Article 82 The articles of association of a joint stock
limited company shall specify the following matters:
(1) the name and domicile of the company;
(2) the business scope of the company;
(3) the form of company establishment;
(4) total shares, value of each share, and the amount
of registered capital of the company;
(5) the name
of every initiator, the shares it has subscribed for, as well as the form and
date of capital contributions;
(6) the
composition, authorities, term of office, and rules of procedure of the board of
directors,
(7) the legal representative of the
company;
(8) the composition, authorities, term of
office, and rules of procedure of the board of supervisors;
(9) the methods for profit distribution of the
company;
(10) the reasons for dissolution of the
company and liquidation methods;
(11) the methods
for issuing notices or public announcements of the company; and
(12) other matters deemed necessary by the meetings
of shareholders.
Article 83 The form of capital contributions of
initiators shall be subject to the provisions in Article 27 of this Law.
Article 84 When establishing a joint stock limited
company by promotion, the initiators shall subscribe, in writing, for the full
amount of shares prescribed in the articles of association. In the case of
paying the capital contributions at one time, the initiators shall make the
payment in a lump sum; in the case of paying the capital contributions by
installments, the initiators shall make the down payment immediately. In the
case of making capital contributions in non-monetary properties, the initiators
shall go through the procedures for the transfer of property rights according to
law.
If any of the initiators fails to make capital
contributions by following the provisions of the preceding paragraph, it shall
bear the liabilities for breach of contract according to the stipulations in the
initiators agreement. After the initiators have made their down payment, they
should elect the board of directors and the board of supervisors. The board of
directors shall file a registration application with the company registration
authority and submit thereto the articles of association, the capital
verification certification as issued by a lawfully established capital
verification institution, as well as other documents as stimulated by the laws
and administrative regulations.
Article 85 For a joint stock limited company established
by stock flotation, the shares subscribed for by the initiators shall not be
less than 35 % of the total shares. However, if it is otherwise provided for by
any law or administrative regulation, such law or administrative regulation
shall prevail.
Article 86 When raising shares in the public, the
initiators shall publish a prospectus and prepare share subscription forms. The
share subscription form shall involve the items listed in Article 87, and a
subscriber shall fill in the number and amount of shares he subscribes for and
his domicile, and shall affix his signature or seal thereto. The subscriber
shall pay the shares pursuant to the number of shares he has subscribed for.
Article 87 The prospectus shall be accompanied by the
articles of association formulated by the initiators and shall state the
following:
(1) the number of shares subscribed for
by the initiators;
(2) the value and issuing price
of each share;
(3) the total number of
unregistered stocks issued;
(4) the purposes of
the funds raised;
(5) the rights and obligations
of the subscribers; and
(6) the beginning and
ending dates for the public offer and a statement that the subscribers may
revoke their subscriptions if the offer is under-subscribed at the close of the
offer.
Article 88 The public offer shares shall be underwritten
by a lawfully established securities company, and an underwriting agreement
shall be concluded.
Article 89 As for the public offer shares, the
initiators shall sign an agreement with the receiving bank.
The receiving bank shall receive and hold as an agent the
payments for shares in light of the agreement, issue receipts to subscribers who
have made the payments and be obliged to issue evidence of receipt of payments
to the relevant departments.
Article 90 After the full payment for the public offer
shares, they shall be verified by a lawfully established capital verification
institution, and a certification shall be issued thereby. The initiators shall
hold a company establishment meeting within 30 days, which shall comprise the
subscribers. If the public offer shares are not fully subscribed for at the
expiration of the time limit prescribed in the prospectus, or the initiators
fail to hold an establishment meeting within 30 days after the full payment for
the public offer shares, the subscribers may demand the initiators to make
repayments for the public offer shares plus an interest calculated at the bank
deposit interest rate for the same period.
Article 91 The initiators shall notify every subscriber
of the date of the establishment meeting or make a public announcement on the
meeting 15 days in advance. The establishment meeting may not be held, unless
subscribers representing at least half of the shares appear. The establishment
meeting shall exercise the following authorities:
(1) deliberating the report on the pre-establishment
activities prepared by the sponsors;
(2) adopting
the articles of association;
(3) electing members
of the board of directors;
(4) electing members of
the board of supervisors;
(5) checking the
expenses incurred for the establishment of the company;
(6) checking the value of the assets contributed by
the initiators in lieu of pecuniary payment for the shares;
(7) Where any force majeure or major change of the
operation conditions directly affect the establishment of the company, the
resolution not to establish the company may be adopted. A resolution adopted at
the establishment meeting on any of the matters as mentioned in the previous
paragraph requires affirmative votes by subscribers representing more than half
of the votes of those attending the meeting.
Article 92 The initiators and subscribers shall not
withdraw their share capital after making payments for the shares they have
subscribed for or after making capital contributions by using non-monetary
properties, unless the public offer shares have not been fully subscribed within
the time limit, the initiators fail to convene the establishment meeting within
the time limit or the establishment meeting has decided not to set up the
company.
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