Viewpoint... The main amendments to the articles of association in the new Company Law.
Published:
2024-10-08
On July 1, 2024, the new "Company Law" (hereinafter referred to as the "Company Law") was formally implemented. At the same time, relevant supporting documents (such as the "Regulations of the State Council on the Implementation of the" the People's Republic of China Company Law "Registered Capital Registration Management System", Hereinafter referred to as the "Registration Management System") have also been announced and implemented. The Company Law has been amended considerably, and the main contents of the Articles of Association are as follows.
On July 1, 2024, the new "Company Law" (hereinafter referred to as the "Company Law") was formally implemented. At the same time, relevant supporting documents (such as the "Regulations of the State Council on the Implementation of the" the People's Republic of China Company Law "Registered Capital Registration Management System", Hereinafter referred to as the "Registration Management System") have also been announced and implemented. The Company Law has been amended considerably, with the main contents of the Articles of Association as follows:
Term of 1. contribution
Article 47 The registered capital of a limited liability company shall be the amount of capital contribution paid by all shareholders registered with the company registration authority. The amount of capital contribution subscribed by all shareholders shall be fully paid by the shareholders within five years from the date of establishment of the company in accordance with the provisions of the articles of association.
Where laws, administrative regulations and the decision of the State Council provide otherwise for the paid-in registered capital, the minimum amount of registered capital and the period of shareholders' capital contribution of a limited liability company, such provisions shall prevail.
Article 2 of the "Registration Management System" For companies registered and established before June 30, 2024, if the remaining subscribed capital contribution period of a limited liability company exceeds 5 years from July 1, 2027, the remaining subscribed capital contribution period shall be adjusted to 5 years before June 30, 2027 and recorded in the company's articles of association. Shareholders shall pay the subscribed capital contribution in full within the adjusted subscribed capital contribution period; the promoters of a company limited by shares shall pay the full amount of the shares subscribed by them by 30 June 2027.
Tip:
It is recommended to sort out and modify the company's capital contribution period. If the period exceeds the above-mentioned prescribed period, the capital contribution period shall be changed; if the registered capital is too large or the shareholders have no further willingness to pay, the capital reduction shall be considered to reduce the registered capital.
Capital contribution of 2. shareholders
Article 48 of the Company Law Shareholders may make capital contributions in money, or in kind, intellectual property rights, land use rights, equity, creditor's rights and other non-monetary property that can be valued in money and can be transferred in accordance with the law, except for property that may not be used as capital contributions as stipulated by laws and administrative regulations.
The value of non-monetary property as a capital contribution shall be assessed, the property shall be verified, and the price shall not be overvalued or undervalued. Where laws and administrative regulations provide for valuation, such provisions shall be followed.
Article 49 Shareholders shall pay in full and on time the amount of their respective contributions as stipulated in the articles of association.
Where a shareholder makes a capital contribution in currency, the full amount of the capital contribution in currency shall be deposited in the bank account opened by the limited liability company; where the capital contribution is made in non-monetary property, the transfer of its property rights shall be handled in accordance with the law.
If a shareholder fails to pay the capital contribution in full and on time, he shall, in addition to paying the full amount to the company, be liable for the losses caused to the company.
Tip:
1, the implementation of the existence of equity, debt and other special forms of capital contribution, whether the implementation of the corresponding approval and evaluation of the price procedures, whether the price is fair;
2. Attention should be paid to the new rules for the verification and collection of shareholders' capital contributions and the system of shareholders' loss of rights.
3. equity transfer
Article 84 The shareholders of a limited liability company may transfer all or part of their shares to each other.
Where a shareholder transfers his equity to a person other than a shareholder, he shall notify the other shareholders in writing of the quantity, price, payment method and time limit of the equity transfer, and the other shareholders shall have the right of first refusal under the same conditions. If a shareholder fails to reply within 30 days from the date of receiving the written notice, it shall be deemed to have waived the preemptive right. If two or more shareholders exercise the right of first refusal, they shall negotiate to determine their respective purchase ratios; if they fail to negotiate, they shall exercise the right of first refusal in accordance with their respective proportions of capital contribution at the time of transfer.
Where the articles of association provide otherwise for the transfer of shares, such provisions shall prevail.
Tip:
In addition to amending the relevant content on equity transfer in accordance with the Company Law, shareholders may also consider whether there are other special amendment requirements for equity transfer.
The generation and change of the legal representative of the 4..
Article 10 The legal representative of a company shall, in accordance with the provisions of the company's articles of association, be the director or manager who performs the company's affairs on behalf of the company.
If a director or manager who serves as the legal representative resigns, he shall be deemed to have resigned as the legal representative at the same time.
If the legal representative resigns, the company shall determine a new legal representative within 30 days from the date of resignation of the legal representative.
Article 46 The articles of association of a limited liability company shall specify the following matters: (7) The method for the creation and change of the legal representative of the company.
Tip:
1, in the company's articles of association should be added to the company's legal representative of the generation, change methods and replacement process and other content;
2. Article 10 of the Company Law adjusts the scope of election of the legal representative to "director or manager of executive affairs". From a legislative point of view, directors of executive affairs should be directors who also serve as senior executives. At the same time, attention should be paid to whether the current legal representative of the company will need to be replaced if understood from a legislative perspective.
5. increase the scope of access to shareholders' right to know
Shareholders shall have the right to consult and copy the articles of association, the register of shareholders, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports.
Shareholders may request access to the company's accounting books and accounting vouchers. If a shareholder requests to consult the company's accounting books and accounting vouchers, he shall submit a written request to the company stating the purpose. If the company has reasonable grounds to believe that the shareholders' inspection of accounting books and accounting vouchers has an improper purpose, which may harm the legitimate interests of the company, it may refuse to provide inspection, and shall reply to the shareholders in writing and explain the reasons within 15 days from the date of the shareholders' written request. If the company refuses to provide inspection, the shareholder may file a lawsuit in the people's court.
Shareholders may consult the materials specified in the preceding paragraph by entrusting intermediary agencies such as accounting firms and law firms.
Shareholders and their entrusted accounting firms, law firms and other intermediary agencies shall abide by the provisions of laws and administrative regulations on the protection of state secrets, trade secrets, personal privacy and personal information when consulting and copying relevant materials.
Where a shareholder requests to consult or copy the relevant materials of the company's wholly-owned subsidiary, the provisions of the preceding four paragraphs shall apply.
Tip:
If it is not stipulated in the articles of association that accounting vouchers can be consulted, it is suggested to increase it.
6. the powers of the shareholders' meeting
Article 59 The shareholders' meeting shall exercise the following functions and powers:
To (I) the election and replacement of directors and supervisors, and to decide on matters relating to the remuneration of directors and supervisors;
(II) review and approve the reports of the Board of Directors;
(III) review and approve the report of the board of supervisors;
(IV) review and approve the company's profit distribution plan and loss recovery plan;
The (V) shall make a resolution on the increase or decrease of the registered capital of the company;
The (VI) makes resolutions on the issuance of corporate bonds;
The (VII) shall make resolutions on the merger, division, dissolution, liquidation or change of corporate form of the Company;
(VIII) amendment of the articles of association;
(IX) other powers specified in the articles of association.
The shareholders' meeting may authorize the board of directors to make a resolution on the issuance of corporate bonds.
If the shareholders unanimously agree in writing on the matters listed in the first paragraph of this article, they may make a decision directly without convening a meeting of the shareholders, and all shareholders shall sign or seal the decision document.
Article 66 The methods of discussion and voting procedures of the shareholders' meeting shall be prescribed by the articles of association of the company, except as provided for in this Law.
A resolution of the shareholders' meeting shall be adopted by the shareholders representing more than half of the voting rights.
The resolution of the shareholders' meeting to amend the articles of association, increase or decrease the registered capital, as well as the resolution of the merger, division, dissolution or change of the form of the company shall be adopted by the shareholders representing 2/3 or more voting rights.
Tip:
1. The Company Law deletes "determining the company's operating policies and investment plans" and "reviewing and approving the company's annual financial budget plan and final accounts plan" from the functions and powers of the shareholders' meeting. However, it is necessary to consider whether the company has a state-owned background, whether there are still investment plans, budget and final accounts plans and other contents in the follow-up from the level of state-owned supervision, and whether it is necessary to adjust the functions and powers of the shareholders' meeting.
2, should be in accordance with the provisions of the company law, the relevant statements of the articles of association, such as "signature or seal", "half of the voting shareholders adopted" and so on.
7. Board of Directors
Composition of (I) Board of Directors
Article 68 The board of directors of a limited liability company shall be composed of three or more members, among whom may be representatives of the employees of the company. A limited liability company with more than 300 employees shall have representatives of the company's employees among its board of directors, except where it has a board of supervisors in accordance with the law and has representatives of the company's employees. The representatives of the staff and workers on the board of directors shall be democratically elected by the staff and workers of the company through the staff and workers' congress or other forms.
The board of directors shall have a chairman and may have a vice-chairman. The method for the establishment of the chairman and vice-chairman shall be prescribed by the articles of association.
Article 75 A limited liability company with a relatively small scale or a relatively small number of shareholders may have one director instead of a board of directors, who may exercise the functions and powers of the board of directors as prescribed in this Law. The director may also be the manager of the company.
Tip:
1. It is necessary to confirm whether to set up a board of directors and whether to increase the number of employee representative directors according to the situation of the enterprise;
2. For companies that originally had executive directors, if the structure does not change, they need to be uniformly adjusted and expressed as "directors";
3. Whether the enterprise is a limited liability company with more than 300 employees.
(II) Authority of the Board of Directors
Article 67 A limited liability company shall have a board of directors, except as otherwise provided in Article 75 of this Law.
The board of directors shall exercise the following powers:
(I) convene the shareholders' meeting and report to the shareholders' meeting;
(II) implement the resolutions of the shareholders' meeting;
(III) determine the company's business plans and investment plans;
(IV) formulating the company's profit distribution plan and loss recovery plan;
(V) formulate plans for the company to increase or decrease its registered capital and issue corporate bonds;
(VI) formulate plans for the merger, division, dissolution or change of corporate form of the Company;
(VII) determine the establishment of the company's internal management structure;
The (VIII) decides on the appointment or dismissal of the manager of the Company and his remuneration, and decides on the appointment or dismissal of the deputy manager and the person in charge of finance of the Company and his remuneration in accordance with the manager's nomination;
(IX) formulate the basic management system of the company;
(X) the provisions of the articles of association or other powers granted by the shareholders' meeting.
The restrictions on the powers of the board of directors in the articles of association shall not be used against the bona fide counterpart.
Tip:
The authority of the board of directors has deleted the formulation of the company's annual financial budget plan and final accounts plan, and it is also necessary to consider whether to make corresponding adjustments at the level of state-owned supervision.
(III) voting ratio
Article 73 of the "Company Law" Article 73 The method of discussion and voting procedures of the board of directors shall be prescribed by the articles of association of the company, except as provided for in this law.
A meeting of the board of directors shall be held only when more than half of the directors are present. A resolution of the board of directors shall be adopted by a majority of all directors.
The voting on the resolution of the board of directors shall be one person, one vote.
The board of directors shall make minutes of the meeting of the decisions on the matters under discussion, and the directors present at the meeting shall sign the minutes of the meeting.
Tip:
The rules of procedure of the board of directors shall be specified in the articles of association in accordance with the provisions of the new law, and the relevant proportions and requirements shall not be lower than those stipulated in the Company Law.
(IV) make it clear that more than half of the board members are outside directors.
Article 173 of the Company Law
The board of directors of a wholly state-owned company shall exercise its functions and powers in accordance with the provisions of this Law.
More than half of the members of the board of directors of a wholly state-owned company shall be outside directors, and there shall be representatives of the company's employees.
Tip:
Applicable to wholly state-owned companies.
8. Supervisory Board and Audit Committee
Article 69 of the Company Law A limited liability company may, in accordance with the provisions of its 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. Representatives of employees who are members of the company's board of directors may become members of the audit committee.
Article 76 A limited liability company shall have a board of supervisors, except as otherwise provided for in Articles 69 and 83 of this Law.
The number of members of the board of supervisors shall be three or more. The members of the board of supervisors shall include representatives of shareholders and an appropriate proportion of representatives of the company's employees, of which the proportion of employee representatives shall not be less than 1/3, and the specific proportion shall be stipulated in the company's articles of association. The employee representatives on the board of supervisors shall be democratically elected by the employees of the company through the employee representative assembly, the employee assembly or other forms.
The board of supervisors shall have a chairman, who shall be elected by more than half of all supervisors. The chairman of the board of supervisors shall convene and preside over the meetings of the board of supervisors; if the chairman of the board of supervisors is unable or fails to perform his duties, a supervisor jointly elected by more than half of the supervisors shall convene and preside over the meetings of the board of supervisors.
Directors and senior management personnel shall not concurrently serve as supervisors.
Article 83 A limited liability company with a relatively small scale or a relatively small number of shareholders may have one supervisor instead of a board of supervisors to exercise the functions and powers of the board of supervisors as prescribed by this Law, or may have no supervisor with the unanimous consent of all shareholders.
Tip:
At present, there are three situations in which there is a supervisor, a board of supervisors and an audit committee composed of directors. At the same time, it should also be considered whether the company belongs to a company with more than 300 employees. Therefore, it is necessary to determine the setting of the supervisory body and the arrangement of the employee representative supervisor according to the specific situation of the enterprise.
9. Adjustment of the Qualifications of Directors and Supervisors
Article 178 Under any of the following circumstances, a person shall not serve as a director, supervisor or senior manager of a company:
(I) incapacity or limited capacity for civil conduct;
If a (II) is sentenced to criminal punishment for embezzlement, bribery, embezzlement of property, misappropriation of property or disruption of the order of the socialist market economy, or is deprived of political rights for a crime, and the sentence of probation is suspended for less than five years, it shall be suspended for less than two years from the date of expiration of the probation period;
If a (III) is a director, factory director or manager of a company or enterprise that has been liquidated and is personally responsible for the bankruptcy of the company or enterprise, it has not been more than three years since the date of completion of the bankruptcy liquidation of the company or enterprise;
If the (IV) is the legal representative of a company or enterprise whose business license has been revoked and which has been ordered to close down due to violation of the law, and is personally liable, not more than three years have elapsed since the date on which the business license of the company or enterprise has been revoked and which has been ordered to close down;
The (V) individual is listed by the people's court as a person who has broken his promise due to the large amount of debt.
Where a director or supervisor is elected or appointed or a senior manager is appointed in violation of the provisions of the preceding paragraph, such election, appointment or appointment shall be invalid.
The company shall remove a director, supervisor or senior manager from his post if any of the circumstances listed in the first paragraph of this Article occur during his term of office.
Tip:
According to the amendment of the company law, the qualifications of the directors and supervisors of the articles of association are adjusted. For example, if the company's articles of association stipulate the qualifications of directors, supervisors, and senior executives, it should be added that "if the probation is declared, it has not been more than two years from the date of the expiration of the probation period", "the company is ordered to close down", and "the people's court is listed as a person who has broken faith.
The scope of regulation of 10. breach of the duty of loyalty is extended to supervisors.
Article 181 of the "Company Law" Directors, supervisors, and senior managers shall not commit the following acts:
(I) misappropriation of company property and misappropriation of company funds;
The (II) deposits the company's funds in his or her own name or in an account opened in the name of another individual;
(III) take advantage of their functions and powers to bribe or accept other illegal income;
(IV) accept as his own commission on transactions between others and the Company;
Unauthorized disclosure of company secrets by the (V);
(VI) other acts that violate the duty of loyalty to the company.
Tip:
If the articles of association of the company provide for the violation of the duty of loyalty, the supervisor shall also be included in the scope of the regulation.
XI. Reporting and approval of special transactions
Article 182 of the Company Law. Directors, supervisors, and senior managers who directly or indirectly enter into contracts or conduct transactions with the company shall report to the board of directors or the shareholders' meeting on matters related to the conclusion of the contract or the transaction, and In accordance with the provisions of the company's articles of association, it shall be approved by the board of directors or the shareholders' meeting by resolution.
The provisions of the preceding paragraph shall apply to the close relatives of directors, supervisors and senior managers, the enterprises directly or indirectly controlled by directors, supervisors and senior managers or their close relatives, and the related persons who have other related relations with directors, supervisors and senior managers.
Article 183 Directors, supervisors and senior managers shall not take advantage of their positions to seek business opportunities belonging to the company for themselves or others. However, any of the following circumstances shall be excluded:
The (I) shall report to the board of directors or the shareholders' meeting, and shall be approved by resolution of the board of directors or the shareholders' meeting in accordance with the provisions of the articles of association;
(II) according to the provisions of laws, administrative regulations or articles of association, the company cannot take advantage of the business opportunity.
Article 184 if a director, supervisor or senior manager fails to report to the board of directors or the shareholders' meeting and is approved by the board of directors or the shareholders' meeting in accordance with the provisions of the articles of association, he shall not operate the same kind of business as the company in which he works for or for others.
Tip:
The articles of association of the company should be clear: whether the company allows the above three acts.
XII. Adjustment of the execution time of distributed profits
Article 212 of the Company Law If the shareholders' meeting makes a resolution to distribute profits, the board of directors shall distribute the profits within six months from the date of the resolution of the shareholders' meeting.
Tip:
If the articles of association of the company stipulate the implementation time for the distribution of profits, it shall not exceed six months.
Thirteen, electronic communication means to convene and vote three meetings.
Article 24 of the Company Law The shareholders' meeting, the board of directors and the board of supervisors of a company may hold meetings and vote by electronic communication, unless otherwise provided for in the articles of association.
Tip:
According to this provision, the default company may hold three meetings by means of electronic communication, and if exclusion is required, additional provisions of the articles of association are required.
XIV. Liquidation Obligor and Liquidation Group Members
"Company Law" Article 232 If a company is dissolved due to the provisions of the first, second, fourth, and fifth paragraphs of the first paragraph of Article 229 of this law, it shall be liquidated. If the directors are the company's liquidation obligors, they shall form a liquidation group to liquidate the company within 15 days from the date of the dissolution.
The liquidation group shall be composed of directors, unless the articles of association provide otherwise or the shareholders' meeting adopts a resolution to elect another person.
If the liquidation obligor fails to perform the liquidation obligation in time and causes losses to the company or creditors, he shall be liable for compensation.
Tip:
The Company Law stipulates that the liquidation group shall be composed of directors, but the articles of association may make other provisions, so after the implementation of the Company Law, if the provisions of the aforementioned articles of association are not amended, the liquidation obligor of the company will become a director, but the members of the liquidation group will still be shareholders. If the company has changed from the center of the shareholders' meeting to the center of the board of directors in accordance with the Company Law, but the members of the liquidation group are still shareholders, it will lead to a disconnection in the continuity of corporate governance, so the company needs to adjust according to the actual situation.
Fifteen, clearly stipulates the company to the legal representative to recover the rules.
Article 11, paragraph 3, of the Company Law, if the legal representative causes damage to others as a result of the performance of his duties, the company shall bear civil liability. After the company has assumed civil liability, it may, in accordance with the law or the articles of association, recover from the legal representative at fault.
Tip:
1, can clearly list the legal representative is at fault;
2. The proportion and manner in which the legal representative is liable may be clarified.
XVI. Clarify the authority of the manager
Article 74 A limited liability company may have a manager, who shall be appointed or dismissed by the board of directors. The manager shall be responsible to the board of directors and exercise his powers in accordance with the provisions of the articles of association or the authorization of the board of directors. The manager shall attend the meeting of the board of directors.
Tip:
1, the new "Company Law" to delete the original "Company Law" Article 49 paragraph 1 provisions of the eight statutory manager's powers;
2, the company may, according to the actual business needs, determine whether the articles of association provide for the manager's authority, or by the board of directors to authorize the manager;
3, the board of directors authorized the way can also be clear, whether the list of authorization or general authorization.
17. Clarify the decision-making authority for the employment and dismissal of accounting firms.
Article 215 Paragraph 1 of the Company Law The hiring and dismissal of an accounting firm undertaking the company's audit business shall be decided by the shareholders' meeting, the board of directors or the board of supervisors in accordance with the provisions of the company's articles of association.
Tip:
The company may determine the specific decision-making organ according to the actual business needs.
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