The Company Law of the People's Republic of China

Author: China Legal Publishing House
Publisher:
Publishing Date: 2005-06-01
Features:
Fragment:
Article 4: Company shareholders, as investors, enjoy the rights of asset benefit, major decision-making, and selecting managers in accordance with the capital they have invested in the company. The company enjoys the full legal property rights formed by shareholders' investments and legally enjoys civil rights while bearing civil liabilities. The ownership of state-owned assets in the company belongs to the state.
Article 5: The company, with its full legal property rights, operates independently and bears its own risks and rewards in accordance with the law. Under national macro-control, the company organizes production and operation autonomously based on market demand to improve economic efficiency, labor productivity, and achieve asset preservation and appreciation.
Article 6: The company implements an internal management system with clear rights and responsibilities, scientific management, and a combination of incentives and constraints.
Article 7: When state-owned enterprises are converted into companies, they must comply with the conditions and requirements stipulated by laws and administrative regulations, transform their operational mechanisms, systematically clear assets and liabilities, define property rights, settle debts and obligations, appraise assets, and establish standardized internal management institutions.
Article 8: The establishment of limited liability companies or joint-stock companies must meet the conditions stipulated by this Law. If the conditions are met, they shall be registered as limited liability companies or joint-stock companies; if the conditions are not met, they shall not be registered as such. If laws and administrative regulations require approval before the establishment of a company, the necessary approval procedures must be completed legally before registration.
Article 9: Limited liability companies established in accordance with this Law must include the words "Limited Liability Company" in their company name. Joint-stock companies established in accordance with this Law must include the words "Joint-Stock Company" in their company name.
Article 10: The company's registered address is the location of its main administrative office.
Article 11: The establishment of a company must formulate a company charter in accordance with this Law. The company charter is binding on the company, shareholders, directors, supervisors, and managers. The scope of business of the company is stipulated in the company charter and legally registered. If the scope of business involves items restricted by laws and administrative regulations, approval must be obtained legally. The company shall engage in business activities within the registered scope of business. The company may change its scope of business by amending the company charter in accordance with legal procedures and obtaining a change of registration from the company registration authority.
Article 12: The company may invest in other limited liability companies or joint-stock companies and be liable for the invested amount to the invested company. When the company invests in other limited liability companies or joint-stock companies, except for investment companies and holding companies specified by the State Council, the cumulative investment amount shall not exceed 50% of the company's net assets. After investment, the increase in capital resulting from the reinvestment of profits by the invested company shall not be included.
Article 13: The company may establish branches, which do not possess legal personality as enterprises and bear civil liabilities for the company. The company may establish subsidiaries, which possess legal personality as enterprises and independently bear civil liabilities in accordance with the law.
Article 14: When engaging in business activities, the company must comply with the law, adhere to professional ethics, strengthen the construction of socialist spiritual civilization, and accept supervision from the government and the public.