CHAPTER III Limited Company |
| Article 98 | A limited company shall be organized by one or more shareholders.
The shareholders of a company shall, with an unanimous agreement, draw up the Articles of Incorporation and shall affix their respective signatures or personal seals thereon. The articles of incorporation shall be kept at the head office of the company, and a duplicate thereof shall be held by each shareholder of the company.
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| Article 99 | The liability of shareholders to the company shall, unless otherwise provided for in Paragraph Two, be limited to the extent of the capital contributed by each of them.
If a shareholder abuses the company’s status as a legal entity and thus causes the company to bear specific debts and to be apparently difficult for the company to pay such debts, and if such abuse is of a severe nature, the shareholder shall, if necessary, be liable for the debts.
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| Article 99-1 | Equity capital to be contributed other than cash by shareholders may be in the form of monetary credit extended to the company, or the property or technical know-how required by the business of the company.
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| Article 100 | The capital stock of a limited company shall be paid up in full by all its shareholders, and shall not be paid in installments nor be raised from external sources.
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| Article 101 | The Articles of Incorporation of a limited company shall contain the following particulars:
- The name of the company;
- The scope of business to be operated by the company;
- The name, domicile or residence of each shareholder;
- The aggregate of capital stock and the capital contribution made by each shareholder;
- The ration or standards for profit distribution and loss apportionment among all shareholders;
- The location of the head office and the branch office(s), if any;
- The number of directors;
- The causes of dissolution of the company, if any; and
- The date of establishment of the articles of incorporation.
The director who is authorized to represent a limited company and failed to make the articles of incorporation available at the head office of the company shall be imposed with a fine in an amount of not less than NT$ 10,000 but not more than NT$ 50,000. If the company still refuses to make available the articles of incorporation as required, the amount of fine shall be increased to an amount of not less than NT$ 20,000 but not more than NT$ 100,000 consecutively for each non-compliance.
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| Article 102 | Each shareholder shall have one vote irrespective of the amount of his contribution to capital; however, the Articles of Incorporation may prescribe that votes shall be allocated to the shareholders in proportion to their responsible contributions to capital.
In case the government or a juristic person becomes a shareholder, the provisions in Article 181 shall mutatis mutandis apply.
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| Article 103 | A limited company shall keep at its head office a shareholders roster, which shall contain the following particulars:
- The amount of capital contribution made by each shareholder, and the serial number of the share certificate issued to him/her;
- The name or title, domicile or residence of each shareholder; and
- The date of payment of share equity by each shareholder.
The director who is authorized to represent the company and failed to make the shareholders roster available at the company shall be imposed with a fine not less than NT$ 10,000 but not more than NT$ 50,000. If the company still refuses to make available the shareholder roster as required, the amount of fine shall be increased to an amount of not less than NT$ 20,000 but not more than NT$ 100,000 consecutively for each non-compliance.
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| Article 104 | (Deleted)
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| Article 105 | (Deleted)
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| Article 106 | Increase of the amount of capital stock of a limited company shall be approved by a majority of voting shares of all shareholders. However, even if a shareholder has agreed to the capital increase plan of the company, he/she has no obligation to contribute for the increased portion of the capital stock proportionally to the percentage of his/her original shareholding in effect prior to the capital increase.
Under the circumstance set forth in the proviso of the preceding paragraph, new shareholders may be allowed to join the company with an approval by a majority of voting shares of all shareholders.
Subject to an approval by a majority of voting shares of all shareholders, a limited company may effect a capital reduction project or change its organization into a company limited by shares.
The shareholders of a limited company who disagree with the proposals set forth in the preceding 3 paragraphs shall be deemed to be in agreement with the portion of amendment made in the Articles of Incorporation in respect to such proposals.
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| Article 107 | After the company has adopted a resolution for the change of organization, it shall immediately notify each of its creditors and make a public announcement.
A company, after the change of organization, shall assume the debt owned by it prior to its change of organization.
The provisions of Article 73 and Article 74 shall apply mutatis mutandis to reduction of capital.
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| Article 108 | A limited company shall have at least one but not more than three directors to execute the business operation and to represent the company who shall be elected from among the shareholders with disposing capacity and shall be approved by two thirds or more of the voting shares of all shareholders. When there are several directors, the Articles of Incorporation may stipulate to have one director to act as the chairman of directors and to represent the company externally; the directors shall elect a chairman of directors from among the directors by a majority vote of all directors.
In case the or an executive director is on leave or unable to exercise his/her functional duties for any reason, a shareholder shall be designated to act in his/her behalf; and if no representative is so designated, the representative shall be elected by the shareholders from among themselves.
Where a director intends to conduct, for the benefit of his/her own or others, a business of the same kind as that of the company, he/she shall make an explanation to all shareholders about the important contents of such act and shall obtain a prior consent of two thirds or more of the voting shares of all shareholders.
The provisions set out in Article 30, Article 46, Articles 49 through 53, Paragraph Three of Article 54, Articles 57 through 59, Paragraph Three of Article 208, Article 208-1, and Paragraph One and Two of Article 211 of this Act shall apply mutatis mutandis to the directors of a limited company.
The director representing a limited company fails to comply with Paragraph One and Two of Article 211 as applied mutatis mutandis in the preceding paragraph shall be imposed with a fine in an amount of not less than NT$ 20,000 but not more than NT$ 100,000.
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| Article 109 | Shareholders who do not conduct business may, from time to time, exercise power of audit, and the provisions in Article 48 shall mutatis mutandis apply to such power of audit.
In performing their functional duties under the preceding Paragraph, shareholders who do not conduct business may appoint, on behalf of the company, a practicing lawyer and/or a certified public accountant to conduct the examination.
A limited company evades, impedes or refuses the examination to be conducted by shareholders who do not conduct business, the director representing a limited company shall be imposed with a fine of not less than NT$ 20,000 but not more than NT$ 100,000.
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| Article 110 | Upon close of each fiscal year, the directors shall prepare various reports and financial statements in accordance with the provisions of Article 228 of this Act and shall deliver the same to each of the shareholder for their approval; such approval shall be approved by a majority of voting shares of all shareholders.
The annual reports and financial statements referred to in the preceding Paragraph shall be duly delivered to shareholders within six months after close of each fiscal year. If no objection is raised by any shareholder over a period of one month after such delivery , they shall be deemed to have been approved by all shareholders.
The provisions set out in Article 228-1, Articles 231 through 233, Article 235, Article 235-1, Paragraph One of Article 240 and Paragraph One of Article 245 of this Act shall apply mutatis mutandis to a limited company.
Any person who evades, impedes, or refuses the inspection to be conducted by the inspector under Article 245 as applied mutatis mutandis in the preceding paragraph shall be imposed with a fine of not less than NT$ 20,000 but not more than NT$ 100,000.
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| Article 111 | A shareholder shall not, without the consent of a majority of voting shares of all other shareholders, transfer all or part of his contribution to the capital of the company to another person or persons.
The directors shall not, without the consent of two thirds or more of the voting shares of all other shareholders, transfer all or part of their contribution to the capital of the company to another person or persons.
The shareholders who disagree with the transfer as mentioned in the preceding two paragraphs, shall have priority to accept such transfer. If they do not accept the transfer, it shall be deemed that their consent has been given for the transfer and to amend the Articles of Incorporation in regard to matters relating to the shareholders and the amount of their contribution to the capital of the company.
The court shall, in transferring a shareholder’s contribution to the capital of a company to another person or persons through the proceedings of compulsory execution, order the company and all other shareholders to designate, within twenty days the transferee or transferees in accordance with the manner set forth in Paragraph One or Paragraph Two. In case the transferee or transferees are not designated within the prescribed time limit or the transferee or transferees designated do not accept the terms and conditions set forth for the transfer, it shall be deemed that consent has been given for the transfer and for the modification or alteration of the Articles of Incorporation in regard to matters relating to the shareholders and the amount of their contribution to the capital of the company.
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| Article 112 | A company shall, after its losses have been covered and all taxes and dues have been paid and at the time of allocating surplus profits, first set aside ten percent of such profits as a legal reserve. However when the legal reserve amounts to the authorized capital, this shall not apply.
Aside from the aforesaid legal reserve, a company may, by the provisions of its Articles of Incorporation or with the consent of two thirds or more of the voting shares of all shareholders, appropriate another sum as a special reserve.
Article 239 and Item Two, Paragraph One and Paragraph Three of Article 241 shall apply mutatis mutandis to a limited company.
Responsible persons of a limited company who fail to set aside a legal reserve in violation of the provisions in Paragraph One, shall be imposed with a fine of not less than NT$ 20,000 but not more than NT$ 100,000.
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| Article 113 | A modification of Articles of Incorporation, consolidation or merger and dissolution of a limited company shall be approved by two thirds or more of voting shares of all shareholders.
Subject to the provision of the preceding paragraph, for modification of Articles of Incorporation, consolidation or merger, dissolution and liquidation of a limited company, the relevant provisions of the unlimited company shall apply mutatis mutandis.
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