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Relevant Laws

Title：Company Act (2021.12.29)
Article 128     A company limited by shares shall have two or more promoters.
    Any person without disposing capacity, with limited disposing capacity or having been adjudicated of the commencement of assistantship and such assistantship having not been revoked yet is not qualified as a promoter.
    Any government agency or any juristic person may become a promoter, provided, however, that the juristic person eligible to act as a promoter shall be limited to that conforming to any of the following requirements:
  1. a company or a limited partnership;
  2. a juristic person which contributes any proprietary technology or intellectual property right created on its own through research and development as its investment capital contribution; or
  3. a juristic person which is operating a category of business that has been recognized and approved to be in conformity with the objective of its incorporation by the central authority in charge of the end enterprise involved.
Article 133     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 agents; and
  6. Other matters as may be prescribed by the authority in charge of securities exchange.
    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.
    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 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 not 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 155     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.
    The promoters shall, even after incorporation, be jointly and severally liable for debts of the company incurred prior to incorporation.
Article 248     When a company plans to issue corporate bonds, an application setting forth therein the following particulars shall be filed with the competent authority in charge of securities affairs:
  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 competent authority in charge of securities affairs;
  12. The name or title of the trustees of all holders of the corporate bonds, and the covenants made in the mandates except for the issuance of corporate bonds to specific creditors;
  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 competent authority in charge of securities affairs.
    Issue of corporate bonds, convertible bonds, or corporate bonds with warrants 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.
    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.
    In the event of any change in any of the particulars declared under the preceding Paragraph, the company shall file to the competent 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 competent authority in charge of securities affairs.
    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.
    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.
    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 248-1     A company issuing convertible bonds or corporate bonds with warrants to specific creditors in accordance with the provision of the preceding paragraph shall be approved by the meeting of the board of directors as provided for in Article 246 and by the resolution of shareholders' meeting. However, a public company shall comply with the provisions otherwise stipulated by the competent authority in charge of securities affairs.
Article 249     Under any of the following circumstances, a company shall not issue unsecured corporate bonds;
  1. Within 3 years from the date of settlement, 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, or 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 shall not be restrained.
Article 267     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.
    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.
    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.
    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.
    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.
    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.
    Qualification requirements of employees, including the employees of parent s or subsidiaries of the company meeting certain specific requirements, entitled to receive shares in accordance with the provision of Paragraph One, may be specified in the Articles of Incorporation.
    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 under reorganization, or is issuing new shares in accordance with the provisions set out in Article 167-2, Article 235-1, Article 262, or Paragraph I, Article 268-1 of this Act.
    A company issuing restricted stock for employees shall not apply Paragraphs One to Six of this Article and shall adopt such resolution, 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.
    In the event the total number of shares represented by the shareholders present at a shareholders’ meeting of a public company is less than the percentage of the total shareholdings required in 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.
    Qualification requirements of employees, including the employees of parents or subsidiaries of the company meeting certain specific requirements, entitled to receive restricted stock for employees in accordance with the provision of Paragraph Nine, may be specified in the Articles of Incorporation.
    The competent authority in charge of securities shall prescribe rules governing the issuance amount, issuance price, issuance conditions and other matters for compliance for a company offering its shares to the public and issuing new shares in accordance with the preceding three Paragraphs.
    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     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 competent authority in charge of securities affairs 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 competent 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 Items One to Three, Six and Eight of Paragraph One, 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 competent authority in charge of securities affairs.
    In the event of any change in any of the particulars required under the preceding paragraph, the company shall apply to the competent authority in charge of securities affairs for correction. The responsible person of the company who fails to apply for such correction shall be imposed a fine by the competent authority in charge of securities affairs of not less than NT$ 10,000 but not more than NT$ 50,000.
    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 8 and 9, Paragraph I under this Article shall be examined and certified by a practicing lawyer.
    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 Act.
    In case the aggregate of the number of new shares to be issued by a company 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     The company issuing share subscription warrants or special shares under ancillary share subscription rights 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 Act provided, however, that the holders of such share subscription rights shall have the option whether to exercise such subscription rights or not.
    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 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 277     A company shall not modify or alter its Articles of Incorporation without a resolution adopted at a meeting of shareholders.
    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.
    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.
    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 Articles of Incorporation, such stricter criteria shall govern.
Article 279     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.
    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.
    Responsible persons of the company who violate the provision of Paragraph One pertaining to the time limit for notice shall be severally subject to a fine of not less than NT$3,000 but not more than NT$15,000.
Article 281     The provisions of Article 73 and Article 74 shall apply mutatis mutandis to reduction of capital.