Article 72 All or some of the stock rights of the
shareholders of a limited liability company may be transferred between the
shareholders.
Where a shareholder intends to transfer
his/its stock rights to any non-shareholder, he/it shall be subject to the
approval of more than half of the other shareholders. The shareholder shall
notify the other shareholders in written form of the matters on the transfer of
stock rights for their approval. If any of the other shareholders fails to give
it a reply within 30 days after the receipt of the written notice, it shall be
deemed to have agreed to the transfer. If half or more of the other shareholders
disagree to the transfer, the shareholders who disagree to the transfer shall
purchase the stock rights to be transferred. If they refuse to purchase these
stock rights, they shall be deemed to have agreed to the transfer. Under the
same conditions, the other shareholders have a preemptive right to purchase the
stock rights to be transferred upon their approval. If two or more shareholders
claim the preemptive rights, they shall determine their respective percentage of
purchase through negotiation. If they fail to reach an agreement during the
negotiation, they shall exercise the preemptive rights on the basis of their
respective percentage of capital contributions. Unless it is otherwise provided
for of the transfer of stock rights in the articles of association, the articles
of association shall be followed.
Article 73 When the people's court transfers the stock
rights of a shareholder in light of the mandatory enforcement procedures as
provided for in laws, it shall notify the company and all the shareholders, and
the other shareholders have a preemptive right under the same conditions. If any
of the other shareholders fails to exercise their preemptive rights within 20
days after he/it receives the notice of the court, it shall be deemed to have
waived his/its preemptive right.
Article 74 After a company transfers its stock rights
according to Articles 72 and 73 of this Law, it shall cancel the capital
contribution certificate of the former shareholder, issue a capital contribution
certificate to the new shareholder and modify the record on the shareholders and
their capital contributions in the articles of association and the register of
shareholders. And no voting of the shareholders' meeting is needed for the
modification of the articles of association.
Article 75 Under any of the following circumstances, a
shareholder, who votes against the resolution of the shareholders' meeting, may
request the company to purchase its stock rights at a reasonable price:
(1) The company has not distributed any profit to the
shareholders for 5 consecutive years, though it has made profits for five
consecutive years and meets the profit distribution conditions as prescribed in
this Law;
(2) The merger, split-up, or transfer of
the main properties of the company is undertaken;
(3) When the business term as prescribed in the
articles of association expires or other reasons for dissolution as stipulated
in the articles of association occur, the shareholders' meeting makes the
company continue existing by adopting a resolution on modifying the articles of
association.
Within 60 days after the resolution is
adopted at the shareholders' meeting, if the shareholder and the company fail to
reach an agreement on the purchase of stock rights, the shareholder may file a
lawsuit to the people's court within 90 days after the resolution is adopted at
the shareholders' meeting.
Article 76 After the death of a natural person
shareholder, his lawful inheritor may inherit the shareholder's qualifications,
unless it is otherwise prescribed by the articles of association.
Chapter IV Establishment and
Organizational Structure of a Joint Stock Limited Company
Section 1 Establishment
Article 77 The establishment of a joint stock limited
company shall meet the following conditions:
(1)
The number of initiators meets the quorum;
(2) The
capital stock subscribed for and raised by the initiators reaches the minimum
amount of the statutory capital;
(3) The issuance
of shares and the preparatory work accord with the provisions of the law;
(4) The articles of association are formulated by the
initiators, and are adopted at the establishment meeting if the company is to be
launched by stock floatation;
(5) The company has
a name, and its organizational structure accords with that of a joint stock
limited company
(6) The company has a
domicile.
Article 78 A joint stock limited company may be
established by ways of promotion or stock floatation. The establishment of a
company by promotion means that the initiators establish a company by
subscribing for all of the shares that should be issued by the company. The
establishment of a company by stock floatation means that the initiators
establish a company by subscribing for some of the shares that should be issued
by the company and offering the remaining shares to the general public or to
particular objects for subscription.
Article 79 To establish a joint stock limited company,
there shall be not less than 2 but not more than 200 initiators, of whom half or
more shall have a domicile within the territory of China.
Article 80 The initiators of a joint stock limited
company shall undertake the preparatory work of the company. They shall conclude
an agreement of initiators to clarify their respective rights and obligations
during the course of establishingthe company.
Article 81 Where a joint stock limited company is
established by promotion, its registered capital shall be the total capital
stock subscribed for by all the initiators as registered in the company
registration authority. The minimum amount of initial capital contributions to
be made by all initiators shall be not less than 20% of the total registered
capital, and the remaining amount shall be paid off by the initiators within 2
years as of the day when the company is established, while for an investment
company, the remaining amount may be paid off within 5 years. Before the
registered capital is paid off, no stock may be offered to others for
subscription.
Where a joint stock limited company is
established by stock floatation, its registered capital shall be the total
actually paid capital stock as registered in the company registration authority.
The minimum amount of the registered capital of a joint stock limited company
shall be RMB 5 million Yuan. If any law or administrative regulation prescribes
a relatively higher minimum amount of registered capital, such provision shall
be followed.
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