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.
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