Article 52 A limited liability company may set up a
board of supervisors, which shall comprise at least 3 persons. A limited
liability company, which has relatively less shareholders or is relatively small
in scale, may have 1 or 2 supervisors, and does not have to establish a board of
supervisors. The board of supervisors shall include representatives of
shareholders and representatives of the employees of the company at an
appropriate ratio which shall be specifically stimulated in the articles of
association. The employees' representatives, who are to serve as members of the
board of supervisors, shall be democratically elected by the employees of the
company through the meeting of the employees' representatives or employees'
meeting, or by any other means. The board of supervisors shall have one
chairman, who shall be elected by half or more 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 to or does not perform his duties, the supervisor recommended by half or
more of the supervisors shall convene and preside over the meetings of the board
of supervisors.
No director or senior manager may
concurrently work as a supervisor.
Article 53 Every term of office of the supervisors shall
be 3 years. The supervisors may, after the expiry of their term of office, hold
a consecutive term upon re-election. If no reelection is timely carried out
after the expiry of the term of office of the supervisors, or the number of the
members of the board of directors is less than the quorum due to the resignation
of some directors from the board of supervisors prior to the expiry of their
term of office, the original supervisors shall, before the newly elected
supervisors assume their posts, exercise the authorities of the supervisors
according to laws, administrative regulations as well as the articles of
association.
Article 54 The board of supervisors or supervisor of a
company with no board of supervisors may exercise the following authorities:
(1) checking the financial affairs of the company;
(2) supervising the duty-related acts of the
directors and senior managers, and bringing forward proposals on the removal of
any director or senior manager who violates any law, administrative regulation,
the articles of association or any resolution of the shareholders' meeting;
(3) demanding any director or senior manager to make
corrections if his act has injured the interests of the company;
(4) proposing to convening temporary shareholders'
meetings, and convening and presiding over shareholders' meetings when the board
of directors does not exercise the functions of convening and presiding over the
shareholders' meetings as prescribed in this Law;
(5) bringing forward proposals at shareholders'
meetings;
(6) initiating actions against directors
or senior managers according to
Article 152 of this Law;
and
(7) other duties as prescribed by the articles
of association.
Article 55 The supervisors may attend the meetings of
the board of directors as non-voting delegates, and may raise questions or
suggestions on the matters to be decided by the board of directors.
If the board of supervisors or supervisor of the company
with no board of directors finds that the company is running abnormally, it (he)
may make investigations. Where necessary, it (he) may hire an accounting firm to
help it (him) with the relevant expenses being born by the company.
Article 56 The board of supervisors shall hold meetings
at least once a year. The supervisors may propose to hold temporary meetings of
the board of supervisors.
The discussion methods and
voting procedures of the board of supervisors shall be prescribed in the
articles of association, unless it is otherwise stimulated in this Law.
The resolution of the board of supervisors shall be adopted
by half or more of the supervisors. The board of supervisors shall make records
for the resolutions on the matter it discusses, which shall be signed by the
supervisors in presence.
Article 57 The expenses necessary for the board of
supervisors or the supervisor of a company with no board of supervisors to
perform its (his) duties shall be borne by the company.
Section 3 Special Provisions on One-person Limited
Liability Companies
Article 58 The provisions of this Section shall apply to
the establishment and organizational structure of a one-person limited
liability. As for any matter not prescribed in this Section, it shall be subject
to the provisions of Sections 1 and 2 of this Chapter.
The term "one-person limited liability company" as
mentioned in this Law refers to a limited liability company with only one
natural person shareholder or a juridical person shareholder.
Article 59 The minimum amount of registered capital of a
one-person limited liability company shall be RMB 100, 000 Yuan. The shareholder
shall, in a lump sum, pay the capital contribution as specified in the articles
of association.
One natural person is allowed to
establish merely one one-person limited liability company which shall not set up
any further one-person limited liability company.
Article 60 A one-person limited liability company shall,
in the company registration, give a clear indication that it is solely-funded by
one natural person or one juridical person, and the same shall be specified in
the business license of the company.
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