Regulations
of Shenzhen Special Economic Zone
|
on
Wholly State-Owned Limited Companies
|
(Adopted
at the Thirty-second Meeting of Standing Committee of the Second
Shenzhen Municipal People'
s Congress on May 6, 1999.)
|
Chapter
I General Provisions
|
Article
1 In order to standardize the
organizations and activities of wholly state-owned limited
companies, protect
the lawful rights and interests of companies,
shareholders and creditors, safeguard social and economic order
and promote the economic development of Shenzhen Special Economic
Zone (hereinafter referred to as "Special
Zone" ), these
regulations are hereby formulated in light of the specific
conditions of the Special
Zone and in accordance with the
Company Law of the People's Republic of China(hereinafter
referred to as the "Company Law" ).
|
Article
2 A wholly state-owned company in
these regulations refers to a limited liability company, which
invested
in and established solely by state-owned subscriber
according to these regulations in the Special Zone.
|
Article
3 A wholly state-owned limited
company is an enterprise legal person.
|
In
the case of a wholly state-owned limited liability company, the
subscriber is liable to the company
to the extent of the amount of
its capital. A wholly state-owned limited liability company is
liable
for the debts of the company with all its assets. A company
and its shareholder are units independent to each other.
|
The
domicile of a company is the place where its principal place of
business is located.
|
Article
4 A limited liability company
established in accordance with these regulations shall have the
words "wholly
state-owned limited company" in
its name.
|
Chapter
II Establishment of Wholly State-owned Limited Companies
|
Article
5 To establish a wholly state-owned
company in accordance with these regulations shall be approved by
a state-authorized department for administration of state-owned
assets.
|
A
wholly state-owned company shall be restricted to establish a new
wholly state-owned company as an
exclusive shareholder or the
company as of the date these regulations take effect.
|
Article
6 A company, which engages in the
production of special products or belongs to a specified trade,
shall
be established in the form of a wholly state-owned limited
company.
|
A
company, which does not engage in the production of special
products or belong to a specified trade,
shall be strictly
restricted to be established in the form of a wholly state-owned
limited company.
|
Article
7 To establish a wholly state-owned
limited company shall meet the following requirements:
|
(1)
The investment contributed by shareholders meets the minimum
amount of capital required by these
regulations;
|
(2)
The company's articles of association shall be formulated by the
state-authorized department for
administration of state-owned
assets, or be formulated by the directorate and submitted to the
state-authorized
department for administration of state-owned
assets for approval;
|
(3)
There is a company name, and an organizational structure complying
with the requirements for establishing
a limited liability
company; and
|
(4)
There is a fixed place and necessary conditions for productions
and operations.
|
Article
8 A wholly state-owned limited
company' s registered capital is the capital actually contributed
by the
shareholder and registered with the company registration
authorities.
|
The
registered capital of a wholly state-owned limited company, which
engages in the production of special
products or belongs to a
specified trade, shall not be less than RMB 2,000,000.
|
The
registered capital of a wholly state-owned limited company, which
does not engage in the production
of special products or belong to
a specified trade, shall not be less than RMB 500,000.
|
Article
9 The subscription by a subscriber
shall abide by relevant provisions of the Company Law.
|
Article
10 The establishment of a wholly
state-owned limited company shall be applied by the legal
representative
of the shareholder or the person consigned by the
shareholder in accordance with these regulations.
|
Chapter
III Shareholders of Wholly State-owned Limited Companies
|
Article
11 The shareholder exercises the
following powers:
|
(1)
To decide on the company's operational policies and investment
plans;
|
(2)
To nominate or appoint any director or supervisor;
|
(3)
To examine and approve reports of the board of directors;
|
(4)
To examine and approve reports of the board of supervisors;
|
(5)
To examine and approve the company's proposed annual financial
budget and final accounts; and
|
(6)
Other powers as prescribed by laws, regulations and company's
articles of association.
|
Article
12 Shareholders shall not withdraw
their capital contributions after the registration of the wholly
state-owned
limited company.
|
The
shareholder, who illicitly withdraws its capital contribution,
shall be jointly liable for the debts
of the wholly state-owned
limited company.
|
Article
13 The shareholder may transfer its
capital contributions with the consent of the state-authorized
department
for administration of state-owned assets or state-owned
assets operation institution.
|
Article
14 Any deal between a wholly
state-owned limited company and its shareholder shall be recorded
in the
memorials of the company or in other written forms.
|
Any
deal between a wholly state-owned limited company established by
shareholder' s representative
and the shareholder itself shall
be prohibited.
|
Article
15 A wholly state-owned limited
company shall not loan any company fund to its shareholder.
|
A
wholly state-owned limited company shall not provide a guarantee
for debts of its shareholder with
the company's assets.
|
Article
16 Where a shareholder of a wholly
state-owned limited company enjoys creditor' s right against the
company,
it shall not enjoy the pre-emptive right against other
creditors for claiming payment of the debts from the company.
|
Article
17 Where the institutions and
finances of a shareholder and its wholly state-owned limited
company are
commingled continuously, the shareholder shall bear
joint and several liabilities for debts of the company.
|
Article
18 The shareholder shall be deemed
to excessively rig the company in case it falls into the following
circumstances:
|
(1)
There are unfair commerce clauses between the parent company and
its subsidiary company, which lead
to the transfer of the profits
of the subsidiary company to the parent company or the loss of the
parent
company to the subsidiary company;
|
(2)
The subsidiary company is part of its parent company all along
other than an independent one;
|
(3)
The subsidiary company has never established any independent
institution; and
|
(4)
The external deals of the parent company and its subsidiary
company have never been clearly divided.
|
Where
a shareholder excessively rigs a wholly state-owned limited
company and causes the company loss
its independence, it shall
bear joint and several liabilities for debts of the company caused
during
the period it excessively rigged the company.
|
Chapter
IV Institutions of Wholly State-owned Limited Companies
|
Article
19 A wholly state-owned company does
not establish shareholder's meeting, the company's board of
directors
authorized by the shareholder is to exercise part of the
powers of the shareholder' s meeting which stipulated by
Article
38 of the Company Law. But the decisions on merger, division,
dissolution of the company, increase
or decrease in capital and
issue of corporate bonds shall be made by the shareholder and
approved by
the state-authorized assets administrative department.
|
Article
20 A wholly state-owned company
shall establish a board of directors to exercise powers stipulated
by
Article 46 and Article 49 of the Company Law and Article 19 or
these regulations. The term of office of the board
of directors is
three years.
|
Article
21 The board of directors of a
wholly state-owned limited company shall have three to nine
members, in
which shall include representatives of the staff and
workers of the company.
|
Article
22 The board of directors shall have
a chairman and may have one vice-chairman if necessary. The
chairman
and the vice-chairman are designated from among the
directors.
|
The
chairman of the board of directors is the legal representative of
the company.
|
Article
23 A wholly state-owned company
shall have a manager who is appointed or dismissed by the board of
directors.
With the consent of the state-authorized department for
administration of state-owned assets or state-owned assets
operation institution, the chairman of the board of directors may
act concurrently as manager.
|
The
manager shall exercise his powers in accordance with the
provisions of Article 50 of the Company
Law.
|
Article
24 The chairman and vice-chairman of
the board of directors, directors and the manager of a wholly
state-owned
limited company shall not act concurrently as chief
officers of other limited liability companies, companies limited
by shares or other economic organizations without the consent of
the state-authorized department for
administration of state-owned
assets or state-owned assets operation institution.
|
Article
25 A wholly state-owned company
shall establish a board of supervisors, which shall include
representatives
of the staff and workers of the company. The term
of office of the board of supervisors is three years.
|
The
board of supervisors or the supervisions shall exercise their
powers in accordance with Article
54 of the Company Law.
|
Article
26 Any person shall not serve as a
director, supervisor or manager of a wholly state-owned limited
company
in case he falls into the following circumstances:
|
(1)
Without civil capacity or with restricted civil capacity;
|
(2)
Having a relatively large amount of debts due and outstanding;
|
(3)
Having taken the post of board chairman or manager in other
companies and having not been audited
for outgoing post or having
been audited and proved to have committed illegal economic acts;
|
(4)
Causing gross loss to the company as a result of fault decision;
|
(5)
Causing loss to the company in each of the two previous years as a
result of mismanagement, and
the loss keeps on increasing;
|
(6)
Being the legal representatives of a company or enterprise which
has its business license revoked
due to a violation of the law and
being personally liable;
|
(7)
Having committed the offences of corruption, bribery, infringement
of property, misappropriation
of property or sabotaging the
socioeconomic order, and having been sentenced to criminal
penalties
or subject to administrative sanctions; and
|
(8)
Other circumstances as stipulated by laws and administrative
regulations.
|
Chapter
V Finance and Account of Wholly State-owned Limited Companies
|
Article
27 A wholly state-owned limited
company shall establish its financial and accounting systems
according
to laws, administrative regulations and the regulations
of the responsible finance department of the State Council.
|
Article
28 A
wholly state-owned limited company shall prepare its financial and
accounting report in accordance
with Article 175 of the Company
Law.
|
Article
29 The distribution of annual
after-tax profits of a wholly state-owned limited company shall
abide by
Article 175 of the Company Law.
|
Article
30 A
wholly state-owned limited company shall not provide a guarantee
for debts of any individual or organization
provide that it has
not been approved by the state-authorized department for
administration of state-owned
assets or state-owned assets
operation institution.
|
|
Chapter
VI Transformation of Corporate Form
|
Article
31 Where a wholly state-owned
limited company is to change its corporate form, it shall have the
approval
of the state-authorized department for administration of
state-owned assets.
|
Article
32 In the case of change of
shareholder, a wholly state-owned limited company shall notify its
creditors
within ten days of the date of the company's resolution
to change and shall publish public notices in a newspaper
at least
three times within thirty days of the date of the company's
resolution to change. A creditor
has the right within thirty days
of receiving such notice from the company (or, for creditors who
do
not receive the notice, within ninety days of the date of the
first public notice) to demand that the company repay
its debts to
that creditor or provide a corresponding guarantee for such debt.
A wholly state-owned
limited company, which does not repay its
debts or provide corresponding guarantees for such debts, shall
not change its shareholder.
|
Article
33 In
the case of adjustment of industrial structure or vacancy of
shareholder, a limited liability company
with two or more
shareholders may transform to a wholly state-owned limited company
according to approval
procedures stipulated by these regulations.
|
Chapter
VII Supplementary Provisions
|
Article 34
The Company Law and other relevant laws and regulations shall be
applicable to the matters that are
not specifically stipulated by
these regulations.
|
Article 35
After the effective date of the Company Law, the state-owned
companies including all internal union
enterprises owned by the
whole people, which have not been standardized in accordance with
the Company
Law, shall be standardized in two years from the date
these regulations take effect in accordance with these regulations
or the Company Law and be re-registered.
|
Article 36
These regulations shall take effect as of July 1, 1999.
|