any important issue related to business operation, or to formulate any important regulation, a company shall solicit the opinions of its labor union, and shall solicit the opinions and proposals of the employees through the meeting of the representatives of the employees or in any other way. 

 Article 19 An organization of the Chinese Communist Party shall, according to the Charter of the Chinese Communist Party, be established in the company to carry out activities of the Chinese Communist Party. And the company shall provide necessary conditions for the activities of the Chinese Communist Party.

 Article 20 The shareholders of a company shall comply with the laws, administrative regulations and articles of association, and shall exercise the shareholder's rights according to law. None of them may injure any of the interests of the company or of other shareholders by abusing the shareholder's rights, or injure the interests of any creditor of the company by abusing the independent status of legal person or the shareholder's limited liabilities.

Where any of the shareholders of a company causes any loss to the company or to other shareholders by abusing the shareholder's rights, it shall be subject to compensation.

Where any of the shareholders of a company evades the payment of its debts by abusing the independent status of legal person or the shareholder's limited liabilities, and thus seriously damages the interests of any creditor, it shall bear joint liabilities for the debts of the company.

 Article 21 Neither the holding shareholder, nor the actual controller, any of the directors, supervisors or senior managers of the company may injure the interests of the company by taking advantage of its connection relationship. Anyone who has caused any loss to the company due to violation of the preceding paragraph shall be subject to compensation.

 Article 22 The resolution of the shareholders' meeting, shareholders’s assembly or board of directors of the company that has violated any law or administrative regulation shall be null and void. 

Where the procedures for convoking and the voting form of a shareholders' meeting or shareholders’s assembly or meeting of the board of directors, violate any law, administrative regulation or the articles of association, or the resolution is in violation of the articles of association of the company, the shareholders may, within 60 days as of the day when the resolution is made, request the people's court to revoke it.

If the shareholders initiate a lawsuit according to the preceding paragraph, the people's court shall, in light of the request of the company, demand the shareholders to provide corresponding guarantee.

Where a company has, in light of the resolution of the shareholders' meeting,  shareholders’s assembly or meeting of the board of directors, completed the modification registration, and the people's court declares the resolution null and void or revoke the resolution, the company shall file an application with the company registration authority for cancelling the modification registration.

Chapter II Incorporation and Organization of a Limited Liability Company

Section 1 Incorporation

Article 23 The incorporation of a limited liability company shall satisfy the following conditions:

 (1) The number of shareholders accords with the quorum;

 (2) The amount of capital contributions paid by the shareholders reaches the statutory minimum amount of the registered capital;

 (3) The articles of association are worked out jointly by shareholders;

 (4) The company has a name and its organization complies with that of a limited liability company; and

 (5) The company has a domicile.

 Article 24 A limited liability company shall be established by not more than 50 shareholders that have made capital contributions.

 Article 25 A limited liability company shall state the following items in its articles of association:

 (1) the name and domicile of the company;

 (2) the scope of business of the company;

 (3) the registered capital of the company;

 (4) names of shareholders;

 (5) forms, amount and time of capital contributions made by shareholders;

 (6) the organizations of the company and its formation, their functions and rules of procedure;

 (7) the legal representative of the company;

 (8) other matters deemed necessary by shareholders. The shareholders should affix their signatures or seals on the articles of association of the company.

 Article 26 The registered capital of a limited liability company shall be the total amount of the capital contributions subscribed for by all the shareholders that have registered in the company registration authority. The amount of the initial capital contributions made by all shareholders shall be not less than 20% of the registered capital, nor less than the statutory minimum amount of registered capital, and the margin shall be paid off by the shareholders within 2 years as of the day when the company is established; as for an investment company, it may be paid off within 5 years. The minimum amount of registered capital of a limited liability company shall be RMB 30, 000 Yuan. If any law or administrative regulation prescribes a relatively higher minimum amount of registered capital of a limited liability company, the provisions of that law or administrative regulation shall be followed.

 Article 27 A shareholder may make capital contributions in currency, in kind or intellectual property right, land use right or other non-currency properties that may be assessed on the basis of currency and may be transferred according to law, excluding the properties that shall not be treated as capital contributions according to any law or administrative regulation.

The value of the non-currency properties as capital contributions shall be assessed and verified, which shall not be over-valued or under-valued. If any law or administrative regulation prescribes the value assessment, such law or administrative regulation shall be followed.

The amount of the capital contributions in currency paid by all the shareholders shall be not less than 30% of the registered capital of the limited liability company.

 Article 28 Every shareholder shall make full payment for the capital contribution it has subscribed to according to the articles of association. If a shareholder makes his/its capital contribution in currency, he shall deposit the full amount of such currency capital contribution into a temporary bank account opened for the limited liability company. If the capital contributions are made in non-currency properties, the appropriate transfer procedures for the property rights therein shall be followed according to law. Where a shareholder fails to make his/its capital contribution as specified in the preceding paragraph, it shall not only make full payment to the company but also bear the liabilities for breach of the contract to the shareholders who have make full payment of capital contributions on schedule.

 Article 29 The capital contributions made by shareholders shall be checked by a legally established capital verification institution, which shall issue a certification.

 Article 30 After the initial capital contributions made by the shareholders for the first time have been checked by a legally established capital verification institution, the representative designated by all the shareholders or the agent authorized by all the shareholders shall apply for incorporation registration with a company registration application, the articles of association, capital verification report and other documents to the company registration authority.

 Article 31 After the incorporation of a limited liability company, if the actual value of the capital contributions in non-currency properties is found to be apparently lower than that provided for in the articles of association of the company, the balance shall be supplemented by the shareholder who has offered them, and the other shareholders of the company who have established the company shall bear joint liabilities.

 Article 32 After the incorporation of a limited liability company, every shareholder shall be issued with a capital contribution certificate, which shall specify the following:

 (1) the name of the company;

 (2) the date of incorporation of the company;

 (3) the registered capital of the company;

 (4) the name of the shareholder, the amount of his capital contribution, and the day when the capital contribution is made; and

 (5) the serial number and date of issuance of the capital contribution certificate. The capital contribution certificate shall bear the seal of the company.

 Article 33 A limited liability company shall prepare a register of shareholders, which shall specify the following:

 (1) the name of every shareholder and his/its domicile thereof;

 (2) the amount of capital contribution made by every shareholder;

 (3) the serial number of every capital contribution certificate.

The shareholders recorded in the register of shareholders may, in light of the register of shareholders, claim to and exercise the shareholder's rights. A company shall register every shareholder's name and the amount of its capital contribution in the company registration authority. Where any of the registration particulars is changed, it shall apply for modification registration. If the company fails to do so, it shall not, on the basis of the unregistered or un-modified registration particulars, stand up to any third party.

 Article 34 The shareholder shall be entitled to consult and copy the articles of association, records of the shareholders' meetings, resolutions of the meetings of the board of directors, resolutions of the meetings of the board of supervisors, as well as financial reports.

The shareholders may request to consult the accounting books of the company. Where a shareholder requests to consult the accounting books of the company, it shall submit to the company a written request which shall state its motives. If the company, pursuant to any justifiable reason, considers that the shareholder's request to consult the accounting books for any improper purpose may damage the legitimate interests of the company, it may reject the request of the shareholder, and shall, within in 15 days after the shareholder submits a written request, give it a written reply which shall include an explanation. If the company rejects the request of any shareholder to consult the accounting books, the shareholder may plead the people's court to demand the company to approve consultation.

 Article 35 The shareholders shall distribute dividends in light of the percentages of capital contributions actually made by them, unless all shareholders agree that the dividends are not distributed on the percentages of capital contributions. Where the company is to increase its capital, its shareholders have the preemptive right to contribute to the increased amount on the basis of the same percentages of the capital contributions they have already made, unless all shareholders agree that they will not contribute to the increased amount of capital on the basis of the percentages of the capital contributions they have already made.

 Article 36 After the incorporation of a company, no shareholder may illegally take away the contribution capital.  

Section 2 Organization Structure

 Article 37 The shareholders' meeting of a limited liability company shall comprise all the shareholders. It shall be the authority of the company, and shall exercise its authorities according to this Law.

 Article 38 The shareholders' meeting shall exercise the following authorities:

 (1) determining the company's operation guidelines and investment plans;

 (2) electing and changing the director and supervisors assumed by non-representatives of the employees, and determining the matters concerning their remuneration;

 (3) deliberating and approving the reports of the board of directors;

 (4) deliberating and approving the reports of the board of supervisors or the supervisor;

 (5) deliberating and approving annual financial budget plans and final account plans of the company;

 (6) deliberating and approving profit distribution plans and loss recovery plans of the company;

 (7) making resolutions on the increase or decrease of the company's registered capital;

 (8) making resolutions on the issuance of corporate bonds;

 (9) adopting resolutions on the assignment, division, change of company form, dissolution, liquidation of the company;

 (10) revising the articles of association of the company;