BIZCHINA / Company laws
Company Law of the People's Republic of China (revised in 2005)
Updated: 2006-04-17 10:09
Article 61 The articles of association of a one-person limited liability
company shall be formulated by the shareholders.
Article 62 A one-person limited liability company may not set up the
board of directors. When the shareholders make a decision on any of the
matters as listed in
Article 38 of this Law, they shall make it in written form, and preserve
it in the company after signed by the shareholders.
Article 63 A one-person limited liability company shall make a financial
statement at the end of every fiscal year, which shall be subject to the
audit by an accounting firm.
Article 64 If the shareholder of a one-person limited liability company
is unable to prove that the property of the one-person limited liability
company is independent from his own property, he shall bear joint
liabilities for the debts of the company.
Section 4 Special Provisions on Solely State-funded Companies
Article 65 The provisions of this Chapter shall apply to the
establishment and organizational structure of the solely state-owned
companies. Any matter not prescribed by this Chapter shall be subject to
the provisions of Sections 1 and 2 of this Chapter.
The term "solely state-owned company" as mentioned in this law refers to
a limited liability company established through investment solely by the
state, for which the State Council or the local people's government
authorizes the state-owned assets supervision and administration
institution of the people's government at the same level to perform the
functions of the capital contributors.
Article 66 The articles of association of a solely state-owned company
shall be formulated by the state-owned assets supervision and
administration institution, or shall be drafted by the board of directors
and then be reported to the state-owned assets supervision and
administration institution for approval.
Article 67 A solely state-owned company shall not set up the
shareholders' meeting, and the functions of the shareholders' meeting
shall be exercised by the state-owned assets supervision and
administration institution. The state-owned assets supervision and
administration institution may authorize the board of directors of the
company to exercise some of the functions of the shareholders' meeting
and decide on important matters of the company, excluding those that must
be decided by the state-owned assets supervision and administration such
as merger, split-up, dissolution of the company, increase or decrease of
registered capital as well as the issuance of corporate bonds. The
merger, split-up, dissolution or application for bankruptcy of an
important solely state-owned company shall be subject to the examination
of the state-owned assets supervision and administration institution, and
then be reported to the people's government at the same level for
approval. The term "important solely state-owned company" as mentioned in
the preceding paragraph shall be determined according to the provisions
of the State Council.
Article 68 A solely state-owned company shall establish the board of
directors, which shall exercise its functions according to Articles 47
and 67 of this Law. Every term of office of the directors shall not
exceed 3 years. The board of directors shall comprise representatives of
the employees. And the members of the board of directors shall be
designated by the state-owned assets supervision and administration
institution, but of whom the representatives of the employees shall be
elected through the meeting of the representatives of the employees of
the company. The board of directors shall have one chairman and may have
a deputy chairman. The chairman and deputy chairman shall be designated
by the state-owned assets supervision and administration institution from
the members of the board of directors.
Article 69 A solely state-owned company shall have a manager, who shall
be hired or dismissed by the board of directors and exercise his
authorities according to
Article 50 of this Law. Upon consent of the state-owned assets
supervision and administration institution, the members of the board of
directors may concurrently hold the post of manager.
Article 70 None of the chairman, deputy chairman, directors and senior
managers of a solely state-owned company may concurrently hold a post in
any other limited liability company, joint stock limited company or any
other economic organization, unless it is permitted by the state-owned
assets supervision and administration institution.
Article 71 The board of supervisors of a solely state-owned company shall
comprise at least 5 persons, of whom the employees' representatives shall
account for not less than 1/3, and the concrete percentage shall be
specified in the articles of association.
The members of the board of supervisors shall be appointed by the
state-owned assets supervision and administration institution, however,
of whom the employees' representatives shall be elected through the
meeting of representatives of the employees of the company. The chairman
of the board of supervisors shall be appointed by the state-owned assets
supervision and administration institution from the members of the board
of supervisors. The board of supervisions shall exercise the functions as
mentioned in Article 54 (1) through (3) of this Law and those prescribed
by the State Council.
Chapter III Transfer of Stock Rights of a Limited Liability Company
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