〖上接中华人民共和国公司法(2)〗
Article 85
Subject to the approval of the securities administration authorities
of the State Council, promotersmay publicly offer shares to investors
outside China. The concreteprocedures for such offers are set out in
specific regulations of theState Council.
Article 86
The securities administration authorities of theState Council grant
approval to applicationsfor offers which comply with the conditions
provided in this Law. If the applications do not comply with the
conditions provided in this Law,no approval is granted.
If, after the approval has been granted, theoffer is found not to
comply with the provisions ofthis Law, approval shall be revoked. If
shares have not been offered,the offer will not be carried out. If shares
have already been offered, thesubscribers may demand that the promoters
refund their payments for shareswith interest at the bank's rate for a
deposit of the sameterm.
Article 87
The articles of association formulated by the promoters shall be
attached to the prospectus whichshall set out the following:
(1) the number of shares subscribed by thepromoters;
(2) the par value per share and issue price for eachshare;
(3) the total number of non-registered sharesissued;
(4) the rights and obligations of the subscribers;and
(5) the duration of the offer and explanation that subscribers may
revoke their subscription toshares if the offer is under-subscribed at
the close of theoffer.
Article 88
In making a public offer of shares, promoters shall publish a
prospectus and prepare sharesubscription applications. Share subscription
applications shall set out theitems stated in the preceding article.
Subscribers fill in the numberof shares subscribed, the amount of payment
and their domiciles, and signand seal the share subscription application.
Subscribers make payment forshares according to the number of shares they
have subscribed.
Article 89
A public offer of shares by promoters shall be underwritten by
securities institutions.established in accordance with the law, and an
underwriting agreement shall beentered into.
Article 90
In making a public offer of shares, the promotersshall enter into a
agreement with the receivingbankers.
The receiving bankers shall receive and holdas agents the payments
for shares, issue receipts tosubscribers making payments, and shall be
obliged to issue evidence of receipt of payments to the relevant
departments.
Article 91
After payment in full has been made for the shares issued, an
authorized investmentverification authority shall verify the investments
and issue aninvestment verification certificate. The promoters shall
convene a founding meetingwithin thirty days. The founding meeting is
made up of thesubscribers.
If the shares issued are not fully subscribed afterthe closing date
specified in the prospectus; orif the promoters do not convince the
founding meeting within thirtydays of payment in full having been made
for the shares offered, thesubscribers may demand that the promoters
refund their payments for sharesplus interest at the bank's rate for a
deposit of the sameterm.
Article 92
The promoters shall give notice to all subscribers or make an
announcement of the date of thefounding meeting fifteen days before the
meeting. The founding meeting shall be held only if subscribers
representing half or more of thetotal shares are present.
The founding meeting exercises the followingpowers:
(1) to examine the report of the promoters on preparations for the
establishment of thecompany;
(2) to adopt the company's articles ofassociation;
(3) to elect the members of the board ofdirectors;
(4) to elect the members of the board ofsupervisors;
(5) to examine and verify the expenses incurred forthe establishment
of the company;
(6) to examine and verify the valuation of the property used by
promoters as payments forshares; and;
(7) in the case of the occurrence of force major or substantial
changes to operating conditions which have a direct effect on the
establishment of the company, aresolution not to establish the company
may be made.
A resolution at the founding meeting on anyof the matters set out
above requires the approval ofsubscribers with more than half of the
voting rights present at themeeting.
Article 93
The promoters and subscribers shall not withdrawtheir share capital
after making payments for sharesor making their contribution of capital
as payment forshares, except where the shares have not been fully
subscribed within the offerperiod, the promoters have not convened the
founding meeting within theperiod specified, or a resolution not to
establish the company is adoptedat the founding meeting.
Article 94
Within 30 days of the conclusion of the foundingmeeting, the board of
directors shall submit to thecompany registration authority the following
documents and shall apply toregister the establishment of the company:
(1) approval document from the relevant supervising departments;
(2) minutes of the founding meeting;
(3) the company's articles of association;
(4) the auditors' report on financial matters relating to the
preparation of the establishmentof the company;
(5) investment verification certificate;
(6) the names and domiciles of members of the boardof directors and
board of supervisors;and
(7) the name and domicile of the legalrepresentative.
Article 95
The company registration authority shall, withinthirty days from the
date of receipt of anapplication to register the establishment of a
company limited by shares decidewhether or not to grant registration.
Registration is granted and a business licence issued if all the
conditions set out in this Laware met. Registration is not granted if the
conditions set out in this Laware not met.
The date of issue of the business licence is the dateof establishment
of a company limited by shares.After the company is established, a public
announcement shall bemade.
After the registration and establishment of a company limited by
shares, in the case ofestablishment by the offer method, a report on the
offer of shares shall be filed with the securities administration
authorities of the State Councilfor the record.
Article 96
Where a branch or branches are to be set up at thesame time as the
establishment of a companylimited by shares, application shall be made to
the company registrationauthority to register it or them and obtain
business licence(s).
Where a branch or branches are to be set up after theestablishment of
a company limited by shares, thelegal representative of the company shall
apply to the companyregistration authority to register it or them and
obtain businesslicence(s).
Article 97
Promoters of a company limited by sharesshall assume the following
responsibilities:
(1) to be jointly liable for the debts and expenses arising from
actions to establish thecompany, if the company can not be established;
(2) to be jointly liable to refundsubscribers' payments for shares
plus interest at the bank's ratefor a deposit of the same term, if the
company cannot be established;and
(3) to be responsible for compensating the company fordamages to the
interests of the company arisingfrom negligence of the promoters during
the process of establishing thecompany.
Article 98
A limited liability company being converted into acompany limited by
shares shall meet the conditionsfor a company limited by shares set out
in this Law, and procedures forthe establishment of a company limited by
shares shall be carried out inaccordance with this Law.
Article 99
When a limited liability company is converted intoa company limited
by shares in accordance with thelaw and with approval, the total amount
of shares into which conversionis made shall be equivalent to the amount
of the company's net assets.When a limited liability company is converted
into a company limited by sharesand increases its capital by public offer
of shares, theprovisions of this Law concerning public offer of shares
shall be followed.
Article 100
Where a limited liability company is beingconverted into a company
limited by shares, thecreditors' rights and indebtedness of the original
limited liability company areassumed by the company limited by shares
after the conversion.
Article 101
A company limited by shares shall deposit its articlesof association,
register ofshareholders, minutes of shareholders' general meetings and
financial and accounting reportsat the company.
Section 2 Shareholders' General Meeting
Article 102
A company limited by shares shall have a shareholders'general meeting
made up of all shareholders.The shareholders' general meeting is the
company's authoritative organization which exercises its powers in
accordance with thisLaw.
Article 103
The shareholders' general meeting exercises thefollowing powers:
(1) to decide on the company's operational policies and investment
plans;
(2) to elect and replace directors and decide onmatters relating to
the remuneration ofdirectors;
(3) to elect and replace the supervisorswho are representatives of
the shareholders and decide onmatters relating to the remuneration of
supervisors;
(4) to examine and approve reports of the board ofdirectors;
(5) to examine and approve reports of the board ofsupervisors;
(6) to examine and approve the company's proposed annual financial
budget and finalaccounts;
(7) to examine and approve the company's profitdistribution plan and
plan for recovery oflosses;
(8) to decide on increases in or reductions of the company's
registered capital;
(9) to decide on the issue of bonds by thecompany;
(10) to decide on issue such as merger, division, dissolution and
liquidation of the company andother matters; and
(11) to amend the company's articles ofassociation.
Article 104
Shareholders' general meetings shall be held once every year. An
interim shareholders' generalmeeting shall be held within two months
under any of the followingcircumstances:
(1) the number of directors is less than tow-thirds ofthe number of
directors required by this Lawor of the number of directors specified in
the company's articles ofassociation;
(2) the unrecovered losses of the company's capitalreach one-third of
the company's total sharecapital;
(3) upon request by shareholders holding ten per centor more of the
shares of the company;
(4) when deemed necessary by the board of directors;and
(5) when the board of supervisors proposes conveningit.
Article 105
Convening shareholders' general meetings is theresponsibility of the
chairman of the board ofdirectors in accordance with the provisions of
this Law and such meetings arepresided over by the chairman. If the
chairman is unable to performhis duties for a particular reason, the
vice-chairman or anotherdirector designated by the chairman presides over
the meeting. When convening ashareholders' general meeting, notice shall
be given to all shareholdersthirty days before the meeting, stating the
matters to be considered at themeeting. An interim shareholders' general
meeting shall not adoptresolutions on matters not stated in the notice.
Where bearer shares are issued, a publicannouncement shall be made
about the matters in thepreceding paragraph forty-five days before the
meeting.
Where shareholders of bearer shares are present at a shareholders'
general meeting, their sharesshall be deposited with the company from
five days prior to the openingof the meeting until the adjournment of the
meeting.
Article 106
Shareholders present at a shareholders' generalmeeting have one vote
for each share theyhold.
Resolutions of the shareholders' general meeting shallbe adopted with
half or more of the votingrights held by shareholders present at the
meeting. Resolutions of the shareholders' general meeting on merge,
division or dissolution of acompany shall be adopted by shareholders with
two-thirds or more of the votingrights present at the meeting.
Article 107
Amendments to the articles of association of the company must be
adopted by shareholders withtwo-thirds or more of the voting rights
present at themeeting.
Article 108
Shareholders may appoint proxies to attend shareholders' general
meetings. A proxy shall presentto the company a power of attorney from
the shareholder and shallexercise his voting rights within the scope of
his authorization.
Article 109
Minutes of decision made on matters discussed by the shareholders'
general meeting shall be keptand signed by the shareholders present at
the meetings. The minutes shallbe kept together with the signed register
of shareholders in attendanceand the powers of attomey of shareholders
who attended by proxy.
Article 110
shareholders have the right to examine the company's articles of
association, minutes ofshareholders' general meetings and financial and
accounting reports, and to makeproposals or inquiries in respect of the
company's operations.
Article 111
If any resolution adopted by a shareholders'general meeting or the
board of directors violates any law or administrative regulation or
infringes the lawful rights andinterests of shareholders, shareholders
have the right to initiateproceedings in the people's court to require
that such acts of violation orinfringement be stopped.
Section 3 Board of Directors,Manager
Article 112
A company limited by shares has a board of directors with five to
nineteen members.
The board of directors is responsible to the shareholders' general
meeting and exercises thefollowing powers:
(1) to be responsible for convening the shareholders'general meeting
and reporting on its work to theshareholders' general meeting;
(2) to implement the resolutions of the shareholders' general
meetings;
(3) to decide on the company's business plans andinvestment plans;
(4) to formulate the company's proposedannual financial budget and
final accounts;
(5) to formulate the company's profit distributionplan and plan for
recovery of losses;
(6)to formulate proposals for increases in or reductions of the
company's registered capital andthe issue of corporate bonds;
(7) to prepare plans for the merger, divisionor dissolution of the
company;
(8) to decide on the putting in place of the company's internal
management structure;
(9) to appoint or dismiss the company'smanager, and pursuant to the
manager's nominations to appointor dismiss the deputy general manager and
financial officers of thecompany and decide on their remuneration; and
(10) to formulate the company's basic managementsystem.
Article 113
The board of directors has one chairman and may have one or two
vice-chairmen. The chairman and vice-chairmen are elected from the
directors with the approval ofmore than half of all the directors.
The chairman of the board of directors is the legalrepresentative of
the company.
Article 114
The chairman of the board of directors exercises thefollowing powers:
(1) to preside over shareholders' general meetings and convene and
preside over meetings of theboard of directors;
(2) to check on the implementation of resolutions of the board of
directors; and
(3) to sign the company's share certificates andbonds.
The vice-chairmen assist the chairman in his work.When the chairman
is unable to performhis duties, the vice-chairman designated by the
chairman performs his duties onhis behalf.
Article 115
The term of office of the directors is specified in the company's
articles ofassociation, provided, however, that each term may not be
longer than three years. At theend of a director's term, the director may
serve another term ifre-elected.
The shareholders' general meeting shall notwithout reason remove a
director from office before theexpire of that director's term.
Article 116
Meetings of the board of directors are convened atleast twice a year.
Notice of each meeting shall begiven to all directors ten days before the
meeting.
For convening an interim meeting of the board ofdirectors, the board
of directors may provide fora different method of giving notice and
notice period.
Article 117
Meetings of the board of directors shall be held onlyif half or more
of the directors are present. Resolutions of the board of directors
require the approval of morethan half of all directors.
Article 118
The directors shall attend the meetings of the boardof directors in
person. If a director is unableto attend a meeting for any reason, he may
appoint another director by awritten power of attomey to attend the
meeting on his behalf. The powerof attorney shall set out the scope of
the authorization.
The board of directors shall keep minutesof resolutions on matters
discussed at the meetings. Theminutes are signed by the directors present
at the meeting and the personwho recorded the minutes.
The directors shall be responsible for the resolutionsof the board of
directors. If a resolution ofthe board of directors violates the law,
administrative regulations orthe company's articles of association and
this results in the company sustaining serious losses, the directors
participating in the resolutionare liable to compensate the company.
However, if it can be proventhat a director expressly objected to the
resolution when the resolutionwas voted on, and that such objections were
recorded in the minutes of themeeting, such director may be free of
liability.
Article 119
A company limited by shares has a manager appointedand dismissed by
the board ofdirectors. The manager is responsible to the board of
directors and exercises thefollowing powers:
(1) to be in charge of the company's production, operation and
management and organize theimplementation of the resolutions of the board
of directors;
(2) to organize the implementation of the company's annual business
plan and investmentplan;
(3) to propose plans for the putting in place of the company's
internal managementstructure;
(4) to propose the company's basic managementsystem;
(5) to formulate specific rules and regulations forthe company;
(6) to propose the appointment or dismissalof the company's deputy
manager and financialofficers;
(7) to appoint or dismiss management personnel other thanthose
required to be appointed ordismissed by the board of directors; and
(8) other powers conferred by thecompany's articles of association
and the board ofdirectors.
The manager is present at meetings of the board ofdirectors.
Article 120
The board of directors may, as required, authorize thechairman of the
board of directorsto exercise part of the powers of the board of
directors during the period whenthe board of directors is not in session.
Article 121
When considering and deciding on the wages, welfare and production
safety of staff and workers andlabour protection, labour insurance and
other issues involving thepersonal interests of staff and workers, the
company shall first solicit andconsider the opinions and proposals of the
company's trade union and the staff and workers, and shall invite
representatives from thecompany's trade union and the staff and workers
to attend the relevantmeetings.
Article 122
When considering and deciding on major issues relating to the
company's production andoperation and formulating important rules and
regulations, the companyshall solicit and consider the opinions and
proposals of the company's tradeunion and the staff and workers.
Article 123
The directors and manager shall abide by the company's articles of
association, faithfully executetheir official duties, and protect the
company's interests. They shallnot exploit their position and power in
the company to advance their ownprivate interests.
The provisions of Article 57 to Article 63 of this Lawon persons not
eligible for the positions ofdirector and manager and on the obligations
and duties of the directors andmanager are applicable to the directors
and manager of a company limitedby shares.
Section 4 Board ofSupervisors
Article 124
A company limited by shares has a board of supervisorsmade up of not
less than three members. Theboard of supervisors shall choose a convener
from among itsmembers.
The board of supervisors is made up of representatives of the
shareholders and a reasonable proportion of representatives of the
company's staff and workers, thespecific proportion to be provided for in
the company's articles ofassociation. Representatives of the staff and
workers on the board ofsupervisors are chosen by the company's staff and
workers by democraticelection.
The directors, manager and financial officers shall not act
concurrently assupervisors.
Article 125
The term of office of the supervisors is three years.At the end of a
supervisor's term, thesupervisor may serve another term if re-elected.
Article 126
The board of supervisors exercises the followingpowers:
(1)to inspect the company's financialsituation;
(2)to exercise supervision over the acts of thedirectors and manager
carried out while performingtheir corporate functions which violate laws,
regulations or the company'sarticles of association;
(3) to demand remedies from a director ormanager when the acts of
such director or manager areharmful to the company's interests;
(4)to propose the convening of an interim shareholders' general
meeting; and
(5) other powers specified in the company's articlesof association.
Supervisors are present at meetings ofthe board of directors.
Article 127
The discussion methods and voting procedures of the board of
supervisors are specified in the company's articles of association.
Article 128
The supervisors shall faithfully execute theirsupervisory duties in
accordance with laws, administrative regulations and the company's
articles ofassociation.
The provisions of Articles 57 to Article 59 andArticles 62 to Article
63 of this Law on persons noteligible for the position of supervisor and
on the obligations and duties ofsupervisors are applicable to supervisors
of a company limited byshares.
Chapter 4 Issue and Transfer of Shares by A Company Limited by Shares
Section 1 Issue ofShares
Article 129
The capital of a company limited by shares is divided into shares.
Each share is of equalvalue.
Shares in a company take the form of share certificates. A share
certificate signed and issued bythe company is an evidence that the share
is held by theshareholder.
Article 130
The issue of shares is public, fair and impartial.Shares of the same
class must have the same rightsand benefits.
For shares certificates issued at the same time, eachshare shall have
the same issue terms and price.The share price for each share purchased
by any organization orindividual must be the same.
Article 131
The share certificate issue price may be equal to orgreater than the
par value, but may not be lessthan the par value.
Share certificates with an issue price above par value shall be
approved by the securities administration departments of the State
Council.
The premium obtained from the issue ofshare certificates above par
value is allocated to thecompany's capital common reserve fund.
Specific regulations governing the issue ofshare certificates at a
premium are separately issued bythe State Council.
Article 132
Share certificates take the form of paper certificatesor such other
form as specified bythe securities administration departments of the
State Council.
The following items shall be set out on a sharecertificate:
(1) the company's name;
(2) the company's registration and establishmentdate;
(3) the class of the share certificate, the par valueand the number
of shares represented by theshare certificate; and
(4) the number of the share certificate;
The share certificate is signed by the chairman of the board of
directors and sealed by thecompany.
Share certificates of promoters shall bear the notation "promoter's
share certificate".
Article 133
Shares issued to promoters, state-authorizedinvestment organizations
and legal persons shall be inthe form of registered share certificates,
shall bear the name of such promoter, state-authorized investment
organizations or legal person,and may not carry a different account name
or be registered in the name ofan agent.
Shares issued to the general public may be in theform of registered
share certificates and also may be in the form of bearer share
certificates.
Article 134
A company issuing registered share certificates shall prepare a
register of shareholders settingout the following:
(1) the name and address of theshareholders;
(2) the number of shares held by eachshareholder;
(3) the number(s) of the share certificate(s) held by each
shareholder, and
(4) the date on which each shareholder acquired itsshares.
A company issuing bearer share certificates shallrecord the number of
such share certificates issued,their numbers and dates of issue.
Article 135
The State Council may separately issue regulationsgoverning the issue
of classes of share certificatesnot covered by this Law.
Article 136
A company limited by shares formallydelivers share certificates to
its shareholders immediatelyupon its registration and establishment. No
share certificatesshall be delivered prior to the registration and
establishment of thecompany.
Article 137
A company issuing new shares shall meet the followingconditions:
(1) the previous issue of shares has been fully subscribed and at
least one year have elapsedsince that issue;
(2)the company has been continuouslyprofitable for the last three
years and is able to makedividend payments to its shareholders;
(3) there has been no false reporting in thecompany's financial and
accounting documents during thelast three years; and
(4) the projected profit rate of thecompany equals or exceeds the
rate of interest on bankdeposits for the same term.
A company which uses a given year's profits to issuenew shares is not
subject to clause (2)above.
Article 138
In order for a company to issue new shares, resolutions shall be
passed on the following mattersat a meeting of the shareholders:
(1) the class and quantity of the newshares;
(2) the issue price of the new shares; and
(3) the commencement and closing dates of the newshare issue;
(4) the class and quantity of shares to be issued to existing
shareholders.
Article 139
Once the shareholders at a shareholders' meeting have passed a
resolution to issue new shares,the board of directors shall apply to the
apply to the authorized department of the State Council or to the
provincial level people'sgovernment for approval. Public offers shall
require the approval of thesecurities administration departments of the
State Council.
Article 140
Upon receiving approval to issue new sharesin a public offer, the
company shall publish aprospectus for the new shares and its financial
statements with their detailedschedules, and prepare a share subscription
application.
A public offer of new shares shall be underwritten by a legally
established securitiesinstitution and an underwriting agreement shall be
executed.
Article 141
A company issuing new shares may determine itspricing plans in the
light of the company'scontinuous profitability and the increase in the
value of its property.
Article 142
After a company issuing new shares hasfully collected the payments
for shares, the company shallchange its registration with the company
registration authority and issuea public notice.
Section 2 Transfer ofShares
Article 143
A shareholder may transfer his shares in accordance with the law.
Article 144
A shareholder's transfer of its shares must be carriedout through a
legally established stockexchange.
Article 145
Registered share certificates are transferred by meansof endorsement
or by other means as stipulatedby law or by administrative regulations.
Upon the transfer of registered share certificates, the company
records the name and address of the transferee in the register of
shareholders.
Pursuant to the previous paragraph, no changes in the register of
shareholders shall be madewithin 30 days before the convening of the
shareholders' general meeting orwithin 5 days before the record date for
the issue ofdividends.
Article 146
A transfer of bearer share certificates is effectiveupon delivery of
the share certificates to thetransferee through a legally established
stock exchange.
Article 147
Shares of a company held by a promoter of thatcompany shall not be
transferred for three yearsafter the company's establishment.
Directors, supervisors and the manager of acompany shall report to
that company all the shares thatthey hold in the company, and shall not
transfer them during their termof office.
Article 148
A state-authorized investment institution may transferthe shares it
holds in accordance with the lawand may also purchase the shares held by
other shareholders. The approvallimits and the regulatory regime for such
share transfers and purchasesare separately determined by law or by
administrativeregulations.
Article 149
Acompany shall not purchase the company's own share certificates,
except in order to decrease itscapital by canceling its shares or when it
merges with another company thatholds its shares.
Within ten days following the purchase of the company's own share
certificates pursuant to theterms of the preceding paragraph, a company
shall, in accordance withapplicable law and administrative regulations,
cancel that portion of itsshares, change its registration and issue a
public notice.
A company shall not accept the company's own share certificates as
collateral.
Article 150
In the event registered share certificates are stolen, lost or
destroyed, the shareholdermay, pursuant to the procedures for public
invitation to assert claimscontained in the Code of Civil Procedure,
request the people's court todeclare the share certificates invalid.
After the share certificates are declared invalid by the people's
court, the shareholder may, pursuantto the procedures for public
invitation to assert claims, apply to the company to have share
certificatesre-issued.
Section 3 ListedCompanies
Article 151
A listed company referred to in this Law meansa company limited by
shares whose issued shares areapproved for trading on a stock exchange by
the State Council or itsauthorized securities administration departments.
Article 152
A company limited by shares shall meet the following requirements
before applying for its sharesto be listed on a stock exchange:
(1) the securities administrationdepartments of the State Council
have approved the company'sstock being issued to the public;
(2) the company's total share capital is not less thanRMB 50,000,000;
(3) the company has been in operation forover three years and has
been profitable in each of the last three years; if an original
state-owned enterprise hasbeen converted and the company established
according to the law, or thecompany has been reorganized and established
after the effective date of this Law with a large-or medium-sized
state-owned enterprise as itsmain promoter, the three year periods may be
calculatedcontinuously;
(4) the number of shareholders eachholding shares of a par value
totaling at least RMB 1,000 isnot less than one thousand; the company's
shares already issued to thepublic account for over 25% of the company's
total shares; if the company's total share capital exceeds RMB
400,000,000, company sharesalready issued to the public account for over
15% of the company's total shares;
(5) during the last three years, thecompany has not committed any
significant acts in violationof the law and the company's financial
statements have not containedany false statements; and
(6) such other conditions as may be specifiedby the State Council.
Article 153
A company limited by shares applying tohave its shares listed for
trading shall file anapplication for approval with the State Council or
its authorized securitiesadministration departments and submit relevant
documents in accordance with applicable laws and administrative
regulations.
The State Council or its authorized securities administration
departments grant approval tothose listing applications which meet the
requirements specified in thisLaw and deny approval to those listing
applications which do not meetthe requirements specified in this Law.
A company which has been granted approval for listingmust publish a
share listing report and keepits application documents on file in a
designated place for publicinspection.
Article 154
Shares of a company which has been approved forlisting shall trade on
a stock exchange in accordancewith applicable laws and administrative
regulations.
Article 155
If granted approval by the securities administration departments of
the State Council, shares of acompany may be listed abroad, The specific
means are stipulated by specialregulations issued by the State Council.
Article 156
Pursuant to laws and administrative regulations, a listed company
shall periodically make publicits financial and operational conditions. A
listed company shallpublish its financial statements once every six
months in each fiscalyear.
Article 157
A listed company in one of the following situations shall have its
listing temporarily suspended upon determination by the securities
administration departments ofthe State Council:
(1) the company's total share capital,share distribution, or other
circumstances have changed suchthat the company no longer meets the
listing requirements;
(2) the company does not make public its financial condition as
required by the regulations, orits financial statements contain false
statements;
(3) the company commits a significant violation oflaw; and
(4) the company has had a loss in each ofthe three previous years.
Article 158
A listed company in the situation described in clause(2) or clause
(3) of the preceding articlewhich upon investigation is found to have
caused serious consequences, ora listed company which is in the situation
described in clause (1) orclause (4) of the same article and is unable to
eliminate it within a limited time, does not meet the listing
requirements, its listing shall be terminated upon decision by the
securities administrationdepartments of the State Council.
If a company resolves to dissolve itself, or if acompany is legally
ordered to close down by theresponsible administrative department, or if
a company is declared to bebankrupt, the company shall have its listing
terminated upon decision by thesecurities administration departments of
the State Council.
Chapter 5 Corporate Bonds
Article 159
A company limited by shares, a wholly state-owned company and a
limited liability companyestablished with the investment by two or more
state-owned enterprises or twoor more state-owned investment entities, in
order to raise funds forproduction and operations, may issue corporate
bonds in accordance with thisLaw.
Article 160
"Corporate bonds" as used in this Law mean valuablesecurities issued
by a company in accordance withlegally specified procedures and pursuant
to which the company covenantsto repay principal and interest within a
certain period oftime.
Article 161
The issue of corporate bonds shall be subject to the following
conditions:
(1) the net assets of a company limited by sharesare not less than
RMB 30,000,000, and the netassets of a limited liability company are not
less than RMB60,000, 000;
(2) the aggregate amount of bonds of the company doesnot exceed forty
per cent of the net assets ofthe company;
(3) the average distributable profits over theprevious three years is
sufficient to defray one year'sinterest payments on the company's bonds;
(4) the funds raised are used in a manner consistent with state
industrial policy;
(5) the interest rate payable on the corporate bondsdoes not exceed
the levels set by the StateCouncil; and
(6) such other conditions as may be provided for bythe State Council.
The funds raised by corporate bonds shallbe used for the purposes
approved by the approvalauthority and shall not be used to cover losses
or for non-productiveexpenditures.
Article 162
A company shall not re-issue corporate bonds under any of the
followingcircumstances:
(1) the corporate bonds issued the previoustime have not yet been
fully subscribed;
(2) the company has defaulted on previously issuedcorporate bonds or
other indebtedness, or is latein the payment of principal or interest,
and such situation is stillcontinuing.
Article 163
When a company limited by shares or a limited liability company
proposes to issue corporate bonds, its board ofdirectors shall draft a
proposal for approval byresolution at a meeting of the shareholders.
The issue of corporate bonds by a wholly state-ownedcompany shall be
decided by the state-authorized investment organization or the
state-authorizeddepartment.
Once a resolution or decision has been made pursuantto the preceding
two paragraphs, the companyshall submit an application for approval to
the securities administrationdepartments of the State Council.
Article 164
The scale of an issue of corporate bonds shall bedetermined by the
State Council. Approvals by thesecurities administration departments of
the State Council of an issue ofcorporate bonds shall not exceed the
scale determined by the StateCouncil.
The securities administration departments of theState Council shall
grant approval if an applicationto issue corporate bonds satisfies the
requirements of this Law anddeny approval if an application to issue
corporate bonds does not satisfythe requirements of this Law.
If an approval that has previously been granted for anapplication is
found not to satisfy therequirements of this Law, the approval shall be
revoked. With respect tocorporate bonds not yet issued, the issue will
not be carried out. With respectto corporate bonds already issued, the
issuing company shall return thefunds paid to the subscribers, together
with interest calculated at therate on bank deposits for the same term.
Article 165
The company shall submit the following documents whenapplying to the
securities administrationdepartments of the State Council for approval to
issue corporate bonds:
(1) the company's registration certificate;
(2) the company's articles of association;
(3) corporate bond offer procedure; and
(4) an asset appraisal report and investment verification report.
Article 166
Upon approval of the company's application toissue corporate bonds,
the company shall make publicits corporate bond offer procedure.
The corporate bond offer procedure shall set out thefollowing:
(1) the company's name;
(2) the total amount and face value of thebonds;
(3) the bonds' interest rate;
(4) the periods and method for paying principal andinterest;
(5) the commencement and closing dates of theissue;
(6) the net assets of the company;
(7) the total amount of corporate bondsalready issued but not yet
due; and
(8) the underwriter for the corporate bonds.
Article 167
When a company issues corporate bonds, the bonds shall show
information including thecompany's name, the face value of the bond, the
interest rate, and the date ofmaturity, and be signed by the chairman of
the board of directors andsealed by the company.
Article 168
Corporate bonds may be either bearer or registeredbonds.
Article 169
A company which issues corporate bonds shallkeep a corporate bonds
register.
When registered bonds are issued, the following itemsshall be set out
in the register:
(1) the names and addresses of thebondholders;
(2) the date on which the bond was acquired by thebondholder and its
number;
(3)the total amount of the bond, its face value, interest rate,
principal and interest paymentdates and method of payments; and
(4) the issue date.
When bearer bonds are issued, the registershall set out the total
amount of the bonds, theinterest rate, the maturity date and payment
method, the date of issue andthe number of the bonds.
Article 170
Corporate bonds may be transferred. Transfers ofcorporate bonds shall
be carried out through a legallyestablished stock exchange.
The transfer price is negotiated and agreed upon bythe transferor and
transferee.
Article 171
Registered corporate bonds are transferred bythe bondholder through
endorsement or by othermeans as stipulated by law or administrative
regulations.
Upon the transfer of a registered corporate bond, thecompany records
in its corporate bond registerthe name and address of the transferee.
A transfer of a bearer corporate bond becomes effective upon the
delivery of the corporate bondto the transferee at a legally established
stock exchange.
Article 172
Subject to a resolution at a general meetingof the shareholders, a
listed company may issuecorporate bonds convertible into shares of the
company. The procedures forconversion are specified in the corporate bond
offer procedures.
The issue of corporate bonds convertible into shares shall be
submitted to the securities administration departments of the State
Council for approval. Corporatebonds convertible into shares shall meet
not only the requirements forthe issue of bonds but also the requirements
for the issue ofshares.
Corporate bonds convertible into shares shallbe marked "convertible
corporate bonds", and thequantity of convertible corporate bonds shall be
recorded in the corporate bondregister.
〖下接中华人民共和国公司法(4)〗