Article 1
This Law is enacted in order to standardize the organization and activities of companies, to protect the legitimate rights and interests of companies, shareholders and creditors, to maintain the socio-economic order and to promote the development of the socialist market economy.
Article 2
The term 'company' referred to in this Law means a limited liability company or a joint stock limited company incorporated within the territory of the People's Republic of China in accordance with this Law.
Article 3
A company is an enterprise legal person that shall enjoy the right to the entire independent property of the legal person. A company shall be liable for its debts to the extent of all its assets. In the case of a limited liability company, shareholders shall assume liability towards the company to the extent of their respective capital contributions. In the case of a joint stock limited company, shareholders shall assume liability towards the company to the extent of their respective shareholdings.
Article 4
The shareholders of a company shall enjoy such rights as benefiting from assets of the company, making major decisions and selecting managerial personnel in accordance with the law.
Article 5
In conducting its business, a company must abide by laws and administrative rules and regulations, observe social morals and business ethics, conduct businesses in good faith, subject itself to the supervision of the government and the public and fulfill social responsibilities.
The company's lawful rights and interests are protected by law and shall not be infringed upon.
Article 6
A company shall apply to the company registration authority for establishment registration. Companies meeting the conditions set by this Law shall be registered as limited liability companies or joint stock limited companies; while companies failing to meet the conditions set by this Law shall not be registered as limited liability companies or joint stock limited companies.
Where laws, administrative rules and regulations provide that incorporation of companies must be subject to examination and approval, the procedures of examination and approval shall be completed according to law prior to the registration of such companies.
The public may inquire about registration items from the company registration authority. The company registration authority shall provide such inquiry service.
Article 7
The company registration authority shall grant registration and issue a business license to a company that is established in accordance with the law. The date of the issuance of the company business license shall be the date of the incorporation of the company.
The business license shall specify the name and domicile of the company, registered capital, paid-in capital, business scope, the name of the legal representative, etc. In the event of any change to the registration item of the business license, a company shall undergo alteration registration procedures with the company registration authority in accordance with the law, after which a new business license shall be issued to the company.
Article 8
A limited liability company established according with this Law must clearly indicate the words 'limited liability company' in its name.
A joint stock limited company established according to this Law must clearly indicate the words 'joint stock limited company' or ‘joint stock company’ in its name.
Article 9
If a limited liability company is to be converted into a joint stock limited company, it shall satisfy the requirements for a joint stock limited company stipulated by this Law. If a joint stock limited company is to be converted into a limited liability company, it shall satisfy the requirements for a limited liability company stipulated by this Law. Where a limited liability company is converted into a joint stock limited company or vice versa, the claims and debts of the original company shall be succeeded to by the company into which it is converted.
Article 10
A company's domicile shall be the place where its main administrative organization is located.
Article 11
Articles of association must be formulated in accordance with the law when a company is incorporated. A company's articles of association shall have binding force on the company, its shareholders, directors, supervisors and senior officers.
Article 12
A company's scope of business shall be defined in its articles of association and registered in accordance with the law. A company may change its scope of business by amending its articles of association but shall register such amendments with the company registration authority.
Items within the company's business scope that are subject to verifications under laws, administrative rules and regulations shall be approved in accordance with the law.
Article 13
The legal representative of a company may be represented by the chairman, executive director or manager of a company in compliance with its articles of association and registered in accordance with the law. In the event of any change of the legal representative of a company, such change shall be registered in accordance with the law.
Article 14
A company may establish branches. The company, in establishing its branch(es), shall conduct establishment registration procedures with the company registration authority and obtain the business license(s). The branches shall not possess the status of enterprise legal persons and whose civil liabilities shall be borne by the company.
A company may establish subsidiaries, which shall possess the status of enterprise legal persons, and shall independently bear civil liabilities in accordance with the law.
Article 15
A company may invest in other enterprises, however, unless otherwise stipulated by the law, the company making such investment shall not bear joint and several liability for the debts of the enterprise in which the company invests.
Article 16
Investments in other enterprises or provisions of security by a company shall be determined by its board of directors, shareholders meeting or general meeting of shareholders in compliance with its articles of association. Where the limit of the aggregate amount of investment or security extended by a company or, the amount of investment or security extended in each case is set out in the articles of association, the actual amount of investment or security shall not exceed such limit. Security provided by a company to its shareholders or actual controller shall be determined by the shareholders meeting or the general meeting of shareholders of the company.
The shareholders described in the preceding paragraph or the shareholders dominated by the actual controller described in the preceding paragraph shall not participate in the voting process on the matters described in the preceding paragraph. The vote on such matters shall be adopted by more than half of all the other shareholders attending the meeting.
Article 17
Companies must protect the lawful rights and interests of their staff and workers, sign labor contracts with them and cover them with social insurances in accordance with the law, and strengthen labor protection so as to achieve safety in production.
Companies shall apply various forms to strengthen professional education and on-the-job training of their staff and workers so as to improve their skills and capabilities.
Article 18
Company's staff and workers shall, in accordance with the Trade Union Law of the People’s Republic of China, organize a trade union to carry out the trade union activities and protect the lawful rights and interests of the staff and workers. The company shall provide its trade union with conditions necessary for carrying out its activities. The trade union may represent the staff and workers to enter into a collective contract with the company in respect of the remuneration, work hours, welfare, insurance, labor security, etc. in accordance with the law.
Companies shall, through the congress of the workers and staff members or other forms, practice democratic management in accordance with the provisions of the Constitution and relevant laws.
A company shall seek advices from its trade union when discussing and deciding upon important issues on the restructuring or operation of the company, or formulating important rules and regulations and shall, through the congress of the workers and staff members or other forms, seek advice and suggestions from its staff and workers.
Article 19
The organizations of the Communist Party of China may be established in companies and carry out their activities in accordance with the Constitution of the Communist Party of China. Companies shall provide the organizations of the Communist Party of China with conditions necessary for carrying out their activities.
Article 20
The shareholders of a company shall exercise their shareholders’ rights in compliance with laws, administrative rules and regulations as well as the articles of association of the company, shall not abuse their shareholders’ rights to injure the interests of the company or other shareholders, or take advantage of the company’s independent status or the limited liability of shareholders to injure the interests of the company’s creditors.
Where the abuse of shareholders’ rights causes any loss to the company or other shareholders, such abusive shareholder shall be liable for compensation in accordance with the law.
Where shareholders of a company take advantage of the company’s independent status or the limited liability of shareholders to disregard debts and seriously injures the interests of the company’s creditors, such shareholders shall bear joint and several liability for the debts of the company.
Article 21
The controlling shareholders, actual controllers, directors, supervisors or senior officers of a company shall not take advantage of their affiliations with others in an attempt to harm the company’s interests and, where any losses are incurred in violation hereof, shall be liable for compensation.
Article 22
Any resolution against laws and administrative rules and regulations that is adopted by the shareholders meeting, the general meeting of shareholders or the board of directors of a company shall be null and void.
Where the convening of shareholders meeting, general meeting of shareholders or board of directors of a company or the voting method violates laws, administrative rules and regulations or the articles of association of the company, or the resolution thereof contravenes the articles of association of the company, shareholders may, within sixty (60) days of the resolution, apply to the people’s court for revocation.
Where shareholders file suit in accordance with the provisions of the preceding paragraph, a people’s court may, at the company’s request, order the shareholders to provide relevant security.
Where the company has effected alteration registration according to the resolution of shareholders meeting, general meeting of shareholders or board of directors, the company shall, after the people’s court declares such resolution null and void or revokes the same, shall apply to the company registration authority for cancellation of its alteration registration.
