Viewpoint | New Company Law from Supervisors' Perspective
Published:
2024-02-20
According to the system design of the company law of our country on the three meetings and one layer, the board of supervisors, the shareholders' meeting and the board of directors are the three major organs of corporate governance. However, in the actual operation of the company, the board of supervisors always has the sense of "idle position" in existence. The newly revised company law has made major adjustments to the design of the system of supervisors. Let's look at the new company law from the perspective of supervisors.
According to the system design of the company law of our country on the three meetings and one layer, the board of supervisors, the shareholders' meeting and the board of directors are the three major organs of corporate governance. However, in the actual operation of the company, the board of supervisors always has the sense of "idle position" in existence. This is reflected in the fact that the composition of the members of the board of supervisors is actually subject to the shareholders' meeting, and there is a lack of independent property rights in the daily operation process. The current Company Law does not specify the provisions on the exercise of supervisors' power, and there is a lack of relief channels even if the supervisors' power cannot be exercised. The newly revised Company Law has made great adjustments to the system design of supervisors. Let's look at the new Company Law from the perspective of supervisors:
First, at the establishment level, supervisors are no longer necessary.
Article 69 of the new Company Law stipulates: "A limited liability company may set up an audit committee composed of directors in the board of directors in accordance with the provisions of the articles of association of the company, exercise the functions and powers of the board of supervisors stipulated in this law, and do not have a board of supervisors or supervisors." Article 121 stipulates: "A company limited by shares may, in accordance with the provisions of the articles of association, set up an audit committee composed of directors on the board of directors to exercise the functions and powers of the board of supervisors as stipulated in this Law, without a board of supervisors or supervisors." Article 176 stipulates: "Where a wholly state-owned company has an audit committee composed of directors in the board of directors to exercise the functions and powers of the board of supervisors as stipulated in this law, it shall not have a board of supervisors or supervisors." This can be divided into two situations, one is optional and the other is unnecessary. The right to choose is the provisions of Article 69 and Article 121. Limited liability companies and joint stock limited companies may establish an audit committee in the board of directors without a board of supervisors or supervisors; and the board of directors of a wholly state-owned company The establishment of an audit committee directly stipulates that there is no board of supervisors or supervisors. Is it not necessary to set up a board of supervisors or supervisors as long as an audit committee is established in the board of directors? Careful observation, the audit committee needs to exercise the functions and powers of the board of supervisors stipulated in the new company law in order to replace the board of supervisors or supervisors, not just the establishment of the audit committee can replace the board of supervisors or supervisors.
Second, the duty of loyalty to improve.
First of allThe subject of a series of violations of the duty of loyalty prohibited by Article 148 of the current Company Law is limited to directors and senior executives, and supervisors are not included in the regulatory system, which shows that the requirement for the duty of loyalty to supervisors is significantly lower than that for directors and senior executives. The new Company Law 181, 184 and 186 also include supervisors in the scope of the subject of such prohibited acts, that is, the duty of loyalty assumed by supervisors in the future is equivalent to that of directors and senior executives.
SecondlyIn terms of related party transactions, the new company law includes supervisors into the regulatory body, and if they become company supervisors, they need to pay attention to the new restrictions on related party transactions. The new company law absorbs and draws on the provisions of the listing rules of various stock exchanges on related party transactions, and expands the scope of related party transactions at the legal level, not only including the transactions indirectly engaged by directors, supervisors and companies into the scope of related party transactions, in addition, transactions between close relatives of Dong Jiangao, enterprises directly or indirectly controlled by Dong Jiangao or his close relatives, and related persons and companies that have other related relationships with Dong Jiangao are also included in the scope of related transactions. From the legal level, the disclosure of information on connected transactions by Dong Jiangao is "should" be reported to the board of directors or shareholders' meeting, that is, we understand that the obligation is a legal obligation, at the same time, the object of the report can be the board of directors or shareholders' meeting to make a report on connected transactions through the articles of association to leave a flexible use of the foreshadowing.
Againin terms of business opportunities. Under the new company law, supervisors are included in the regulatory body for business opportunities, and like the reporting system for related party transactions, the articles of association allow the company to devolve the approval level to the board of directors, retaining flexibility, and additionally adding an exception that directors, supervisors and senior executives are not allowed to seek company opportunities: if the company cannot take advantage of the business opportunities according to laws, administrative regulations or the articles of association, directors, supervisors and senior executives can seek. In this way, on the one hand, waste can be avoided when the company objectively does not have the opportunity to take advantage of business opportunities, and on the other hand, such exceptions are limited to the scope of laws, administrative regulations or articles of association.
FinallyIn terms of inter-industry competition, the legal restrictions on inter-industry competition are essentially the protection of the company's business opportunities. The new company law incorporates supervisors into the main body of inter-industry competition regulation, which to a certain extent improves the relevant regulations on inter-industry competition for directors, supervisors and senior executives. The reporting system of related transactions and the use of business opportunities allow the company's articles of association to lower the approval level to the board of directors, retaining flexibility.
Third, the main body responsible for maintaining the supervision of capital enrichment and the company's financial support behavior..
When it comes to the revision of the Company Law, the capital enrichment system should undoubtedly be the highlight. Tightening the company's paid-in registered capital, increasing the delisting system for shareholders not fulfilling their paid-in obligations, accelerating the expiration system for shareholders' capital contribution obligations, and the supplementary responsibility of the transferor for the transferee's insufficient capital contribution all reflect the great importance attached to the capital enrichment system. In addition, the new company law also strengthens the responsibility of directors, supervisors and senior executives to maintain the company's capital enrichment in the process of company's operation, including shareholders' unpaid capital contribution, withdrawal, illegal dividends, the responsible directors, supervisors and senior managers are all liable for compensation to the company, which is more conducive to protecting the interests of the company and creditors.
In addition, it should be noted that the subject to which the provisions apply is a joint stock limited company, which specifically refers to the provision of gifts, loans, guarantees and other financial assistance for the purpose of acquiring shares of the Company or its parent company by others. The current company law does not clearly stipulate whether the company can implement financial assistance. In the new company law, except for the implementation of employee stock ownership plans, financial assistance is not allowed in principle. In exceptional cases, a resolution is required by the shareholders' meeting, or the board of directors shall make a resolution in accordance with the articles of association or the authorization of the shareholders' meeting, and shall not exceed the total limit of 10% of the total issued share capital. In addition, it is stipulated in this article that if the company violates the regulations and causes losses to the company, the responsible directors, supervisors and senior managers shall be liable for compensation.
To sum up, after the new company law came into effect, lawyers kindly remind friends who are arbitrarily named supervisors: supervisors are at risk, and nominations need to be cautious.
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