BIZCHINA / Company laws
Company Law of the People's Republic of China (revised in 2005)
Updated: 2006-04-17 10:09
Article 170 Where a company plans to hire or dismiss any accounting firm
to undertake the auditing of the company, a resolution shall be made by
the shareholders' meeting or shareholders' assembly or the board of
directors according to the provisions of the articles of association.
Where the shareholders' meeting or shareholders' assembly or the board of
directors adopts a voting on the dismissal of any accounting firm, it
shall allow the accounting firm to state its own opinions.
Article 171 A company shall provide to the accounting firm it hires
truthful and complete accounting vouchers, account books, financial and
accounting statements and other accounting materials, and may not refuse
to do so or conceal any of them or make any false statements.
Article 172 Except for the statutory account books, a company shall not
set up other account books.
No company asset may be deposited into any individual's account.
Chapter IX Merger and Split-up of Company, Increase and Deduction of
Registered Capital
Article 173 The merger of a company may be effected by way of merger or
consolidation. In the case of merger, a company absorbs any other company
and the absorbed company is dissolved; in the case of consolidation, two
or more companies combine together for the establishment of a new one,
and the existing ones are dissolved.
Article 174 As for a corporate merger, both parties to the merger shall
conclude an agreement with each other and formulate balance sheets and
checklists of properties. The companies involved shall, within ten days
as of making the decision of merger, notify the creditors, and shall make
a public announcement on a newspaper within 30 days. The creditors may,
within 30 days as of the receipt of the notice or within 45 days as of
the issuance of the public announcement if it fails to receive a notice,
require the company to clear off its debts or to provide corresponding
guarantees.
Article 175 In the case of a merger, the credits and debts of the
companies involved shall be succeeded by the company that survives the
merger or by the newly established company.
Article 176 As for the split-up of a company, the properties thereof
shall be divided accordingly, and balance sheets and checklists of
properties shall be worked out. The company shall, within 10 days as of
the day when the decision of split-up is made, notice the creditors and
shall make a public announcement on a newspaper within 30 days.
Article 177 The post-split companies shall bear joint liabilities for the
debts of the former company before it is split up, unless it is otherwise
prescribed by the company and the creditors before the split-up with
regard to the clearance of debts in written agreement.
Article 178 Where a company finds it necessary to reduce its registered
capital, it must work out balance sheets and checklists of properties.
The company shall, within ten days as of the day when the decision of
reducing registered capital, notify the creditors and make a public
announcement on a newspaper within 30 days. The creditors shall, within
30 days as of the receipt of a notice or within 45 days as of the
issuance of the public announcement if it fails to receive a notice, be
entitled to require the company to clear off its debts or to provide
corresponding guarantees. The registered capital of the company after
reducing its registered capital shall not be any lower than the bottom
line requirement as provided for by law.
Article 179 Where a limited liability company increases its registered
capital, the capital contributions of the shareholders for the increased
amount shall be subject to the relevant provisions of the present Law
regarding the capital contributions for the establishment of a limited
liability company. Where a joint stock limited company issues new stocks
for increasing its registered capital, the subscription for new stocks by
shareholders shall be subject to the relevant provisions of the present
Law regarding the payment of stock money for the establishment of a joint
stock limited company.
Article 180 Where any of the registered items is changed during the
process of merger or split-up of a company, the company shall go through
modification registration with the company registration authority. If it
is dissolved, it shall be deregistered according to law. If any new
company is established, it shall go through the procedures for company
establishment according to law.
In the case of increasing or reducing its registered capital, a company
shall go through the modification registration with the company
registration authority according to law.
Chapter X Dissolution and Liquidation of a Company
Article 181 A company may be dissolved under any of the following
circumstances:
(1) The term of business operation as stipulated by the articles of
association expires or any of the matters for dissolution as stipulated
in the articles of association of the company appears;
(2) The shareholders' meeting or the shareholders' assembly decides to
dissolve it;
(3) It is necessary to be dissolved due to merger or split-up of the
company;
(4) Its business license is canceled or it is ordered to close down or
to be dissolved according to law; or
(5) The people's court decides to dissolve it according to Article 183
of this Law.
Article 182 Where any of the circumstances as prescribed in Article 181
(1) of this Law occurs, a company may continue to exist by modifying its
articles of association. To modifying its articles of association
according to the provisions of the preceding paragraph, the consent of
the shareholders who hold two thirds or more of the voting rights shall
be obtained if it is a limited liability company, and the consent of two
thirds or more of the voting rights the shareholders who attend the
meeting of the shareholders shall be obtained if it is a joint stock
limited company.
Article 183 Where a company meets any serious difficulty during its
operation or management so that the interests of the shareholders will be
subject to heavy loss if it continues to exist and it cannot be solved by
any other means, the shareholders who hold ten percent or more of the
voting rights of all the shareholders of the company may plead the
people's court to dissolve the company.
Article 184 Where any company is dissolved according to the provisions of
Article 181 (1), (2), (4) or (5) of this Law, a liquidation group shall
be formed, within fifteen days as of the occurrence of the causes of
dissolution, to carry out a liquidation. The liquidation group of a
limited liability company shall comprise the shareholders, while that of
a joint stock limited company shall comprise the directors or any other
people as determined by the shareholders' meeting. Where no liquidation
group is formed within the time limit, the creditors may plead the
people's court to designate relevant persons to form a liquidation group.
The people's court shall accept such request and form a liquidation group
so as to carry out the liquidation in a timely manner.
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
(For more biz stories, please visit Industry Updates)
Most Popular Stories in 48 Hours
� Futures contracts regulations expected
� H5N1 virus may have mutated
� Avoid becoming a 'World Cup Widow'
� Large natural gasfield discovered
� Iron lady faces latest challenge
Today's Top News
� Zoellick resigns from US State Department
� No 'selfish interests' in African deals
� Delegation to watch US navy drills
� World Cup pays really big!
� Mubarak, Wen discuss economic ties
Top Biz News
� PBOC move to further curb lending
� China remains investors' darling
� Financial reform to proceed
� China to 'fine tune' monetary policy
� China's CITIC Bank seeking to list in HK
Alibaba is the largest B2B marketplace in the world. Source model ship,
wooden puzzle, one-piece toilet, RC hovercraft, photo album, prom dress,
pocket bike, Vaginal Speculum, Samurai Sword, String Panty and PVC Pipe.
Chinese language
