Article 37
The shareholders meeting of a limited liability company shall be composed of all the shareholders. The shareholders meeting shall be the organ of power of the company and shall exercise its functions and powers in accordance with this Law.
Article 38
The shareholders meeting shall exercise the following functions and powers:
(1) to decide on the business policy and investment plan of the company;
(2) to elect and recall directors and supervisors whose posts are not taken by the representatives of the staff and workers, and to decide on matters concerning the remuneration of directors and supervisors;
(3) to examine and approve reports of the board of directors;
(4) to examine and approve reports of the supervisory board or supervisors;
(5) to examine and approve the annual financial budget plan and final accounts plan of the company;
(6) to examine and approve plans for profit distribution of the company and plans for making up losses;
(7) to adopt resolutions on the increase or reduction of the registered capital of the company;
(8) to adopt resolutions on the issuance of company bonds;
(9) to adopt resolutions on matters such as the merger, division, transformation, dissolution and liquidation of the company;
(10) to amend the articles of association of the company;
(11) to exercise other functions and powers provided for in the articles of association.
Where a unanimous consent on the matters described above is achieved in writing by shareholders, the company may directly make decisions that shall be signed and executed by all shareholders instead of convening a shareholders meeting.
Article 39
The first meeting of the shareholders of a company shall be convened and presided over by the shareholder who has made the biggest capital contribution to the company and shall exercise its functions and powers in accordance with this Law.
Article 40
Shareholders meetings shall be divided into regular meetings and interim meetings. Regular shareholders meetings shall be convened on time as stipulated by the articles of association of the company. Interim shareholders meetings may be convened upon proposal made by shareholders representing more than one-tenth of voting rights or by more than one-third of directors, or at the request of board of supervisors or the supervisors of a company absent a board of supervisors.
Article 41
Where a limited liability company has a board of directors, its shareholders meeting shall be convened by the board of directors and presided over by the chairman of the board. Where the chairman of the board is unable to or does not perform his function, the meeting shall be presided over by a vice-chairman. Where the vice-chairman is unable to or does not perform his function, the meeting shall be presided over by a director jointly nominated by more than half of the directors.
Where a limited liability company does not form a board of directors, the shareholders meetings shall be convened and presided over by the executive director.
Where the board of directors or executive director cannot or does not perform its function, the shareholders meeting shall be convened and presided over by the board of supervisors or the supervisor in the absence of a board of supervisors. Where the board of supervisors or supervisor cannot or does not perform its function, the meeting shall be convened and presided over by shareholders representing more than one-tenth of the voting rights.
Article 42
All shareholders shall be notified fifteen (15) days prior to the convening of a shareholders meeting, unless otherwise stipulated by the articles of association or agreed upon by all shareholders.
The shareholders meeting shall prepare minutes regarding the decisions on matters considered at the meeting, which shall be signed by the shareholders present at the meeting.
Article 43
Shareholders shall exercise their voting rights at the shareholders meeting in proportion to their capital contributions, unless otherwise stipulated by the articles of association.
Article 44
Except as provided for in this Law, the rules of deliberation and voting procedures of the shareholders meeting shall be stipulated by the articles of association of the company.
Resolutions of the shareholders meeting on the increase or reduction of the registered capital, the division, merger, dissolution, or transformation of the company must be adopted by shareholders of the company representing two-thirds or more of the voting rights.
Article 45
Except as otherwise provided for in Article 51 of this Law, a limited liability company shall have a board of directors, which shall be composed of three to thirteen members. The members of the board of directors of a limited liability company invested in and established by two or more State-owned enterprises, or by two or more other State-owned investment entities shall include representatives of the staff and workers of the company. The members of the board of directors of other limited liability companies may also include representatives of the staff and workers. Such representatives of the staff and workers shall be democratically elected by the workers and staff members of the company through the congresses or assemblies of the staff and workers or other forms. A board of directors shall have a chairman and may have a vice-chairman. The method for the creation of the chairman and vice-chairmen shall be stipulated in the articles of association of the company.
Article 46
The term of the directors shall be prescribed by the articles of association, provided that each term may not exceed three (3) years. A director may continue to serve his post if he is re-elected upon the expiration of his term. Where a new elect is not yet available upon expiration of a director’s term, or the number of the directors on the board is less than the quorum due to the resignation of a director within his term, such director, before the new elect takes his office, shall continue the performance of his duties in accordance with laws, administrative regulations and the articles or association.
Article 47
The board of directors is accountable to the shareholders meeting and shall exercise the following powers:
(1) being responsible for convening shareholders meetings and presenting reports thereto;
(2) implementing resolutions adopted by the shareholders meeting;
(3) determining the company's operational plans and investment programs;
(4) preparing annual financial budget plans and final accounting plans of the company;
(5) preparing profit distribution plans and plans to cover company losses;
(6) preparing plans for increasing or reducing registered capital of the company or issuing company bonds;
(7) drafting plans for merger, division, change of corporate form or dissolution of the company;
(8) determining the structure of the company's internal management;
(9) appointing or removing the general manager of the company, appointing or removing, upon the general manager's recommendation, deputy managers of the company and the officer in charge of finance, and determining the remuneration for those officers;
(10) formulating the basic management scheme of the company;
(11) exercising other powers stipulated by the articles of association.
Article 48
A meeting of the board of directors shall be convened and presided over by the chairman. Where the chairman is unable to or does not perform his duties, the meeting shall be convened and presided over by the vice-chairman. Where the vice-chairman is unable to or does not perform his duties, the meeting shall be convened and presided over by a director jointly nominated by more than half of the directors.
Article 49
Except as otherwise provided for in this Law, the rules of deliberation and voting procedures at the meeting of board of directors shall be stipulated by the articles of association of the company.
The board shall prepare minutes relating to the decisions on matters considered at the meeting, which shall be signed by the directors present at the meeting.
In the voting process, one director shall represent one vote.
Article 50
A limited liability company shall have a general manager, to be appointed or removed by the board of directors. The general manager is accountable to the board and shall exercise the following powers:
(1) management of the company's production and operation, and organizing the implementation of board resolutions;
(2) organizing the implementation of annual operating plans and investment programs of the company;
(3) preparing the plan for the structure of the company's internal management;
(4) preparing the basic management scheme of the company;
(5) formulating detailed company rules;
(6) recommending the appointment or removal of a deputy manager and the officer in charge of finance;
(7) appointing and removing officers of the company other than those to be appointed or removed by the board of directors;
(8) exercising other powers delegated by the board of directors.
Where the articles of association stipulate otherwise in respect of the manager’s powers, such stipulations shall prevail. The general manager shall be present at board meetings.
Article 51
A small-scaled limited liability company or a limited liability company with only a few shareholders may have an executive director without establishing a board of directors. The executive director may serve concurrently as the general manager of the company.
The powers of the executive director shall be prescribed in the articles of association.
Article 52
A limited liability company shall have a board of supervisors composed of no less than three (3) members. A small-scaled limited liability company or a limited liability company with only a few shareholders may have one or two supervisors without establishing a board of supervisors. The board of supervisors shall be composed of shareholders' representatives and representatives of the staff and workers of the company. The number of the staff and workers’ representatives shall not be lower than one third of all the supervisors, the specific percentage of which shall be determined in the articles of association. The representatives of the staff and workers on the board of supervisors shall be democratically elected by the staff and workers through the congresses or assemblies of the workers and staff members or other forms. The board of supervisors shall have one chairman elected by more than half of all the supervisors. The meetings of the board of supervisors shall be convened and presided over by the chairman of the board. In the event that the chairman is unable to or does not perform his duties, the meeting shall be convened and presided over by a supervisor jointly nominated by more than half of all the supervisors.
A director and a senior officer of the company shall not serve concurrently as a supervisor.
Article 53
Each term of a supervisor shall be three (3) years, and a supervisor may continue to serve his post upon expiration of his term if he is re-elected.
Where a new elect is not yet available upon expiration of a supervisor’s term, or the number of the supervisors on the board is less than the quorum due to the resignation of a supervisor within his term, such supervisor, before the new elect takes his office, shall continue the performance of his duties in accordance with laws, administrative regulations and the articles or association.
Article 54
The board of supervisors or the supervisor, as the case may be, shall exercise the following authorities:
(1) reviewing the financial affairs of the company;
(2) monitoring the acts of the directors or the senior officers in the course of performance of their duties, and propose recall of the director or senior officer in violation of laws, administrative regulations or the articles of association;
(3) requiring the directors or the senior officers to make rectification when any act thereof causes harm to company interests;
(4) proposing for interim meetings of shareholders meetings, convene and preside over the meeting when the board of directors does not perform its function to convene and preside over a shareholders meeting as set forth in this Law;
(5) submitting proposals at the shareholders meeting;
(6) filing suit against the directors or senior officers of the company in accordance with the provisions of Article 152 in this Law;
(7) exercising other authorities prescribed by the articles of association.
Article 55
The supervisors may attend board meetings, present inquiry or proposal with regards to the issues to be determined by the board of directors.
The board of supervisors or the supervisors of a company that does not have the board may conduct investigations upon discovery of any unusual operations of the company and, where necessary, engage an accounting firm to assist in such investigations at the expense of the company.
Article 56
The board of supervisors shall have a meeting at least once a year. An interim meeting may be convened at the request of supervisors.
Except as provided for in this Law, the rules of deliberation and voting procedures at the meeting of board of directors shall be stipulated by the articles of association of the company.
The resolution of the board of supervisors shall be adopted by more than half of all the supervisors. The board shall prepare minutes relating to the decisions on matters considered at the meeting, which shall be signed by the supervisors present at the meeting.
Article 57
Reasonable expenses necessary for the board of supervisors or supervisors of a company that does not have the board to perform their duties shall be borne by the company.
