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Regulation on Limited Liability Companies of the Shenzhen
Special Economic Zone |
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(Adopted at the 5th Meeting of the Standing
Committee of the First People' s
Congress of Shenzhen Municipality on April 26, 1997, Revised in
accordance with the provisions of Article 20 and Article
27 of
the Decision on Revising the Regulations on Liability limited
Companies of the Shenzhen Special Economic Zone at
the 19th
Meeting of the Second Standing Committee of People' s
Congress of Shenzhen Municipality on December 17, 1997.) |
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Chapter I General Provisions |
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Article 1 This
Regulation is formulated to establish the legal status of the
limited liability companies within the
territory of Shenzhen
Special Economic Zone (hereinafter refer to as
"Special
Zone" ),
to standardize the organization and activities of the limited
liability companies, to protect the legal rights and interests
of the shareholders and creditors, to maintain the economic
order of socialist market and to promote the economic
development of the Special Zone. |
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Article 2 The
term "limited
liability company"
mentioned in this Regulation refer to an legal person, which is
incorporated within the territory of the Special Zone.
Shareholders shall assume liability towards the company to the
extent of their respective capital contributions, and the
company shall be liable for its debts to the extent of all its
assets. |
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Article 3 These
Regulations applies to all limited liability companies
established within the territory of the Special
Zone. |
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Other legal persons
incorporated within the territory of the Special Zone or other
economic organizations restructured to
form liability limited
companies shall comply with these Regulations. |
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Article 4 A
liability company (hereafter refer as
"company" )
shall apply to the Industrial and Commercial Administrative
Department of Shenzhen Municipality (hereinafter refer as
"Registration
Authority" )
for registration of incorporation. |
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Article 5 A
limited liability company shall clearly indicate the words
"limited
liability
" in
its name. |
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If the company
fails to indicate the words
"limited
liability" in
violation of the provision of the preceding paragraph, or
enterprise fails to register as company in accordance with
the
law and uses
"limited
liability" in
its name, the Register Authority shall order them to make a
rectification within a specific time limit and publicly announce
its order. Punishment will be given to the company which refuses
to rectify by the Register Authority. |
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Article 6 A
company' s
domicile shall be the place where its main administrative
organization is located within the territory of the Special
Zone. |
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Article 7 The
formulation of the articles of association is required for
incorporation of a company. |
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Article 8 A
company shall abide by laws and regulations. |
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The legal rights
and interests of a company shall be protected by law. |
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Article 9 A
company shall not be shareholder of unlimited liability of other
economy organizations or partner of partnership
organization. |
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Where a company is
to invest in another legal representatives of other enterprises,
the aggregated amount of such investments
shall not exceed 50%
of its net assets with an exception of companies of professional
operations or for the purpose of
share holding.
If a company violates the provisions of Paragraph 1 and
Paragraph 2 of this Article, the legal representative of the
company and persons held directly responsible shall be
separately given a fine of not less than RMB 20,000 yuan but not
more than RMB 50,000 yuan by the Register Authority. In the case
has caused losses to the company, the legal representative
and
persons held directly responsible shall assume the
responsibility of compensation. |
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Article 10 The
capital of the company shall not be loaded to shareholders or
others with an exception of loan companies
or for the needs of
business with other enterprises, and the financers prescribed by
the relevant regulations.
if the
company violates the provisions of the preceding paragraph, the
legal representative of the company and persons held
directly
responsible shall be separately given a fine of not less than
RMB 50,000 yuan but not more than RMB 100,000 yuan
by the
Register Authority. If the case has caused losses to the
company, the legal representative and persons held directly
responsible shall assume the responsibility of compensation. |
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Article 11 A
company shall not offer guarantee to shareholders or others with
an exception of those with the approval
of provisions of the
articles of association of the company or shareholders' meeting.
In case the
company violates the provision of the preceding paragraph, the
legal representative of the company and persons
held directly
responsible shall be separately given a fine of not less than
RMB 50,000 yuan but not more than RMB 100,000
yuan by the
Register Authority. If the case has causes losses to the
company, the legal representative and persons held
directly
responsible shall assume the responsibility of compensation. |
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Article 12 While
transacting registration and preparing documents to be open to
the public, the accounting firm, lawyers' office,
assets valuation organs and other relevant organs and their
certified practicing personnel shall comply to the principle
of
honesty, truth and legality. |
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If the organs and
their personnel prescribed by the preceding paragraph have
conducted malfeasances or collusive falsifications,
they shall
be punished by the competent organ of operation. If losses have
been caused to other persons, they shall assume
joint and
several liabilities with the company. If the case constitutes a
crime, criminal liabilities of the persons held
directly
responsible shall be investigated in accordance with the law. |
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Article 13 In case
the company and the relevant personnel discontent with the
Register Authority and its personnel
in the specific
administrative acts of the performance of these Regulations,
they may apply to the organization for administrative
review of
the People' s
Government of Shenzhen Municipality (referred to as municipal
government thereinafter) for reconsideration. They also
may
institute a proceeding to the people' s
court.
If the
Register Authority and its personnel violate these Regulations
by irregularities for favoritism and falsifications,
the
criminal responsibilities of the relevant persons held
responsible shall be investigated. If losses have been caused,
they shall assume the civil responsibilities. If the case
constitutes a crime, the criminal responsibilities of the
persons held directly responsible shall be investigated in
accordance with the law. |
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Article 14 A
state-owned enterprise may reorganize to form company, its
state-owned shares shall be succeeded by the
management
department of state-owned assets or its authorized agencies.
The conditions and procedures of
reorganizing a state-owned enterprise into a company shall be
stipulated by the municipal
government. |
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Chapter
II Incorporation |
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Article 15 A
company shall be established by the joint capital contributions
of more than 2 persons but less than
50 persons, and at least
one of subscribers shall have domicile in the Special Zone. |
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Article 16
Agreement of a company' s
incorporation shall be established, specifying the rights and
obligations of all capital contributors during the period
of
incorporation. |
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Article 17 The
formulation of the articles of association of the company shall
be approved by all the subscribers.
Each subscriber shall sign
and stamp on the articles of association of the company.
The articles of association of a
company shall specify the following items: |
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(1) the name
and domicile of the company; |
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(2) the tenet
and scope of business of the company; |
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(3) the
registered capital of the company; |
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(4) the names
or titles and domiciles of the shareholders; |
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(5) the
amount, term and method of capital contribution of the
shareholders |
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(6) the rights
and obligations of the shareholders; |
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(7) the
establishment, functions and powers and rules of procedure of
the company' s
organs |
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(8) the
producing procedure and scope of functions and powers of the
legal representative; |
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(9) the
financial and accounting system; |
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(10) the terms
of office of the directors and supervisors; |
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(11) the
measures of the profit distribution; |
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(12) the
conditions and procedures of stock equity of the shareholders; |
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(13) the
amendment of the articles of association of the company; |
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(14) the
termination and liquidation of the company; |
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(15) other
matters that are deemed necessary to be specified. |
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Article 18 The
registered capital shall be the amount of the paid-up capital
contributions of all its contributors. |
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The minimum amounts
of the registered capital of different industries which is not
less than RMB 100,000 yuan shall be stipulated
by the municipal
govern. |
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Article 19 The
capital contribution of a subscriber may be subscribed for by
installment in accordance with the provisions
of the articles of
association of the company.
Where the
capital contribution is subscribed for by installment, the total
amount of initial payment of the capital distribution
shall not
be less than 50% of the company' s
registered capital and not be lower than the minimum amount
prescribed by the preceding paragraph. The remaining capital
distribution shall be paid up within 2 years since the company' s
establishment. The amount of the initial payment and term of
full subscription of the subscribers of the companies of
long-term operation and production, and big scale of investment,
shall be stipulated by the municipal government separately.
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Article 20 The
board of directors or executive director shall supervise and
urge the shareholders to subscribe for
the capital distribution
on schedule after the incorporation of the company.
Where the
shareholder fails to make his full capital contributions he
subscribed for by violating the provisions of these
Regulations
or the articles of association of the company, the board of
directors or executive director will be ordered
by the Register
Authority for call with time limit. Other shareholders and
creditors shall have the right to claim for
losses compensation
ont the shareholders who have not fully subscribed for the
capital distribution. |
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Article 21 The
subscriber may make his capital contributions in currency or by
contributing material objects, land-use
rights, industrial
property rights or non-patented technology.
The
investment in the form of currency of the subscriber shall not
be 50% less than the company' s
registered capital, and the amount of the initial payment in
currency shall not be 50% less than the whole initial payment.
The
investment in the form of industrial property rights and
non-patented technology shall not exceed 20% of the company' s
registered capital.
Article 22
The material objects, land-use rights to be contributed as
capital must undergo an asset valuation and
verification of the
assets valuation organization which is authorized in accordance
with the law. The industrial property
rights and non-patented
technology to be contributed as capital shall be valuated by
agreement of all subscribers or by
the asset valuation
organization which is approved in accordance with the law. |
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Article 23 After
all shareholders have made their capital contributions in full,
such contributions must be verified
by a Chinese certified
public account who shall issue capital verification
certificates. |
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Article 24 Where a
company is applying to the Register Authority for registration,
following documents and materials
shall be submitted:
(1) the application for
incorporation of a company; |
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(2) the
certificate of permitting use of the company' s
name;
(3) the articles of association of
the company; |
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(4) the
capital verification certificate of all contributors; |
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(5) the
certificates of domicile or certificate of the use of the
premises of the company
(6) the certificates of legal
representative and his qualification. |
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Where a company of
special business is established, it must gain the approval of
the competent departments of the government
in accordance with
the provisions of the law and regulations, and the approval
documents shall be submitted. |
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Article 25 The
Register Authority shall make decision whether or not to
register the company within 30 days after
receipt of an
application. When a company is approved for registration,
business license shall be issued to the legal representative
of
the company and a written reply shall be made to the company
which is not approved for registration. |
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Article 26 The
date of the issuance of the company business license shall be
the date of the incorporation of the
company. |
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Once a company is
incorporated, an announcement shall be made.
Where a
company fails to commence its business without justification
within the period of more than 6 months of its incorporation
or,
after commencing its business, suspends business at its own will
for a period of 6 consecutive months or more, the
Register
Authority shall revoke the company' s
business license. |
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Article 27 Where
an enterprise operates under the name of company without
authorization, the Register Authority shall
order it to suspend
the business and confiscate its illegal gains and impose a fine
of not less than RMB 50,000 yuan but
not more than RMB 100,000
yuan on the persons held directly responsible. Where the
applicant falsifies the registration,
the Register Authority
shall order him to make a rectification. Where a company has
gained the business license of the
legal representative and
refuses to make rectification, its business license shall be
revoked by the Register Authority
and a fine of not less than
RMB 100,000 yuan but not more than RMB 150,000 yuan will be
imposed on the persons held directly
responsible. |
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Article 28 Where
the valuations of the material objects, land-use rights,
industrial property rights, non-patented
technology which are to
be contributed as capital during the incorporation of the
company are obviously higher than their
practical value, the
shareholders shall assume the joint and several liability to
make up the discrepancy. |
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Article 29 Where a
company is incorporated, it shall provide the shareholders with
the certificates of capital distribution.
The
certificate of capital distribution shall specify the following
items:
(1) the name of the company; |
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(2) the
incorporation date of the company; |
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(3) the
registered capital of the company; |
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(4) the name
or title of the shareholders; |
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(5) the amount
and date of shareholders' capital
distribution;
(6) the issuing date of the certificate of capital
distribution.
Signature of the legal representative and the seal of the
company shall be shown in the certificate of capital
distribution. |
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Article 30 A
company shall prepare a roster of the shareholders for the
examination of the shareholders and creditors.
The roster
of shareholders shall specify the following items:
(1) the name or title, domicile of
the shareholders; |
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(2) the amount
and date of shareholders' capital
distributions;
(3) The serial numbers of the capital distribution
certificates. |
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Article 31 A
company may establish branches with the authorization of the
Register Authority.
Application
of registration of the branches established shall be made to and
business license shall be obtained from the
Register Authority. |
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Article 32 In the
incorporation of the company, company' s
interests has been damaged due to the faults of the subscribers,
the subscribers in fault shall assume the liability of
compensation.
Where a
company fails to be incorporated, the subscribers shall bear the
joint and several liability of the debts occurred
in the acts of
incorporation. |
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Chapter III Shareholders of a Company |
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Article 33 The
natural person, legal person and other economy organizations may
be the shareholders of the company
in accordance with these
Regulations with exceptions of the ones banned by the law and
regulations, or the restrictive
special provisions. |
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Article 34
The shareholders shall not withdraw their capital distributions
without authorization in the time of the
company' s
existence. |
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Article 35
The shareholders may exercise their voting rights in proportion
to their capital distribution or by the
means of one man one
vote in accordance with the provisions of the articles of
associations of the company. |
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Article 36 The
shareholders have priority in purchasing the newly increased
shares. |
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Article 37 A
shareholder may transfer all or part of his shares to other
shareholders or non-shareholders. Where a
shareholder transfers
his stock equity, the consent of over half of all the
shareholders must be secured. Other shareholders,
under the
identical terms, have priority in purchasing. Where a
shareholder take his stock equity as mortgage, the consent
of
over half of all the shareholders must be secured. |
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Article 38 Where a
shareholder assigns his stock equity, modification shall be made
to the roster of shareholders.
The name or title, domicile and
stock equity of the consignee shall be recorded in the roster of
shareholders. This assignment
shall not be against the company. |
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Article A
shareholder shall have the right to elect the director or
supervisor of the company and the right to be
being elected to
be a director and supervisor. |
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Article 40 A
shareholder has the right to examine the roster of shareholders
of the company, minutes of meetings,
and fiscal statements and
the like. |
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Article 41 A
shareholder has the distribution right of the surplus profit
gains and the remaining assets after the
completion of
liquidation. |
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Chapter IV
Organizational Structure |
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Article 42 A
company may have a board of shareholders which will be the
agency of power of the company.
Where a
company does not establish the board of shareholders, all
shareholders shall conjointly exercise the functions and
powers
of the board of shareholders by the means prescribed by the
articles of association of the company. |
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Article 43 The
board of shareholders shall exercise the following functions and
powers: |
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(1) to amend
the articles of association of the company;
(2) to make up resolution on the
increase or reduction of the registered capital of the company; |
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(3) to authorize
the assignment and mortgage or a shareholder' s
stock equity;
(4) to
make decision on the division, merger, transformation,
termination and liquidation of the company;
(5) to
elect or dismiss the director and supervisor;
(6) to
deliberate and confirm the budget and final accounts of company' s
fiscal year;
(7) to deliberate and confirm the reports of the board of
directors or executive director, board of supervisors
or
supervisor;
(8) to
deliberate and confirm the proposals for making-up losses and
the distribution of surplus profit gains
of the company;
(9) other functions and powers
stipulated in the articles of association of the company. |
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Article 44 The
meetings of the board of the shareholders are divided into
shareholders' regular
meetings and shareholders' interim
meetings. |
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Article 45 The
shareholders' regular
meeting which is convened by the board of directors of the
company or executive director shall be convened at least
once
every year.
Where a
company fails to convene or convene on schedule the shareholders' regular
meeting by violating the provisions of the preceding paragraph
or the articles of association of the company, the
Register
Authority shall order it to convene with a specific time limit. |
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Article 46
Shareholders' interim
meeting shall be convened by the board of directors, executive
director or board of supervisors, supervisor in accordance
with
the provisions of the articles of association of the company.
The
shareholders' interim
meeting shall be convened upon the proposal of the shareholders
whose capital distributions have taken up over 30%
of company' s
registered capital. |
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Article 47 Where a
shareholders' meeting
is convened, notifications of the items like time, place and
contents shall be made to the shareholders 10 days
prior to the
convening of the meeting. |
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Article 48 The
resolutions of followings shall be consented by over two ¨Cthirds
of all shareholders:
(1) to increase or reduce the
registered capital of the company; |
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(2) to merge,
divide or modify the incorporation of the company; |
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(3) to
dissolve the company. |
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As to the methods
of resolutions of the items outside the provisions of the
preceding paragraph, with the consents of shareholders
whose
capital distribution taken up over half of the company' s
capital, may be prescribed by the articles of association of the
company separately. |
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Article 49 Matters
discussed at the shareholders' meeting
and resolutions shall be recorded with the signatures of the
shareholders present. |
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Article 50 A
company may have a board of directors. Where a board of
directors is established, it shall be the agency
of making
operation decision and executing business and be responsible to
the board of shareholders or all shareholders
who do not have
the board of directors. Where a company does not have board of
directors, it shall have one to two executive
directors to
exercise the functions and powers of the board of directors. |
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Article 51 The
board of directors shall exercise the following functions and
powers: |
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(1) to convene
the shareholders' meetings; |
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(2) to
implement the resolutions of the shareholders' meetings
or the decisions of all shareholders in case the company does
not have shareholders' meeting; |
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(3) to examine
and approve plans of company' s
development and the plans of annual production and operation; |
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(4) to decide
on the mortgage and transference of company' s
assets; |
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(5) to
formulate plans for the fiscal financial budget and final
accounting of the company; |
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(6) to
formulate plans for making up losses or profit distribution of
the company; |
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(7) to
formulate plans for increasing or reducing the registered
capital of the company; |
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(8) to
formulate plans for the merger, division and modification of
incorporation, termination and liquidation
of the company; |
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(9) to decide
on the establishment of the management organs of the company; |
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(10) to engage
or dismiss the high-grade managers of the company; |
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(11) to decide
on the encouragement and punishment of the high-grade managers
of the company; |
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(12) other
functions and powers provided for in the articles of association
of the company. |
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Article 52 A
board of directors shall have at least three directors. |
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Article 53
Directors shall be elected by the board of shareholders, or
accredited by all shareholders who do not have
the board of
shareholders. |
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Article 54 Where a
company has the board of directors, the chairman of the board
shall be the legal representative;
where there is no board of
directors established, the legal representative shall be
shouldered by an executive director
prescribed by the articles
of association of the company. |
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Article 55 Manager
may be appointed by the board of directors or the executive
director to handle the daily activities
of operation of the
company. |
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The functions and
powers of the manager shall be stipulated by the articles of
association of the company or decided by
the board of directors. |
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Article 56 None
of the following persons may hold the position of director or
manager of the company: |
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(1) a person
without capacity or with restricted capacity for civil acts; |
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(2) a person who
was accused by the judicatory organization of crime and has not
settled the lawsuit;
(3)
a person who had sentenced to criminal
punishment fixed-term imprisonment or above, and there had not
been over three years
since the release upon completion of his
term of imprisonment;ˇˇˇˇ
(4) the legal representative and persons and
persons held mainly responsible for the revocation of the
business license
of the company or enterprise by violation the
law, and not more than 3 years have elapsed since the date of
revocation
of the business license; |
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(5) a person who
held directly responsible for the bankruptcy liquidation or
cancellation of the company or
enterprise and not more than 3
years have elapsed since the date of completion of bankruptcy
liquidation or cancellation; |
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(6) a person with
huge amount of debts that have not been repaid for long;
(7) other persons prescribed in the
law, rules and regulations. |
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Article 57
Director, manager shall not be the unlimited liability
shareholder of other economy organizations or partner
of the
partnership organization. They shall not operate their own in,
or operate for others, the competitive category of
business of
the company they are serving or, conduct trades, loans on behalf
of himself or his company, or shall
not engage in actives which
damage the interests of the company.
The board of
shareholders or all shareholders who do not have the board of
shareholders shall have the right to claim the
income of a
director or manager derived from the violation of the provisions
of the preceding paragraph. If losses of the
company have been
caused by the director or manager' s
violation of the preceding paragraph, they shall assume the
responsibility for compensation. If the case has constitutes
a
crime, criminal liabilities shall be investigated in accordance
with the law. |
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Article 58 A
company shall have the board of supervisors or one to two
supervisors to supervise the business and finance
of the
company. |
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Article 59 The
board of supervisors shall have at least 3 supervisors. The
rules of procedure of the board of supervisors
or supervisors
shall be prescribed by the articles of association of the
company. |
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Article 60
Two-thirds of the members of the board of supervisors shall be
the shareholders who are to be elected and
dismissed by the
shareholders' meeting,
and where there is no shareholders' meeting,
they shall be accredited and dismissed by all shareholders.
Other members shall be the personnel of the company
who are to
be elected and dismissed by the staff. The high-class managing
personnel like director, manager and fiscal director
shall not
concurrently serve as supervisors. |
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Article 61 The
board of supervisors or supervisors shall report their work to
the shareholders' meeting,
and where there is no shareholders' meeting,
they shall report to all shareholders.
The supervisory board or supervisors
shall exercise the following functions and powers: |
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(1) to attend
the meetings of directors as a non-voting participants; |
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(2) to check,
look up and the financial and accounting statements and other
materials of the company; |
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(3) to examine
the business and financial conditions of the company; |
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(4) to
supervise the work of the board of directors, executive
directors and managers; |
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(5) to convene
the interim shareholder' s
meetings according to the articles of association of the
company; |
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(6) to
represent the company to negotiate with the directors and
managers, or proceed against the directors
and managers; |
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(7) other
functions and powers provided for in the articles of association
of the company. |
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Article 62 Where supervisors fail to supervise the acts of
damaging the interests of the company and the shareholders,
they
shall bear the joint and several liabilities as the actor. |
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Chapter V Financial Affairs and Accounting |
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Article 63 A
company shall establish the financial and accounting system. |
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Article 64 A
company shall formulate the fiscal statements like a balance
sheet, a profit and loss statement, a statement
on changes in
the fin national position of the company in every fiscal year
which shall be submitted to the tax authority
after the
validation of a Chinese certified accountant.
Article 65
A company shall submit a balance sheet to the Register Authority
when the Register Authority conducts the
yearly inspection.
Where a
company violates the provisions of the preceding paragraph, it
shall be ordered by the Register Authority to submit
within a
specific time limit, and a fine of not less than RMB 20,000 yuan
but not more than RMB 50,000 yuan shall be separately
imposed on
the legal representative and persons held directly responsible. |
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Article 66 A
company shall make its financial and accounting statement
available at the company for examination by
its shareholders and
creditors. |
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Article 67 Where a
company distributes the after-tax profits, it shall make up the
losses first, and allocate 10%
of the profits to its statutory
surplus common reserve fund and another 5% to its statutory
common welfare fund. |
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Where the statutory
surplus common reserve fund has accumulated to 50% of the
company' s
registered capital, no further allocation may b e made. |
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Article 68 The
statutory surplus common reserve fund shall be functioned in the
following ways:
(1) to make up losses; |
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(2) to
increase the capital; |
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(3) other
functions stipulated by the law and regulations. |
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The statutory
common welfare fund shall be used for the collective welfare of
the company' s
staff.. |
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Article 69 A
company may allocate the surplus common reserve fund voluntarily
in accordance with the provisions of
the articles of association
of the company. |
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Article 70 A
company shall not distribute the after-tax profits to the
shareholders prior to making-up losses, allocation
of the
statutory surplus common reserve fund and statutory common
welfare fund. |
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Where a
company distributes the profits by violating the provisions of
the preceding paragraph, it shall be ordered to return
the part
of illegal distribution, and its legal representative and
persons held directly responsible shall be separately
given a
fine of not less than RMB 20,000 yuan but not more than RMB
50,000 yuan. |
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Chapter VI Merger, Division and Modification of
Incorporation |
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Article 71 The
merger, division or modification of incorporation may be made in
accordance with these Regulations. |
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Article 72
Liquidation of the company' s
assets shall be conducted in the merger or division, and a
balance sheet and an inventory of property shall be formulated.
Where
companies merge, parties to merge shall sign a merger agreement.
Where a company proceeds to a division, resolution
of assuming
the debts of the companies shall be made.
Where a
balance sheet and inventory of assets are falsified in the
merger and division of a company in the violation of the
provisions of Paragraph 1 and Paragraph 2 of this Article, the
legal representative and persons held directly responsible
shall
be separately imposed by the Register Authority on a fine of not
less than RMB 20,000 yuan but not more than RMB
50,000 yuan. If
the case institutes a crime, criminal responsibilities shall be
investigated in accordance with the law. |
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Article 73 The
already-known creditors of the company shall be notified of the
resolution of merger or division within
10 days following the
adoption date, and at least 3 public announcements shall be made
within 30 days.
Where a
company fails to make notifications or public announcements in
accordance with the provisions of the preceding paragraph,
it
shall be ordered by the Register Authority to make the
notifications and public announcements, and the legal
representative
of the company and the persons held directly
responsible shall be separately imposed on a fine of RMB 20,000
yuan. |
|
Article 74
Creditors may lodge abjections within 30 days following the date
of receipt of the notification, or within
60 days following the
date of the public announcement for these who have not received
the notice. |
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Article 75 Where
creditors lodge objections against the merger or division of the
company, the company shall repay
debts in full, or reach
agreement with the creditors on the full repayment of the debts.
Otherwise the company shall not
merger or divide.
Where a
company violates the provisions of the preceding paragraph, it
shall be ordered by the Register Authority to make
a
rectification within a specific time lime. A fine of not less
than RMB 50,000 yuan but not more than RMB 100,000 yuan
shall be
imposed on the company, and a fine of not less than RMB 20,000
yuan but not more than RMB 50,000 yuan shall be
separately
imposed on the legal representative of the company and persons
held directly responsible. |
|
Article 76 Where
creditors lodge no objections against the merger of the company,
the debts of the companies to merge
shall be succeeded by the
absorbing company or the newly established company.
Where
creditors lodge no objections against the division of the
company, the debts prior to the division of a company shall
be
assumed by the companies in accordance with the division
agreement. |
|
Article 77 Where
companies fail to merge, the expenses due to the preparation of
merger shall be jointly assumed by
the companies to merge. |
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Article 78 Where a
company alternates into a joint stock limited company, the total
amount converted from the stock
equity of the original
shareholders shall not exceed the amount of the present net
assets of the company. If the present
net assets have been
exceeded, all shareholders of the company shall assume the
liabilities of making up the discrepancy.
|
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Article 79 Where a
company alternated into a joint stock limited company, its debts
prior to the alternation shall
be assumed by the joint stock
limited company. |
|
Article 80
Registrations of modification, cancellation or incorporation of
the merger, division or modification of
incorporation of a
company shall be handled in accordance with the provisions of
these Regulations and Regulations on Joint
Stock Limited
Companies of the Shenzhen Special Economic Zone |
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Chapter VII Increase or reduction of Registered Capital |
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Article 81 Where a
company is to increase its registered capital, the distribution
of the newly increased capital
shall comply with the relevant
provisions on the capital distributions of Chapter II of these
Regulations. |
|
Article 82 Where a
company is to reduce its registered capital, a balance sheet and
an inventory of assets shall be
formulated.
The
already-known creditors shall be informed of the resolution of
reducing the registered capital by the company within
10 days
front the adoption date of the resolution and at least 3 public
announcements shall be made within 30 days. Creditors
may lodge
objections within 30 days from the date of receipt of the notice
or, within 60 days from the date of public announcement
for
these who have not received the notice. |
|
Article 83 As to
the creditors who have lodged the objections, the company shall
make full repayment of the debts,
or reach an agreement with the
creditors on the repayment; otherwise the company is not allowed
to reduce the registered
capital.
The registered capital after reduction
of the company shall not be less than the minimum amount
prescribed by these Regulations,
and the amount of companies of
different industries shall not be less than the minimum amount
prescribed by the municipal
government. |
|
Article 84 Where a company increases or reduces its registered
capital, it shall apply to the Registration Authority
for
registration of modification. |
|
|
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Chapter VIII Termination and Liquidation |
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Article 85
Where one of the following reasons occurs, a company may be
terminated: |
|
(1) the term
of operation as stipulated by the articles of association of the
company expires or other reasons
for termination as stipulated
by the articles of association occur; |
|
(2) tenet of the
company established by the company has been realized or been
unable to realize; |
|
(3) two thirds
of its shareholders agree to terminate the company; |
|
(4) the
company is to merge with other companies or to make divisions; |
|
(5) the
company is to be cancelled in accordance with the law;
(6) the
company fails to commence its business without justification
within six months after incorporation,
or suspends business at
its own will for more than six months;
(7) the
company is declared bankrupt in accordance with the law. |
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Article 86
Where a company terminates, a liquidation committee shall be
established. |
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Where a company is
terminated due to the reasons stipulated by Item1, 2, 3 and 4 of
the preceding Article, the liquidation
committee shall be
established by the shareholders' meeting,
or by all shareholders for those who do not have shareholders' meeting.
Where a company is terminated due to the reasons stipulated by
Item 5 and 6 of the preceding Article, the liquidation
committee
shall be established by the Registered Authority. |
|
Article 87
During liquidation, the liquidation committee shall exercise the
following functions and powers: |
|
(1) to clear
up the company' s
assets and formulate the balance sheet, asset catalog and
detailed inventories of claims and debts; |
|
(2) to dispose
company' s
unfinished business; |
|
(3) to require
the company' s
creditors to perform their obligations; |
|
(4) to pay off
the debts of the company according to the law and regulations.
(5) to draw in shareholders' capital
distribution which should have been subscribed for but have not; |
|
(6) to dispose
the company' s
remaining property; |
|
(7) to
participate in lawsuits and arbitration on behalf of the
company. |
|
Article 88 The
already-known creditors shall be informed in written by the
liquidation committee within 10 days from
date of establishment,
and at least 3 public announcements shall be made within 30
days. |
|
Article 89
Creditors shall report their claims of debts to the liquidation
committee within 30 days from the date
of receipt of notice, or
within 90 days for these who have not received the notice.
Where
creditors report their claims, the character and amount of the
debts shall be specified and the relevant certifying
materials
shall be submitted. The liquidation committee shall make
separate registrations for these who have the property
guarantee
or those who do not. |
|
|
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Article 90
Liquidation proposal shall be drawn up by the liquidation
committee.
Where a liquidation committee is
established by a company, the consent of over two thirds of its
all shareholders shall
be secured before the implementation of
the liquidation plans. In case the liquidation committee is
established by the
Registration Authority, the liquidation plans
shall be submitted to the Registration Authority for approval
before implementation. |
|
Article 91 A
company shall terminate the activities irrelevant to the
liquidation after the conduction of liquidation.
Any one shall not dispose of the
assets of the company without the authorization of the
liquidation committee. Where there
is a private disposal of
company' s
assets, these parts shall be recovered by the liquidation
committee, and persons held directly responsible shall be given
a fine of not less than RMB 50,000 yuan but not more than RMB
100,000 yuan by the Register Authority. |
|
Article 92
Creditors who have the property guarantee shall be compensate in
priority. |
|
Article 93 The
assets after paying of f the expenses of the company shall be
liquidated in accordance with the following
orders: |
|
(1) the wages
and social insurance premiums of the staff and workers of the
company; |
|
(2) the
taxation; |
|
(3) the debts
of the company. |
|
Company' s
assets after the liquidation in accordance with the orders
prescribed by the preceding paragraph shall be distributed
to
the shareholders in proportion of their capital distribution. |
|
Article 94
Where the liquidation committee discovers that there are
insufficient assets in the company to pay off
its debts during
clearing up the assets , claims and debts, the committee shall
apply to the people' s
court for a declaration of bankruptcy of the company
After the people' s
court has ruled to declare the company bankrupt, the liquidation
committee shall turn the liquidation matters over to
the court
and notify all shareholders. |
|
Article 95
Where a liquidation committee can not exercise its functions or
powers, it may apply to the people' s
court for conduction of liquidation. |
|
In case a
liquidation committee does not exercise its functions or powers
according to the law, the creditors may apply
to the people' s
court for conduction of liquidation. |
|
Article 96 The
liquidation committee established by the Registration Authority
or people' s
court shall have professionals like the Chinese lawyers and the
Chinese registered accountants. |
|
Article 97
Liquidation report shall be formulated by the liquidation
committee after the completion of liquidation.
The statements of
various accounts and finance during the liquidation shall be
reported to the shareholders' meeting
or to all shareholders who do not have shareholders' meeting,
and the statements shall be confirmed by the Register Authority
or people' s
court. The liquidation committee shall submit the liquidation
report to the Register Authority in order to cancel the
registration within 10 days following the date of confirmation
of the report. |
|
Article 98 A
public announcement of a company' s
termination shall be made by a after it has been approved to
cancel the registration of the company. |
|
Article 99 The
members of the liquidation committee shall perform the
liquidation obligations in accordance with the
law. Members of a
liquidation committee, who cause losses to the company or to its
creditors through negligence, shall
be assumed of the joint and
several liabilities. |
|
Article 100 Where a company is declared bankrupt according to
the law, it shall conduct a liquidation in accordance
with the
relevant laws and regulations. |
|
|
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Chapter IX Supplementary Provisions |
|
Article 101 Companies incorporated within
the territory of the Special Zone before the implementation of
these Regulations
shall improve the conditions of the companies
and the articles of association of the companies, and transact
the
procedures of annual inspection during the period of annual
inspection of 1994. |
|
Article 102 The limited liability companies
incorporated by means of foreign investments within the
territory of the
Special Zone shall apply to these Regulations.
However, the ones stipulated
separately by the law and regulations are excepted. |
|
Article 103 The items of public announcement
formulated by these Regulations shall be published in the
prominent place
of the Shenzhen Special Zone Daily, Shenzhen
Economic Daily or other newspapers and magazines expressly
provided by the
municipal government. |
|
Article 104 These Regulations shall be
interpreted by the Standing Committee of Shenzhen Municipal
People' s
Congress. |
|
Article 105 The specific rules of
implementation shall be formulated by the municipal government
in accordance with
these Regulations.
Article 106 These Regulations shall
take effect as of July 1, 1993. |
