China Joint-Stock Company Shareholders are either capital contributors or investors of a joint-stock company.
Shareholders have the right to attend the shareholders’ general meeting and have voting rights. Equally, Shareholders are entitled to inspect the articles of association, shareholders’ register, corporate bond receipts, minutes of general meetings of shareholders, minutes of meetings of the board of directors, minutes of meetings of the board of supervisors, and financial reports, and may put forward proposals and raise questions about the business operations of the company.
Controlling China Joint-Stock Company Shareholders
A “controlling shareholder” refers to one of the following:
- any shareholder whose stock accounts for more than 50% of the total stock of a joint stock limited company; or
- a shareholder whose capital contribution or proportion of stock is less than 50% of the total capital or stock but holding sufficient voting rights to have a significant influence on any resolution put to the shareholders’ meeting or the general meeting of shareholders.
The general meeting of the shareholders has prescribed the same functions as the shareholders’ meeting of a limited liability company, i.e., the general meeting shall exercise the following functions:
- Determination of the company’s operational guidelines and investment plans;
- Election of non-employee representative directors and supervisors and setting the remuneration thereof;
- Deliberation on and approval of reports of the board of directors;
- Deliberation on and approval of reports of the board of supervisors or the supervisor(s);
- Deliberation on and approval of annual budgets and final account plans of the company;
- Deliberation on and approval of company profit distribution plans and debt recovery plans;
- Making resolutions about any increase or reduction in the company’s registered capital;
- Making resolutions about the issuance of corporate bonds;
- The adoption of resolutions on any merger, demerger, change in company form, dissolution or liquidation of the company;
- Revision of the articles of association of the company; and
- Any other function specified in the articles of association.
General Meeting of Shareholders
A general meeting is held annually. Although, under any of the following circumstances, an interim general meeting is required to be held within two months:
- Where the number of directors falls below two-thirds of the minimum number of directors as required by the Law. Or as specified in the articles of association;
- Where the bad debts of the company reach one-third of its total paid-in capital;
- Where it is requested by a shareholder who holds or by shareholders who together hold 10%. Or more of the company’s shares;
- Where the board of directors deems it necessary;
- On the request of the board of supervisors; or
- Any other circumstances specified in the articles of association.
Notification of General Meeting
Shareholders are required to be notified no less than 20 days in advance of the general meeting.
The notification shall include the time and place of the meeting and the matters to be considered at the meeting. Shareholders shall be notified no less than 15 days in advance of an interim general meeting of shareholders.
Holders of unregistered shares shall be notified of the following:
- place of the meeting; and
- matters to be considered at the meeting
This should be conducted via a public announcement of no less than 30 days in advance of any general meeting.
Any shareholder who holds or shareholders who together hold 3% or more of the shares of the company may put forward an interim proposal. And submit to the board of directors the proposal in writing ten days in advance of a general meeting.
The Board of Directors shall notify other shareholders of the interim proposal within two days of the receipt thereof. And submit the proposal to the general meeting for consideration. Any interim proposal put forward shall fall within the purview of the general meeting. And shall have clear discussion points and matters to be decided.
The general meeting shall not make any resolution on any matter not listed in a notice as stipulated in either of the preceding two paragraphs.
Convening and Chairing the General Meeting
The general meeting is convened by the Board of Directors. And presided over by the chairman of the board of directors.
If there the chairman is unable or fails to perform his duties, the meeting shall be presided over by the deputy chairman of the board of directors.
Where the deputy chairman of the Board of Directors is unable or fails to perform his duties, the meeting shall be presided over by a director nominated by a majority of the directors.
If the Board of Directors is unable or fails to fulfill its obligations to convene a general meeting, the Board of supervisors shall convene and preside over the meeting.
Where the Board of Supervisors does not convene or shareholder(s) may preside over the meeting under the following circumstances;
- a shareholder who holds; or
- shareholders who together hold 10% or more of the company’s shares.
Shareholder(s) shall hold shares for 90 consecutive days or more.
Attending the General Meeting
Shares of holders of bearer shares who attend the shareholders’ assembly shall be kept in the company during the period from 5 days before the meeting until the meeting is closed. A shareholder may appoint an agent to attend a shareholders’ assembly. The agent appointed shall present a proxy form issued by the shareholder to the company and may exercise voting rights within the scope of his authorization.
China Joint-Stock Company Shareholders Voting Rights
Each share shall have one vote at a shareholders’ general meeting, however, shares registered in the name of the company shall have no voting rights attached.
Any resolution proposed at a general meeting of shareholders shall be adopted by an affirmative vote of shareholders representing a majority of the voting rights of shareholders present, other than resolutions proposing any modification to the articles of association, or any increase or decrease in registered capital, or any resolution about any proposed merger, demerger, dissolution or change in company form, which shall be adopted by shareholders representing 2/3 or more of the voting rights of shareholders present.
The shareholders’ general meeting may adopt a cumulative voting system for the election of directors and supervisors under the articles of association or by way of a resolution made at its meeting.
The term “cumulative voting system” as referred to in the Company Law means a voting system whereby shareholders can multiply their voting rights by the number of candidates and cast their votes for one candidate for director or supervisor.
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