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China WFOE Registration Guide (7) - Shareholder(s)

China WFOE Registration Guide (7) - Shareholder(s)

1. Power of Shareholder(s)


The authority of a limited liability company is the shareholders?meeting which comprises all the shareholders.


The shareholders?meeting shall exercise the following authorities according to Company Law of the PRC:
 (1) determining the company’s operation guidelines and investment plans;
 (2)electing and changing the director and supervisors assumed by non-representatives of the employees, and determining the matters concerning their remuneration;
 (3) deliberating and approving the reports of the board of directors;
 (4) deliberating and approving the reports of the board of supervisors or the supervisor;
 (5) deliberating and approving annual financial budget plans and final account plans of the company;
 (6) deliberating and approving profit distribution plans and loss recovery plans of the company;
 (7) making resolutions on the increase or decrease of the company’s registered capital;
 (8) making resolutions on the issuance of corporate bonds;
 (9) adopting resolutions on the merger, split-up, change of company form, dissolution, liquidation of the company;
 (10) revising the articles of association of the company;
 (11) other functions as specified in the articles of association.


According to the newly revised Company Law (effective on January 1st 2006), a WFOE shall set up a shareholders?meeting.


2. Voting Rights


The shareholders shall exercise their voting rights at the shareholders?meetings on the basis of their respective percentage of the capital contributions, unless it is otherwise stipulated by the articles of association.


3. Proceeding of Meetings


The discussion methods and voting procedures of the shareholders?meeting shall be prescribed in the articles of association, unless it is otherwise provided for by Company Law. A resolution made at a shareholders?meeting on amending the articles of association, increasing or reducing the registered capital, merger, split-up, dissolution or change of the company form shall be adopted by the shareholders representing 2 / 3 or more of the voting rights.



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