Article 65
The provisions under this section shall govern the formation and the organizational structure of wholly state-owned companies. Where there are matters that are not covered by this section, the provisions of the first two sections under Chapter One shall apply.
A wholly state-owned company referred to herein means a limited liability company established through the State’s sole investment by the state-owned assets supervision and administration authority entrusted by the State Council or local people’s government to perform the capital contribution functions.
Article 66
The articles of association of a wholly state-owned company may be formulated by the state-owned assets supervision and administration authority or may be prepared by its board of directors and submitted to the state-owned assets supervision and administration authority for approval.
Article 67
A wholly state-owned company does not have shareholders meetings, and the state-owned assets supervision and administration authority shall exercise the authorities of the shareholders meeting. The state-owned assets supervision and administration authority may authorize the board of directors to exercise part of the authorities of the shareholders meeting to decide on major issues of the company, provided that matters such as merger, division or dissolution of the company, capital increase or reduction by the company, and issue of company bonds must be decided by the state-owned assets supervision and administration authority. The merger, division, dissolution or application for bankruptcy of key wholly state-owned companies shall, after examination and verification by the state-owned assets supervision and administration authority, be submitted to the people’s government at the same level for approval. The key wholly state-owned companies referred to herein shall be defined in accordance with the provisions of the State Council.
Article 68
A wholly state-owned company shall have a board of directors, which shall exercise its powers and perform its duties in accordance with the provisions of Article 47 and Article 67 hereof. The term of the directors shall not exceed three (3) years. There shall be representatives of the staff and workers on the board. The members of the board shall be designated by the state-owned assets supervision and administration authority. However, representatives of the staff and workers on the board shall be democratically elected through the congresses of the workers and staff members. The board of directors shall have a chairman and may have a vice-chairman. The chairman and vice-chairman shall be appointed by the state-owned assets supervision and administration authority from among the board members.
Article 69
A wholly state-owned company shall have a general manager, to be appointed or removed by the board of directors. The general manager shall exercise his powers and perform his duties in accordance with the provisions of Article 50 hereof. With the approval of the state-owned assets supervision and administration authority, a board member may serve concurrently as the general manager.
Article 70
Absent approval by the state-owned assets supervision and administration authority, the chairman, vice-chairman, a director, or a senior officer may not serve concurrently for any other limited liability company, joint stock limited company or any other business organization.
Article 71
The board of supervisors of a wholly state-owned company shall have no less than five (5) members, and the number of the staff and worker’s representatives on the board shall be no less than one third of the board members, the specific percentage of which shall be determined in the articles of association.
The supervisors shall be designated by the state-owned assets supervision and administration authority, however, the staff and worker’s representatives on the board shall be democratically elected through the congresses of workers and staff members. The chairman of the board of supervisors shall be appointed by the state-owned assets supervision and administration authority from among the board members. The board of supervisors shall exercise the powers prescribed in Article 54 (1), (2) and (3) hereof and other powers stipulated by the State Council.
