Chapter I General Provisions
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| Article 1 | The term "company" as used in this law denotes a corporate juristic person organized and incorporated in accordance with this law for the purpose of profit making. |
| Article 2 | I.Companies are of four classes as set forth in the following:
1.Unlimited Company: which term denotes a company organized by
two or more shareholders who bear unlimited joint and several
liabilities for discharge of the obligations of the company.
2.Limited Company: which term denotes a company organized by
one or more shareholders, with each shareholder being liable for
the company in an amount limited to the amount contributed by
him.
3.Unlimited Company with Limited Liability Shareholders: which
term denotes a company organized by one or more shareholders
of unlimited liability and one or more shareholders of limited
liability; among them the shareholder(s) with unlimited liability
shall bear unlimited joint liability for the obligations of the
company, while each of the shareholders with limited liability
shall be held liable for the obligations of the company only
in respect of the amount of capital contributed by him.
4.Company Limited by Shares: which term denotes a company organized
by two or more or one government or corporate shareholder, with
the total capital of the company being divided into shares and
each shareholder being liable for the company in an amount equal
to the total value of shares subscribed by him.
II.The name of a company shall indicate the class to which it
belongs. |
| Article 3 | I.The domicile of a company is the location of its head office.
II.The term "head office" as used in this law denotes the principal
office first established according to law to take charge of
affairs of the entire organization; the term "branch office"
denotes branch unit subject to the control of the head office. |
| Article 4 | The term "foreign company" as used in this law denotes a company,
for the purpose of profit making, organized and incorporated in
accordance with the laws of a foreign country, and authorized by
the R.O.C. Government to transact business within the territory of
the Republic of China. |
| Article 5 | I.The term "Competent authority" as used in this Law shall denote
the Ministry of Economics Affairs where the central government is
concerned;or the Bureau of Reconstruction where a municipal
government under the jurisdiction of the Executive Yuan is
concerned.
II.The central competent authority may authorize its subordinate
authority (authorities) or mandate or appoint other government
authority (authorities) to handle the matter(s) set forth in this
Law. |
| Article 6 | No company may be incorporated unless it has registered with the
central competent authority. |
| Article 7 | Before applying for company incorporation, or for alteration of the
registered amount of capital of the company, the company shall first
obtain an auditing certificate from an independent certified public
accountant. Regulations governing the foregoing process shall be
prescribed by the central competent authority. |
| Article 8 | I.The term "responsible persons" of a company as used in this law
denotes shareholders conducting the business or representing the
company in case of an unlimited company or unlimited company
with limited liability shareholders; directors of the company in case
of a limited company or a company limited by shares.
II.The managerial officer or liquidator of a company, the promoter,
supervisor, inspector, reorganizer or reorganization supervisor of
a company limited by shares acting within the scope of their
duties, are also responsible persons of a company. |
| Article 9 | I.Where the share prices (or the capital stock) receivable by a
company have not been actually paid up by its shareholders,
but are declared as having paid up in its incorporation application,
or where the share prices have been paid up by its shareholders
but are subsequently refunded to its shareholders or withdrawn
by such shareholders with the permission of the company after
having completed the procedures for company incorporation, the
responsible persons shall each be punished with imprisonment for
a term of not more than five years, detention, or in lieu thereof or
in addition thereto a fine in AN amount of not less than New Taiwan
Dollar Five Hundred Thousand (NT$ 500,000) but not more than
New Taiwan Dollar Two Million and Five Hundred Thousand
(NT$ 2,500,0000).
II.Under any of the circumstances set forth in the preceding
Paragraph, the responsible persons shall be liable, jointly and
severally with such shareholders, for the damages to be sustained
by the company or the third party or parties there-from.
III.Upon rendition of the final judgment for the punishment set out
in Paragraph I hereinabove, the Procuratorate concerned shall
notify the central competent authority to cancel or to nullify
the original registration of that company provided, however,
that the provision set out in this Paragraph shall not apply in
case the unlawful act has been rectified by the company, either
initiatively or within a time limit given by the competent
authority, before the judgment becomes final.
IV.After a company has been adjudicated, by a final judgment, to
have submitted any forged or altered documents in filing an
application for registration of its company incorporation or
other company alterations, the Procuratorate concerned shall
notify the central competent authority to cancel or to nullify
such registration of the said company. |
| Article 10 | Under either of the following circumstances, the competent authority
may, ex officio or upon an application filed by an interested party,
order the dissolution of a company:
1.Where the company fails to commence its business operation after
elapse of six months from the date of its company incorporation
registration, unless it has made an extension registration; or
2.Where, after commencing its business operation, the company has
discontinued, at its own discretion, its business operation for a
period over six months, unless it has made the business
discontinuation registration. |
| Article 11 | I.In the event of an apparent difficulty in the operation of a company
or serious damage thereto, the court may, upon an application from
its shareholders and after having solicited the opinions of the
competent authority and the central authority in charge of the
relevant end enterprises and having received a defence from the
company, make a ruling for the dissolution of the company.
II.The dissolution application to be filed by the company under the
preceding Paragraph shall be filed by shareholders who have been
continuously holding more than 10% of the total number of
outstanding shares issued by the company for a period over six
months. |
| Article 12 | In a company, after its incorporation, fails to register any
particular that should have been registered or fails to register
any changes in particulars already registered, such particulars
or changes in particulars cannot be set up as a defence against
any third party. |
| Article 13 | I.A company shall not be a shareholder of unlimited liability in
another company or a partner of a partnership enterprise. When
a company becomes a shareholder of limited liability in other
companies, the total amount of its investments in such other
companies shall not exceed forty percent of the amount of its
own paid-up capital unless it is a professional investment company,
or otherwise provided for in its Article of Incorporation, or has
obtained the consent of its shareholders or a resolution adopted
by its shareholders' meeting in accordance with any of the following
provisions:
1.In the case of an unlimited company or an unlimited company with
limited liability shareholders: the unanimous consent of the
unlimited liability shareholders;
2.In the case of a limited company: the unanimous consent of its
shareholders; or
3.In the case of a company limited by shares: a resolution adopted,
at a shareholders' meeting, by a majority of the shareholders
present who represent two-thirds or more of the total number
of its outstanding shares:
II.In the event the total number of shares represented by the
shareholders present at a shareholders' meeting of a company
whose shares have been issued in public is less than the percentage
of the total shareholdings required in the Item 3 of the preceding
Paragraph, the resolution may be adopted by two-third of the voting
rights exercised by the shareholders present at the shareholders'
meeting who represent a majority of the outstanding shares of the
company.
III.Where there is any higher percentage of the total number of
shares represented by the shareholders present and/or the total
number of the voting rights is required in the Articles of
Incorporation, such higher percentage shall prevail.
IV.Shares received by a company as a result of distribution of surplus
earnings or capitalization of legal reserves by its invested company
shall not be included in the total amount of investments set forth
in Paragraph One of this Article.
V.The responsible person of a company who has violated the provisions
of Paragraph One of this Article shall be liable for the damages
incurred by the company there-from. |
| Article 14 | (deleted) |
| Article 15 | I.Unless otherwise under any of the following circumstances, the
capital of a company shall not be lend to any shareholder of the
company or any other person:
1.Where an inter-company or inter-firm business transaction calls for
such lending arrangement; or
2.Where an inter-company or inter-firm short-term financing facility
is necessary provided that the amount of such financing facility
shall not exceed forty percent of the amount of the net value of
the lending enterprise.
II.The responsible person of a company who has violated the provisions
of the preceding Paragraph shall by liable, jointly and severally
with the borrower, for the repayment of the loan at issue and for
the damages, if any, to company resulted there-from. |
| Article 16 | I.A company shall not act as a guarantor of any nature, unless
otherwise permitted by any other law or by the Articles of
Incorporation of the company.
II.The responsible person who has violated the provision set out in the
preceding Paragraph shall take up the surety-ship on his own and
shall be liable for the damages, if any, to the company resulted
there-from. |
| Article 17 | I.If the business of a company should require special permission of the
government in accordance with the law or an order given by a
competent authority duly authorized by the law, such company may
apply for company registration only after having received the
foregoing government permission document.
II.Where revocation or rescission of a business permit granted under
the preceding Paragraph becomes final, the government authority in
charge of the relevant end-enterprise shall advise, by a notice, the
central competent authority to cancel or to nullify the company
registrations, in whole or in part, previously made by the said
company. |
| Article 17-1 | Where a company was operated in a manner in violation of the governing
laws and/or regulations and is ordered, by a conclusive injunction, to
closedown, the authority giving such injunction shall notify the
central authority to cancel the company registrations, in whole or in
part, previously made by the said company. |
| Article 18 | I.No company may use a corporate name which is identical with that of
another company. Where the corporate names of two companies contain
any marks or identifying words respectively that may distinguish the
different categories of business of the two companies, such corporate
names shall not be considered identical with each other.
II.A company may operate any category of business which is not
prohibited or restricted by the laws and regulations, except for any
business requiring special approval which shall be explicitly
described in the articles of incorporation of the company.
III.A company shall not use a name which tends to mislead the public to
associate it with the name of a government agency or a public
welfare organization, or has an implication of offending against
public order or good customs.
IV.Before proceeding to the company incorporation registration
procedure, a company shall first apply for approval and reservation,
for a specific period of time, of its corporate name and the scope
of its business. Rules for examination and approval of such
application shall be prescribed by the central competent authority. |
| Article 19 | I.A company may not conduct its business operations or commit any
juristic act in the name of its company, unless it has completed the
procedure for company incorporation registration.
II.The person who has violated the provision set out in the preceding
Paragraph shall be punished with imprisonment for a period of not
more than one year, detention, or in lieu thereof or in addition
thereto a fine of not more than NT$ 150,000 and shall assume on his
own the civil liabilities arising there-from, or shall be jointly
and severally liable therefore, in case there are two or more
violators. In addition, the company shall be enjoined from using
its corporate name for doing its business. |
| Article 20 | I.A company shall, at the end of each fiscal year, submit to its
shareholders for their approval or to the shareholders' meeting for
ratification the annual business report, the financial statements,
and the surplus earnings distribution or loss make-up proposal.
II.Where the amount of equity capital of a company exceeds a certain
amount as specifies by the central competent authority, the company
shall first have its financial statements audited and certified by
a certified public accountant pursuant to the auditing and
certification rules as prescribed by the central competent
authority. The provision set out in this Paragraph shall not apply
to the companies whose stocks are offered in public and which are
subject to the provisions otherwise stipulated by the securities
and exchange control authority.
III.The provisions of Paragraph One, Article 29 of this Law shall
apply, mutatis mutandis, to the appointment, discharge and
remuneration of the certified public accountant set forth in the
preceding Paragraph.
IV.The competent authority may, at any time or from time to time, send
its officer(s) to examine or may require, by an order, a company to
submit, within a given time limit, the documents and statements set
forth in Paragraph I under this Article in accordance with the
regulations to be prescribed by the central competent authority.
V.Upon violation the provisions set out respectively in the preceding
Paragraphs I or II, the responsible person of the violating company
shall be imposed with a fine of not less than NT$ 10,000 but not more
than NT$ 50,000; or shall be imposed with a fine of not less than
NT$ 20,000 but not more than NT$ 100,000 if the company impedes,
refuses or evades the foregoing examination or fails to make the
submission thereof after expiry of the deadline date. |
| Article 21 | I.The competent authority may, in conjunction with the authority in
charge of the end enterprise concerned, at any time or from time to
time, send their respective officials to inspect the operation and
financial conditions of a company, to which the responsible person
of the company shall not impede, refuse or evade.
II.The responsible person of a company who impedes, refuses or evade
the inspection set forth in the preceding Paragraph shall be imposed
with a fine of not less than NT$ 20,000 but not more than
NT$ 100,000. For successive acts in terms of impeding, refusing
or evading such inspection, the company shall be imposed
successively in each case a fine of not less than NT$ 40,000
but not more than NT$ 200,000.
III.When sending its official to conduct the inspection as set forth
in Paragraph I of this Article, the competent authority may,
depending on actual requirement, appoint a certified public
accountant, a lawyer or any other professional personnel to assist
in carrying out such inspection. |
| Article 22 | I.In examining the documents and statements submitted by a company
under Article 20 or in inspecting the operation and financial
conditions of a company under the preceding Article, the competent
authority may order the company to present evidential documents,
vouchers, books and statements and other relevant information, but
shall, unless otherwise provided for by law, keep the same as
confidential information; and shall complete the examination and
return the same to the company within fifteen days after its receipt
thereof.
II.The responsible of a company who has violated the provisions of the
preceding Paragraph by refusing to provide such information shall be
imposed with a fine of not less than NT$ 20,000 but not more than
NT$ 100,000. For successive act in terms of refusing to provide the
information required, the company shall be imposed in each case a
fine of not less than NT$ 40,000 but not more than NT$ 200,000. |
| Article 23 | I.The responsible person of a company shall have the loyalty and shall
exercise the due care of a good administrator in conducting the
business operation of the company; and if he/she has acted contrary
to this provision, shall be liable for the damages to be sustained
by the company there-from.
II.If the responsible person of a company has, in the course of
conducting the business operations, violated any provision of
the applicable laws and/or regulations and thus caused damage to
any other person, he/she shall be liable, jointly and severally,
for the damage to such other person. |
| Article 24 | A dissolved company shall be liquidated, unless such dissolution is
caused by consolidation or merger, split-up, or bankruptcy. |
| Article 25 | A dissolved company in the process of liquidation shall be deemed as
not yet dissolved. |
| Article 26 | A dissolved company as referred to in the preceding article may, during
the period of liquidation, temporarily transact its business for the
purpose of settling pending affairs and facilitating the liquidation. |
| Article 26-1 | Where the official registrations of a company are cancelled or invalidated
by the central competent authority, the provisions set out in the preceding
three Articles shall apply mutatis mutandis. |
| Article 27 | I.Where a government agency or a juristic person acts as a shareholder
of a company, it may be elected as a director or supervisor of the
company provided that it shall designate a natural person as its
proxy to exercise, in its behalf, the duties of a shareholder.
II.Where a government agency or a juristic person acts as a shareholder
of a company, its authorized representative may also be elected as a
director or supervisor of the company; and if there is a plural
number of such authorized representatives, each of them may be so
elected.
III.Any of the authorized representatives of a company referred to in
Paragraphs I and II of this Article may, owing to the change of
his/her functional duties, be replaced by a person to be authorized
by the company so as to fulfill the unexposed term of office of the
predecessor.
IV.Any restriction placed upon the power or authority of the authorized
representatives set forth in Paragraph I and Paragraph II of this
Article shall not be set up as a defence against any bona fide third
party. |
| Article 28 | Any and all public announcements to be made by a company shall be
published in a conspicuous place on a daily newspaper circulating in
the municipality or county (city) wherein the company is located,
except for the public offering companies subject to the provisions
otherwise stipulated by the securities and exchange control authority. |
| Article 28-1 | Where service of any official document which should be served to a
company can not be executed for any reason, such official document may
be served on the responsible person of the said company. If the
service still can not be executed, a public notice of such official
document may be made instead. |
| Article 29 | I.A company may have one or more managerial personnel in accordance
with its articles of incorporation. Appointment and discharge and
the remuneration of the managerial personnel shall be decided in
accordance with the following provisions provided, however, that if
there are higher standards specified in the articles of
incorporation, such higher standards shall prevail:
1.In the case of an unlimited company or an unlimited company with
limited liability shareholders, it shall be decided by a majority
of all shareholders with unlimited liability;
2.In the case of a limited company, it shall be decided by a
majority of all shareholders;
3.In the case of a company limited by shares, it shall be decided
by a resolution to be adopted by a majority vote of the directors
at a meeting of the board of directors attended by at least a
majority of the entire directors of the company.
II.A managerial personnel shall have a residence or domicile within
the territory of the Republic of China. |
| Article 30 | A person who is under any of the following circumstances shall not act
as a managerial personnel of a company. If he has been appointed as
such, he shall certainly be discharged:
1.Having committed an offence as specified in the Statute for
Prevention of Organizational Crimes and subsequently adjudicated
guilty by a final judgment, and the time elapsed after he has served
the full term of the sentence is less than five years;
2.Having committed the offence in terms of fraud, breach of trust or
misappropriation and subsequently punished with imprisonment for a
term of more than one year, and the time elapsed after he has served
the full term of such sentence is less than two years;
3.Having been adjudicated guilty by a final judgment for
misappropriating public funds during the time of his public service,
and the time elapsed after he has served the full term of such
sentence is less than two years;
4.Having been adjudicated bankrupt, and having not been reinstated to
his rights and privileges;
5.Having been dishonored for unlawful use of credit instruments, and
the term of such sanction has not expired yet; or
6.Having no or only limited disposing capacity. |
| Article 31 | I.The scope of duties and power of managerial personnel of a company
may, in addition to what are specified in the articles of
incorporation, also be defined in the employment contract.
II.A managerial personnel shall be empowered to manage the operation
of the company and to sign relevant business documents for the
company, subject to the scope of his/her duties and power as
specified in the articles of incorporation or his/her employment
contract. |
| Article 32 | A managerial personnel of a company shall not concurrently act as a
managerial personnel of another company, nor shall he/she operate,
for the benefit of his/her own or others, any business which is the
same as that of the company employs him/her, unless otherwise
concurred in by the company pursuant to the provisions of Paragraph
One, Article 29 hereof. |
| Article 33 | A managerial personnel shall not make any change or alteration in any
decision made by the directors or the executive shareholder(s), or any
resolution adopted by the shareholders' meeting or the board of
directors, or go beyond the scope of his/her duties and power when
exercising his/her functional duties. |
| Article 34 | A managerial officer who violates any provision of laws or ordinances,
or of Articles of Incorporation, or of the preceding article, thereby
causing loss or damage to the company, shall be liable to compensate
the company. |
| Article 35 | (deleted) |
| Article 36 | Any restriction imposed by a company on the duty and power of
managerial officers is not valid as defence against a bona fide
third person. |
| Article 37 | (deleted) |
| Article 38 | (deleted) |
| Article 39 | (deleted) |
Chapter II Unlimited Company
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Section I FORMATION
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| Article 40 | I.An unlimited company shall gave two or more shareholders, and at
least one half of them shall each have a domicile within the
territory of the Republic of China.
II.The shareholders of a company shall, by unanimous agreement,
draw up the articles of incorporation for the company and shall
affix their respective signatures or personal seals thereon.
The articles of incorporation shall be kept by the company, and
one duplicate thereof shall be held by each shareholder
respectively. |
| Article 41 | I.The articles of incorporation of an unlimited company shall contain
the following particulars:
1.The name of the company;
2.The scope of business to be conducted;
3.The name, domicile or residence of each shareholder;
4.The total amount of capital stock and the equity capital
contributed by each shareholder;
5.The form, quantity, value or appraisal standards of the value
of the property other than cash contributed as equity capital
by shareholders, if any;
6.The ratio or standards for profit distribution and loss
apportionment among shareholders;
7.The location of the head office and the branch office(s), if any;
8.The name of the shareholder designated to represent the company,
if any;
9.The name of the shareholder(s) who is (are) designated to conduct
the business operations of the company, if any;
10.The cause of dissolution of the company, if defined; and
11.The date of execution of the articles of incorporation.
II.In case the articles of incorporation is not made available at the
head office of a company, the shareholder who is designated to
represent the company shall be imposed with a fine in an amount not
less than NT$ 10,000 but not more than NT$ 50,000. For consecutive
refusals to prepare and made available of the articles of
incorporation, a fine in an amount not less than NT$ 20,000 but not
more than NT$ 100,000 shall be imposed each time of such
consecutive violation. |
Section II INTERNAL RELATIONS OF A COMPANY
|
| Article 42 | The internal relations of a company, unless otherwise provided by law,
may be prescribed in the Articles of Incorporation. |
| Article 43 | A shareholder may contribute his capital in the form of goodwill,
service or other rights, provided that provisions in Article 41,
paragraph 1, item 5, be fulfilled. |
| Article 44 | A shareholder who contributes capital by assigning a monetary claim
which is not satisfied upon maturity, shall make good the loss and be
liable to compensate the company for any damage or loss in consequence
thereof. |
| Article 45 | I.Each shareholder shall have the right to conduct the business of
the company and be responsible thereof, but in case the Articles
of Incorporation provide for one of several of the shareholders
to conduct the business, then that provision shall prevail.
II.More than one-half of the shareholders who conduct the business as
mentioned in the preceding paragraph shall have domiciles within the
territory of the Republic of China. |
| Article 46 | I.When several or the whole body of shareholders are conducting the
business a company, then decisions shall be carried out by a
majority vote.
II.Each shareholder who conducts the business of a company may act
independently in all ordinary affairs, provided that in any matter
in which any one of the other shareholders who also conducts
company business objects, such objection shall be followed
immediately by stopping any further proceeding in the matter. |
| Article 47 | Any modification or alteration in the Articles of Incorporation of a
company shall be agreed upon by all of the shareholders. |
| Article 48 | Shareholders who do not conduct business may, at any time, require
shareholders who conduct business to furnish information on the
business condition of the company and examine its assets, documents,
books and statement. |
| Article 49 | A shareholder who conducts business shall not Clairemuneration
from the company unless there is special agreement to that effect. |
| Article 50 | I.Shareholder who advance money while conducting the business of the
company may demand from the company reimbursement and payment of
interest on the sum or sums thus advanced; where a debt is incurred
and such debt has not yet matured, he may request the company to
furnish appropriate security.
II.A shareholder who suffers loss or damage through no fault of his
own in the course of conducting business may claim compensation
from the company. |
| Article 51 | When the Articles of Incorporation provide for one or several of
the shareholders to conduct business, such shareholder or
shareholders shall not resign without cause nor can other
shareholders cause him or them to retire without cause. |
| Article 52 | I.A shareholder shall conduct business in accordance with laws and
ordinances, Articles of Incorporation, and decisions of the
shareholders.
II.A shareholder who acts in violation of the aforesaid provision
thereby causing loss or damage to the company, shall be liable
to compensate the company. |
| Article 53 | A shareholder who receives money on behalf of the company and does
not turn in the said sum within a reasonable period of time, or
appropriates the sum for his own use, shall repay the said money with
interest and compensate the company for any loss or damage sustained
thereby. |
| Article 54 | I.A shareholder, without the unanimous consent of all other
shareholders, shall not be a shareholder of unlimited liability
of another company or a partner in a partnership business.
II.A shareholder who conducts business of the company, shall not,
on his own account or on behalf of another, engage in the same
business as that of the company.
III.If a shareholder who conducts business of the company violates
the company on his own account or on behalf of another, he shall
not at the same time represent the company; however, the repayment
of debt to the company shall be excepted. |
| Article 55 | A shareholder, without the unanimous consent of all other shareholders,
shall not transfer to another person all or a part of his contribution
to the capital of the company. |
Section III EXTERNAL RELATIONS OF A COMPANY
|
| Article 56 | I.A company may, by its Article of Incorporation, designate one or
more shareholders to represent the company, and in the absence of
such a provision each shareholder may represent the company.
II.The provision of Article 45, Paragraph 2, shall apply mutatis
mutandis to the shareholder or shareholders who represent the
company. |
| Article 57 | A shareholder who represent the company shall have power to conduct
all affairs pertaining to the business of the company. |
| Article 58 | Any restriction imposed by the company power of representation
of a shareholder cannot be set up as a defence against a bona fide
third person. |
| Article 59 | When a shareholder who represents the company buys or sells, lends
or leases, or does any juristic act vis-a-vis the company on his
own account or on behalf of another, he shall not at the same time
represent the company; however, the repayment of debt to the company
shall be excepted. |
| Article 60 | When the assets of the company are not sufficient to meet its
liabilities, the shareholders shall be jointly liable. |
| Article 61 | Any one who becomes a shareholder of a company shall also be liable
for the liabilities of the company contracted prior to his being
shareholder. |
| Article 62 | Any one who is not a shareholder, but leads other to believe that he
is a shareholder, shall have the liabilities vis-a-vis a bona fide
third person as though he were a shareholder. |
| Article 63 | I.A company, unless losses have been covered, shall not make
distribution of surplus profit.
II.Responsible persons of the company, acting in violation of the
aforesaid provision, shall be severally subject to imprisonment
not exceeding one year, detention, or singularly or in addition
thereto a fine not exceeding NT$60,000. |
| Article 64 | A debtor of a company cannot set off his debt to the company against
his claim vis-a-vis a shareholder. |
Section IV WITHDRAWAL OF SHARES
|
| Article 65 | I.In case the continuance of existence of a company is not specified
in its articles of incorporation, and except that the rules for
withdrawal of share capital are otherwise established, any
shareholder of the company may withdraw his/her share capital
upon close of each fiscal year, provided that a six-month prior
notice of such intent in writing shall be given to the company.
II.A shareholder may, upon occurrence of a significant cause not
attributable to him/her, withdraw his/her share capital at any
time, regardless whether or not the continuance of existence of
the company has been specified in its articles of incorporation. |
| Article 66 | I.In addition to the cases mentioned in the preceding article, every
shareholder shall cease to be one under any of the following
circumstances:
1.The occurrence of a condition for withdrawal of shares stipulated
in the Article of Incorporation;
2.Death;
3.Bankruptcy;
4.Adjudication of interdiction;
5.Expulsion; and
6.Compulsory execution of the shareholder's contribution to the
capital by the court.
II.Where a shareholder shall cease to be one under item 6 of the
preceding Paragraph, the execution court shall notify the company
and other shareholders two months in advance of the compulsory
execution. |
| Article 67 | A shareholder may, by unanimous agreement of all other
shareholders, be expelled under any of the following circumstances:
1.Inability to contribute the capital which should have been
contributed or failure to do so despite repeated demand;
2.Violation of the provisions of Article 54 Paragraph 1;
3.Improper conduct detrimental to the interest of the company; and
4.Failure to attend to important duties of the company; however, such
expulsion shall not be valid in respect of such a shareholder until
after due notice has been given. |
| Article 68 | If the name of a company contains the surname or a full name of
a shareholder, such shareholder may, upon withdrawal of his shares,
request the company to discontinue the use of his name. |
| Article 69 | I.The settlement of account of a retiring shareholder shall be based
on the financial condition of the company at the time of his
withdrawal.
II.The contribution of the retiring shareholder shall, whatever the
nature of his contribution, be repaid in cash.
III.If, at the time of withdrawal, certain affairs of the company
have not yet been concluded, then allocation of a retiring
shareholder's share of profit and loss shall only be made after
the due conclusion of such affairs. |
| Article 70 | I.For withdrawal of share capital, a shareholder of a company shall
file an application for share capital withdrawal with the competent
authority for registration thereof, and shall, within two years
after such withdrawal registration, stay liable, jointly and
severally and without limitation, for the liabilities incurred
by the company.
II.The provisions set out in the preceding Paragraph shall apply
mutatis mutnadis, to the shareholder of a company withdrawing
his/her capital contribution. |
Section V DISSOLUTION, CONSOLIDATION OR MERGER AND REINCORPORATION
|
| Article 71 | I.A company shall be dissolved under any of the following
circumstances:
1.The occurrence of the conditions for dissolution stipulated
in the Articles of Incorporation;
2.The accomplishment or impossibility of accomplishment of the
purpose for which the company has been formed;
3.Unanimous agreement of all shareholders;
4.The reduction of the number of shareholders to a number below
the minimum required by this law;
5.Consolidation or merger with another company;
6.Bankruptcy; or
7.Order or judgment for dissolution.
II.In such cases as specified in items 1 and 2 of the aforesaid
paragraph, if all or a part of the shareholders agree to continue
the business, they may so continue, and those disagreed are deemed
to be retired.
III.In the case specified in Item 4 of Paragraph 1, new shareholders
may join the company to continue the business.
IV.In case of continuation of the business under the circumstances
specifies in the two preceding paragraphs, the Article of
Incorporation shall be modified. |
| Article 72 | A company may, with the unanimous agreement of all shareholders,
consolidate or merge with another company. |
| Article 73 | I.A company shall, upon adoption of a resolution to enter into
the process of company merger or consolidation, prepare a balance
sheet and an inventory of property.
II.A company shall, after having resolved to enter into the process
of company merger or consolidation, give a notice to each creditor
of the company as well as a public notice of such resolution, and
shall fix a time limit of not less than thirty (30) days within
which the creditors may raise their objections, if any, to such
resolution. |
| Article 74 | A company which fails to give the individual notice or the public
notice or to settle its liabilities with or to provide an appropriate
security for the claims of the creditors who have made objections
within the time limit fixed under the preceding Paragraph shall not
set up the company merger or consolidation resolution as a defence
against such creditors. |
| Article 75 | Rights and obligations of a company ceasing to exist after
consolidation or merger shall be assumed by the surviving or new
company. |
| Article 76 | I.A company may, with unanimous agreement of all shareholders,
change a part of its shareholders to shareholders with limited
liability or admit shareholders of limited liability and
reincorporate it into an unlimited company with limited
liability shareholders.
II.The provisions of the aforesaid paragraph shall mutatis mutandis
apply to a company continuing business in accordance with the
provisions of Article 71, Paragraph 3. |
| Article 77 | The provisions of Article 73 to 75 shall mutatis mutandis apply to
the reincorporation of a company under the preceding article. |
| Article 78 | The shareholders who become shareholders of limited liability under
Article 76, Paragraph 1, shall still bear joint and unlimited
responsibility for the obligations which the company acquired prior
to its reincorporation, for a period of two years following
registration of such reincorporation. |
Section VI LIQUIDATION
|
| Article 79 | Unless otherwise provided in this law or in the Articles of
Incorporation of unless liquidators are otherwise appointed by a
resolution adopted by the shareholders, liquidation of a company shall
be undertaken by all of its shareholders. |
| Article 80 | In the event of death of a member of the shareholders during a
time of liquidation undertaken by all of them, participation of the
deceased in the liquidation shall be undertaken by his successor.
In there are several successors one of them shall be nominated from
among themselves. |
| Article 81 | In case a liquidator or liquidators cannot be determined in
accordance with the provisions of Article 79, the court may, upon
application by a concerned party, appoint a liquidator or liquidators. |
| Article 82 | The court may, if it deems it necessary, upon the application of a
concerned party, remove the liquidator; however, a liquidator chosen
by shareholders may also be removed by a majority vote of the
shareholders. |
| Article 83 | I.A liquidator shall, within fifteen days after having assumed
office, file a report to the court, setting forth his name, domicile
or residence, and the date on which he assumed office.
II.The removal of a liquidator shall be reported to the court by
the shareholders within fifteen days.
III.When a liquidator is appointed by the court, public announcement
shall be made, and the same procedure shall be followed when a
liquidator is removed.
IV.A person who fails to comply with the time-limit for filing a report
as provided for in Paragraph 1 or Paragraph 2 shall be subject to a
fine of not less than NT$3,000, but no more than NT$15,000. |
| Article 84 | I.The duties of a liquidator are as follows:
1.To wind up all pending business;
2.To collect all outstanding debts and to pay off all claims;
3.To allocate surplus or loss; and
4.To allocate the residual assets.
II.The liquidator in performing the aforesaid duties shall have the
power to act on behalf of the company in all litigation matters;
however, the transfer of the business including assets and
liabilities to others shall be effected only if all shareholders
so concur. |
| Article 85 | In case of more than one liquidator, one or more may be selected
to represent the company. If no one is so selected, each shall have
the power to represent the company toward a third person. The
execution of liquidated affairs shall be decided by a majority of
liquidators. Liquidators selected to represent the company shall, by
mutatis mutandis application of the provision of Article 83,
paragraph 1, file a report to the court. |
| Article 86 | Any restriction imposed upon the power of representation of a
liquidator shall not be asserted as a defense against a bona
fide third person. |
| Article 87 | I.The liquidators shall, forthwith upon assuming the office, examine
the financial condition of the company and prepare a balance and an
inventory of property, and shall deliver the same to all
shareholders for their review.
II.Any person who impedes, refuses or evades the examination to be
conducted under the provisions of the preceding Paragraph shall be
imposed with a fine in an amount not less than NT$ 20,000 but not
more than NT$ 10,000.
III.The liquidators shall complete the examination within a period
of six months; and if the examination can not be completed within
the foregoing six month, an application, with good cause shown
therein, for extension of the deadline date may be filed with the
competent court by the liquidators.
IV.The liquidators who failed to complete the examination within the
time limit fixed in the preceding Paragraph shall each be imposed
with a fine in an amount not less than NT$ 10,000 but not more
than NT$ 50,000.
V.The liquidators shall, upon request made by any shareholder at
any time or from time to time, provide the current status of progress
of the liquidation process.
VI.The liquidators who failed to comply with the provision set out in
the preceding Paragraph shall be imposed a fine in an amount not
less than NT$ 10,000 but not more than NT$ 50,000. |
| Article 88 | The liquidators shall by public announcement, after having assumed
office, call the creditors to make statements of claims and send
notice to known creditors. |
| Article 89 | I.Where the aggregate of the assets of a company is insufficient
to satisfy its liabilities, the liquidators shall file an
application for declaration of bankruptcy.
II.The functional duties of liquidators shall terminate upon
transfer of the matters transacted by them to the receiver in
bankruptcy.
III.The liquidators who violated the provision set out in Paragraph
One of this Article by failing to apply for declaration of
bankruptcy shall each be imposed with a fine in an amount not
less than NT$ 20,000 but not more than NT$ 100,000. |
| Article 90 | I.The liquidators shall not allocate the assets of the company
to the shareholders until all liabilities of the company have
been discharged.
II.The liquidators who allocate assets of the company in
violation of the aforesaid provision shall be severally
subject to imprisonment for a period not exceeding one year,
detention or, singularly or in addition thereto, a fine not
exceeding NT$60,000. |
| Article 91 | The distribution of residual assets, unless otherwise provided
for in the Article of Incorporation, shall be based on the ratio of
net contribution of such shareholder after allocation of profit or
loss. |
| Article 92 | The liquidators shall, within fifteen days after winding up the
company, draw up a final statement to be submitted to shareholders
for approval. The shareholders shall be deemed to have given approval,
if no objection is raised within one month after having received the
said statement; however, unlawful conduct on the part of the
liquidators shall be excepted. |
| Article 93 | I.The liquidators shall, within fifteen days after completing of
the liquidation and presentation of a report to shareholders for
approval, file a report with the court.
II.Liquidators who violate the aforesaid time-limit for filing a
report, shall be severally subject to a fine of not less than
NT$3,000, but not more than NT$15,000. |
| Article 94 | The account books, statements and documents relating to business and
liquidation affairs of the company shall be kept for a period of ten
years from the date of filing a report to the court after completion of
liquidation, and the custodian of the aforesaid materials shall be
appointed by a majority of the shareholders. |
| Article 95 | The liquidators shall perform their duties with care of a good
administrator. In case of any loss or damage to the company in
consequence of their lack of care, they shall be jointly liable to
make good such loss or damage to the company; and if due to any
intentional act or gross negligence, they shall in addition be
jointly liable to make good such loss or damage to any third person. |
| Article 96 | The joint and unlimited liability of the shareholders shall terminate
five years after filing articles of dissolution. |
| Article 97 | The relation between liquidators and a company shall, unless otherwise
provided in this law, be determined in accordance with the provision
contained in the Civil Code pertaining to mandate. |
Chapter III Limited Company
|
| Article 98 | I.A limited company shall be organized by one or more shareholders.
II.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. |
| Article 99 | The liability of shareholders to the company shall be
limited to the extent of the capital contributed by each
of them. |
| Article 100 | I.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.
II.The minimum amount of the capital stock of a limited company shall
be fixed by the central competent authority per its directive. |
| Article 101 | I.The articles of incorporation of a limited company shall contain
the following particulars:
1.The name of the company;
2.The scope of business to be operated by the company;
3.The name, domicile or residence of each shareholder;
4.The aggregate of capital stock and the capital contribution made
by each shareholder;
5.The ration or standards for profit distribution and loss
apportionment among all shareholders;
6.The location of the head office and the branch office(s), if any;
7.The number of directors;
8.The causes of dissolution of the company, if any; and
9.The date of establishment of the articles of incorporation.
II.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 not
less than NT$ 10,000 but not more than NT$ 50,000. For successive
refusals to make available the articles of incorporation as
required, the amount of fine shall be increased to an amount not
less than NT$ 20,000 but nor more than NT$ 100,000 upon each
successive refusal. |
| Article 102 | I.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.
II.In case the government or a juristic person becomes a shareholder,
the provisions in Article 181 shall mutais mutandis apply. |
| Article 103 | I.A limited company shall keep at its head office a shareholders
roster, which shall contain the following particulars:
1.The amount of capital contribution made by each shareholder,
and the serial number of the share certificate issued to him/her;
2.The name or title, domicile or residence of each shareholder; and
3.The date of payment of share equity by each shareholder.
II.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. For successive refusals to make the shareholders
roster available at the company, the amount of the fine shall be
increased to not less than NT$ 20,000 but not more than
NT$ 1000,000 for each successive refusal. |
| Article 104 | I.A company shall, after having been incorporated, issue certificates
of amounts contributed setting forth the following particular:
1.The name of the company;
2.The date of incorporation;
3.The full name or title of the shareholder and the amount of his
contribution to capital; and
4.The date of issue of the certificate of amount contributed.
II.The provisions of Article 162, Paragraph 2, proviso to Article 163,
Paragraph 1 and Article 165 shall mutatis mutandis apply to
certificates of amounts contributed. |
| Article 105 | The certificate of capital contributions to be issued by the company
shall be affixed with the signatures or personal seals of all
shareholders. |
| Article 106 | I.Increase of the amount of capital stock of a limited company shall
be concurred in by a majority 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.
II.The shareholders of a limited company who disagree with the capital
increase proposal set forth in the preceding Paragraph shall be
deemed to be in agreement with the portion of amendment made in
the articles of incorporation in respect to such capital increase.
III.Under the circumstance set forth in the proviso of Paragraph
One of this Article, new shareholders may be allowed to join
the company with an unanimous agreement of all existing
shareholders.
IV.Subject to an unanimous agreement of all shareholders, a limited
company may effect a capital reduction project or convert its
organization into a company limited by shares. |
| Article 107 | I.After the company has adapted a resolution for the change of
organization, it shall immediately notify each of its creditors
and make a public announcement.
II.A company, after the change of organization, shall accept the
debt owned by it prior to its change of organization. |
| Article 108 | I.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
all the shareholders. When there are several directors, one of
them shall be designated, in the articles of incorporation, to
act as the chairman of directors and to represent the company
externally.
II.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.
III.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
a majority of all shareholders.
IV.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 Article 211 of
this Law shall apply mutatis mutandis to the directors of a
limited company. |
| 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. |
| Article 110 | I.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 Law and shall send the same to
each of the shareholder for their approval.
II.If no objection is raised by any shareholder over a period one
month after the annual reports and financial statements referred
to in the preceding Paragraph have been duly served to the
shareholders, they shall be deemed to have been approved by all
shareholders.
III.The provisions set out in Articles 231 through 233, Article 235,
and Paragraph One of Article 245 of this Law shall apply mutatis
mutandis to a limited company. |
| Article 111 | I.A shareholder shall not, without the consent of a majority of
all other shareholders, transfer all or part of his contribution
to the capital of the company to another person or persons.
II.The shareholders who disagree with the transfer as mentioned in the
preceding paragraph, 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.
III.The directors shall not, without the unanimous consent of all
other shareholders, transfer all or part of their contribution to
the capital of the company to another person or persons.
IV.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
1 or Paragraph 3. 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. |
| Article 112 | I.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.
II.Aside from the aforesaid legal reserve, a company may, by the
provisions of its Articles of Incorporation or with the
unanimous agreement of all shareholders, appropriate another
sum as a special reserve.
III.Responsible persons of a company who fail to set aside a legal
reserve in violation of the provisions in Paragraph 1, shall be
severally subject to a fine not exceeding NT$60,000. |
| Article 113 | For modification of articles of incorporation, consolidation or
merger, dissolution and liquidation of a company, the relevant
provisions of the unlimited company shall apply. |
Chapter IV UNLIMITED COMPANY WITH LIMITED LIABILITY SHAREHOLDERS
|
| Article 114 | I.An unlimited company with limited liability shareholders shall be
organized by shareholders of unlimited liability and shareholders
limited liability.
II.Shareholders of unlimited liability shall bear joint unlimited
liability for obligations of the company, and shareholders of
limited liability shall be liable to the company only to the extent
of the capital contributed by them. |
| Article 115 | The provisions of Chapter II shall mutatis mutandis apply to an
unlimited company with limited liability shareholders unless otherwise
provided for in this chapter. |
| Article 116 | The Articles of Incorporation of an unlimited liability with limited
liability shareholders shall, in addition to particulars set forth in
Article 41, state the liability of each shareholder whether unlimited
or limited. |
| Article 117 | A shareholder of limited liability cannot contribute his capital in
the form of goodwill or service. |
| Article 118 | I.Any shareholder with limited liability may, upon close of each
fiscal year, examine the accounting books and records, the
current condition of the business operations and the property
of a limited company; and when it is deemed necessary, the court
may, at the request of the shareholders with limited liability,
allow them to examine at any time the accounting books and records,
and the conditions of the business operations and the property of
the company.
II.Any person who impedes, refuses or evades the examination set
forth in the preceding Paragraph shall be imposed with a fine in
an amount not less than HT$ 20,000 but not more than NT$ 100,000.
For successive impeding, refusing or evading acts, if any, the
amount of fine shall be increased for each successive impeding,
refusing or evading act to not less than NT$ 40,000 but not more
than NT$ 200,000. |
| Article 119 | I.A shareholder of limited liability shall not, without the consent
of a majority of shareholders of unlimited liability, transfer all
or part of his contribution to the capital of the company to an
other person or persons.
II.The provisions of Article 111, Paragraph 2 and 4, shall mutatis
mutandis apply to the transfer of contribution specified in the
preceding paragraph. |
| Article 120 | A shareholder of limited liability may engage in the same business
as that of the company either on his own account or on behalf of
another and may also become a shareholder of unlimited liability in
another company or a partner in partnership business. |
| Article 121 | A shareholder of limited liability who leads others to be believe
that he is a shareholder of unlimited liability, shall be liable to
bona fide third person as though he were a shareholder of unlimited
liability. |
| Article 122 | A shareholder of limited liability can neither conduct the business
of the company nor represent the company in its external affairs. |
| Article 123 | I.A shareholder of limited liability may not withdraw his
contribution to the capital by reason of an adjudication
of interdiction.
II.Upon the death of a shareholder of limited liability, his
contribution to the capital shall devolve upon his successors. |
| Article 124 | A shareholder of limited liability may withdraw his shares due
to some serious cause for which he is not personally responsible
with the consent of a majority of the shareholders of unlimited
liability, or he may apply to the court for sanction to withdraw. |
| Article 125 | I.A shareholder of limited liability may, with the unanimous agreement
of all shareholders of unlimited liability, be expelled under any
of the following circumstances:
1.Non-performance of his obligation to contribute his capital share;
or
2.Improper conduct detrimental to the interest of the company.
II.The aforesaid expulsion shall not be valid in respect to such
shareholder until after due notice shall have been given to him. |
| Article 126 | I.A company shall be dissolved upon the withdrawal of all shareholders
of unlimited liability or of limited liability; however, the
remaining shareholders may, with unanimous agreement, join with
either shareholders of unlimited liability or shareholders of
limited liability to continue the business.
II.When all shareholders of limited liability withdraw as aforesaid,
two or more shareholders of unlimited liability may, with unanimous
agreement, reincorporate the company into an unlimited company.
III.When shareholders of unlimited liability and shareholders of
limited liability unanimously agree to reincorporate the company
into an unlimited company, it shall be done in accordance with
the provisions of the preceding paragraph. |
| Article 127 | Liquidation shall be undertaken by all shareholders of unlimited
liability, provided that liquidators may be otherwise appointed by
a resolution adopted by a majority of the shareholders of unlimited
liability; the same shall apply to the discharge of such liquidators. |
Chapter V Company Limited by Shares
|
SECTION I INCORPORATION
|
| Article 128 | I.A company limited by shares shall have two or more promoters.
II.Any person without disposing capacity or with limited disposing
capacity is not qualified as a promoter.
III.Any government agency or any juristic person may become a
promoter provided that the juristic person which acts as a
promoter shall be limited to that organized in the form of a
company. |
| Article 128-1 | I.A company limited by shares which is organized by a single
government shareholder or a single juristic person shareholder
shall be free from restrictive requirement set out in Paragraph
One of the preceding Article. The functional duties and power
of the shareholders' meeting of such company shall be exercised
by its board of directors, to which the provisions governing the
shareholders' meeting as set out in this Law shall not apply.
II.The directors and supervisors of the company referred to in
the preceding Paragraph shall be appointed by such government
shareholder or juristic person shareholder. |
| Article 129 | I.The promoters of a company limited by shares shall draw up the
articles of incorporation containing the following particulars
and shall affix thereon their respective signatures or personal
seals:
1.The name of the company;
2.The scope of business to be operated by the company;
3.The total number of shares and the par value of each share
certificate;
4.The location of the company;
5.The number of directors and supervisors, and the term of their
respective offices; and
6.The date of establishment of the articles of incorporation. |
| Article 130 | I.The following matters shall not take effect, unless they are
stipulated in the articles of incorporation:
1.Establishment of branch office;
2.The number of shares to be issued upon incorporation of the
company, if the total authorized number of shares are to be
issued in installments;
3.The cause(s) for dissolution of the company, if any:
4.The kind of special shares and the rights and obligations covered
by such shares; and
5.Special benefits to be accorded to promoters, and the name of
such beneficiaries.
II.The shareholders' meeting may make change of the special benefits
accordable to promoters under the provision set out in Item 5 of
the preceding Paragraph provided that such change shall not result
in any prejudice to the benefits already accrued to the promoters. |
| Article 131 | I.The promoters, after having subscribed in the first issue to the
total number of shares, shall make full payment for the numbers
of shares respectively subscribed to, and elect directors and
supervisors.
II.The provisions of Article 198 shall apply mutatis mutandis to the
aforesaid election.
III.The payment for shares as mentioned in the first paragraph may be
made in assets required in the business of the company. |
| Article 132 | I.In case the promoters have not subscribed to the total number of
shares in the first issue, the remainder shares shall be subscribed
to by solicitation.
II.When the aforesaid subscription to shares is to be solicited,
special shares may be issued in accordance with the provisions
of Article 157. |
| Article 133 | I.The promoters, when publicly soliciting subscriptions to shares,
shall first have the following documents and information prepared,
and then file the same along with an application to the authority
in charge of securities exchange for examination and approval:
1.Business plan;
2.Full names and resumes of the promoters, and the number of shares
subscribed, and the kind of contribution;
3.Prospectus;
4.Names and locations of banks or post offices authorized to
collect payment for shares subscribed;
5.Names of underwriters or agents, if any, and the covenants between
the promoters and such underwriters or aor or agents; and
6.Other matters as may be prescribed by the authority in charge of
securities exchange.
II.The total number of shares subscribed by the aforesaid promoters
shall not be less than one-fourth of the total number of shares in
the first issue.
III.Within thirty days after receiving a notice from the authority in
charge of securities exchange, all documents and information
specified in various items of Paragraph 1 of this Article shall be
annotated with the reference number and date of the approval
letter and publicly announced provided, however, that the
covenants referred to in Item 5 of the Paragraph 1 may be exempt
from public announcement. |
| Article 134 | Banks or post offices authorized to collect payments for shares
subscribed to shall have the obligation to certify the amount of
money received, and the amount so certified shall be deemed as the
capital money already received. |
| Article 135 | I.Upon finding either of the following discrepancies in an
application for public offering of shares, the authority in
charge of securities may disapprove the application or may
revoke its approval previously granted to the applicant:
1.Where any statement made in the application is found to be
contrary to the applicable laws and/or regulations or to be
false; or
2.Where there is any change in the matters described in the
application; and no correction thereto has been made within a
given time limit after having been required to do so.
II.Under the circumstance set forth in Item 2 of the preceding
Paragraph, the authority in charge of securities may impose on
each of the promoters a fine in an amount not less than NT$ 20,000
but not more than NT$ 100,000. |
| Article 136 | I.In case of annulment of approval in accordance with the preceding
articles, the solicitation shall be cancelled if not yet in
progress.
II.If solicitation is already in progress, persons so drafted may
demand a refund of the original issuing value of shares plus
interests thereon to be calculated at the legal rate. |
| Article 137 | The prospectus shall state the following particulars:
1.Particulars set forth in Article 129 and Article 130;
2.Number of shares subscribed to by each of the promoters;
3.If share certificates are issued above par value, the issuing value;
4.The time-limit for full subscription by solicitation and the
statement that if the shares are not subscribed in full within
such time-limit, the subscribers may rescind their subscription;
5.In case special shares are issued, the total amount of such shares
and the matters specified in various items of Article 157; and
6.In case bearer shares are issued, the total number of such shares. |
| Article 138 | I.The promoters shall prepare a share subscription form indicating
therein the matters required in Paragraph One, Article 133 and the
reference number and the date of the approval letter given by the
authority in charge of securities, and shall make such form
available to the subscribers for them to fill in the number and
amount of the shares to be subscribed and their respective domiciles
or residences, and to affix thereon their respective signatures or
personal seals.
II.In case the share certificates are issued at a premium, the
subscribers shall indicate in the share subscription form the
amount of share price they agree to pay.
III.In the event the promoters violate the provisions of Paragraph
One of this Article by failing to prepare and make available
the share subscription forms, the authority in charge of
securities shall impose on them a fine in an amount not less
than NT$ 10,000 but not more than NT$ 50,000. |
| Article 139 | Subscribers shall have the obligation to pay for the shares they
have subscribed to in the subscription form. |
| Article 140 | The issue price of share certificates shall not be less than the par
value thereof, unless otherwise provided for by the authority in
charge of securities for the companies offering their respective
share certificates to the public. |
| Article 141 | When the total number of shares in the first issue has been subscribed
to in full, the promoters shall immediately press each of the
subscribers for payment. Where share certificates are issued above the
par value thereof, the amount in excess of such value shall be
collected at the same time with the payment for shares. |
| Article 142 | I.Where subscriber delays payment for shares as provided in the
preceding article, the promoters shall fix a period of not less
than one month and call upon each subscriber to pay up, declaring
that in case of default of payment within the stipulated period
their right shall be forfeited.
II.After the promoters have made the aforesaid call, the subscribers
who fail to pay accordingly shall forfeit their rights and the
shares subscribed to by them shall be otherwise sold.
III.Under the aforesaid circumstances, compensation for loss or
damage, if any, may still be claimed against such defaulting
subscribers. |
| Article 143 | After the share price payable by all subscribers under the preceding
Article has been fully paid up, the inaugural meeting of the company
shall be convened by the promoters within two months. |
| Article 144 | The provisions of Article 172, Paragraphs 1, 3 and 6, Article 174
to 179, Article 181, and Article 183 shall apply mutatis mutandis
to the procedure and resolutions of the inaugural meeting; however,
in the election of directors and supervisors, the provisions of
Article 198 shall apply mutatis mutandis. |
| Article 145 | I.At the inaugural meeting of the company, the following matters shall
be reported by the promoters:
1.The articles of incorporation;
2.The roster of shareholders;
3.The total number of shares issued;
4.The name of subscribers and the kinds, quantities, values or
appraisal standards of the property other than cash provided by
subscribers as their capital contributions, if any;
5.The incorporation costs to be borne by the company, and the
remuneration payable to promoters;
6.The total number of special shares, if any, to be issued; and
The roster of directors and supervisors of the company,
which roster shall indicate the domiciles or residences, the
serial number of ID Cards or the reference number of the status
certificates issued by the government of them.
II.Upon finding of any false statements in the report made under
the preceding Paragraph, the promoters shall each be imposed with
a fine in an amount not than NT$ 60,000. |
| Article 146 | I.At the inaugural meeting of a company, election of the directors
and supervisors shall be effected. The directors and supervisors
elect shall, upon election, immediately investigate the accuracy
of the matters reported by promoters under the preceding Article,
and shall report to the inaugural meeting of the investigation
results.
II.Where any promoter is elected a director or a supervisor who has
a personal interests in the matters subject to investigation,
then the inaugural meeting shall elect another person as the
substitute of said promoter to perform the investigation.
III.If anything contained in the promoters report is found excessive
or false in the course of investigation conducted under the
preceding two Paragraphs, appropriate cut-off or reduction shall
be made by the inaugural meeting;
IV.If any promoter impedes the investigation, or if any director,
supervisor or investigator makes false report, he/she shall be
imposed with a fine in an amount not more than NT$ 60,000;
V.Upon request of the directors, supervisors or investigators for
extension of the deadline date for submission of the investigation
report under either of the provisions of the preceding two
Paragraphs, the inaugural meeting may decide, by applying the
provisions of Article 182 of this Law mutatis mutandis, to postpone
or to reconvene the inaugural meeting. |
| Article 147 | The inaugural meeting may curtail the remuneration given or special
privileges accorded to the promoters and expense incurred in the
incorporation of the company, if any is found excessive. If the
payment on shares other than in cash is overestimated in value, the
inaugural meeting may reduce the number of shares to be given or
order the subscriber to make up for the deficiency. |
| Article 148 | All shares in the first issue, which have not been subscribed to
and those which, though subscribed, have not been paid for, shall
be subscribed and paid for the promoters jointly and severally.
The same shall apply to those shares which have been subscribed but
eventually rescinded. |
| Article 149 | In the circumstances specified in Article 147 and Article 148,
the company may claim against the promoters for compensation for
loss or damage, if any. |
| Article 150 | In the event that a company be formed, the promoter shall be jointly
and severally responsible for the consequence of their acts in forming
the company and all expenses incurred. The same shall apply to that
portion of the expenses which were curtailed on account of being
excessive. |
| Article 151 | I.The initiation meeting may amend the Articles of Incorporation or
resolve not to incorporate the company.
II.The provisions of Article 277, Paragraphs 2 through 4 shall
apply, mutatis mutandis, to the aforesaid amendment of Articles
of Incorporation; and the provisions of Article 316 shall apply,
mutatis mutandis, to the aforesaid resolution not to incorporate
the company. |
| Article 152 | Where three months have elapsed after the total number of shares
in the first issue has been contributed but the payment for which
has not been fully met, or, where the payment has been fully met but
the promoters have not called the inaugural meeting within two
months, the subscribers may rescind their subscription. |
| Article 153 | After the conclusion of the inaugural meeting, no subscriber may
rescind his subscription. |
| Article 154 | The liability of shareholders to the company shall be limited to
payment in full of the shares they have subscribed. |
| Article 155 | I.The promoters shall be jointly and severally liable to the company
for compensation for loss or damage in consequence of an neglect
on their part in the performance of their duties connected with
the formation of the company.
II.The promoters shall, even after incorporation, be jointly and
severally liable for debts of the company incurred prior to
incorporation. |
SECTION II SHARES
|
| Article 156 | I.The capital of a company limited by shares shall be divided into
shares, and each share shall have the same par value. A portion
of the shares may be designated as special shares, with the kind
of such special shares to be specified in the articles of
incorporation.
II.The total number of shares as classified under the preceding
Paragraph may be issued in installments, provided that the
number of shares to be issued in the initial issue shall not
be less than one-forth of the total number of shares.
III.The minimum amount of capital stock of a company limited by
shares shall be determined by the central competent authority
per its directive.
IV.A company may, in pursuance of the resolution adopted by its
board of directors, apply to the authority in charge of
securities for an approval of public issuance of its shares.
However, in the case of a government owned company, the
public issuance of its shares shall require a special approval
of the authority in charge of such enterprise.
V.Equity capital to be contributed other than cash by shareholders
may be in the form of monetary credit extended to the company,
or the technical know-how or good-will required by the company
provided, however, that the amount of such substitutive
capital contribution shall require a prior approval of the
board of directors, without being subject to the requirement
set out in Article 272 hereof.
VI.After its incorporation, the company may, pursuant to a
resolution adopted by a majority vote of the shareholders at
a meeting of the board of directors attended by two-thirds or
more of all the directors, issue new shares and use the share
equity so raised as the consideration payable by the company
for its acquisition of another company, without being subject
to the requirements set out respectively in the proviso of
Paragraph II of this Article 156; Paragraphs One through Three,
Article 267; and Paragraph Two, Article 278 of this Law.
VII.For shares to be issued at the same time and under the same
conditions of issuance, the par value thereof shall be unified,
unless otherwise provided for by the authority in charge of
securities in respect of the shares to be issued by companies
whose shares are issued in public. |
| Article 157 | Where a company is to issue special shares, it shall include in its
Articles of Incorporation provisions concerning:
1.Order, fixed amount or fixed ratio of allocation of dividends and
bonus on special shares;
2.Order, fixed amount or fixed ratio of allocation of surplus assets
of the company;
3.Order of or restriction on or no voting right on the exercise of
voting power by special shareholders; and
4.Other matters concerning rights and obligations incidental to
special shares. |
| Article 158 | All special shares issued by a company shall be redeemable out of
surplus profits or proceeds realized from issue of new shares,
provided that the privileges accorded to special shareholders by
the Articles of Incorporation shall not be impaired. |
| Article 159 | I.In case a company has issued special shares, any modification or
alteration in the Articles of Incorporation prejudicial to the
privileges of special shareholders shall be adopted in a resolution
by a majority of the shareholders present who represent two-thirds
or more of the total number of its outstanding shares and shall
also be adopted by a meeting of special shareholders.
II.For a company whose share certificates have been publicly issued,
if the total number of shares represented by shareholders attending
a shareholders' meeting is not sufficient to meet the criteria as
specified in the preceding paragraph, the said resolution may be
adopted by a large majority representing two thirds of the votes at
a shareholders' meeting attended by shareholders representing a
majority of the total number of issued shares, and a favorable
resolution to be adopted by a meeting of special shareholders
shall be also be required.
III.In case stricter criteria for the total number of shares
represented by the attending shareholders and the number of
votes at the shareholders' meetings referred to in the
preceding two paragraph are specified in the Articles of
Incorporation of a company, such stricter criteria shall
govern.
IV.The provisions governing shareholders' meetings shall apply. |
| Article 160 | I.Where there are several persons owning the same share or shares,
such co-owners shall select one of them for the exercise of their
shareholders rights.
II.The co-owners of a share shall be jointly and severally liable
to the company to pay for the share so owned. |
| Article 161 | I.A company shall not issue share certificates, unless it has completed
the procedure for incorporation registration or for company alteration
registration as required for issuance of new shares. However, this
clause shall not apply to the companies whose share certificates are
to be issued under the provisions otherwise provided for by the
authority in charge of securities.
II.Share certificate issued in violation of the provisions set out in
the preceding Paragraph shall be null and void. However, holders
of such share certificates may claim for damages against the
issuers of such share certificates. |
| Article 161-1 | I.When the total amount of capital stock of a company aggregates
or exceeds the amount specifically fixed by the central
competent authority, the company shall, within three months
after having completed the procedures for company incorporation
registration or for company alteration registration as required
for issuance of new shares, issue its capital shares.
Any company with a total amount of capital stock of less than
the amount specifically fixed by the central competent authority
shall not issue any share certificate, unless otherwise provided
for in its articles of incorporation.
II.The responsible persons of a company who violate the provisions
set out in the preceding Paragraph for failing to issue share
certificates shall be ordered by the competent authority to effect
the issuance of share certificate within a given time limit, and
each of them shall further be subject to a fine in an amount not
less than NT$ 10,000 but not more than NT$ 50,000; and upon failure
to comply with the said order, they shall be ordered again to issue
the share certificates within another given time limit and in
addition thereto, each of them shall be subject to a fine in an
amount not less than NT$ 20,000 but not more than NT$ 100,000.
The foregoing penal clause for the second violation may be
enforced successively each time against any further violation
thereafter until the time the issuance of share certificates is
effected as required. |
| Article 162 | I.Share certificates shall be assigned with serial numbers, shall
indicate thereon the following particulars, shall be affixed with
the signatures or personal seals of three or more directors of the
issuing company, and shall be duly certified or authenticated by
the competent authority or a certifying institution appointed by
the competent authority before issuance thereof:
1.The name of the company;
2.The date of incorporation registration, or the date of company
alteration registration for issuance of new shares;
3.The total number of shares issued and the par value per share;
4.The number of shares issued this time;
5.The words "share certificates of promoters" shall be marked on
the share certificates to be issued to promoters;
6.In the case of special share certificates, the words describing
the class of such special shares shall be marked thereon; and
7.The date of issue of the share certificate.
II.A registered share certificate shall bear the true name of the
shareholder thereof. Where a plural number of share certificates
are held by a same person, his/her name shall be indicated on all
such share certificates. For share certificate(s) to be held by
a government agency or a corporate shareholder, the name of such
government agency or such corporate shareholder shall be indicated
thereon, and no other shareholder's name nor only the name of the
representative of such government shareholder or corporate
shareholder may be indicated thereof.
III.The rules governing certification or authentication of share
certificates to be issued under Paragraph One of this Article
shall be prescribed by the central competent authority.
However, the provision set out in this Paragraph shall not
apply to the companies offering their respective share
certificates to the public in accordance with the rules otherwise
prescribed by the authority in charge of securities. |
| Article 162-1 | I.For the new shares to be issued by a company offering its shares to
the public, the issuing company may print a consolidated share
certificate representing the total number of the new shares to be
issued at the same time of issue.
II.The share certificate to be issued under the provision of the
preceding Paragraph shall be placed under the custody of a
centralized securities custody enterprise.
III.The provision requiring assignment of serial numbers to share
certificates as set out in Paragraph One of this Article 162,
and the provision governing share assignment by endorsement as
set out in Article 164 of this Law shall not apply to the new
shares to be issued under the provision set out in Paragraph
I of this |
| Article 162-2 | I.For the shares to be issued to the public by a company, the issuing
company may be exempted from printing any share certificate for the
shares issued.
II.For the shares to be issued in accordance with the provision of
the preceding Paragraph, the issuing company shall appoint a
centralized securities custody enterprise/institution to make
recordation of the issue of such shares. |
| Article 163 | I.Assignment/transfer of shares of a company shall not be prohibited
or restricted by any provision in the articles of incorporation of
the issuing company, but shall not be effected until the
incorporation registration of the company.
II.Assignment/transfer of the shares owned by promoters of the
issuing company shall not be effected until the elapse of one
year after the incorporation registration of the issuing company;
except for the shares owned by the promoters of a company newly
incorporated after the completion of a company merger or splitting
process. |
| Article 164 | Registered share certificate shall be assigned only by the holder
thereof by way of endorsement, and the name or title of the assignee
shall be indicated on the share certificate. Bearer share certificate
may be assigned by way of delivery of the share certificate. |
| Article 165 | I.Assignment/transfer of shares shall not be set up as a defence
against the issuing company, unless name/title and
residence/domicile of the assignee/transferee have been recorded
in the shareholders' roster.
II.The entries in the shareholders' roster referred to in the
preceding Paragraph shall not be altered within 30 days prior to
the convening date of a regular shareholders' meeting, or within
15 days prior to the convening date of a special shareholders'
meeting, or within 5 days prior to the target date fixed by the
issuing company for distribution of dividends, bonus or other
benefits.
III.In the case of a company whose shares are issued to the public,
the entries in its shareholders' roster shall not be altered
within 60 days prior to the convening date of a regular
shareholders' meeting, or within 30 days prior to the convening
date of a special shareholders' meeting.
IV.The periods specified in the preceding two Paragraphs shall
commence from the applicable convening date of shareholders'
meeting or from the applicable target date, as the case may
be. |
| Article 166 | I.A company may, by its Articles of Incorporation, issue bearer
share certificates, provided that such issue shall not be more
than one half of the total number of shares already issued.
II.A company may, upon request of its shareholders, issue bearer
share certificates or change the bearer share certificates to
registered share certificates. |
| Article 167 | I.Subject to the provisions otherwise set out in Article 158,
Article 167-1, Article 186 and Article 317 of this Law, a
company may not, at its own discretion, redeem or buy back
any of its outstanding shares, nor may it accept any of its
outstanding shares as a security in pledge, unless a
shareholder is in liquidation or adjudged bankrupt, in which
case, the shares being held by the said shareholder may be bought
back by the issuing company at the market price, with the buy-back
price payable to the said shareholder to be withheld for off-setting
the debt owed to the company by said shareholder prior to the
process of the foregoing liquidation or bankruptcy pronouncement.
II.The shares redeemed or bought back by the issuing company in
accordance with the proviso of the preceding Paragraph or the
provisions of Article 186 hereof shall be sold at the then current
market price within six months. If the shares so redeemed or
bought back remain unsold after expiry of the foregoing time limit,
such shares shall be deemed as the shares which have never been
issued by the company; and under such circumstance, the company
shall apply for an alteration of the entries of the then existing
corporate registration in respect of such shares accordingly.
III.Where a majority of the total number of outstanding voting shares
or of the total amount of the capital stock of a subordinate
company are held by its holing company, the shares of the holding
company shall not be purchased nor be accepted as a security in
pledge by the said subordinate company.
IV.Where the holding company and its subordinate company as referred
to in the preceding Paragraph jointly hold or possess a majority
of the total number of outstanding shares or of the total amount
of the capital stock of another company, the shares of the said
holding company and its subordinate company shall also not be
purchased nor be accepted as a security in pledge by the said
another company.
V.Where the responsible person(s) of a company has (have) acted c
ontrary to any provisions set out in the preceding four Paragraphs
by redeeming or buy back its outstanding shares, or accepting such
shares as the security in pledge, or raising the share price for
offsetting its outstanding debt, or reducing the selling price of
such shares. |
| Article 167-1 | I.Unless as otherwise provided for in the law, a company may,
upon adoption of a resolution by a majority voting of the directors
present at a meeting of its board of directors attended by
two-thirds of the directors of the company, buy back its shares
in a number not exceeding 5% of the total number of its outstanding
shares provided, however, that the total amount of the price for
buying back such shares shall not exceed the sum of the amount
of its reserved surplus earnings plus the amount of the realized
capital reserve.
II.The shares bought back by the issuing company under the preceding
Paragraph shall be assigned or transferred to its employees within
three years. If such shares have not been transferred as required
after expiry of the foregoing time limit, such shares shall be
deemed as the shares which have never been issued; and under this
circumstance, the company shall apply for a necessary alteration
registration in respect of such shares accordingly.
III.The issuing company of the shares bought back under Paragraph I
of this Article shall not be entitled to exercise the rights of a
shareholder in respect of such shares. |
| Article 167-2 | I.Unless as otherwise provided for in the law or in the articles of
incorporation, a company may, upon adoption of a resolution by a
majority of the directors present at a meeting of the board of
directors attended by two-thirds of more of the total number of
directors of the company, enter into a share subscription right
agreement with its employees whereby the employees may subscribe,
within a specific period of time, a specific number of shares of
the company. Upon execution of the said agreement, the company
shall issue to each employee a share subscription warrant.
II.The share subscription warrant obtained by any employee of the
issuing company shall be non-assignment, except to the heir(s)
of the said employee. |
| Article 168 | I.A company shall not cancel its shares, unless a resolution on
capital reduction has been adopted by its shareholders' meeting;
and capital reduction shall be effected based on the percentage
of shareholding of the shareholders pro rata, unless otherwise
provided for in this Law or any other governing laws.
II.Where a company cancels its shares in a manner in violation to
the provisions set out in the preceding paragraph, the responsible
person(s) of the company shall (each) be imposed with a fine in an
amount not less than NT$ 20,000 but not more than NT$ 100,000. |
| Article 168-1 | I.Where a company has a need to reduce and to increase it capital
stock before the end of any fiscal year in order to offset its
loss, the board of directors shall, at least 30 days prior to
the convening date of the shareholders' meeting, forward the
financial statements and a loss offsetting proposal to the
supervisors for their auditing before submitting the audited
version thereof to the shareholders' meeting for review and
approval by a resolution.
II.In case the audited financial statements and the loss offsetting
proposal are submitted to a special shareholders' meeting under
the provisions of the preceding Paragraph, the provisions of
Articles 229 through 231 of this Law shall apply mutatis mutandis. |
| Article 169 | I.The shareholders' roster of a company shall be assigned with
serial numbers and shall contain the following particulars:
1.The name or title and the domicile or residence of the
shareholders;
2.The number of shares held by each shareholder; and the serial
number(s) of share certificate(s), if issued, by that shareholder;
3.The date of issuance of the share certificates;
4.The number of shares, the serial number of share certificate(s),
and the date of issuance of the bearer share certificate(s),
if bearer stocks are issued; and
5.The words describing the type of special shares, if special shares
are issued.
II.Where computerized operation or machine processing operation is
used in the company, then the information as required in the
preceding Paragraph may be annexed to the shareholders' roster
with relevant supplemental tables.
III.The director who is authorized to represent the company shall
make the shareholders' roster(s) available at the head office
of the company or the business place of the agency appointed by
the company to handle the share-related affairs for the company.
Violation of this clause shall be subject to a fine in an amount
not less than NT$ 10,000 but not more than NT$ 50,000.
Successive violations of this clause shall be subject to a fine
to be imposed at the rate of not less than NT$ 20,000 but not
more than NT$ 100,000 for each successive violation. |
SECTION III SHAREHOLDERS MEETING
|
| Article 170 | I.Shareholders' meeting shall be of the following two kinds:
1.Regular meeting of shareholders: to be held at least once every
year.
2.Special meeting of shareholders: to be held when necessary.
II.The regular meeting of shareholders referred to in the preceding
Paragraph shall be convened within six months after close of each
fiscal year, unless otherwise approved the competent authority for
good cause shown,
III.The director who is authorized to represent the company and fails
to call a regular shareholders' meeting within the time limit
specified in the preceding Paragraph shall be imposed with a fine
in an amount not less than NT$ 10,000 but not more than NT$ 50,000. |
| Article 171 | A shareholders meeting shall, unless otherwise provided for in this
law, be convened by the Board of Directors. |
| Article 172 | I.A notice to convene a regular meeting of shareholders shall be
given to each shareholder no later than 20 days prior to the
scheduled meeting date; while a public notice shall be given to
holders of bearer share certificates no later than 30 days to the
scheduled meeting date.
II.A notice to convene a special meeting of shareholders shall be
given to each shareholder no later than 10 days prior to the
scheduled meeting date; while a public notice shall be given to
holders of bearer share certificates no later than 15 days prior
to the scheduled meeting date.
III.For a company offering its shares to the public, a notice to
convene a regular meeting of shareholders shall be given to each
shareholder no later than 30 days prior to the scheduled meeting
date, and to the holders of bearer share certificates no later
than 40 days prior to the scheduled meeting date. In case a
company offering its shares to the public intends to convene a
special meeting of shareholders, a meeting notice shall be
given to each shareholders no later than 15 days prior to the
scheduled meeting date, and to the holders of bearer share
certificates no later than 30 days prior to the scheduled
meeting date.
IV.The cause(s) or subject(s) of a meeting of shareholders to be
convened shall be indicated in the individual notice and the
public notice to be given to shareholders.
V.Matters pertaining to re-election of directors and supervisors,
alteration of the contents of the articles of incorporation,
and dissolution, merger, splitting of company, or any matters
as set forth in Paragraph I, Article 185 hereof shall be itemized
in the causes or subjects to be described in the notice to
convene a meeting of shareholders, rather than being brought up
as extemporary motions.
VI.The director who is authorized to represent the company and
fails to convene the shareholders' meeting as required in
Paragraph I, Paragraph II or Paragraph III under this Article
shall be imposed with a fine in an amount not less than NT$ 10,000
but not more than NT$ 50,000. |
| Article 173 | I.Any or a plural number of shareholder(s) of a company who has
(have) continuously held more than one third of the total number
of outstanding shares for a period of one year or a longer time
may, by filing a written proposal setting forth therein the
subjects for discussion and the reasons, request the board of
directors to call a special meeting of shareholders.
II.If the board of directors fails to give a notice for convening
a special meeting of shareholders within 15 days after the
filing of the request under the preceding Paragraph, the proposing
shareholder(s) may, after obtaining an approval from the competent
authority, convene a special meeting of shareholders on his/their
own.
III.A special meeting of shareholders convened in accordance with the
provisions set out in the preceding two Paragraphs may appoint an
inspector to examine the business and financial condition of the
company.
IV.When the board of directors fails or can not convene a
shareholders' meeting on account of share transfer or any other
causes, the shareholder(s) holding 3% or more of the outstanding
shares of the company may, after obtaining an approval from the
competent authority, convene a shareholders' meeting. |
| Article 174 | Resolutions at a shareholders' meeting shall, unless otherwise
provided for in this law, be adopted by a majority vote of the
shareholders present, who represent more than one-half of the total
number of voting shares. |
| Article 175 | I.When the number of shareholders present does not constitute the
quorum prescribed in the preceding article, but those present
represent one-third or more of the total number of issued shares,
a tentative resolution may be passed by a majority of those present.
A notice of such tentative resolution shall be given to each of the
shareholders, and within one month. If bearer share certificates
have been issued, such tentative resolution shall also be publicly
announced.
II.In the aforesaid meeting of shareholders, if the tentative
resolution is again adopted by a majority of those present who
represent one-third or more of the total number of issued shares,
such tentative resolution shall be deemed to be a resolution under
the preceding article. |
| Article 176 | A holder of bearer share certificates shall not attend a meeting of
shareholders unless he shall have deposited his share certificates
with the company five days before the meeting. |
| Article 177 | I.A shareholder may appoint a proxy to attend a shareholders' meeting
in his/her/its behalf by executing a power of attorney printed by
the company stating therein the scope of power authorized to the
proxy.
II.Except for trust enterprises or stock agencies approved by the
competent authority, when a person who acts as the proxy for
two or more shareholders, the number of voting power represented
by him/her shall not exceed 3% of the total number of voting
shares of the company, otherwise, the portion of excessive
voting power shall not be counted.
III.A shareholder may only execute one power of attorney and
appoint one proxy only, and shall serve such written proxy
to the company no later than 5 days prior to the meeting
date of the shareholders' meeting. In case two or more written
proxies are received from one shareholder, the first one
received by the company shall be prevail; unless an explicit
statement to supercede the previous written proxy is made in
the proxy which comes the later. |
| Article 178 | A shareholder who has a personal interest in the matter under
discussion at a meeting, which may impair the interest of the
company, shall not vote nor exercise the voting right on behalf of
another shareholder. |
| Article 179 | I.Except in the circumstances set forth in Item 3, Article 157
hereof, a shareholder shall have one voting power in respect
of each share in his/her possession.
II.A company shall have no voting power in respect of the share
issued by itself and in its own possession in accordance with
this Law. |
| Article 180 | I.The shares held by shareholders having no voting right shall not be
counted in the total number of issued shares while adopting a
resolution at a meeting of shareholders.
II.In passing a resolution at a shareholders' meeting, shares for
which voting right cannot be exercised as provided in Article 178
shall not be counted in the number of votes of shareholders present
at the meeting. |
| Article 181 | I.When the government or a juristic person is a shareholder,
its proxy shall not be limited to one person, provided that
the voting right that may be exercised shall be calculated on
the basis of the total number of voting shares it holds.
II.In case the aforesaid proxies are two persons or more, they
shall exercise their voting right jointly. |
| Article 182 | The provisions of Article 172 shall not apply where a meeting of
shareholders resolves to postpone the meeting for not more than, or
to reconvene the meeting within, five days. |
| Article 182-1 | I.For a shareholders' meeting convened by the board of directors, the
chairman of the meeting shall be appointed in accordance with the
provisions of Paragraph Three, Article 208 of this Law; where as for
a shareholders' meeting convened by any other person having the
convening right, he/she shall act as the chairman of that meeting
provided, however, that if there are two or more persons having the
convening right, the chairman of the meeting shall be elected from
among themselves.
II.A company shall establish the rules governing the proceedings of
meetings. During the session of a shareholders' meeting, if the
chairman declares the adjournment of the meeting in a manner in
violation of such rules governing the proceedings of meetings, a
new chairman of the meeting may be elected by a resolution to be
adopted by a majority of the voting rights represented by the
shareholders attending the said meeting to continue the
proceedings of the meeting. |
| Article 183 | I.Resolutions adopted at a shareholders' meeting shall be recorded in
the minutes of the meeting which shall be affixed with the signature
or seal of the chairman of the meeting and shall be distributed to
all shareholders of the company within 20 days after the close of the
meeting.
II.With regard to a company having its shares issued to the public,
the distribution of the minutes of the shareholders' meeting as
required in the preceding Paragraph to the registered stock
shareholders whose shareholding is less than one thousand shares may
be effected by means of a public notice.
III.The minutes of shareholders' meeting shall record the date and
place of the meeting, the name of the chairman, the method of
adopting resolutions, and a summary of the essential points of
the proceedings and the results of the meeting. The minutes
shall be kept persistently throughout the life of the company.
IV.The attendance list bearing the signatures of shareholders
present at the meeting and the powers of attorney of the proxies
shall be kept by the company for a minimum period of at least one
year. However, if a law-suit has been instituted by any
shareholder in accordance with the provisions of Article 198
hereof, the minutes of the shareholders' meeting involved shall
be kept by the company until the conclusion of that litigation
case.
V.The director authorized to represent the company who violates
the provisions of Paragraph I, Paragraph III or the preceding
Paragraph of this Article shall be imposed with a fine of not
less than NT$ 10,000 but not more than NT$ 50,000. |
| Article 184 | I.The shareholders' meeting may examine the statements and books
prepared and submitted by the board of directors and the auditing
reports submitted by the supervisors, and may decide, by resolution,
the surplus earning distribution and deficit off-setting plan.
II.In order to conduct the examination set forth in the preceding
Paragraph, the shareholders' meeting may select and appoint
inspectors as required.
III.Any person who commits any act of impeding, refusing or evading
the examination set forth in the preceding two Paragraphs shall
be imposed with a fine of not less than NT$ 20,000 but not more
than NT$ 100.000. |
| Article 185 | I.A company shall not do any of the following acts without a
resolution adopted by a majority of the shareholders present
who represent two-thirds or more of the total number of its
outstanding shares:
1.Enter into, amend, or terminate any contract for lease of the
company's business in whole, or for entrusted business, or for
regular joint operation with others;
2.Transfer the whole or any essential part of its business or
assets; or
3.Accept the transfer of another's whole business or assets,
which has great bearing on the business operation of the
company.
II.For a company which has had its share certificates publicly
issued, if the total number of shares represented by the
shareholders present at shareholders' meeting is not
sufficient to meet the criteria specified in the preceding
paragraph, the resolution to be made thereto may be adopted by a
large majority vote representing two-thirds of the attending
shareholders who represent a majority of the total number of
issued shares.
III.Where stricter criteria for the total number of attending
shareholders and for the number of votes required to adopt a
resolution at a shareholders' meeting referred to in the
preceding two paragraphs are specified in the Articles of
Incorporation of the company, such stricter criteria shall
govern.
IV.Essential facts of the acts referred to in Paragraph 1 shall
be stated in the notice or public announcement to be given under
Article 172 hereof. A proposal for doing any of the acts specified
in Paragraph 1 shall be submitted by the Board of Directors by a
resolution adopted by a majority vote at a meeting of the Board of
Directors attended by over two-thirds of the directors. |
| Article 186 | A shareholder, who has served a notice in writing to the company
expressing his intention to object to such an act prior to the
adoption of a resolution at a shareholders' meeting in accordance with
the provisions of the preceding article, and also has raised his
objection at the shareholders' meeting, may request the company to buy
back all of his shares at the then prevailing fair price, provided,
however, that this shall not apply if, at the time of adopting a
resolution under Item 2, Paragraph 1 of the preceding article, the
shareholders' meeting also adopts a resolution for dissolution. |
| Article 187 | I.The request mentioned in the preceding article shall be brought
forth in writing within twenty days after the adoption of resolution
under Article 185, Paragraph 1, stating therein the kinds and
number of shares.
II.In case an agreement on the price of shares is reached between the
shareholder and the company, the company shall pay for the shares
within ninety days from the date on which the resolution was
adopted. In case no agreement is reached within sixty days of the
date on which the resolution was adopted in accordance with Article
185, the shareholder may, within thirty days from the date on which
the sixty-day period expired, apply to court for a ruling on the
price.
III.The company shall pay legal interest on the price ruled by the
court from the date of expiration of the period referred to in
Paragraph 2. The payment of price shall be made at the same time
against the delivery of share certificates, and the transfer of
such shares shall be effective at the time when payment is made. |
| Article 188 | The request of a shareholder as provided in Article 186 shall lose
its effect at the time when the company calls off its act as specified
in Article 185, paragraph 1. The same shall apply where a shareholder
fails to make request within the period prescribed in Paragraphs 1 and
2 of the preceding article. |
| Article 189 | In case the procedure for convening a shareholders' meeting or the
method of adopting resolutions thereat is in contrary to any law,
ordinance or the company's articles of incorporation, a shareholder may
, within 30 days from the date of adoption of the said resolution,
enter a petition in the court for annulment of such resolution. |
| Article 189-1 | Upon receipt of the petition for annulment of a resolution filed under
the preceding Article, if the court considers that the fact of violation
described in the said petition is insignificant and will do nothing to
the prejudice of the resolution, the court may dismiss such petition. |
| Article 190 | In case a resolution already registered is annulled by an irrevocable
judgment of a court, the authority shall annul the registration upon
notice by the court of application of an interested party. |
| Article 191 | In case the substance of a resolution adopted at a meeting of
shareholders is contrary to law or ordinance or the company's articles
of incorporation, the resolution shall be null and void. |
SECTION IV DIRECTORS AND BOARD OF DIRECTORS
|
| Article 192 | I.The board of directors of a company shall have at least three
directors who shall be elected by the shareholders' meeting from
among the persons with disposing capacity.
II.For a company whose shares are issued to the public, if the
percentage of shareholdings of all the directors selected in
accordance with the preceding Paragraph is subject to the provisions
separately prescribed by the competent authority in charge of
securities affairs, such provisions shall prevail.
III.The provisions set out in Article 85 of The Civil Code shall not
apply to the disposing capacity set forth in Paragraph I of this
Article.
IV.Unless otherwise provided for in this Law, the relations between
the company and its directors shall be governed by the provisions
of The Civil Code pertaining to the mandate.
V.The provisions set out in Article 30 hereof shall apply mutatis
mutandis to the directors of a company. |
| Article 193 | I.The Board of Directors, in conducting business, shall act in
accordance with laws and ordinances, the Articles of Incorporation,
and the resolutions adopted at the meetings of shareholders.
II.Where any resolution adopted by the Board of Directors contravenes
the aforesaid provisions, thereby causing loss or damage to the
company, all directors taking part in the adoption of such
resolution shall be liable to compensate the company for such loss
or damage; however, those directors whose disagreement appears on
record or is expressed in writing shall be exempted from liability. |
| Article 194 | In case the board of directors decide, by resolution, to commit any
act in violation of any law, ordinance or the company's articles of
incorporation, any shareholder who has continuously held the shares of
the company for a period of one year or longer may request the board of
directors to discontinue such act. |
| Article 195 | I.The term of office of a director shall not exceed three years; but he
/she may be eligible for re-election.
II.In case no election of new directors is effected after expiration of
the term of office of existing directors, the term of office of
out-going directors shall be extended until the time new directors
have been elected and assumed their office. However, the competent
authority may, ex office, order the company to elect new directors
within a given time limit; and if no re-election is effected after
expiry of the given time limit, the out-going directors shall be
discharged ipso facto from such expiration date. |
| Article 196 | The remuneration of directors, if not prescribed in the Articles of
Incorporation, shall be determined by a meeting or shareholders. |
| Article 197 | I.Each director shall, after having been elected, declare to the
competent authority the number and amount of the shares of the
company being held by him/her at the time when he/she is elected.
In case a director of a company whose shares are issued to the public
that has transferred, during the term of office as a director, more
than one half of the company's shares being held by him/her at the
time he/she is elected,he/she shall, ipso facto, be discharged from
the office of director.
II.If the number of company's shares held by a director is increased or
reduced during his/her term of office as a director, he/she shall
declare such change to the competent authority and shall place a
public notice of such fact.
III.After re-election of directors effected prior to the expiration
date of the term of office of existing directors, if any new
director elect has, before his/her inauguration of the office of
director, assigned more than one half of the total number of shares
of the company he/she holds at the time of his/her election as such
; or had transferred more than one half of the total number of
shares he/she held within the share transfer prohibition period
fixed prior to the convention of a shareholder's meeting, then his/
her election as a director shall become invalid. |
| Article 197-1 | Upon creation or cancellation of a pledge on the company's shares
held by a shareholder, a notice of such action shall be given to the
company, and the company shall, in turn and within 15 days after such
pledge creation/ cancellation date, have the change of pledge over such
shares reported to the competent authority and declared in a public
notice; unless otherwise provided for in any rules or regulations
separately prescribed by the authority in charge of securities affairs. |
| Article 198 | I.Subject to the provisions otherwise provided for in the articles of
incorporation, in the process of electing directors at a
shareholders' meeting, the number of votes exercisable in respect of
one share shall be the same as the number of directors to be elected,
and the total number of votes per share may be consolidated for
election of one candidate or may be split for election of two or more
candidates. A candidate to whom the ballots cast represent a
prevailing number of votes shall be deemed a director elect.
II.The provision of Article 178 hereof shall not apply to the voting
power referred to in the preceding Paragraph. |
| Article 199 | I.A director may be discharged at any time by a resolution adopted at a
shareholders' meeting provided, however, that if a director is
discharged during the term of his/her office as a director without
good cause shown, the said director may make a claim against the
company for any an all damages sustained by him/her as a result of
such discharge.
II.A resolution required for discharging a director under the preceding
Paragraph may be adopted only by a majority of the shareholders
present who represent two-thirds or more of the total number of its
outstanding shares by the company.
III.For a company whose shares are issued to the public, if the total
number of shares represented by the shareholders present at a
shareholders' meeting is less than the quorum set forth in the
preceding Paragraph, the resolution required for discharging a
director may be adopted by two-thirds (2/3) of the total votes of
the shareholders present at the shareholders' meeting attended by
the shareholders representing a majority of the total number of
outstanding shares issued by the company.
IV.Where higher requirements of the quorum of a shareholders' meeting
and the number of votes are specified in the articles of
incorporation of a company, such higher requirements shall prevail. |
| Article 199-1 | Where re-election of all directors is effected, by a resolution
adopted by a shareholders' meeting, prior to the expiration of the
term of office of existing directors, and in the absence of a
resolution that existing directors will not be discharged until the
expiry of their present term of office, all existing directors shall
be deemed discharged in advance. |
| Article 200 | In case a director has, in the course of performing his/her duties,
committed any act resulting in material damages to the company or in
serious violation of applicable laws and/or regulations, but not
discharged by a resolution of the shareholders' meeting, the
shareholder(s) holding 3% or more of the total number of outstanding
shares of the company may, within 30 days after that shareholders'
meeting, institute a lawsuit in the court for a judgment in respect of
such matter. |
| Article 201 | When the number of vacancies in the board of directors of a company
equals to one third of the total number of directors, the board of
directors shall call, within 30 days, a special meeting of shareholders
to elect succeeding directors to fill the vacancies. However, in the
case of a company whose shares are issued to the public, the special
meeting of shareholders for electing succeeding directors shall be
convened by the board of directors within 60 days. |
| Article 202 | Business operations of a company shall be executed pursuant to the
resolutions to be adopted by the board of directors, except for the
matters the execution of which shall be effected pursuant the
resolutions of the shareholders' meeting as required by this Law or the
articles of incorporation of the company. |
| Article 203 | I.Meetings of the board of directors shall be convened by the chairman
of the board of directors, except for the first meeting of each term
of the board of directors which shall be convened by the director who
received a ballot representing the largest number of votes at the
election of directors.
II.The first meeting of each term of the board of directors shall be
convened within 15 days after the re-election. However, in case the
re-election of directors was conducted prior to the expiration of
the term of office of the directors of the preceding term, and a
resolution was adopted not to discharge the directors of the
preceding term until the expiration of the term of their offices as
directors, the first meeting of the newly elected directors shall be
convened within 15 days after expiration of the term of office of the
directors of the preceding term.
III.where directors are elected prior to the expiration of the term of
office of the directors of the preceding term, and a resolution is
adopted not to discharge the directors of the preceding term until
the expiration of the term of office of the preceding term, the
chairman, the vice chairman and the managing directors of the newly
elected board of directors may be carried out prior to the
expiration of the term of office of the directors of the preceding
term, free from the binding of the provisions of the preceding
Paragraph.
IV.Where the number of directors attending the first meeting of e newly
selected board of directors is less than the minimum quorum of the
meeting of the board of directors convened for election of the
chairman and the managing directors of the board of directors, then
the original convener shall resume the meeting within 15 days to
conduct the election, and may apply the resolution adopting method
set forth in Article 206 of this Law.
V.In case the director elect receiving the a ballot representing the
largest number of votes fails to convene the meeting of the board of
directors within the time limit set out in Paragraph II or the
preceding Paragraph of this Article, then one-fifth (1/5) or more of
the directors elect may convene the meeting on their own, with a
prior permission of the competent authority. |
| Article 204 | In calling a meeting of the board of directors, a notice setting
forth therein the subject(s) to be discussed at the meeting shall be
given to each director and supervisor. However, in the case of
emergency, the meeting may be convened at any time. |
| Article 205 | I.Each director shall attend the meeting of the board of directors in
person, unless as otherwise provided for in the articles of
incorporation that a director may be represented by another director.
II.In case a meeting of the board of directors is proceeded via visual
communication network, then the directors taking part in such a
visual communication meeting shall be deemed to have attended the
meeting in person.
III.In case a director appoints another director to attend a meeting of
the board of directors in his/her behalf, he/she shall, in each
time, issue a written proxy and state therein the scope of
authority with reference to the subjects to be discussed at the
meeting.
IV.A director may accept the appointment to act as the proxy referred
to in the preceding Paragraph of one other director only.
V.A director residing in a foreign country may appoint in writing a
shareholder residing in the national territory as his/her proxy to
attend the meetings of the board of directors on a regular basis.
VI.Appointment of the proxy in accordance with the provisions of the
preceding Paragraph shall be registered with the competent
authority; and this requirement shall also apply to the change of
the proxy. |
| Article 206 | I.Unless otherwise provided for in this law, resolutions of the Board
of Directors shall be adopted by a majority of the directors at a
meeting attended by a majority of the directors.
II.The provisions of Article 178 and Article 180, paragraph 2 shall
apply mutatis mutandis to the aforesaid resolutions. |
| Article 207 | I.Minutes shall be taken of the proceedings of the meeting of the board
of directors.
II.The provisions of Article 183 shall apply mutatis mutandis to the
aforesaid minutes. |
| Article 208 | I.In case a company has no managing directors, the board of directors
shall elect a chairman of the board directors from among the
directors by a majority vote at a meeting attended by over two-thirds
of the directors, and may also elect in the same manner a vice
chairman of the board in accordance with the provisions of the
articles of incorporation.
II.In case a company has managing directors, the managing directors
shall be selected from among the directors in accordance with the
manner set forth in the preceding Paragraph provided that the number
of managing directors shall not be less than three persons but not
more than one-third of the total number of directors. The chairman
or the vice chairman of the board shall be elected from the managing
directors in accordance with the same manner set forth in the
preceding Paragraph.
III.The chairman of the board of directors shall internally preside the
shareholders' meeting, the meeting of the board of directors, and
the meeting of the managing directors; and shall externally
represent the company. In case the chairman of the board of
directors is on leave or absent or can not exercise his power and
authority for any cause, the vice chairman shall act on his behalf.
In case there is no vice chairman, or the vice chairman is also on
leave or absent or unable to exercise his and authority for any
cause, the chairman of the board of directors shall designate one
of the managing directors, or where there is no managing directors,
one of the directors to act on his behalf. In the absence of such
a designation, the managing directors or the directors shall elect
from among themselves an acting chairman of the board of directors.
IV.During the recess of the board of directors, the managing directors
shall regularly exercise the power and authority of the board of
directors in accordance with the provisions of laws and regulations
and the articles of incorporations of the company, and the
resolutions adopted by the shareholders' meetings and the meetings
of the board of directors by conferences to be called from time to
time by the chairman of the board of directors; with the resolutions
to be adopted by a majority of managing directors present at such
conferences attended by a majority of managing directors.
V.The provisions set out in Article 57 and Article 58 hereof shall
apply mutatis mutandis to directors representing the company. |
| Article 208-1 | I.In case the board of directors fails or is unable to exercise its
power and authority to the extent which is likely to cause damage to
the company, the court may, at the petition of interested party or
parties or a public prosecutor, appoint one or more temporary manager
to exercise the power and authority of the chairman of the board of
directors and the board of directors instead provided, however, that
he/she shall not commit any act unfavorable to the company.
II.Upon appointment of the temporary manager under the preceding
Paragraph, the court shall request the competent authority to make
appropriate registration of such appointment.
III.Upon discharge of the temporary manager appointed hereunder, the
court shall request the competent authority to cancel the
registration of his appointment. |
| Article 209 | I.A director who does anything for himself or on behalf of another
person that is within the scope of the company's business, shall
explain to the meeting of shareholders the essential contents of such
an act and secure its approval.
II.The aforesaid approval shall be given upon a resolution adopted by a
majority of the shareholders present who represent two-thirds or
more of the total number of its outstanding shares.
III.For a company whose share certificates have been publicly issued,
if the total number of shares represented by shareholders present at
a shareholders' meeting is not sufficient to meet the criteria
specified in the preceding paragraph, the resolution may be adopted
by a large majority of two thirds of the voting powers of the
shareholders present at a shareholders' meeting who present a
majority of the total number of issued shares.
IV.Where stricter criteria for the total number of shares represented
by the attending shareholders and the required number of votes at
the shareholders' meeting set forth in the preceding two paragraphs
are specified in the Articles of Incorporation, such stricter
criteria shall govern.
V.In case a director does anything for himself or on behalf of another
person in violation of the provisions of Paragraph 1, the meeting of
shareholders may, by a resolution, consider the earnings in such an
act as earnings of the company unless one year has lapsed since the
realization of such earnings. |
| Article 210 | I.Subject to the provisions otherwise provided for by the authority in
charge of securities affairs, the board of directors shall keep at
the head office of the company copies of the articles of
incorporation, the minutes of every meeting of the shareholders and
the financial statements, and shall keep at the head office of the
company or the business office of its securities agent the
shareholders roster and the counterfoil of corporate bonds issued by
the company.
II.Any shareholder and any creditor of a company may request at any
time, by submitting evidentiary document(s) to show his/her
interests involved and indicating the scope of interested matters,
an access to inspect and to make copies of the articles of
incorporation and accounting books and records.
III.The director(s) authorized to represent the company who has(have)
violated the provisions set out in Paragraph I hereinabove by not
making the financial statements and the articles of incorporation
available at the office of the company, or has(have) violated the
provisions of the preceding Paragraph by refusing the examination
or copying of relevant information shall be imposed with a fine not
less than NT$ 10,000 but not more than NT$ 50,000. |
| Article 211 | I.In case the loss incurred by a company aggregates to one half of its
paid-in capital, the board of directors shall convene and make a
report to a meeting of shareholders.
II.Subject to the provisions set out in Article 282 of this Law, in
case the assets of a company is insufficient to set off its
liabilities, the board of directors shall apply to the court for
pronouncement of its bankruptcy.
III.The director(s) authorized to represent the company who has (have)
violated the provisions of the preceding two Paragraphs shall be
imposed with a fine of not less than NT$ 20,000 but not more than
NT$ 100,000. |
| Article 212 | In case the shareholders' meeting of a company resolves to institute
an action against a director, the company shall, within 30 days from
the date of such resolution, institute the action. |
| Article 213 | In case of a lawsuit between the company and a director, the
supervisor shall act on behalf of the company, unless otherwise
provided by law; and the meeting of shareholders may also appoint some
other person to act on behalf of the company in a lawsuit. |
| Article 214 | I.Shareholder who have been continuously holding 3% or more of the total
number of the outstanding shares of the company over one year may
request in writing the supervisors of the company to institute, for
the company, an action against a director of the company.
II.In case the supervisors fails to institute an action within 30 days
after having received the request made under the preceding
Paragraph, then the shareholders filing such request under the
preceding Paragraph may institute the action for the company; and
under such circumstance, the court may, at the petition of the
complainant, order the suing shareholders to furnish an appropriate
security. In case the suing shareholders become the loser in that
lawsuit and thus causing any damage to the company, the suing
shareholders shall be liable for indemnifying the company for such
damage. |
| Article 215 | I.Where a lawsuit instituted under paragraph 2 of the preceding article
is found by a final judgment to be based on facts apparently untrue,
the shareholders who instituted the action shall be liable to
compensate the defendant director for loss or damage resulting from
such an action.
II.Where a lawsuit instituted under paragraph 2 of the preceding
article is found by a final judgment to be based on facts apparently
true, the defendant director shall be liable to compensate the
shareholders who instituted the action for loss or damage resulting
from such an action. |
SECTION V SUPERVISORS
|
| Article 216 | I.Supervisors of a company shall be elected by the meeting of
shareholders, among them at least one supervisor shall have a
domicile within the territory of the Republic of China.
II.For a company whose shares are issued to the public, there must be
two or more supervisors to be elected in accordance with the
provision of the preceding Paragraph, and the total shareholdings of
all supervisors shall meet the requirement as separately specified
by the authority in charge of securities affairs, if any.
III.The relation between the company and its supervisors shall be
subject to the provisions governing the mandate as stipulated in
The Civil Code.
IV.The provisions set out in Article 30, and Paragraph I and Paragraph
III regarding the disposing capacity, Article 192 of this Law shall
apply mutatis mutandis to the supervisors. |
| Article 217 | I.The term of office of a supervisor shall exceed three years, but he
may be eligible for re-election.
II.In case election of new supervisors can not be effected in time
after expiration of the term of office of existing supervisors, the
existing supervisor shall continue to perform their duties until the
new supervisors elect has assumed their office as supervisors.
However, the competent authority may order, ex officio, the company
to conduct the re-election of supervisors within a given time limit.
If election of new supervisors is still not effected, the existing
supervisors shall be discharged, ipso facto, upon expiry of the time
limit hereinabove fixed by the competent authority. |
| Article 217-1 | In case all supervisors of a company are discharged, the board of
directors shall, within 30 days, convene a special meeting of
shareholders to elect new supervisors. However, for a company whose
shares are issued to the public, the special meeting of shareholders
for election of supervisors shall be convened by the board of directors
within 60 day. |
| Article 218 | I.Supervisors shall supervise the execution of business operations of
the company, and may at any time or from time to time investigate the
business and financial conditions of the company, examine the
accounting books and documents, and request the board of directors or
managerial personnel to make reports thereon.
II.In performing their functional duties under the preceding Paragraph,
the supervisors may appoint, on behalf of the company, a practicing
lawyer and a certified public accountant to conduct the examination.
III.Any person who hinders, refuses or evades the examination to be
conducted by supervisors shall be imposed with a fine of not less
than NT$ 20,000 but not more than NT$ 100,000. |
| Article 218-1 | When a director discovers the possibility that the company will
suffer substantial damage, he shall report to the supervisor
immediately. |
| Article 218-2 | I.Supervisors of a company may attend the meeting of the board of
directors to their opinions.
II.In case the board of directors or any director commits any act, in
carrying out the business operations of the company, in a manner in
violation of the laws, regulations, the articles of incorporation or
the resolutions of the shareholders' meeting, the supervisors shall
forthwith advise, by a notice, to the board of directors or the
director, as the case may be, to cease such act. |
| Article 219 | I.Supervisors shall audit the various statements and records prepared
for submission to the shareholders' meeting by the board of
directors, and shall make a report of their findings and opinions at
the meeting of shareholders.
II.In performing their functional duties under the preceding Paragraph,
the supervisors may appoint a certified public accountant to conduct
the auditing in their behalf.
III.Supervisors who violated the provisions by making false report
shall each be imposed with a fine in an amount not more than
NT$ 60,000. |
| Article 220 | Subject to the condition that the board of directors does not or is
unable to convene a meeting of shareholders, the supervisors may, for
the benefit of the company, call a meeting of shareholders when it is
deemed necessary. |
| Article 221 | Supervisor may each exercise the supervision power individually. |
| Article 222 | A supervisor shall not be concurrently a director, a managerial
officer or other staff/employee of the company. |
| Article 223 | In case a director of a company transacts a sales with, or borrows
money from or conducts any legal act with the company on his own
account or for any other person, the supervisor shall act as the
representative of the company. |
| Article 224 | In case a supervisor has, in performing his functional duties,
violated the provisions of any law, regulations, or the articles of
incorporation of the company, or was negligent of his duties and thus
causing any damage to the company, he shall be liable for indemnifying
the company for such damage. |
| Article 225 | I.When a meeting of shareholders resolves to institute an action
against a supervisor, the company shall institute such action within
30 days from the date of adoption of such resolution.
II.The person who represents the company in the action instituted under
the preceding Paragraph may be appointed by the shareholders'
meeting from the persons other than the directors of the company. |
| Article 226 | In case supervisor is liable to compensate the company or a third
party and a director is also liable, such supervisor and director shall
be joint debtors. |
| Article 227 | The provisions set out in article 196, Article 208-1, Article 214 and
Article 215 hereof shall apply mutatis mutandis, to the supervisors
provided, however, that the request to be submitted to supervisors
under Article 214 hereof shall be submitted to the board of director. |
SECTION VI ACCOUNTS
|
| Article 228 | I.At the close of each fiscal year, the board of directors shall
prepare the following statements and records and shall forward the
same to supervisors for their auditing not later than the 30th day
prior to the meeting date of a general meeting of shareholders:
1.the business report;
2.the financial statements; and
3.the surplus earning distribution or loss off-setting proposals.
II.The financial statements and records as required in the preceding
Paragraph shall be prepared in accordance with the rules prescribed
by the central competent authority.
III.Supervisors may request the board of directors to provide in
advance the financial statements and records for auditing as
required in Paragraph I hereinabove. |
| Article 229 | The statements and records of accounts prepared by the Board of
Directors and the report made by the supervisors shall be made
available at the head office for inspection at any time by the
shareholders, ten days prior to the regular meeting of shareholders.
The shareholders may bring their lawyers or certified public
accountants for such an inspection. |
| Article 230 | I.The board of directors shall submit the various financial statements
and records prepared by it to the general meeting of shareholders for
its ratification; and after the ratification thereof by the general
meeting of shareholders, shall distribute to each shareholder the
copies of ratified financial statements and the resolutions on the
surplus earning distribution and/or loss offsetting.
II.For a company whose shares are issued to the public, the
distribution of the ratified financial statements and the
resolutions on the surplus earning distribution and/or the loss
offsetting to its shareholders holding the registered share
certificates in a number less than 1,000 shares may be effected by
way of a public notice.
III.Any creditor of the company may request the company to provide him
the financial statements and records and the resolutions set forth
in Paragraph I hereinabove or to allow him to make copies thereof.
IV.The director authorized to represent the company who has violated
the provisions of Paragraph I of this Article by failing to
distribute the financial statement and records and the resolutions
shall be imposed with a fine of not less than NT$ 10,000 but not
more than NT$ 50,000. |
| Article 231 | Only after all the statements and records of accounts have been
approved by the meeting of shareholders shall directors and supervisors
be deemed to have been discharged from their liabilities, except in the
event of any unlawful conduct on the part of directors or supervisors. |
| Article 232 | I.A company shall not pay dividends or bonuses, unless its losses shall
have been covered and a legal reserve shall have been set aside in
accordance with the provisions of this Law.
II.A company shall not pay dividends or bonuses, if there is no surplus
earnings provide, however, that the aggregate of its legal reserve
exceeds fifty per cent (50%) of its paid-in capital.
III.The responsible person(s) of a company who violates the provisions
of the preceding two Paragraphs by making distribution of dividends
and bonuses shall (each) be punished with imprisonment of not more
than one year, detention, and a fine in lieu thereof or in addition
thereto in an amount of not more than NT$ 60,000. |
| Article 233 | If a company pays dividends and bonuses in violation of the
provisions of the preceding article, creditors of the company may
request rescission and may also claim for compensation for loss or
damage resulted there-from. |
| Article 234 | I.A company which according to he nature of its business requires more
than two years of preparation from the date of its incorporation
before it can commence business, may, with the approval of the
competent authority, make distribution of dividends in accordance
with the provisions of its articles of incorporation.
II.The amount of the aforesaid dividends for distribution may be
included as pre-paid dividends under the account of shareholder's
equity to be shown in the balance sheet of the company. After
commencing its business operation, whenever the total amount of
dividends and bonuses to be distributed each time exceeds six percent
(6%) of its paid-in capital, then the amount of such excessive
distribution shall be offset against the aforesaid pre-paid dividends. |
| Article 235 | I.Unless otherwise provided for in the articles of incorporation,
distribution of the dividends and bonuses shall be effected in
proportion to the number of shares held by each shareholder
accordingly.
II.The percentage of surplus profit distributable as employees' bonus
shall be definitely specified in the articles of incorporation,
unless otherwise approved specifically by the central authority in
charge of the end-enterprise concerned.
III.The provisions set out in the preceding Paragraph shall not be
applicable to the government operated enterprises, except in the
case where special approval has been granted by the authority in
charge of the government operated enterprise concerned, and the
percentage of surplus profit distributable as employees' bonus has
been specifically fixed in the articles of incorporation.
IV.Qualification requirements of employees, including the employees of
subsidiaries of the company meeting certain specific requirements,
entitled to receive dividend bonus may be specified in the articles
of incorporation. |
| Article 236 | (deleted) |
| Article 237 | A company, when allocating its surplus profits after having paid all
taxes and dues, shall first set aside ten percent of said profits as
legal reserve. Where such legal reserve amounts to the total authorized
capital, this provision shall not apply. Aside from the aforesaid legal
reserve, the company may, under its Articles of Incorporation or by
resolution of the meeting of shareholders, set aside another sum as
special reserve. Responsible persons of the company who fail to set
aside legal reseve, in violation of the provisions of Paragraph 1,
shall be everally subject to a fine not exceeding NT$60,000. |
| Article 238 | (deleted) |
| Article 239 | I.The legal reserve and the capital reserve referred to in the preceding
two Articles shall not be used except for making good the deficit (or
loss) of the company; however, this clause shall not apply to the
case set forth in Article 241 hereof or as otherwise provided for in
the law.
II.A company shall not use the capital reserve to make good its capital
loss, unless the surplus reserve is insufficient to make good such
loss. |
| Article 240 | I.A company may, by a resolution adopted by a majority of the
shareholders present who represent two-thirds or more of the total
number of its outstanding shares of the company, have the whole or a
part of the surplus profit distributable as dividends and bonuses
distributed in the form of new shares to be issued by the company for
such purpose. In case the amount of balance of such distributable
surplus profit is less the par value (or a fraction) of one share, it
shall be paid in cash.
II.For a company whose shares are issued to the public, if the total
number of shares represented by the shareholders present at a
meeting of shareholders is less than the threshold specified in the
preceding Paragraph, the resolution may be adopted by a large
majority (2/3 or more) vote of the shareholders present at that
meeting of shareholders attended by the shareholders representing a
majority of the total number of the outstanding shares of the company.
III.Where a higher threshold of the number of shareholders to be
present and the total number of shares the represent is required by
the articles of incorporation of the company, such higher threshold
shall prevail.
IV.Where the distributable bonus is to be capitalized in accordance with
the preceding three Paragraphs, the bonus distributable to the
employees under the articles of incorporation may be paid either in
the form of shares newly issued for such purpose or in cash.
V.For the distribution of dividends and bonuses in an amount or ratio
explicitly specified in the articles of incorporation and to be
effected by a resolution to be adopted by the board of directors as
authorized (by a shareholders' meeting), the whole or a part of the
distributable dividends and bonuses may be paid in accordance with
the provisions set out in Paragraph I and Paragraph IV of this
Article in the form of shares newly issued for such purpose after a
resolution has been adopted by a majority of shareholders present at
a meeting of the board of directors attended by two-thirds of the
total number of directors; and in addition thereto a report of such
distribution shall be submitted to the shareholders' meeting. |
| Article 241 | I.Where a company incurs no loss, it may, pursuant to a resolution to
be adopted by a shareholders' meeting as required in the preceding
Article, capitalize its legal reserve and the following capital
reserve, in whole or in part, by issuing new shares which shall be
distributable as dividend shares to its original shareholders in
proportion to the number of shares being held by each of them:
1.the income derived from the issuance of new shares at a premium;
2.the income from endowments received by the company.
II.The provisions set out in Paragraph V and Paragraph VI of the
preceding Article shall be applicable mutatis mutandis to the
capitalization of reserves to be effected under the preceding
Paragraph.
III.Where legal reserve is capitalized, the amount of the legal reserve
shall have aggregated up to fifty per cent of the paid-in capital,
and only one half of the amount of such legal reserve may be
capitalized. |
| Article 242 | Expenses incurred under Article 419, Paragraph 1, Section 5, and fees
paid for incorporation may be accounted on the assets side in the
balance sheet. The aforesaid amounts of money shall be amortized in
equal amounts in every fiscal year within five years after the
commencement of business. |
| Article 243 | (deleted) |
| Article 244 | (deleted) |
| Article 245 | I.Shareholders who have been continuously holding three per cent of
total number of the outstanding shares of a company for a period of
one year or longer may apply to the court for appointment of
inspector to inspect the current status business operations, the
financial accounts and the property of the company.
II.The court may, when it deems necessary based on the report made by
the inspector, order the supervisor(s) of the company to convene a
meeting of shareholders.
III.Any person who impedes, refuses or evades the inspection to be
conducted by the inspector, or the supervisor(s) who fails to
convene a meeting of shareholders as ordered by the court shall be
imposed with a fine of not less than NT$ 20,000 but not more than
NT$ 100,000. |
SECTION VII CORPORATE BONDS
|
| Article 246 | I.A company may, by a resolution adopted by the Board of Directors,
invite subscription for corporate bonds, provided that the reasons
for the said action as well as other relevant matters shall be
reported to the meeting of shareholders.
II.The aforesaid resolution shall be adopted by a majority of directors
at a meeting attended by two-thirds or more of the total number of
directors. |
| Article 246-1 | When a company issues corporate bonds, the company may covenant that
the preferential order of the corporate bonds to receive
indemnification shall be lower than that of other claims of the company. |
| Article 247 | I.The total amount of corporate bonds shall not exceed the net
remainder of all assets in hands of the company after deducing a l
liabilities and intangible assets.
II.The total amount of unsecured corporate bonds shall not exceed
one-half of the aforesaid net remainder. |
| Article 248 | I.When a company plans to issue corporate bonds, an application setting
forth therein the following particulars shall be filed with the
authority in charge of securities transactions:
1.The name of the company;
2.The total amount of corporate bonds to be issued and the value of
each bond;
3.The interest rate payable on the corporate bonds;
4.The method and deadline date for redemption of the corporate bonds;
5.The plan for raising and the method for custody of the funds raised;
6.The purpose for which the funds raised by issuing corporate bonds
are to be used, and the plan for using such funds;
7.If corporate bonds have been issued in the past, the amount of such
bonds remains unredeemed;
8.The value or the minimum value at which corporate bonds are to be
issued;
9.The total number of authorized shares of the company and the total
number and the amount of shares actually issued;
10.The amount of balance of all existing assets of the company after
deducting all liabilities and intangible assets;
11.The financial statements which should be prepared and submitted
pursuant to the requirements of the authority in charge of
securities transactions;
12.The name or title of the trustees of all holders of the corporate
bonds, and the covenants made in the mandates;
13.The name or title and the address of the bank or the post office
to collect payments on behalf of the company;
14.The name or title of the underwriter or the distributing agent(s),
if any, and the covenants contained in the mandate;
15.The type, name and evidential documents of the security or
collateral, if any, provided for issuing the corporate bonds;
16.The name or title and the evidential documents of the guarantor(s),
if any, for the issuance of the corporate bonds;
17.The facts or the current status of previous contract violating act
or delay in payment of principal and interest of indebtedness of
the company in respect of the corporate bonds previously issued or
other liabilities incurred by the company, if any;
18.If the corporate bonds to be issued are convertible into shares,
the method of such conversion;
19.If share subscription warrants is associated with the corporate
bonds to be issued, the method for exercising such option;
20.The minutes of the meeting of the board of directors involved;
21.Other matters pertaining to the issuance of the corporate bonds, or
other requirements stipulated by the authority in charge of
securities affairs.
II.Issue of corporate bonds to specific creditors shall be free from
the restrictions set out in Item 2, Article 249 and Item 2, Article
250 hereof provided, however, that the company shall, within 15
days after the issuance thereof, submit to the authority in charge
of securities affairs for its records a report on the issuance
thereof accompanied with relevant supporting information.
Companies eligible for issuing corporate bonds to specific
creditors shall not be limited to the companies listed on
centralized trading floor or over the counter trading places, and
the companies whose shares are issued to the public.
III.The number of creditors to whom the corporate bonds are to be
issued shall not exceed 35 persons, but this limitation shall not
apply, if the subscribers are of financial institutions.
IV.In the event of any change in any of the particulars declared under
the preceding Paragraph, the company shall file to the authority in
charge of securities affairs an application for correction. The
responsible person(s) who fail(s) to apply for such correction
shall be subject to a fine of not less than NT$ 10,000 but not more
than NT$ 50,000 to be imposed by the authority in charge of
securities affairs.
V.The information as required in Item 7; Items 9 through 11; and Item
17 of Paragraph I under this Article shall be audited and certified
by a certified public accountant; while the information as required
in Items 12 through 16 shall be verified and certified by a
practicing lawyer.
VI.The trustees as required in Item 12, Paragraph I under this Article
shall be limited to banking and trust enterprises, and shall be
appointed at the time when applying for issue of corporate bonds
and shall be paid by the company for their services.
VII.In the event the aggregate number and value of the corporate bonds
convertible into shares as set forth in Item 18 or of the aggregate
number and value of the shares subscribable under Item 19 of
Paragraph I of this Article plus the total number of outstanding
shares, the total number of shares convertible from the corporate
bonds previously issued, the total number of shares subscribable
by holders of the share subscription warrants associated to the
special shares previously issued, and the total number of shares
subscribable by holders of share subscription warrants previously
issued exceeds the total number of shares specified in the articles
of incorporation, the issue of convertible corporate bonds may be
effected only after a change or alteration of the articles of
incorporation for increasing the amount of capital stock has been
made. |
| Article 249 | Under any of the following circumstances, a company shall not issue
unsecured corporate bonds;
1.Where the company has done any act in breach of contract, or has been
in default of payment of principal and interest, in respect of
previously issued corporate bonds or other debts, although the debt is
now settled; or
2.Where the company's average annual net profit, after paying tax, of
the most recent three years or, in case the company has been in
operation for less than three years, of the years the company is in
operation, does not reach one hundred fifty per cent of the total
amount of interest payable on corporate bonds intended to be issued. |
| Article 250 | Under any of the following circumstances, a company shall not issue
corporate bonds:
1.Where the company has done any act in breach of contract, r has been
in default of payment of principal and interest, in respect of
previously issued corporate bonds or other debts, and such state of
thing still exist; or
2.Where the company's average annual net profit, after paying tax, most
recent three years or, in case the company has been in operation for
less than three years, of the years the company is in operation, does
not reach one hundred per cent of the total amount of interest
payable on corporate bonds intended to be issued, provided, however,
that corporate bonds that are issued under bank guarantee hall not be
restrained. |
| Article 251 | I.After approval to issue corporate bonds is granted to a company, if any
of the particulars in the application shall be found contrary to law
or ordinance, or fraudulent, the authority in charge of securities
exchange may annul the approval.
II.In the event of the aforesaid annulment of approval, the invitation
to subscriptions in respect to unissued bonds shall be called off,
and all issued bonds shall be redeemed immediately. The responsible
persons of the company shall be jointly liable to compensate the
company and the subscribers for loss or damage resulting there-from.
III.The provisions of Article 135, Paragraph 2, shall apply, mutatis
mutandis, to the circumstances specified in this article, Paragraph
1. |
| Article 252 | I.After approval of the application for issuing corporate bonds, the
board of directors shall, within thirty days after receipt of the
notice of such approval, start inviting subscriptions by preparing
forms of subscription, setting forth therein all the particulars
enumerated in Paragraph I, Article 248, and the title of the authority
in charge of securities affairs granting the approval, together with
the date and the Reference number of the approval letter, and by
making a public announcement thereof. But the financial statements
as required in Item 11, the covenants set out in the mandate as
required in Items 12 and 14, the evidentiary documents as required in
Items 15 and 16, and the minutes of the meeting as required in Item
20 under Paragraph I, Article 248 of this Law need not be declared in
the public announcement.
II.Where the company has failed to begin inviting subscriptions during
the aforesaid time limit but still desires to invite subscriptions, a
new application shall be filed therefore.
III.If the director designated to represent the company fails to prepare
the forms of subscription in accordance with the provisions of
Paragraph I, such director shall be subject to a fine of not less
than NT$ 10,000 but not more than NT$ 50,000 to be imposed by the
authority in charge of securities affairs. |
| Article 253 | I.Subscribers shall fill in the forms of subscription by indicating
therein the amount of subscription and their domiciles or residences,
affixing their respective signatures or seals thereon, and assume the
obligation to pay the amount they have filled in the forms of
subscription.
II.Subscribers who buy bearer corporate bonds with cash on the spot of
subscription need not fill in the aforesaid forms of subscriptions. |
| Article 254 | The Board of Directors shall after subscriptions have been made by
subscribers, request such subscribers to pay in full the amounts they
have subscribed. |
| Article 255 | I.Before making the request provided for in the preceding article, the
Board of Directors shall prepare a complete list, setting forth
therein the name and domiciles or residences of and the amount
subscribed by, all subscribers or registered corporate bonds and also
the number, serial numbers and amount of money of all bearer corporate
bonds already issued, and send the list together with the documents
set forth in Article 248, Paragraph 1, to trustees of corporate
bondholders.
II.The aforesaid trustees shall, for the interest of subscribers, have
the right to check and supervise the performance by the company of
the obligation arising from the issue of corporate bonds. |
| Article 256 | I.Mortgages or pledges established by the company for the purpose of
issuing corporate bonds may be taken over by the trustees for the
bondholders and may be established prior to the issue of corporate
bonds.
II.The trustees shall be responsible for the enforcement and safe-keep
of the aforesaid mortgages or pledges or the securities furnished
under the mortgages or pledges. |
| Article 257 | I.Certificates of corporate bonds shall, prior to their issuance, bear
serial numbers, issuing dates and all the particulars as required
Items 1 to 4, and Item 18 and Item 19 under Paragraph I of Article 248
of this Law. If the corporate bonds to be issued are issued under
guarantee, or are convertible to shares, or may be used for
subscribing shares, they shall be marked with the words of "Guaranteed"
, "Convertible" and/or "share subscription allowed", and shall be
affixed with signature or seal of three or more directors, and they
shall be certified by the authority in charge of securities affairs or
by the securities issuance and registration agencies authorized by
such authority.
II.In addition to the particulars to be indicated on the certificates of
corporate bonds as required by the preceding Paragraph, the name or
title and the signature or seal of the guarantor(s) shall also be
indicated and affixed on the face of the secured corporate bond
certificates. |
| Article 257-1 | I.In issuing corporate bonds, the company may print a single
consolidated corporate bond certificate to cover the total amount of
the corporate bonds to be issued at each time.
II.The corporate bond certificate to be issued under the preceding
Paragraph shall be placed under the custody of a centralized
securities custody institution.
III.The provisions set out in Item 2, Paragraph I of Article 248; Article
257; Article 258, and Article 260 of this Law regarding the value,
the serial number, and the endorsement for assignment shall not
apply to the issuance of corporate bonds to be effected in
accordance with the provisions of Paragraph I of this Article. |
| Article 257-2 | The company issuing corporate bonds may be exempted from printing the
certificate(s) in respect of the corporate bonds issued by it, but shall
register with a centralized securities custody the corporate bonds
issued by it. |
| Article 258 | I.The counterfoil of corporate bonds shall bear the serial numbers of
all such bonds and set forth the following particulars:
1.The names or titles and domiciles or residences of corporate
bondholders;
2.Particulars as required in Items 2 to 4, the names of trustees as
required in Item 112, the security/collaterals and guarantors as
required in Items 15 and 16, the particulars concerning conversion
as required in Item 18; and the subscription as required in Item19
of Paragraph I, Article 248 of this Law.
3.The date of issue of the corporate bonds; and
4.The date on which each corporate bond is procured by a corporate
bondholder.
II.Bearer corporate bond certificates shall be marked with the word
"bearer" in lieu of the statement required under Item 1 of the
preceding paragraph. |
| Article 259 | If the proceeds realized from the issue of corporate bonds are applied
for usage other than that stipulated without first applying for approval
of such change, the responsible persons of the company shall be subject
to imprisonment for a period not exceeding one year, detention and/or a
fine not exceeding NT$60,000, and shall be liable to compensate the
company for any loss or damage resulting there-from. |
| Article 260 | Registered corporate bond certificates may be transferred with
endorsement thereon by the holders; unless the name or title of the
transferee is recorded in the bond certificate, and the name or title
and domicile or residence of the transferee are recorded in the
counterfoil of the corporate bonds, such transfer shall not be set up
as a defense against the company. |
| Article 261 | Holders of bearer bonds may at any time request to have them converted
into registered bonds. |
| Article 262 | I.Where it is prescribed that corporate bonds may be converted into
shares, the company shall have the obligation to allot shares in
accordance with the prescribed method of conversion; however, the
corporate bondholders shall have the right to choose.
II.Where the corporate bond is vested with share subscription right,
the issuing company shall have the obligation to allot, in accordance
with the subscription regulations, the shares for the holder of
corporate bond to exercise the subscription right provided, however
that the holder of the share subscription warrant shall have the
option whether to exercise such right or not. |
| Article 263 | I.The company, which issues corporate bonds, or the trustees of
corporate bondholders, or the bondholders holding more than five
percent of the total corporate bonds in the same issue, may, for
matters concerning the common interest of corporate bondholders
convene meetings of corporate bondholders in the same issue.
II.Resolutions at the aforesaid meeting shall be adopted by two-thirds
or more of the votes of bondholders present who hold bonds
representing over three-fourths of the total number of corporate
bonds and each bondholder shall have one vote for each minimum par
value of the bonds.
III.The provisions governing the attendance at the meetings of
shareholders by shareholders of bearer share certificates of a
company limited by shares shall apply mutatis mutandis to holders of
bearer corporate bond certificates in attending the meetings referred
to in Paragraph 1. |
| Article 264 | The resolutions adopted at the meeting of corporate bondholders as
provided in the preceding article shall be recorded in the minutes of
meeting, signed by the chairman, and reported to the local court for
approval and publication, after which such resolutions shall then bind
of all corporate bondholders and shall be executed by trustees of
corporate bondholders, unless otherwise designated by the meeting of
corporate bondholders. |
| Article 265 | The court shall not approve the resolutions of a meeting of corporate
bondholders under any of the following certificates:
1.The procedure in convening a meeting of corporate bondholders or the
method of adopting resolutions at the meeting is in violation of law
or ordinance or statement contained in the subscription forms;
2.The resolution is not led to adoption in a proper way;
3.The resolution is apparently unjust and unfair; or
4.The resolution is contrary to the general interest of corporate
bondholders. |
SECTION VIII ISSUE OF NEW SHARES
|
| Article 266 | I.The provisions contained in this section shall govern the issue of
new shares by installments under Article 156, Paragraph 2 and the
issue of new shares after increase of capital under Article 278,
Paragraph 2.
II.The issue of new shares of a company shall be determined by the Board
of Directors by a resolution adopted by a majority vote at a meeting
attended by over two-thirds of the directors.
III.The provisions of Article 141 and Article 142 shall apply mutatis
mutandis to the issue of new shares. |
| Article 267 | I.Unless otherwise approved specifically by the central authority in
charge of the object enterprise, when a company issues new shares,
there shall be ten to fifteen per cent of such new shares reserved
for subscription by employees of the company.
II.When a government operated enterprise issues new shares, it may,
after obtaining the special approval from the competent authority in
charge of the said enterprise, reserve no more than ten per cent of
such new shares for subscription by its employees.
III.In issuing new shares, a company shall make public announcement and
advise, by notice, its original shareholders to subscribe for, with
preemptive right, the new shares, except those reserved under either
of the preceding two paragraphs, in proportion respectively to their
original shareholding and shall state in the notice that if any
shareholder fails to subscribe for new shares, his right shall be
forfeited. Where a fractional percentage of the original shares
being held by a shareholder is insufficient to subscribe for one new
share, the fractional percentages of the original shares being held
by several shareholders may be combined for joint subscription of
one or more integral new shares or for subscription of new shares in
the name of a single shareholder. New shares left unsubscribed by
original shareholders may be open for public issuance or for
subscription by specific person or persons through negotiation.
IV.The right to subscription of new shares as provided for in the
preceding three paragraphs, except those reserved for subscription by
employees, may be separated from the rights in original shares and
transferable independently.
V.The provisions provided in Paragraphs One and Two under this Article
for reserving the right of subscribing new shares by employees shall
not apply to the case where the new shares are distributed to original
shareholders as dividend shares capitalized with the reserve fund or
the value increments of assets.
VI.A company may restrain the shares subscribed by its employees under
Paragraph One or Paragraph Two of the article from being transferred
or assigned to others within a specific period of time which shall in
no case be longer than two years. The provisions set out in this
Article shall not apply to the company which is merged by or with
another company, or is split up, or is issuing new shares in
accordance with the provisions set out in Article 167-2, Article 262;
or Paragraph I, Article 268 of this Law.
VII.The responsible person of a company violating the provisions of
Paragraph I under this Article shall be subject to a fine of not less
than NT$ 20,000 but not more than NT$ 100,000. |
| Article 268 | I.For issue of new shares, a company shall, unless such new shares are
fully subscribed by its original shareholders and employees or by
specific persons by agreement without any new share being open for
public issuance, file an application, setting forth therein the
following particulars, with the authority in charge of securities
exchange for approval of public issuance:
1.The name of the company;
2.The originally authorized total number of shares, number of shares
issued, and the value thereof;
3.The total number of new shares to be issued, par value of each share
and other terms of issue;
4.The financial statements as required by the authority in charge of
securities affairs;
5.The capital increase plan;
6.Where special (preference) shares are to be issued, the kinds and
number of such shares, and the par value of each share, together
with the matters specified in various Items of Article 157;
7.The number and amount of shares can be subscribed by each holder of
a share subscription warrant or the person entitled to subscribe
preferred shares;
8.The name and address of bank or post office to collect payment on
shares on behalf of the company;
9.The name of the underwriter or distribution agency, if any, and
matters agreed upon between the company and the underwriter or
distributing agency;
10.The minutes indicating the resolution for the issue of new shares;
and
11.Other matters as may be required by the authority in charge of
securities exchange.
II.In the event of any change in any of the particulars required under
the preceding paragraph, the company shall apply to the authority in
charge of securities exchange for correction. The responsible person
of the company who fails to apply for such correction shall be
subject to a fine of not less than NT$ 10,000 but not more than
NT$ 50,000.
III.All matters specified in Items 2 to 4 and 6 of Paragraph I shall be
examined and certified by a certified public accountant, and those
in Items 7 and 8, Paragraph I under this Article shall be examined
and certified by a practicing lawyer.
IV.The provisions of Paragraphs I and II under this Article shall not
apply to the issue of new shares as referred to in Paragraph V of
Article 267 of this Law.
V.In case the aggregate of the number of new shares to be issued under
the preceding Paragraph and the number and amount of share subscription
warrants or the shares subscribable under the ancillary special share
subscription rights plus the total number of outstanding shares, the
total number of shares which can be acquired under outstanding
convertible corporate bonds, the total number of shares subscribable
under outstanding corporate bonds vested with share subscription
rights, the total number of special shares subscribable under
outstanding ancillary special share subscription warrants, and the total
number of shares subscribable under outstanding share subscription
warrants exceeds the total number of shares authorized by the articles
of incorporation, such excessive number of shares may be issued only
after completing the procedure for capital increase by making necessary
changes or alterations in the articles of incorporation. |
| Article 268-1 | I.The company issuing share subscription warrants or special shares under
ancillary share subscription rights vested with corporate bonds shall
have the obligation to allot the shares in accordance with the share
subscription regulations, without being bond by the provisions set out
in Article 269 and Article 270 of this Law provided, however, that the
holders of such share subscription rights shall have the option whether
to exercise such subscription rights or not.
II.The provisions set out in Paragraph II, Article 266; Paragraphs I and
II, Article 271; Article 272; and Paragraphs II and III, Article 273
hereof shall apply, mutatis mutandis, to company issuing share
subscription warrants. |
| Article 269 | Under any of the following circumstances a company shall not publicly
issue special shares with preference;
1.Where its average net profit of the most recent three years or, in
case the company has commenced its business for less than three years,
of the years the company is in operation, after paying taxes, is not
sufficient to pay dividends on special shares already issued and
intended to be issued;
2.Where it has been in default in making regular payment of dividends on
special shares already issued. |
| Article 270 | Under any of the following circumstances a company shall not publicly
issue new shares:
1.Where it has incurred losses in the most recent two consecutive years;
this, however, shall not apply where the nature of business requires a
longer period for preparation or it has a sound business plan under
which its profit-making capability will be improved; or
2.Where its assets are not sufficient to meet liabilities. |
| Article 271 | I.After approval to issue new shares publicly is granted to a company,
if any of the particulars in the application shall be found contrary to
law or ordinance or to be fraudulent, the authority in charge
securities exchange may annul the approval. In case of the annulment
in accordance with the preceding paragraph, all unissued shares shall
be withheld from issuing and holders of issued shares may, from the
time of annulment, demand repayment at the original fixed value of the
shares together with legal interest and may claim compensation for
loss or damage resulting there-from.
II.The provisions of Article 135, Paragraph 2 shall apply, mutatis
mutandis, to this article. |
| Article 272 | When a company publicly issues new shares, the payment on such shares
shall be in cash; where such shares are not issued to the public;
however, but rather subscribed to by shareholders or by particular
persons by agreement, any property necessary to the business of the
company may be in lieu thereof. |
| Article 273 | I.When a company publicly issues new shares, the Board of Directors
shall prepare forms of subscription, setting forth therein the
following particulars, to be filled by each subscriber with the number
of shares subscribed, the kind and value thereof, and his domicile or
residence, and to be signed and sealed by the subscriber:
1.Particulars specified in Article 29, Paragraph 1, Items 1 to 6 and
Article 130;
2.The total number of shares originally authorized or the number of
shares already issued out of the total number of authorized shares
after increase of capital and the value thereof;
3.Particulars specified in Article 268, Paragraph 1, Items 3 to 10; and
4.The time of payment for shares subscribed.
II.When a company publicly issues new shares, the company shall insert in
the aforesaid forms of subscription the serial number of the document
of approval and the date of approval by the authority in charge of
securities exchange and shall, within thirty days after receipt of the
notice of approval from such authority, publicly announce the
particulars specified in the preceding paragraph together with the
serial number of the document of approval and the date of approval and
issuance of such shares. The business report, inventory, meeting
minutes and the matters agreed upon with underwriter or distributing
agency need not be publicly announced.
III.After the expiration of the time-limit set forth in the preceding
paragraph, if a company still desires to invite public subscriptions,
a new application shall be filed.
IV.Subscribers who buy bearer share certificates with cash on the spot
need not fill in the forms of subscription required bevy Paragraph 1.
V.If the director designated to represent the company fails to prepare
the forms of subscription in accordance with the provisions of
Paragraph I under this Article, such director shall be subject to a
fine of not less than NT$ 10,000 but not more than NT$ 50,000 to be
imposed by the authority in charge of securities affairs. |
| Article 274 | I.Where a company issues new shares other than to the public, under the
proviso to Article 272, it shall still be required to make the forms
of subscription available as required by Paragraph I of the preceding
Article. If property other than cash is paid by subscribers,
additional particulars such as the name/title of the subscriber, the
type, the quantity and the value of or the standards for evaluation of
the value of the property furnished by the subscriber, and the number
of shares allotted to the subscriber by the company shall also be
stated in the form of subscription.
II.After accepting property other than cash payment, the Board of
Directors shall pass it on to the supervisor for inspection and
comment, and shall report to the authority for approval. |
| Article 275 | (deleted) |
| Article 276 | I.Upon expiration of the time limit set forth for payment on new shares,
if there are still some not subscribed or some subscribed but withdrawn
or not yet paid for, the shareholders who subscribed the new shares and
paid for them may set a time limit of over one month to press the
company for full subscription and full payment on shares, failing which
the shareholders may withdraw their subscriptions and the company
shall refund the money paid on shares together with legal interest.
II.ors whose acts are responsible for loss or damage to the company under
the aforesaid circumstance shall be jointly liable for compensation. |
SECTION IX MODIFICATION OR ALTERATION OF THE ARTICLES OF INCORPORATION
|
| Article 277 | I.A company shall not modify or alter its Article of Incorporation
without a resolution adopted at a meeting of shareholders.
II.The aforesaid resolution at the meeting of shareholders shall be
adopted by a majority of the shareholders present who represent
two-thirds or more of the total number of its outstanding shares.
III.For a company that has had its share certificates publicly issued,
if the total number of shares represented by shareholders present at
a shareholders' meeting is not sufficient to meet the criteria
specified in the preceding paragraph, the resolution may be adopted
by two-thirds of the votes of the shareholders present at a
shareholders' meeting who represent a majority of the total number
of issued shares.
IV.Where stricter criteria for the total number of shares represented by
shareholders present at a shareholders' meeting and the number of
votes required to pass a resolution as referred to in the preceding
two paragraphs are specified in the Article of Incorporation, such
stricter criteria shall govern. |
| Article 278 | I.A company shall not increase the amount of its capital until the total
number of its authorized shares have been fully issued.
II.After increase of the amount of capital, the number of new shares to
be issued in the first issue shall not be less than one-froths of the
total number of increased shares.
III.The total number of shares referred to in the preceding Paragraphs
shall not include the number and amount of the shares to be acquired
under convertible corporate bonds and the shares subscribable under
share subscription warrants.. The provisions of Paragraphs I and II
shall not apply to the case where the shares required for converting
corporate bonds into shares are issued under Article 262, or the
shares subscribable under share subscription warrants are issued
under Article 268-1 of this Law. |
| Article 279 | I.In case of replacement of old share certificates by new ones as a
result of a reduction in capital, the company shall, after the
registration of such reduction in capital, serve a notice upon each
shareholder and require all shareholders to exchange their share
certificates for new ones within a period of not less than six months,
and shall make it known to all shareholders that any person who fails
to effect such exchange within the time limit may forfeit all rights
he shall otherwise enjoy as a shareholder. In case bearer share
certificates have been issued, the foregoing information shall also be
publicly announced.
II.Any shareholder who fails to make the exchange within the aforesaid
time-limit shall forfeit all rights and privileges he shall otherwise
enjoy as a shareholder, and the company may dispose of his shares by
auction and pay the proceeds realized there-from to such shareholder.
III.Responsible persons of the company who violate the provision of this
article pertaining to the time limit for notice or public
announcement shall be severally subject to a fine of not less than
NT$3,000 but not more than NT$15,000. |
| Article 280 | In the event of a consolidation of shares as a result of reduction in
capital, the provisions of Paragraph 2 of the preceding article shall
apply mutatis mutandis to the disposition of shares which cannot be
consolidated. |
| Article 281 | The provisions of Article 73 and Article 74 shall apply mutatis
mutandis to reduction of capital. |
SECTION X REORGANIZATION OF A COMPANY
|
| Article 282 | I.Where a company which publicly issues shares or corporate bonds
suspends its business due to financial difficulty or there is an
apprehension of suspension of business thereof, but there is a
possibility for the company to be constructed or rehabilitated, the
company or any of the following interested parties may apply to the
court for reorganization:
1.Shareholders who have been continuously holding shares representing
ten per cent or more of the total number of issued shares for a
period of six months or longer; or
2.Creditors of the company who have claims equivalent to ten per cent
or more of the capital from the total number of issued shares.
II.For filing the reorganization application by a company under the
preceding Paragraph, the Board of Directors of the company shall
adopt a resolution by a majority vote of the directors present at a
meeting of the Board of Directors attended by over two-thirds of all
directors. |
| Article 283 | I.The application for reorganization of a company shall be filed to the
court in writing in five copies by the applicant(s) and shall state
therein the following particulars:
1.The name and domicile or residence of the applicant and a statement
on the status of the petitioner as such; in case the applicant is a
juristic person, or an organization or agency, the title, the
business place of office of the applicant;
2.The name or title and the location of the statutory representative
or the agent, if any, and the relationship between the statutory
representative and the applicant;
3.The name, location, office, business place, and the name, domicile
or residence of the responsible person representing the company;
4.The cause and the fact of the application;
5.The business undertaken by the company and the condition of such
business;
6.The reports, financial statements, records and books prepared by the
company for the most recent year in accordance with the provisions
set out in Article 282 hereof. If the application date falls beyond
the sixth month after commencement of a year, a separate semi-annual
balance sheet for the first half of the current year shall also be
submitted; and
7.Opinions on the reorganization of the company.
II.The matters as required in Items 5 through7 of the preceding
Paragraph may be supplemented by attachments.
III.In case the application is filed by the company, a substantial
reorganization proposal shall be submitted.
IV.In case the application is filed by shareholders or creditors, the
documents identifying the qualification of the applicants shall be
filed along with the application, but particulars as required in
Items 5 and 6 of Paragraph I under this Article need not be stated. |
| Article 283-1 | Under any of the following circumstances, an application for
reorganization shall be dismissed by the court:
1.Where the application is not file in accordance with the proper
procedure provided, however, that if the improper filing procedure can
be rectified, the applicant shall be ordered to take corrective action;
2.Where the company has not made public issuance of shares or corporate
bonds;
3.Where the company has been adjudicated bankrupt by a final ruling;
4.Where the settlement resolution made by the company in accordance with
this Law has become final;
5. Where the company has been dissolved; or
6. Where the company has been ordered to wind up and to liquidate within
a given time limit. |
| Article 284 | I.Subject to the dismissal of the application as provided for in the
preceding Article, the court shall, when it receives an application for
reorganization, forthwith send copies of such application to the
competent authority, the central authority in charge of end-enterprise
concerned, and the authority in charge of securities affairs, and shall
solicit their substantial opinions as to whether the reorganization
shall be effected or not..
II.The court may also solicit the opinions on the proposed reorganization
from the taxation authority and other relevant authorities at the
locality of the company.
III.The authorities whose opinions are solicited by the court in
accordance with the provisions of the preceding Paragraph shall give
their opinions within 30 days.
IV.In case the applicants are shareholders or creditors of a company, the
court shall send a notice with a copy of the application to the
company. |
| Article 285 | I.In addition to the requests for opinions as provided in Paragraph 1 of
the preceding article, the court may also select and appoint a person
with specialized knowledge or experience in the operation of the
business of the company but without any interest therein as the
inspector who shall, within thirty days after appointment, complete the
following examinations and submit a report accordingly:
1.The actual business, financial condition, and evaluation of the
assets of the company;
2.To examine in the light of the analysis of the business and
financial conditions, the assets and production equipment of the
company to see whether the reconstruction or rehabilitation of the
company is possible or not;
3.To examine the merits and demerits of the previous business operation
of the company and the records of management of the operation by the
responsible person of the company to see whether there was any
neglect or improper practices;
4.To examine whether there is any fraudulent or false statement in the
application;
5.To examine the feasibility of the reorganization proposal, if the
applicant is the company; and
6.To examine other relevant reorganization proposals.
II.The inspector may inspect all books, records of accounts, documents
and property relating to the business or finance of the company. The
directors, supervisors, managerial personnel, or other staff personnel
shall have the obligation to answer the enquiries made by the
inspector regarding the operation and financial activities.
III.Directors, supervisors, managerial officers and other employees of
the company who refuse the aforesaid examination or refuse to answer
the aforesaid questions without reason or make false statements shall
be severally subject to a fine not less than NT$ 20,000 but not more
than NT$ 1000,000. |
| Article 285-1 | I.Based on the report made by the inspector and by making reference to
the opinions provided by the central authority in charge of the end
enterprise concerned, the authority in charge of securities affairs,
the central authority in charge of financial affairs, and other
relevant authorities and organizations, the court shall, within 120
days after its receipt of a reorganization application filed by a
company, render a ruling to approve or to dismiss the said
re-organization application and shall notify all authorities concerned
of such ruling accordingly.
II.The 120-day reviewing period fixed in the preceding Paragraph may be
extended by a ruling to be made by the court for an additional 30
days provided that no more than two extensions may be made.
III.Under either of the following circumstances, the court may dismiss
a company re-organization application:
1.Where any statement or information contained in the written
application documents is found false or untrue; or
2.Where reconstruction and/or rehabilitation as proposed by the
applicant is deemed unfeasible after considering the business and
financial conditions of the company.
IV.When dismissing a company reorganization application by a ruling to
be rendered in accordance with the provisions set out in the preceding
Paragraph, the court may, ex officio, make a bankruptcy pronouncement,
if the conditions for bankruptcy are met. |
| Article 286 | Prior to a ruling for reorganizers of a company, the court may order
responsible persons of the company to prepare and submit lists of
creditors and shareholders of the company within seven days according to
the nature of their rights respectively, stating therein also their
domiciles or residences and the total amount of credits or the total
amount of money in shares. |
| Article 287 | I.Prior to rendition of a ruling for reorganization of a company, the
court may, at the request of the company or an interested party or
ex efficio, render a ruling for the following disposal:
1.Disposal for preservation of the company's property;
2.Restriction on the business of the company;
3.Restriction on performance of obligation of the company and exercise
of claim against the company;
4.Suspension of proceedings for bankruptcy, composition, or compulsory
execution and others;
5.Prohibition of transfer of registered share certificates; and
6.Assessment of the liabilities of responsible persons of the company
to compensate the company for loss or damage and preservation of
their property.
II.The term of validity of the ruling to be made under the preceding
Paragraph shall not exceed 90 days, unless otherwise fixed by the
court; and may be extended when necessary by the court at the request
of the company or an interest party provided that the duration of each
extension shall not exceed 90 days.
III.In case the ruling for dismissing a company reorganization application
becomes final prior to the expiry of the term of validity referred to
in the preceding Paragraph, then the ruling rendered under Paragraph
I under this Article shall become null and void.
IV.In rendering a ruling under the provisions of Paragraph I of this
Article, the court shall inform, by a notice, the authority in charge
of securities affairs and the central authority in charge of the
relevant end enterprise. |
| Article 288 | (deleted) |
| Article 289 | I.At the time of ruling for reorganizers, the court shall select and
appoint a person with specialized knowledge and experience in the
operation of the business of such company or a banking institution as
reorganizers supervisor and decide on the following matters:
1.The period and place for declaring rights of creditors and
shareholders, and the period shall not be less than ten days nor more
than thirty days from the date of ruling;
2.The date and place to examine rights of creditors and shareholders
thus declared, and the date shall be within ten days of the date of
expiration of the aforesaid period for declaration; and
3.The date and place of the first meeting of parties concerned, and the
date shall be within 30 days of the date after expiration of the
period for declaration mentioned in Item 1.
II.The aforesaid reorganization supervisor shall act under the
supervision of the court and may be discharged by the court at any time. |
| Article 290 | I.The reorganizers of the company shall be selected and appointed by the
court from among the relevant experts recommended by creditors,
shareholders, directors, the central authority in charge of the
relevant end enterprise, and/or the authority in charge of securities
affairs.
II.In the meeting of interested parties, if the result of the voting
conducted in groups under Article 302 shows that two or more groups
prefer a change of reorganizers, a list of candidates may be submitted
to the court along with an application for such change.
III.In case there is a plural number of reorganizers, execution of all
matters relating to reorganization shall be effected by a majority
vote of them.
IV.In the execution of duties, the reorganizers shall secure the prior
consent of the reorganization supervisor:
1.Disposal of property of the company outside the scope of its
business;
2.Change of the business of the company or in the ways of operation;
3.Contract of loans;
4.Conclusion or rescission of important or long term contracts, the
scope of which shall be determined by the reorganizers supervisor;
5.Proceeding in litigation or arbitration;
6.Waiver or assignment of rights of the company;
7.Dealing in cases where others exercise rights of retrieval,
rescission or set-off;
8.Appointment and removal of important officers of the company; and
9.Other acts restricted by the court. |
| Article 291 | I.After rendering a ruling of company reorganization, the court shall
publish the following particulars by means of a public notice:
1.The text and the date of the ruling of company reorganization;
2.The name or title and the domicile or address of the reorganization
supervisor and the reorganizers;
3.The period, date and place as fixed in accordance with the
provisions of Paragraph I, Article 289 hereof; and
4.The legal consequences which may result from the negligence of the
creditors and shareholders of bearer share certificates of the
company to declare their claims and rights.
II.The court shall still be obligated to serve notice in writing of the
ruling and the particulars contained therein to the reorganization
supervisor, the reorganizers, the company and the creditors and the
known shareholders.
III.At the time the court sends the aforesaid notice of ruling to the
company, the court shall send a court clerk to write down in the
accounting books the account-closing decision, to affix thereon his
signature or seal, and to write down a brief statement describing the
condition of such accounting books. |
| Article 292 | The court shall, after rendering ruling for reorganizers, notify the
authority with a copy of such ruling for registration of the institution
of reorganizers. |
| Article 293 | I.After delivery of the ruling for reorganization of the company, the
operation of the business of the company and the power of controlling
and disposing of the property thereof shall be transferred to
reorganizers, and the reorganization supervisor shall supervise such
transfer, which shall then be reported to the court.
II.Upon such transfer, the shareholders' meeting, directors and
supervisors shall cease to perform their duties and to exercise their
powers. At the time of the aforesaid transfer, the directors and
managerial officers of the company shall hand over to the reorganizers
all statements and records of accounts and documents relating to the
business and finance of the company and all property thereof.
III.Directors, supervisors, managerial officers or other members of the
staff of the company, for any of the following acts, shall be
severally subject to imprisonment for a period not exceeding one
year, detention and/or a fine not exceeding NT$60,000:
1.Refusal to transfer;
2.Concealment, destruction or damage of statements, records of
accounts or documents relating to the business or financial
condition of the company;
3.Concealment, destruction, or removal of property of the company,
or the disposal of such property a manner prejudicial to creditors;
4.Refusal to answer questions mentioned in the aforesaid paragraph
without reason; and
5.Fabrication of debts or acknowledgement of untrue debts. |
| Article 294 | After a ruling for reorganizers is rendered, all procedures of
bankruptcy, composition, compulsory execution and other litigation
involving property shall be suspended in due course. |
| Article 295 | The disposition made by the court in accordance with the provisions of
Article 287, Paragraph 1, Items 1, 2, 5 and 6 shall remain in effect
regardless of the ruling for reorganizers, and in the absence of such
disposition, the court may still render such rulings on the application
of an interested party or the reorganizers supervisor or ex officio after
having rendered the ruling for reorganizers. |
| Article 296 | I.All right of creditors of the company established prior to the ruling
for reorganizers shall be rights of creditors in reorganizers; all
rights with preference for repayment according to law shall be
preferred rights of creditors in reorganizers; all rights secured by
mortgages, pledges or rights of retention shall be secured rights of
creditors in reorganizers; and all right without such security shall
be rights of creditors without security. All such rights of creditors
shall not be exercised unless in a accordance with reorganizers
procedures.
II.The provisions of the Bankruptcy Law relating to the rights of
creditors in bankruptcy, with the exception of provisions governing
right of discriminative, and preferential rights shall apply mutatis
mutandis to the aforesaid rights of creditors.
III.Rights of retrieval, rescission or set off shall be exercised against
the reorganizers. |
| Article 297 | I.All creditors in reorganizers shall produce documents to sufficiently
prove the existence of their rights for declaring their rights to the
reorganizers supervisor and, if so declared, the prescription is
interrupted and, if not declared, no repayment shall be made according
to the reorganizers procedures.
II.Rights of registered shareholders of the company shall be based on
records in the shareholders' roster. The provision of the receding
paragraph governing declaration shall apply mutatis mutandis to rights
of unregistered shareholders and, if not declared, no such right shall
be exercised according to the procedures of reorganizers.
III.In case of failure to declare as provided in the two preceding
paragraphs for causes not attributable to the persons of whom
declaration is required, such persons may make good the declaration
within fifteen days after extinction of the cause; however, no
declaration shall be accepted after the reorganizers plan has been
adopted at a meeting of the concerned parties. |
| Article 298 | I.The reorganizers supervisor shall, after the expiration of the period
for declaring rights, in accordance with findings in the preliminary
examination, prepare lists of preferred creditors in reorganizers
secured creditors in organizers, unsecured creditors in reorganizers
and shareholders respectively, stating therein the nature of their
rights, sums of money and number of votes, and shall submit a report to
the court, keep all of the above at a suitable place, and publicly
announce the date and place of such keeping so that the creditors in
reorganizers, shareholders and other interested persons may inspect,
all to be done three days before the date mentioned in Article 289,
Paragraph 1, Item 2.
II.The number of votes of creditors in reorganizers shall be determined
in proportion to the amounts of money involved in their credits. The
number of votes of shareholders shall be that provided in the articles
of incorporation. |
| Article 299 | I.In the court's session of hearing rights of creditors in reorganizers
and rights of shareholders, the reorganizers supervisor, reorganizers,
and responsible persons of the company shall be present to answer
inquiries, and the creditors in organizers, shareholders and other
interested persons may be present to express their opinions.
II.In the event of any objection to the right of creditor or the right of
shareholder, the court shall render a ruling on such right.
III.Any interested person who substantially contests the right of creditor
or the right of shareholder shall institute an action for determination
within twenty days after the service of the ruling referred to in the
preceding paragraph, and prove to the ruling court that such action
has been instituted. After instituting such action and before a
judgment thereto becomes irrevocable, the right concerned shall be
exercised according to the contents of, and in the amount allowed by
the ruling referred to in the preceding paragraph; however, in
receiving the repayment in accordance with the plan of reorganizers,
the amount received shall be deposited with a court.
IV.A right of creditor or a right of shareholder shall be deemed final
and shall have the same effect as an irrevocable judgment against the
company and all the shareholders and creditors of the company if prior
to the end of hearing in court no objection was raised against such
right. |
| Article 300 | I.All creditors in reorganization and shareholders shall be concerned
persons in the reorganization of the company and shall attend meetings
of concerned persons. They may appoint a proxy to attend such meetings
if they are unable to do so in person for any cause.
II.The reorganization supervisor shall be the chairman of all meetings
of concerned persons and shall convene all such meetings with the
exception of the first meeting.
III.The reorganization supervisor, in calling meetings as provided in
the aforesaid paragraph, shall serve notice and public announcement
five days prior to the meeting, stating therein the purpose of the
meeting. In the event that no conclusion can be reached at one
meeting, and announcement to adjourn or postpone the meeting is made
on the spot by the reorganization supervisor, then no service of
notice or public announcement is required.
IV.At the meeting of concerned persons, the reorganizers and responsible
persons of the company shall be present to answer inquiries.
V.Responsible persons of the company who refuse to answer inquiries as
aforesaid without reason or make false statement in their replies shall
be severally subject to imprisonment for a period not exceeding one
year, detention and/or a fine not exceeding NT$60,000. |
| Article 301 | The functions of the meeting of concerned persons are as follows:
1.To hear reports on business and financial conditions of the company
and opinions on reorganizers of the company;
2.To deliberate and vote on the reorganizers plan; and
3.To resolve other matters relating to reorganizers. |
| Article 302 | I.At the meeting of concerned persons, the voting right shall be
exercised in groups of claimants as provided in Article 298, Paragraph
1, and resolutions shall be adopted by a majority vote of over
one-half of the aggregate votes of different groups; however, decision
on the reorganizers plan shall be made by a majority of over two-thirds
of the aggregate votes of different groups.
II.In the event that there is no net value of capital of the company, the
shareholders group shall not exercise voting right. |
| Article 303 | I.The reorganizers shall draw up a plan or reorganizers and submit same
together with reports and statements of business and finance of he
company to the first meeting of concerned persons for examination.
II.In the event of a change of reorganizers as provided in Article 290,
the reorganizers plan shall be submitted by newly appointed
reorganizers within one month. |
| Article 304 | I. The following particulars, if any, in the reorganizers of a company,
shall be stated clearly in the reorganizers plan:
1.Changes in rights of any or all creditors in reorganizers or
shareholders;
2.Changes in part or all of the business;
3.Disposal of property;
4.Ways and means of paying debts and the financial source thereof;
5.Standards and methods of valuation of assets of the company;
6.Alteration of the Articles of Incorporation of the company;
7.Readjustment or reduction of employees;
8.Issue of new shares or corporate bonds; and
9.Other necessary matters.
II.Subject to the deadline date for discharge of all liabilities
otherwise fixed, the duration for execution of the company
reorganization plan shall not exceed one year as calculated from the
date on which the court ruling of approval of the reorganization plan
becomes final. In case the reorganization plan can not be completed
as scheduled with good cause shown, an application for extension may
be filed, with prior consent of the reorganization supervisors, with
the court for a court ruling of extension provided, however, that if
the reorganization plan is still not completed upon expiry of the
extended period, then the court may, ex officio or at the petition of
interested party or parties, render a ruling of termination of the
company reorganization plan. |
| Article 305 | I.In case the reorganization plan is adopted at the meeting of interested
parties, the reorganizers shall apply to the court for a ruling of
approval and thereupon execute it, and shall also report such court
ruling of approval to the competent authority for its record.
II.The company reorganization plan approved by the court shall bind on
the company and the interested parties, and if the obligation to
perform as specified in such plan can be set up as the object of
compulsory execution, the reorganization plan may be subject to
compulsory executed accordingly. |
| Article 306 | I.In case the plan of reorganizers is not adopted by the groups with
voting right at the meeting of persons concerned, the reorganizers
supervisor shall forthwith report to the court and the court may direct
modification or alteration on fair and reasonable principle and order
the meeting of persons concerned to reconsider the plan reorganizers
within one month. In case the aforesaid plan of reorganizers remains
not adopted upon reconsideration at the meeting of persons concerned,
the court shall render a ruling to terminate the reorganizers; however,
if the company is really worthy of reorganizers the court may, as
against the dissenting group, amend the plan of reorganizers in any one
of the following ways and render a ruling to approve it:
1.That the property held as security by secured creditors in
reorganizers together with the right of claim is to be transferred to
the company after reorganizers, and such right is to remain in
existence without any change;
2.That the property held as security by secured creditors in
reorganizers, the property that can be appropriated to meet repayments
to unsecured creditors in reorganizers and the residual property that
can be distributed to shareholders may, on the basis of its price if
fair deals and in proportion to the sharing parts to which such
creditors and shareholders are entitled, be disposed of for
repayment, distributed to those entitled to receive it, or deposited
with a court; or
3.Other fair and reasonable ways beneficial to maintaining the business
of the company and protecting the right creditors.
II.In case the plan of reorganizers mentioned in the first paragraph of
the preceding article or in the preceding paragraph cannot or need
not be executed on account of change in circumstances or for a good
cause, the court may, on application of the reorganizers supervisor,
reorganizers, or persons concerned, render a ruling to order the
meeting of persons concerned to reconsider. In case there is obviously
no possibility of or necessity for reorganizers, the court may render
a ruling for termination of reorganizers.
III.The aforesaid plan of reorganizers adopted on reconsideration shall
be submitted in an application to the court for a ruling of approval. |
| Article 307 | I.In taking the measures as set forth in the two preceding Articles, the
court shall seek the opinions of the central competent authority, the
central authority in charge of the relevant end enterprise, and also
the authority-in-charge of securities affairs.
II.Where the court renders a ruling for termination of reorganization,
it shall notify the competent authority and provide it with a copy of
such ruling; and the competent authority shall, when the said court
ruling becomes final, forthwith make a registration of termination
of the reorganization plan, and if the conditions for bankruptcy are
met, the court may, ex officio, render a ruling to pronounce the
company bankrupt. |
| Article 308 | Except when the provisions of the Bankruptcy Law shall govern in the
case that a court has ex officio, rendered a judgment to adjudge a
company bankrupt, a ruling for termination of reorganizers rendered by a
court shall have the following effects:
1.Any disposition or effect thereof under Article 287, Article 294,
Article 295 or Article 296 shall be null and void;
2.A person who has been barred from exercising his right for neglect in
declaring the right shall have such right restored; and
3.The shareholders' meeting, directors and supervisors whose powers and
functions have been suspended on account of reorganizers shall have
such powers and functions restored forthwith. |
| Article 309 | During the process of reorganization of a company, if any of the
following provisions conflict with the fact, the court may, at the
request of the reorganizers, render a ruling of other appropriate
disposition:
1.The provisions of Article 277 governing amendment or alteration of the
articles of incorporation;
2.The provisions of Article 278 governing increase of capital;
3.The provisions of Article 279 and 281 governing the period of time for
serving notice and making public announcement of and restrictions on
the reduction of capital;
4.The provisions of Article 268 to 270 and Article1 276 governing issue
of new shares;
5.The provisions of Article 248 to 250 governing issue of corporate bonds;
6.The provisions of Article 128, Article 133, Article 148 through 150,
and Article 155 incorporation of companies; or
7.The provisions of Article 272 governing the categories of capital
contribution. |
| Article 310 | I.Reorganizers of a company shall complete the reorganization plan within
the implementation schedule specified therein; and upon completion of
the reorganization plan, shall apply to the court for a court ruling
of recognition of the completion of the reorganization, and shall,
after such court ruling became final, convene a meeting of shareholders
for election of directors and supervisors.
II.After assuming their offices as directors and supervisors, the
directors and supervisors shall, in conjunction with the reorganizers,
file an application with the competent authority for registration or
for company alteration registration. |
| Article 311 | I.Upon completion, the reorganizers of a company shall have the following
effects:
1.The rights of claims on the unpaid parts of obligatory rights already
declared shall expire except such parts as assigned to and assumed
by the company after reorganizers according to the plan of
reorganizers; the same shall apply to obligatory right not declared;
2.The changed, decreased or cancelled part of the right of shareholders
in consequence of the reorganizers shall expire; the same shall apply
to the right of bearer share certificates not declared; and
3.Procedure of bankruptcy, composition, compulsory execution and other
litigations involving property of the company prior to the ruling
for reorganizers shall be ineffective.
II.The rights of creditors of a company against sureties and other common
debtors of the obligations of the company shall not be affected by
the reorganizers of the company. |
| Article 312 | I.The following debts incurred during the reorganizers of the company
shall have preference for repayment over the rights of creditors in
reorganizers:
1.Debts incurred for continued operation of the business of the
company; and
2.Expenses incurred in the process of reorganizers.
II.The aforesaid right of preference for repayment shall not be
prejudiced on account of a ruling for termination of reorganizers. |
| Article 313 | I.Inspectors, reorganization supervisors and reorganizers shall perform
their duties with the care of good administrators. Their remuneration
shall be determined by the court in consideration of the nature of
their duties.
II.An inspector, reorganization supervisor or reorganizer who violates
law or ordinance in the performance of his duties, thereby causing
loss or damage to the company, shall compensate the company.
III.Inspectors, reorganization supervisors or reorganizers who make a
false statement or record of their acts within the scope of duties
shall be severally subject to imprisonment for a period not exceeding
one year, detention and/or a fine not exceeding NT$60,000. |
| Article 314 | The provisions of the Code of Civil Procedure shall apply mutatis mutandis to jurisdiction, application, notification process service, public announcement, ruling interlocutory appeal, and other proceedings in this section. |
SECTION XI DISSOLUTION AND CONSOLIDATION OR MERGER AND SPLIT-UP
|
| Article 315 | I.A company limited by shares shall be dissolved under any of the
following circumstances:
1.Upon occurrence of the cause of dissolution as specified in
the articles of incorporation;
2.Upon achievement or non-achievement of the objective of the business
undertaken by the company;
3.Upon adoption of a resolution to dissolve the company at a meeting
of shareholders;
4.Where the number of shareholders of registered share certificates is
less than two persons; except that the only one shareholder is a
government agency or a juristic person;
5.Upon consolidation or merger with another company;
6.Upon split-up of the company;
7.Upon bankruptcy of the company; and
8.Upon rendition of a dissolution order or judgment.
II.Under the circumstance specified in Item 1 of the preceding
paragraph, the company may continue its business operations after
amendment or alteration of the articles of incorporation is approved
by a meeting of shareholders; and under the circumstance set forth in
Item 4, the company may continue its business operations by increasing
the number of shareholders of registered share certificates. |
| Article 316 | I.A resolution for dissolution, consolidation or merger, or split-up of
a company shall be adopted by a majority vote at a meeting of
shareholders attended by shareholders representing two-thirds or more
of the total number of the outstanding shares of the company.
II.For a company that has its share certificates publicly issued, if the
total number of shares represented by shareholders present at a
shareholders' meeting is not sufficient to meet the criteria specified
in the preceding paragraph, the resolution may be adopted by
two-thirds of the votes of the shareholders present at a shareholders'
meeting attended by shareholders representing a majority of the total
number of the outstanding shares of the company.
III.Where a higher criteria for the total number of shares represented
by the shareholders present at a meeting of shareholders and the
total number of votes required to adopt a resolution thereat are
specified in the articles of incorporation of the company, such
higher criteria shall prevail.
IV.When a company is to be dissolved for any cause other than
bankruptcy, the board of directors shall forthwith notify each of the
shareholders of the essentials of such dissolution plan and make a
public announcement if bearer share certificates have been issued. |
| Article 316-1 | I.In the case of merger/consolidation between two independent companies
limited by shares or between a company limited by shares and a limited
company, the surviving company or the new company incorporated company
under the merger/consolidation project shall be limited to a company
organized in the form of a company limited by shares.
II.In the case of split-up of a company limited by shares, the surviving
company or the newly incorporated company shall be limited to a
company organized in the form of a company limited by shares. |
| Article 316-2 | I.Where 90% or more of the outstanding shares of a subsidiary company is
held by its controlling company, the controlling company may
merge/consolidate with the said subsidiary company upon a resolution
to be adopted separately at a meeting of the board of directors of
both the controlling company and the subsidiary company by a majority
vote of the directors present at the meeting of board of directors
attended by directors representing two-thirds of the directors of the
respective companies; and the resolutions of merger/ consolidation so
adopted shall be exempt from the application of the provisions set out
in Paragraphs I through III, Article 216 of this Law.
II.After adoption of the resolution by the board of directors of the
subsidiary company under the preceding Paragraph, a notice shall be
given to each of its shareholders and shall state therein that any
shareholder who has an objection against that resolution may, within
30 days or a longer period, submit a written objection requesting the
subsidiary company to redeem, at a fair price, the shares of the
subsidiary company he holds.
III.Where the share redemption price is to be decided by an agreement to
be reached through negotiation between the subsidiary company and its
shareholders under the preceding Paragraph, the subsidiary company
shall, within 90 days from the date of adoption of the resolution by
the board of directors, effect the payment of the redemption price;
whereas, if no agreement on the redemption price is adopted in the
foregoing negotiation within 60 days from the date of adoption of
the said resolution by the board of directors, the shareholders
shall, within 30 days after such 60-day period, apply to the court
for its decision on the redemption price by a court ruling.
IV.The request of a shareholder for redemption of shares by the
subsidiary company shall become mull and void, if the
merger/consolidation resolution is cancelled by the subsidiary
company. This clause shall also apply to the case where the
shareholder fails to make the requests within the time limit set out
in Paragraphs II and III under this Article.
V.The provisions governing shares held by an objecting shareholder shall
bind the controlling company.
VI.Where the articles of incorporation of the controlling company need to
be amended after completion of the merger/consolidation project, the
provisions of Article 277 hereof shall govern. |
| Article 317 | I.When a company is split up or to be consolidated or merged with another
company, the Board of Directors shall draft a split-up plan or a
contract of consolidation or merger in respect of the matters related
to such company split-up plan or the consolidation or merger contract
and shall submit the same to a meeting of shareholders. Any
shareholder who has expressed his dissension, in writing or verbally
with a record before or during the meeting, may waive his voting right
and request the comp any to buy back, shares of the split company he
holds at the then prevailing fair price.
II.In case the another company referred to in the preceding Paragraph is
a newly incorporated company, then the meeting of shareholders of the
split company shall be regarded as the promoters meeting of the said
another company, and election of the directors and supervisors of
such new company may be conducted at that meeting.
III.The provisions of Article 187 and Article 188 of this Law shall
apply, mutatis mutandis , to the circumstance specified in the
preceding Paragraph. |
| Article 317-1 | I.The contract of consolidation or merger, as mentioned in Paragraph 1
of the preceding article, shall be made in writing setting forth the
following particular:
1.The name of the consolidated or merged company and, after the
consolidation or merger, the name of the surviving company or the
newly incorporated company;
2.Total number of shares, kinds of shares and amounts of each kind
issued by the surviving company or newly incorporated company as a
result of the consolidation or merger;
3.Where shares are to be issued to shareholders of the dissolved
company by the surviving company or newly incorporated company as a
result of consolidation or merger, the total number of new shares,
kinds of shares and amount of each kind, method of distribution,
together with other relevant matters;
4.The relevant provision applicable if the amount of shares to be
issued to shareholders of the dissolved company after consolidation
or merger is less than the value of one share and payable in cash;
5.The Articles of Incorporation of a surviving company must be modified
or altered, or that of a newly incorporated company to be executed,
in accordance with Article 129. The aforesaid contract of
consolidation or merger shall be sent to shareholders together with
the notice to convene a meeting of shareholders for approval of the
resolution to be adopted for consolidation or merger.
II.The aforesaid contract of contract of consolidation or merger shall
be sent to shareholders together with the notice to convene a meeting
of shareholders for approval of the resolution to be adopted for
consolidation or merger. |
| Article 317-2 | I.The company split-up plan shall be reduced to writing and contain the
following particulars:
1.The changes/alterations need to be made in the articles of
incorporation of the existing company succeeding the business of the
split company, or the full text of the articles of incorporation;
2.The value of the business, the assets and the liabilities of the split
company, and the share swap ratio and calculation basis;
3.The total number, categories, and the number in each category of the
new shares to be issued by the existing company succeeding the
business of the split company or to be issued by the new company to
be incorporated;
4.The total number, categories, and the number of share in each
category of the shares to be acquired by the split company or its
shareholders;
5.Where the fractional share to be distributed to the split company or
its shareholder is to be paid in cash, the relevant provisions
governing the process thereof;
6.The rights and obligations of the split company to be succeeded by
the existing company or by the new company to be incorporated, and
the mattes in connection therewith;
7.Where the capital stock of the split company is reduced, the matters
in connection with such capital reduction;
8.The matters which shall be settled in the cancellation of the shares
of the split company; and
9.Where the company split-up plan is to be carried out jointly by a
company and another company, the resolutions of company split-up to
be adopted by both companies shall contain the matters pertaining to
such joint splitting arrangement.
II.The company split-up plan as required in the preceding Paragraph shall
be disseminated to all shareholders along with the notice of meeting of shareholders which is convened for a resolution on the approval of the company split-up plan. |
| Article 317-3 | Where the company merger/consolidation plan between a company and
another company is projected for promoting the reasonable operation of
the company, the following provisions shall govern:
1.When the surviving company or the new company to be incorporated is
applying for alteration registration in respect of the title to the
immovable property, the movable property which should be registered,
and various collaterals of the merged company, the applicant shall be
exempt from payment of the registration fees.
2.The stamp duty and deed tax to be incurred on account of the
implementation of the company merger/consolidation plan shall all be
exempted.
3.When the land originally provided for use by the merged company is
transferred together with the assets of the merged company, and after
the current value of such land has been assessed in accordance with the
Land Tax Law, the procedure for land title transfer registration shall
be forthwith effected accordingly; and the land value increment tax
payable on such land shall be credited to the "account payable" and
shall be payable by the surviving company or the new company to be
incorporated after the process of such merger or consolidation at the
time such land is re-transferred provided, however, that the land value
increment tax so credited to the "account payable" shall be paid on a
priority basis, if the surviving company or the said new company
enters into the procedure of bankruptcy or dissolution.
4.Where the proceeds to be derived from selling the machinery and
equipment originally provided for use by the merged company on account
of the merger/consolidation are used, in full, in the payment of or in
offsetting the costs required for purchase of new machinery and
equipment under the merger/consolidation project, the stamp duty to be
incurred shall be exempted.
5.Where the proceeds to be derived from selling the industrial/mineral
land and/or plant buildings originally provided for direct use by the
merged company on account of the merger or consolidation are used, in
full, in the payment of or in offsetting the costs required for
purchase of new land and/or new plant buildings, the deed tax and/or
the stamp duty leviable on the company merger/consolidation transaction
shall be exempted.
6.The good will created as a result of merger/consolidation may be
amortized within 15 years.
7.The expenses arising from the merger/consolidation may be amortized
within 5 years.
8.The loss to be incurred from selling defective claims under the merger/
consolidation project may be offset within 15 years. |
| Article 318 | I.After consolidation or merger of a company, the Board of Directors of
the surviving company or promoters of the new company shall, after
having completed the procedure of serving follow-up notice to
creditors and, in case there are shares consolidated as a result of
the consolidation or merger transaction, after such consolidation
becomes effective or, in the case where shares are not suitable for
consolidation, after such shares are disposed of, take the following
appropriate procedures resp ectively as the case may be:
1.The surviving company shall at once convene a meeting of the
shareholders after consolidation or merger and report on matters of
consolidation or merger and, in case of any necessity to modify or
alter the Articles of Incorporation, shall also modify or alter the
Articles of Incorporation;
2.The newly incorporated company shall at once convene a meeting of
promoters and draw up the Articles of Incorporation.
II.The provisions set out in the Articles of Incorporation drawn up under
the preceding Paragraph shall not contravene any of the provisions set
out in the contract of consolidation or merger. |
| Article 319 | The provisions of Article 73 to 75 shall apply, mutatis mutandis, to
the merger/consolidation or split-up of a company limited by shares. |
| Article 319-1 | The surviving company or the new company to be incorporated and
succeeding the business of the split company after the company split-up
transaction shall, to the extent not exceeding the capital fund
contributed by it in respect of the business succeeded by it, assume the
joint and several responsibility of discharging the liabilities incurred
by the split company prior to the split- up transaction. However, the
creditors' right to claim for the performance of the joint and several
responsibility of discharging the foregoing liabilities shall become
extinguished, if not exercised by the creditors within two year from the
date of reference day of the company split-up transaction. |
| Article 320 | (Deleted) |
| Article 321 | (Deleted) |
SECTION XII LIQUIDATION
|
SUB-SECTION 1. ORDINARY LIQUIDATION
|
| Article 332 | The company shall keep all statements, records of account and
documents for a period of ten years from the date of filing a
record with the court after the completion of liquidation, and the
custodian thereof shall be appointed by the court upon application
of the liquidator and other interested persons. |
| Article 333 | If there are assets to be distributed after the completion of
liquidation the court may, upon application of interested persons,
appoint a liquidator to redistribute such assets. |
| Article 334 | The provisions of Article 83 to 86, Article 87, Paragraph 3 and 4,
Article 89 and Article 90 shall apply mutatis mutandis to liquidation
of a company limited by shares. |
SUB-SECTION 2. SPECIAL LIQUIDATION
|
| Article 335 | I. Where circumstances exist which apparently impede the execution
of liquidation, the court may, upon the application of any creditor
or liquidator or shareholder or ex officio, order the company to
institute a process of special liquidation. The same shall apply
where there is suspicion that the liabilities of the company exceed
assets; but in such a case, only the liquidators may file an
application.
II. Provisions concerning the suspension of procedures of bankruptcy,
composition and compulsory execution as specified in Article 294
shall apply mutatis mutandis to the special liquidation. |
| Article 336 | The court may, prior to the order to institute a process of special
liquidation upon the application of any of the persons specified in
the preceding article or ex officio, first effect any of the
dispositions mentioned in Article 339. |
| Article 337 | I. Whenever any important reason exists, the court may remove
a liquidator.
II. In case of any vacancy among the liquidators or necessity to
increase the number of liquidators, the court shall appoint a
liquidator. |
| Article 338 | The court may, at any time, order liquidators to report on the
business of liquidation and on the state of the property,
and may also make any investigation necessary for the supervisor
of the liquidation. |
| Article 339 | Whenever the court deems necessary for the supervisor of the
liquidation, it may effect any of the dispositions mentioned in
Article 354, Paragraph 1, Items 1 and 2 or Item 6. |
| Article 340 | The company shall discharge its obligations in proportion to the
amount of creditors; however, this shall not apply to credits with
preferential right of performance or right of exclusion in accordance
with law. |
| Article 341 | I. Whenever it is deemed necessary, the liquidators may, during the
process of liquidation, convene a meeting of creditors.
II. Creditors having rights of claim representing not less than ten
percent of the total amount of credits known to the company may
request the liquidators to convene a meeting of creditors by
filing a written application, stating therein the reasons for
convening such a meeting.
III. The provisions of Article 173, Paragraph 2 shall apply mutatis
mutandis to the circumstance specified in the aforesaid paragraph.
IV. The rights of claim of creditors mentioned in the proviso to the
preceding article shall not be included in the total amount of
credits mentioned in Paragraph 2 hereof. |
| Article 342 | The convener of the meeting of creditors may invite creditors with
rights of claims mentioned in the preceding article, paragraph 4,
to be present at the meeting of creditors to express opinions with
no right to vote. |
| Article 343 | The provisions of Article 172, Paragraph 2, 3 and 6; Article 176;
Article 183; Article 298, Paragraph 2; and Article 123 of the
Bankruptcy Law shall apply mutatis mutandis to special liquidation. |
| Article 344 | The liquidators shall draw up a report on their investigation in
the state of the company's business and property, a balance sheet
and an inventory of the company, and bring up at the meeting of
creditors and shall also state their opinion on the policy for
carrying out the liquidation and pre-determined matters. |
| Article 345 | The meeting of creditors may, by resolution, appoint a liquidation
inspector and may remove him at any time. The aforesaid resolution
shall have the approval of the court. |
| Article 346 | I. In doing any of the following acts, the liquidators shall obtain
the consent of the liquidation inspector and, if the liquidation
inspector does not give consent, they shall convene a meeting of
creditors to resolve on the matters; however, this shall not apply
if the value involved is not more than one-tenth of one per cent
of the total value of asset:
1.Disposal of any property of the company;
2.Borrowing of money;
3.Bringing of an action;
4.Agreement to compromise or seek arbitration; or
5.Relinquishment of any right.
II. If, in a case where a resolution of a meeting of creditors is
required, there exist urgent circumstances, the liquidators may,
with the permission of the court, do any of the acts mentioned in
the preceding paragraph.
III.A liquidator who acts in contravention of the provision1s of the
preceding two paragraphs shall be jointly liable with the company
to a bona fide third party.
IV. The provisions of the proviso to Article 84 paragraph 2 shall
not apply to special liquidation. |
| Article 347 | The liquidators may consult the opinion of the liquidation inspector
and make a proposal for an agreement of settlement to the meeting of
creditors. |
| Article 348 | The terms of an agreement of settlement shall be equal among the
creditors; however, this shall not apply to the rights of claim of
creditors mentioned in the proviso to Article 340. |
| Article 349 | When it is deemed necessary for the preparation of a draft for an
agreement of settlement, the liquidators may request the creditors
mentioned in the proviso to Article 340 to participate. |
| Article 350 | I. An agreement of settlement shall be adopted by the concurrence of
the creditors holding three-fourths or more of the total amount of
claims with rights to vote at a meeting attended by over one half
of the creditors entitled to vote.
II. The aforesaid resolution shall be approved by the court.
III. The provisions of Article 136 of the Bankruptcy Law shall apply
mutatis mutandis to the agreement of settlement mentioned in
Paragraph 1. |
| Article 351 | When it is necessary for carrying out an agreement of settlement,
the terms of such agreement may be modified or altered, in which
case, the provisions of the preceding four articles shall apply
mutatis mutandis. |
| Article 352 | I.When it is deemed necessary in view of the state of the company's
property, the court may order inspection of the company's business
and property upon the application of liquidators, the liquidation
inspector, shareholders who have been holding three per cent or more
of the total number of issued shares continuously for a period of
six months or more, creditors who have filed an application for
special liquidation, or creditors who have rights of claim
representing not less than ten per cent of the total a mount of
credits known to the company or of its own motion.
II.The provisions of Articles 285 shall apple mutaatis mutandis to
the circumstance mentioned in the preceding paragraph. |
| Article 353 | The inspector shall report to the court the following matters in
consequence of the inspection:
1.Whether there have been any incidents for which any promoter,
director, supervisor, managerial officer or liquidator should
be responsible under Article 34, Article 148, Article 155,
Article 193 or Article 224;
2.Whether a measure to preserve the property of the company is
necessary; and
3.Whether it is necessary to employ a measure of preservation on
the property of any promoter, director, supervisor, managerial
officer or liquidator, for the exercise of any claim for damage
by the company. |
| Article 354 | When it is deemed necessary, the court may, on the basis of the
report mentioned in the preceding article, effect any of the
following dispositions:
1.Measures of preservation on the property of the company;
2.Prohibition against transfer of registered shares;
3.Prohibition against release of the responsibilities of any of the
promoters, directors, supervisors, managerial officers or
liquidators;
4.Annulment of the release of the responsibilities of any of the
liquidators; this, however, shall not apply to any release effected
one year prior to the institution of the special liquidation other
than for any illegal purpose;
5.Assessment of any claim for damages arising from the
responsibilities of any of the promoters, directors, supervisors,
managerial officers or liquidators; and
6.Measures of preservation on the property of any of the promoters,
directors, managerial officers or liquidators on account of any
claim for damages mentioned in the preceding item. |
| Article 355 | If, in cases where an order for the institution of a process of
special liquidation has been made, there is no prospect of reaching
an agreement of settlement, the court shall ex officio make an
adjudication of bankruptcy in accordance with the Bankruptcy Law.
The same shall apply where there is no prospect of an agreement
of settlement being duly carried out. |
| Article 356 | The provisions pertaining to ordinary liquidation shall apply
mutatis mutandis to matters in special liquidation if not provided
for in this sub-section. |
Chapter VI (Deleted)
|
| Article 357 | (Delete) |
| Article 358 | (Delete) |
| Article 359 | (Delete) |
| Article 360 | (Delete) |
| Article 361 | (Delete) |
| Article 362 | (Delete) |
| Article 363 | (Delete) |
| Article 364 | (Delete) |
| Article 365 | (Delete) |
| Article 366 | (Delete) |
| Article 367 | (Delete) |
| Article 368 | (Delete) |
| Article 369 | (Delete) |
| Article 369-1 | The term "affiliated enterprises" as used in this Law shall refer to
enterprises which are independent in existence but are interrelated in
either of the following relations:
1.Companies having controlling and subordinate relation between them; or
2.Companies having made investment in each other. |
Chapter VI-I Affiliated Enterprises
|
| Article 369-10 | I. Subject to the condition that the fact of mutual investment is
known to both mutual investment companies, the number of voting
power exercisable by either investing company in the invested
company shall not exceed one third of the total number of the
outstanding voting shares or one third of the total amount of the
equity capital of the invested company provided, however, that the
voting power associated with the dividend shares distributed from
capitalization of surplus earnings or excess legal reserve shall
still be exercisable.
II.In case a company has not received a similar notice from another
company after having given a notice such another company in
accordance with the provisions of Article 369-8 of this Law nor
does it know the existence of mutual investment relation between
them, then its right to exercise the voting power in the capacity
of a shareholder of such another company shall be free from the
restriction set forth in preceding Paragraph. |
| Article 369-11 | In calculating the number of shares or the amount of equity capital
of another company being held by a company under this Chapter, the
following shares or equity capital shall also be included into the
calculation:
1.The shares or equity capital of another company being held by the
subordinate company of companies of the investing company;
2.The shares or equity capital (of such another company) being held
by a third party for the investing company; and
3.The shares or equity capital (of such another company) being held
by a third party for any subordinate company of the investing
company. |
| Article 369-12 | I.A subsidiary company of a listed company shall, at the end of each
fiscal year, prepare and submit a report regarding the relationship
between itself and its controlling company indicating therein the
legal acts, funds flow and loss and profit status between the two
companies.
II.The controlling company of a listed company shall, at the end of
each fiscal year, prepare for submission a consolidated business
report and consolidated financial statements of the affiliated
enterprises involved.
III.The rules for preparation of the reports and statements as
required in the preceding two Paragraphs shall be prescribed
by the authority in charge of securities exchange business. |
Chapter VII Foreign Company
|
| Article 370 | The name of a foreign company shall be translated into Chinese and,
in addition to the class to which it belongs, also indicate its
nationality. |
| Article 371 | I.A foreign company may not apply for recognition without making
incorporation registration in its own country and conducting its
business operation therein.
II.A foreign company may not transact business within the territory
of the Republic of China without obtaining a certificate of
recognition from the government of the Republic of China and
completing the procedure for branch office registration.. |
| Article 372 | I.A foreign company that shall appropriate funds exclusively for
its operation of business in the Republic of China shall be subject
to the minimum requirement as may be specified by the authority of
its capital in respect of its business.
II.A foreign company shall designate representative within the
territory of the Republic of China to represent the company in all
litigious and non-litigious matters and to serve as its responsible
persons in the Republic of China. |
| Article 373 | A foreign company shall not be recognized under any of the following
circumstances:
1.If its objective or business is in contrary to the law, public order
or good custom of the Republic of China; or
2.If any information or statement contained in the application
documents filed by it is found false. |
| Article 374 | I.A foreign company shall, after its recognition, keep a copy
of its Articles of Incorporation in the office of its
representative for litigious and non-litigious matters or
branch office within the territory of the Republic of China.
In case there are shareholders of unlimited liability, a roster
of such shareholders shall also be kept.
II.Responsible persons of the company who fail to keep a copy of
its articles of Incorporation or the roster of shareholders of
unlimited liability in violation of the aforesaid provision shall
be severally subject to a fine of not less than NT$ 10,000 but not
more than NT$ 50,000. Any further failure of the same nature shall
be imposed with a fine of not less than NT$ 20,000 but not more
than NT$ 100,000 for each successive failure. |
| Article 375 | A foreign company, after having been given certificate of recognition,
shall have the same rights and obligations and shall be subject to the
same jurisdiction of the authority as a domestic company, unless
otherwise provided by law. |
| Article 376 | (deleted) |
| Article 377 | The provisions of Article 9, Article 10 and Article 12 to 25 shall
apply mutatis mutandis to a foreign company. |
| Article 378 | A foreign company which has received a certificate of recognition to
transact business in the Republic of China and which desires to cease
doing so, shall apply to the competent authority for withdrawal of the
recognition; however it may not be exempted from any obligation and
debtincurred by it prior to the filing of such application. |
| Article 379 | I.In any of the following events, the authority shall revoke or nullify
the certificate of recognition granted to a foreign company:
1.Any of the particulars set forth in filing an application for
recognition or any of the documents attached thereto have been
proved to be false;
2.The company has been dissolved;
3.The company has been declared bankrupt.
II.The aforesaid revocation or nullification of a certificate of
company recognition under the preceding Paragraph shall in no
way impair the rights of creditors and the obligations of the
company. |
| Article 380 | I.A foreign company which surrenders its certificate of recognition
or has its certificate of recognition revoked, shall complete
liquidation of its business within the territory of the Republic
of China or right and obligation incurred by its branch office.
Any outstanding obligation shall still be discharged by such
foreign company.
II.The aforesaid liquidation shall be undertaken by the responsible
person of the foreign company within the territory of the Republic
of China or the managerial officer of its branch office. The
provisions of this law pertaining to the process of liquidation
applicable to different classes of companies shall apply mutatis
mutandis1 to such foreign companies according to their respective
nature. |
| Article 381 | The property of a foreign company within the territory of the
Republic of China shall not be moved out of the territory of the
Republic of China during the time of liquidation and shall not be
disposed of except by the liquidator in the execution of the
liquidation. |
| Article 382 | The responsible person or managerial officer of a foreign company
within the territory of the Republic of China who acts in
contravention of the provisions of the two preceding articles shall
be jointly liable with such foreign company in respect of the
transactions done within the territory of the Republic of China or
obligation contracted by its branch office. |
| Article 383 | (Deleted) |
| Article 384 | A foreign company, after having received its certificate of
recognition, may be subject, whenever necessary, to examination
of its books, records and documents relating to its business by
the Authority. |
| Article 385 | Prior to any replacement or departure of its representative as
provided in Article 372, Paragraph 2, a foreign company shall designate
another representative and file a report stating the name,
nationality and domicile or residence of such representative with the
authority for registration |
| Article 386 | I.A foreign company which, having no intention to sep up a branch
office to transact business within the territory of the Republic of
China, has not applied for recognition in the Republic of China,
but designates a representative for the performance of juristic acts
relating to its business in the territory of the Republic of China,
shall file an application for recordation with the competent
authority setting forth therein the following particulars:
1.The name, class of company, nationality and location of the
company;
2.Its authorized capital and the date of its incorporation;
3.The business of the company and the juristic acts relating to
its business to be done by its representative in the territory
of the Republic of China; and
4.The name, nationality and domicile or residence of its designated
litigious and non-litigious representative in the territory of
the Republic of China.
II.If the aforesaid representative shall, from time to time, be
required to reside in the territory of the Republic of China,
the company shall establish a representative's office and report
its location in accordance with the aforesaid provisions.
III.The documents filed for recordation under the preceding two
Paragraph shall be certified by the embassy/consulate, the
representative office, business office of or any other institute
authorized by the Ministry of Foreign Affairs and stationed at
the locality where the competent authority of its own country or
its representative conducts its/his business or legal acts or at
the place where its representative's office is located.
IV.A foreign company may not set up a representative's office within
the territory of the Republic of China unless an application is
filed for designation of the representative for record. |
Chapter VIII Registration and Recognition of Companies
|
Section I Application
|
| Article 387 | I. In applying for company registration or recognition, an application
together with a complete set of the documents as required shall be
filed with the central competent authority by the responsible person
who represents the company for its approval. In the case the
application is filed by an agent, a power of attorney shall be
attached thereto.
II. Where there is a plural number of responsible person designated to
represent the company, one of them may be authorized to file the
application.
III. The agent referred to in Paragraph I shall be limited to a
certified public accountant or a lawyer.
IV. Regulations governing company registration and recognition
procedure and the alteration thereof shall be prescribed by
the central competent authority.
V. The regulations to be prescribed under the preceding Paragraph
include applicant, application documents, application procedure,
deadline dates for filing the application, and other relevant
matters.
VI. The responsible person of a company who fails to file the
application beyond the appropriate deadline date specified in
the regulations to be prescribed under Paragraph IV hereinabove
shall be imposed with a fine of not less than NT$ 10,000 but
not more than NT$ 50,000.
VII. Subject to the provisions set out in Paragraph IV hereinabove,
the competent authority shall further order the responsible
person to rectify his law violating act within a given time
limit; and if he fails to take corrective action beyond the
given time limit, he shall be imposed with a fine of not less
than NT$ 20,000 but not more than NT$ 100,000 consecutively for
each time of incompliance until the law violating act is rectified. |
| Article 388 | In case any company registration application filed is held by the
competent authority to be contrary to this Law or not in conformity
with legal procedure, correction of errors shall be ordered, and the
registration will not be made until such errors shall have been corrected. |
| Article 389 | (deleted) |
| Article 390 | (deleted) |
| Article 391 | An applicant who is convinced after filing that there are errors
or omissions in matters stated, may apply for rectification of the
same. |
| Article 392 | Upon an application by a company for certification of matters contained
in its company registration file being kept by the competent authority,
the competent authority may issue the certificate as requested. |
| Article 393 | I. The responsible person of a company or any interested person may,
with reasons stated, apply for an access to examine or for making
copy of the contents of such company registration records or
documents in file provided, however, that the authority may
repudiate such application or may set up a limitation of the
information or data to be copied by the applicant.
II. The following particulars of company registration shall be made
open to the public by the competent authority, and any person
may apply to the competent authority for an access thereto or
for making copy thereof:
1.The name of the company;
2.The scope of business of the company;
3.The location of the company;
4.The shareholder(s) executing the business operations or
representing the company;
5.The name of directors and supervisors and their respective
shareholdings in the company;
6.The name of the manager;
7.The amount of authorized capital stock or of the paid-in
capital; and
8.The articles of incorporation of the company.
III. Any person may have the access to the information web site of
the competent authority to examine the information enumerated
in Items 1 through 7 of the preceding Paragraph. |
| Article 394 | (deleted) |
| Article 395 | (deleted) |
| Article 396 | (deleted) |
| Article 397 | I. In case a company fails to file application for dissolution with
the authority after it has been dissolved, the authority may, ex
officio or at the request of any interested party, rescind its
registration.
II. When executing the rescission of company registration under the
preceding Paragraph, the competent authority shall, in addition
to requiring , by an order or a ruling, the dissolution of the
company, instruct the responsible person of the company to file
a statement of objection, if may, within a period of thirty days.
If no objection has been filed upon the lapse of the prescribed
period or if the objection is found not well grounded, its
registration shall be rescinded, |
| Article 398 | (deleted) |
| Article 399 | (deleted) |
| Article 400 | (deleted) |
| Article 401 | (deleted) |
| Article 402 | (deleted) |
| Article 402-1 | I. A company which suspends its business for a period of more than one
month shall, within fifteen days from the date on which its business
is suspended, file an application with the competent authority for
registration of its business suspension.
II. The business suspension as applied for in the preceding Paragraph
shall be for a maximum of one year. After the expiration of the
suspension period, application for resumption of business shall be
filed with the competent authority within fifteen days. |
| Article 403 | (deleted) |
| Article 404 | (deleted) |
| Article 405 | (deleted) |
| Article 406 | (deleted) |
| Article 407 | (deleted) |
| Article 408 | (deleted) |
| Article 409 | (deleted) |
| Article 410 | (deleted) |
| Article 411 | (deleted) |
| Article 412 | (deleted) |
| Article 413 | (deleted) |
| Article 414 | (deleted) |
| Article 415 | (deleted) |
| Article 416 | (deleted) |
| Article 417 | (deleted) |
| Article 418 | (deleted) |
| Article 419 | (deleted) |
| Article 420 | (deleted) |
| Article 421 | (deleted) |
| Article 422 | (deleted) |
| Article 423 | (deleted) |
| Article 424 | (deleted) |
| Article 425 | (deleted) |
| Article 426 | (deleted) |
| Article 427 | (deleted) |
| Article 428 | (deleted) |
| Article 429 | (deleted) |
| Article 430 | (deleted) |
| Article 431 | (deleted) |
| Article 432 | (deleted) |
| Article 433 | (deleted) |
| Article 434 | (deleted) |
| Article 435 | (deleted) |
| Article 436 | (deleted) |
| Article 437 | (deleted) |
Section II Fees
|
| Article 438 | Upon approving the application filed by any person in accordance with this Law for pre-registration enquiry, registration, examination, or making opy of company name and scope of business, or requesting for certification of the company information registered, the competent authorities concerned shall charge the applicant an examination fee, registration fee, checking fee, copy fee, and/or certification fee in accordance with the appropriate charging rates to be fixed by the central competent authority. |
| Article 439 | (Deleted) |
| Article 440 | (Deleted) |
| Article 441 | (Deleted) |
| Article 442 | (Deleted) |
| Article 443 | (Deleted) |
| Article 444 | (Deleted) |
| Article 445 | (Deleted) |
| Article 446 | (Deleted) |
Chapter IX Supplemental Provisions |
| Article 447 | (Deleted) |
| Article 448 | In case of any refusal to pay the fines specified in this law, the case shall be referred to compulsory execution in accordance with the law.. |
| Article 449 | I. This law shall come into force from the date of promulgation.
II. Except for the effect date of the newly amended Article 373 and Article 383 to be decided by the Executive Yuan, all other amendments to this Law shall take effect from the date of promulgation thereof. |