(Adopted at the 5th Session of the Standing Committee of the 8th National People's Congress on December 29, 1993. Revised for the first time on December 25, 1999 in accordance with the Decision of the 13th Session of the Standing Committee of the Ninth People's Congress on Amending the Company Law of the People's Republic of China. Revised for the second time on August 28, 2004 in accordance with the Decision of the 11th Session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on Amending the Company Law of the People's Republic of China. Revised at the 18th Session of the 10th National People's Congress of the People's Republic of China on October 27, 2005. Revised for the third time on December 28, 2013 in accordance with the Decision on Amending Seven Laws Including the Marine Environment Protection Law of the People's Republic of China at the 6th Session of the Standing Committee of the 12th National People's Congress. It is now promulgated and shall come into effect as of March 1, 2014.)

Standing Committee of the National People's Congress

December 28, 2013

Contents

Chapter I General Provisions

Chapter II Establishment and Organizational Structure of Limited Liability Companies

Section 1 Establishment

Section 2 Organizational Structure

Section 3 Special Provisions on One-person Limited Liability Companies

Section 4 Special Provisions on Wholly State-owned Companies

Chapter III Transfer of Equity Interests in Limited Liability Companies

Chapter IV Establishment and Organizational Structure of Companies Limited By Shares

Section 1 Establishment

Section 2 General Meeting

Section 3 Board of Directors and Manager

Section 4 Board of Supervisors

Section 5 Special Provisions on the Organizational Structure of Listed Companies

Chapter V Issuance and Transfer of Shares in Companies Limited by Shares

Section 1 Issuance of Shares

Section 2 Transfer of Shares

Chapter VI Qualifications and Obligations of Directors, Supervisors and Senior Officers of Companies

Chapter VII Corporate Bonds

Chapter VIII Financial Affairs and Accounting of Companies

Chapter IX Merger and Division, Increase and Reduction of Capital of Companies

Chapter X Dissolution and Liquidation of Companies

Chapter XI Branches of Foreign Companies

Chapter XII Legal Liability

Chapter XIII Supplementary Provisions

Chapter I General Provisions

Article 1 The Company Law of the People's Republic of China (hereinafter referred to as the "Law") has been enacted in order to standardize the organization and activities of companies, protect the lawful rights and interests of companies, shareholders and creditors, safeguard the social and economic order and promote the development of the socialist market economy.

Article 2 For the purposes of the Law, the term "companies" refers to limited liability companies and companies limited by shares established within the territory of China pursuant to the Law.

Article 3 A company is an enterprise legal person, which has independent corporate property and enjoys corporate property rights. A company shall be liable for its debts to the extent of all of its property.

A shareholder of a limited liability company shall be liable for the company to the extent of the capital contribution it subscribes. A shareholder of a company limited by shares shall be liable for the company to the extent of the shares it subscribes.

Article 4 The shareholders of a company shall enjoy such rights as return on assets, participation in major decision-making and selection of managers according to the law.

Article 5 When engaging in business activities, a company shall abide by laws and administrative regulations, observe social morality and business ethics, act in good faith, accept supervision by the government and the public, and bear social responsibilities.

The lawful rights and interests of companies shall be protected by law and shall not be infringed upon.

Article 6 To establish a company, an application for registration of establishment shall be filed with the company registration authority according to the law. If the conditions of establishment specified herein are met, the applicant shall be registered by the company registration authority as a limited liability company or a company limited by shares. If the conditions for establishment specified herein are not met, it may not be registered as a limited liability company or a company limited by shares.

If laws or administrative regulations provide that the establishment of a company is subject to approval, approval procedures shall be carried out according to the law prior to the company’s registration.

The public may apply to the company registration authority for inquiring the registered particulars of a company, and the company registration authority shall make such inquiry available.

Article 7 A company established according to the law shall be issued a company business license by the company registration authority. The date of issue of the company business license shall be that of establishment of the company.

The company business license shall contain the name, address, registered capital, scope of business and the name of the legal representative of the company.

In the event of any change to any item recorded in the company business license, the company shall carry out change registration formalities and a new business license shall be renewed by the company registration authority.

Article 8 The name of a limited liability company established in accordance with the Law shall contain the words "limited liability company" or “company limited”.

The name of a company limited by shares established in accordance with the Law shall contain the words "company limited by shares" or “joint stock company”.

Article 9 If a limited liability company intends to be converted into a company limited by shares, the conditions with respect to companies limited by shares set forth herein shall be satisfied. If a company limited by shares intends to be converted into a limited liability company, the conditions with respect to limited liability companies set forth herein shall be met.

If a limited liability company is converted into a company limited by shares, or if a company limited by shares is converted into a limited liability company, the claims and debts of the company that have arisen prior to the conversion shall be succeeded to by the company after the conversion.

Article 10 The domicile of a company shall be the place where its principal office is located.

Article 11 To establish a company, the articles of association shall be formulated according to the law. A company's articles of association shall be binding upon the company, shareholders, directors, supervisors and senior officers.

Article 12 The scope of business of a company shall be specified in the articles of association of the company and shall be registered according to the law. A company may amend its articles of association and change the scope of business, provided that it shall carry out change registration.

If any item in the scope of business of a company is subject to approval as required by laws or administrative regulations, such item shall be approved according to the law.

Article 13 The chairman of the board, the executive director or the manager of the company shall act as the legal representative of a company pursuant to the articles of association of the company and the same shall be registered according to the law. In the event of any change in the legal representative of the company, formalities shall be carried out for registration change.

Article 14 A company may establish branches. To establish a branch, application shall be made to the company registration authority for registration and a business license shall be obtained. A branch does not have the status of a legal person and its civil liability shall be borne by the company.

A company may establish subsidiaries. A subsidiary has the status of a legal person and independently bears civil liability according to the law.

Article 15 A company may invest in other enterprises, provided that it may not become an investor that bears joint and several liability for the debts of the enterprise in which it invests, unless otherwise provided by law.

Article 16 If a company invests in another enterprise or provides security for another party, a resolution shall be adopted by the board of directors or by the board of shareholders or general meeting according to the provisions of the articles of association of the company. If the articles of association of the company have specified a limit on the total amount of investment or security and the amount of a single investment or security, the specified limit may not be exceeded.

If a company provides security for a shareholder or the de facto controller of the company, a resolution of the board of shareholders or general meeting shall be passed.

Any shareholder set forth in the preceding paragraph or controlled by a de facto controller set forth in the preceding paragraph may not participate in voting on any resolution specified in the preceding paragraph. Such resolution shall be adopted by the other shareholders that are present at the meeting and represent more than half of the voting rights.

Article 17 A company shall protect the lawful rights and interests of its employees, and enter into labor contracts with its employees, contribute social insurance premiums, strengthen labor protection and ensure production safety according to the law.

A company shall use various methods to strengthen the vocational education and on-the-job training of its employees in order to improve their capabilities.

Article 18 The employees of a company shall organize a labor union and conduct labor union activities in accordance with the Labor Union Law of the People's Republic of China to protect the lawful rights and interests of the employees. The company shall provide its labor union with conditions necessary for conducting its activities. The labor union of the company shall enter into collective contracts on behalf of the employees with the company with respect to such matters as labor remuneration, working hours, welfare, insurance and labor safety and health of the employees according to the law.

A company shall implement democratic management through the employees' representative congress or other channels in accordance with the provisions of the Constitution and relevant laws.

When a company discusses and decides on restructuring and major issues concerning its business operation or formulates major rules, regulations and policies, it shall solicit opinions from the labor union of the company, as well as opinions and suggestions from its employees through the employees' representative congress or other channels.

Article 19 In a company, an organization of the Communist Party of China shall be established to carry out the activities of the party in accordance with the charter of the Communist Party of China. The company shall provide the necessary conditions for the activities of the party organization.

Article 20 The shareholders of a company shall abide by laws, administrative regulations and the articles of association of the company and exercise shareholder’s rights according to the law, and may not abuse shareholder’s rights to harm the interests of the company or other shareholders, or abuse the independent status of the company legal person and the limited liability of shareholders to harm the interests of the creditors of the company.

If a shareholder of the company abuses its shareholder’s rights, thereby causing losses to the company or other shareholders, the shareholder shall be liable for compensation according to the law.

If a shareholder of the company abuses the independent status of the company legal person and the limited liability of shareholders to evade debts and seriously harms the interests of the creditors of the company, it shall bear joint and several liability for the debts of the company.

Article 21 The controlling shareholder, de facto controller, directors, supervisors and senior officers of a company may not use their affiliation to harm the interests of the company.

Anyone that violates the provisions of the preceding paragraph and causes losses to the company shall be liable for compensation.

Article 22 A resolution of the board of shareholders or general meeting or the board of directors of a company shall be void if its contents are in violation of laws or administrative regulations.

If the procedure for convening the board of shareholders or general meeting or the meeting of the board of directors, or the method of voting violates laws, administrative regulations or the articles of association of the company, or if the contents of a resolution violate the articles of association of the company, a shareholder may, within 60 days of the adoption of the resolution, petition to a people’s court for cancellation of resolution.

If the shareholder institutes proceedings pursuant to the preceding paragraph, the people's court may, at the request of the company, require the shareholder to provide a corresponding security.

If the company has carried out change registration in accordance with the resolution of the board of shareholders or general meeting or the board of directors, the company shall apply to the company registration authority for cancellation of the change registration after the people’s court declares the resolution invalid or cancels the resolution.

Chapter II Establishment and Organizational Structure of Limited Liability Companies

Section 1 Establishment

Article 23 The following conditions shall be fulfilled for the establishment of a limited liability company:

(I) the number of shareholders conforms to the statutory number;

(II) the capital contribution subscribed by subscribed by all shareholders is consistent with that prescribed in the articles of association;

(III) the shareholders have jointly formulated the company's articles of association;

(IV) the company has a name and an organizational structure established in conformity with the requirements for limited liability companies; and

(V) the company has a domicile.

Article 24 A limited liability company shall be invested in and established by no more than 50 shareholders.

Article 25 The articles of association of limited liability companies shall specify the following particulars:

(I) the name and domicile of the company;

(II) the business scope of the company;

(III) the registered capital of the company;

(IV) the names and domiciles of the shareholders;

(V) the method, amount and time of capital contribution by the shareholders;

(VI) the organization of the company and its methods of establishment, functions and powers, and rules of procedure;

(VII) the legal representative of the company; and

(VIII) other matters that the shareholders deem necessary to be specified.

Shareholders shall sign and affix their seals on the company’s articles of association.

Article 26 The registered capital of a limited liability company shall be the capital contributions subscribed by all shareholders as registered with the company registration authority.

Where laws, administrative regulations and the decisions of the State Council stipulate the actual paid registered capital and another amount on the minimum registered capital of a limited liability company, such stipulations shall prevail.

Article 27 Shareholders may make capital contribution in currency or in non-currency property that may be valued in currency and transferable according to the law such as physical objects, intellectual property and land use rights, except for property that may not be used as capital contribution according to the laws or administrative regulations.

Non-currency property contributed as capital shall be valued and verified, and shall not be over-valued or under-valued. Where laws or administrative regulations have provisions on valuation, such provisions shall prevail.

Article 28 Each shareholder shall make the capital contribution it subscribes as specified in the articles of association of the company on time and in full. If a shareholder makes its capital contribution in currency, it shall deposit the full amount of capital contribution in currency in a bank account opened by the limited liability company with a bank. If capital contribution is made in non-currency property, the transfer procedures for the property rights therein shall be handled according to the law.

If a shareholder fails to make capital contribution in accordance with the preceding paragraph, it shall, in addition to making capital contribution in full to the company, be liable for breach of contract to the shareholders that have made their capital contributions on time and in full.

Article 29 After the shareholders subscribed the capital contribution in full as prescribed in the articles of association, a representative designated by all shareholders or an agent jointly appointed by them shall submit a company registration application and documents such as the company’s articles of association to the company registration authority to apply for registration of establishment.

Article 30 If, after establishment of a limited liability company, the actual value of the non-currency property contributed as capital for the establishment of the company is found markedly lower than the value as set forth in the articles of association of the company, the shareholder making such contribution shall make up for the difference. The other shareholders as at the time of the company's establishment shall bear joint and several liability for such difference.

Article 31 A limited liability company shall issue capital contribution certificates to its shareholders after it is established.

The capital contribution certificate shall specify the following particulars:

(I) the name of the company;

(II) the date of establishment of the company;

(III) the registered capital of the company;

(IV) the name of the shareholder, the amount of its capital contribution made and the date of capital contribution; and

(V) the serial number and date of issuance of the capital contribution certificate.

The capital contribution certificate shall be affixed with the seal of the company.

Article 32 A limited liability company shall establish a register of shareholders to record the following items:

(I) the names and domiciles of the shareholders;

(II) the amounts of capital contribution of the shareholders; and

(III) the serial numbers of the capital verification certificates.

The shareholders on the register of shareholders may claim and exercise shareholder’s rights on the basis of the register of shareholders.

The company shall register the names of its shareholders with the company registration authority. If there is a change in the registered items, change registration shall be carried out. Anyone that fails to complete registration or change registration may not resist the claims of a third person.

Article 33 Shareholders shall have the right to examine and reproduce the articles of association of the company, the minutes of the board of shareholders, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports.

Shareholders may request to examine the account books of the company. If a shareholder requests to examine the account books of the company, it shall make a written request to the company stating the purpose thereof. If the company has reasonable basis to believe that the purpose of the examination of the account books by the shareholder is improper and that such examination may harm the lawful rights and interests of the company, the company may refuse to make the books for examination available, and shall reply to the shareholder in writing and state the reason for the refusal within 15 days of the written request of the shareholder. If the company refuses to provide the account books for examination, the shareholder may petition to the people’s court for provision of the account books by the company.

Article 34 A shareholder shall receive dividends in proportion to its paid-up capital contribution. When the company increases its capital, the shareholder shall have the priority right to subscribe for capital contribution in proportion to its paid-up capital contribution, except where all shareholders agree not to receive dividends in proportion to the paid-up capital contribution or not to exercise priority right to subscribe for capital contribution in proportion to the paid-up capital contribution.

Article 35 After a company is established, its shareholders may not withdraw their capital contribution.

Section 2 Organizational Structure

Article 36 The board of shareholders of a limited liability company shall be composed of all the shareholders. The board of shareholders shall be the organ of authority of the company and shall exercise its functions and powers pursuant to the Law.

Article 37 The board of shareholders shall exercise the following functions and powers:

(I) to decide on the business policies and investment plans of the company;

(Ii) to elect and replace directors and supervisors that are not appointed from representatives of staff and workers, and to decide on matters concerning the remuneration of directors and supervisors;

(Iii) to consider and approve reports of the board of directors;

(IV) to consider and approve reports of the board of supervisors or supervisors;

(V) to consider and approve the company's proposed annual financial budgets and final accounts;

(VI) to consider and approve the company's profit distribution plans and plans for making up losses;

(VII) to pass resolutions on the increase or reduction of the company's registered capital;

(VIII) to pass resolutions on the issuance of corporate bonds;

(IX) to pass resolutions on matters such as the merger, division, dissolution, liquidation or change of the corporate form of the company;

(X) to amend the articles of association of the company; and

(XI) other functions and powers specified in the articles of association of the company.

If the shareholders unanimously express consent to the matters set out in the preceding paragraph in writing, the decision may be made, without convening of the board of shareholders, directly with a document of the decision bearing the signatures and seals of all shareholders.

Article 38 The first general meeting shall be convened and presided over by the shareholder that made the largest capital contribution, and shall exercise its functions and powers pursuant to the provisions hereof.

Article 39 General meetings shall be divided into regular meetings and extraordinary meetings.

Regular meetings shall be convened on time in accordance with the articles of association of the company. An extraordinary meeting shall be convened if it is proposed by shareholders representing one tenth or more of the voting rights, or by one third or more of the directors or the board of supervisors or, in the case of a company without a board of supervisors, the supervisor(s).

Article 40 If a limited liability company has established a board of directors, the general meeting shall be convened by the board of directors and presided over by the chairman of the board. If the chairman of the board is unable to or does not perform his duty, the meeting shall be presided over by the vice-chairman of the board. If the vice-chairman of the board is unable to or does not perform his duty, the meeting shall be presided over by a director jointly designated by more than half of the directors.

If a limited liability company has no board of directors, the general meeting shall be convened and presided over by the executive director(s).

If the board of directors or the executive director(s)   cannot or do not perform the duty of convening the general meeting, the meeting shall be convened and presided over by the board of supervisors or, in the case of a company without a board of supervisors, the supervisor(s). If the board of supervisors or the supervisors do not convene and preside over the meeting, the meeting may be convened and presided by the shareholders representing one-tenth or more of the voting rights.

Article 41 If a general meeting is to be convened, all shareholders shall be notified 15 days before the meeting is held, unless otherwise stipulated in the articles of association of the company or agreed by all shareholders.

The board of shareholders shall keep minutes of the decisions on the matters under its consideration. The shareholders present at the meeting shall sign the minutes of the meeting.

Article 42 Shareholders shall exercise voting rights at general meetings in proportion to their capital contribution, unless otherwise stipulated in the articles of association of the company.

Article 43 The method of deliberation and voting procedures of the board of shareholders shall be specified in the articles of association of the company, except where stipulated herein.

Resolutions of the general meeting on the amendment of the articles of association of the company, increase or reduction of the registered capital, and merger, division, dissolution or change of corporate form shall be adopted by shareholders representing two thirds or more of the voting rights.

Article 44 A limited liability company shall have a board of directors of three to 13 members, unless otherwise stipulated in Article 51 hereof.

In a limited liability company invested in and established by two or more State-owned enterprises or two or more other State-owned investment entities, the members of the board of directors shall include representatives of the staff and workers of the company. In other limited liability companies, the members of the board of directors may include representatives of the staff and workers of the company. Representatives of staff and workers on the board of directors shall be democratically elected by the staff and workers of the company through the staff and workers’ congress, the staff and workers’ general meeting or other ways.

A board of directors shall have one chairman of the board and may have vice-chairmen of the board. The method of appointment of the chairman and vice-chairman (or vice-chairmen) of the board shall be specified in the articles of association of the company.

Article 45 The term of office of directors shall be specified in the articles of association of the company but each term may not exceed three years. If re-elected upon expiration of his term of office, a director may serve consecutive terms.

If no new director is elected in time upon expiration of the term of office of a director, or if a director resigns during his term of office, resulting in the number of members of the board of directors falling below the statutory number, the original director shall perform his duties as director according to the provisions of laws, administrative regulations and the articles of association of the company before a newly elected director takes office.

Article 46 The board of directors shall be accountable to the board of shareholders, and shall exercise the following functions and powers:

(I) to convene the general meeting and to report on its work to the board of shareholders;

(II) to implement the resolutions of the general meeting;

(III) to decide on the business plans and investment plans of the company;

(IV) to formulate the company's proposed annual financial budgets and final accounts;

(V) to formulate the company’s profit distribution plans and plans for making up losses;

(VI) to formulate plans for the company’s increase or reduction of the registered capital or for the issuance of corporate;

(VII) to formulate plans for the merger, division, dissolution or change of corporate form of the company;

(VIII) to decide on the establishment of the company's internal management organization;

(IX) to decide on the employment or dismissal of the manager of the company and his remuneration, and to decide on the employment or dismissal of the deputy manager(s) and person(s) in charge of financial affairs of the company according to the recommendations of the manager and on their remuneration;

(X) to formulate the basic management system of the company; and

(XI) other functions and powers specified in the articles of association of the company.

Article 47 Meetings of the board of directors shall be convened and presided over by the chairman of the board. If the chairman of the board is unable to or does not perform his duty, the meeting shall be convened and presided over by the vice-chairman of the board. If the vice-chairman of the board is unable to or does not perform his duty, the meeting shall be convened and presided over by a director jointly designated by more than half of the directors.

Article 48 The method of deliberation and voting procedures of the board of directors shall be specified in the articles of association of the company, except where stipulated herein.

The board of directors shall keep minutes of its decisions on the matters under its consideration. The directors present at the meeting shall sign the minutes of the meeting.

When voting on a resolution of the board of directors, each director present at the meeting shall have one vote.

Article 49 A limited liability company may have a manager, who shall be employed or dismissed by the board of directors. The manager shall be accountable to the board of directors and shall exercise the following functions and powers:

(I) to be in charge of the production, operation and management of the company, and to organize the implementation of the resolutions of the board of directors;

(II) to organize the implementation of the annual business plans and investment plans of the company;

(III) to draft the plan for the establishment of the company's internal management organization;

(IV) to draft the basic management system of the company;

(V) to formulate the specific rules and regulations of the company;

(VI) to request the employment or dismissal of the deputy manager(s) and person(s) in charge of financial affairs of the company;

(VII) to decide on the employment or dismissal of management personnel other than those to be employed or dismissed by the board of directors; and

(VII) other functions and powers delegated by the board of directors.

Where the articles of association of the company otherwise provide for the functions and powers of the manager, such provisions shall prevail.

The manager shall attend meetings of the board of directors as a non-voting attendee.

Article 50 A limited liability company with comparatively few shareholders or comparatively small in scale may have one executive director instead of a board of directors. The executive director may concurrently serve as the manager of the company.

The functions and powers of the executive director shall be specified in the articles of association of the company.

Article 51 A limited liability company shall have a board of supervisors, which shall have no fewer than three members. A limited liability company with comparatively few shareholders and comparatively small in scale may have one to two supervisors instead of a board of supervisors.

The board of supervisors shall include the representatives of the shareholders and an appropriate ratio of representatives of the company's staff and workers, in which the ratio of the staff and workers’ representatives shall not be lower than one third. The specific ratio shall be specified in the articles of association of the company. The staff and workers' representatives on the board of supervisors shall be democratically elected through the staff and workers’ congress, the staff and workers' general meeting or other means.

The board of supervisors shall have a chairman that shall be elected by more than half of all supervisors. The chairman of the board of supervisors shall convene and preside over the meeting of the board of supervisors. If the chairman of the board of supervisors is unable to or does not perform his duty, the meeting of the board of supervisors shall be convened and presided over by a supervisor jointly designated by more than half of the supervisors.

Directors and senior officers may not concurrently serve as supervisors.

Article 52 The term of office of a supervisor shall be three years. If re-elected upon expiration of his term of office, a supervisor may serve consecutive terms.

If no new supervisor is elected in time upon expiration of the term of office of a supervisor, or if a supervisor resigns during his term of office, resulting in the number of members of the board of supervisors falling below the statutory number, the original supervisor shall perform his duties as supervisor according to the provisions of laws, administrative regulations and the articles of association of the company before a newly elected supervisor takes office.

Article 53 The board of supervisors or, in the case of a company without a board of supervisors, the supervisor shall exercise the following functions and powers:

(I) to examine the company's financial affairs;

(II) to supervise the execution of company duties by the directors and the senior officers and to recommend the removal of directors and senior officers that violate laws, administrative regulations, the articles of association of the company or the resolutions of general meeting;

(III) when an act of a director or senior officers is harmful to the company's interests, to require the director or senior officers to rectify such act;

(IV) to propose the convening of extraordinary general meeting and to convene and preside over the general meeting when the board of directors fails to perform the duties of convening and presiding over the general meeting as stipulated herein;

(V) to give proposals to the general meeting;

(VI) to institute proceedings against the directors and senior officers according to Article 152 hereof; and

(VII) other functions and powers specified in the articles of association of the company.

Article 54 Supervisors may attend meetings of the board of directors as non-voting attendees and may make inquiries or suggestions to the matters to be resolved by the board of directors.

If the board of supervisors or, in the case of a company without a board of supervisors, a supervisor discovers irregularities in the operation of the company, it may conduct investigation. If necessary, an accounting firm may be engaged to assist in its or his work. The fees shall be borne by the company.

Article 55 The board of supervisors shall convene at least one meeting each year. Supervisors may propose to convene an extraordinary meeting of the board of supervisors.

The method of deliberation and voting procedures of the board of supervisors shall be specified in the articles of association of the company, except where stipulated herein.

Resolutions of the board of supervisors shall be adopted by more than half of the supervisors.

The board of supervisors shall keep minutes of its decisions on the matters under its consideration. The supervisors present at the meeting shall sign the minutes of the meeting.

Article 56 The costs and expenses necessary for the board of supervisors or, in the case of a company without a board of supervisors, the supervisor to exercise their functions and powers shall be borne by the company.

Section 3: Special Provisions on One-person Limited Liability Companies

Article 57 The provisions of this Section shall apply to the establishment and the organizational structure of one-person limited liability companies. For matters uncovered in this Section, the provisions of Section 1 and Section 2 of this Chapter shall apply.

For the purposes of the Law, the term “one-person limited liability company” refers to a limited liability company that has only one natural person shareholder or one legal person shareholder.

Article 58 A natural person may invest in and establish only one one-person limited liability company. Such one-person limited liability company may not invest in and establish a new one-person limited liability company.

Article 59 A one-person limited liability company shall indicate whether it is wholly owned by a natural person or wholly owned by a legal person in the company registration, and specify the same in the business license of the company.

Article 60 The articles of association of a one-person limited liability company shall be formulated by the shareholder.

Article 61 A one-person limited liability company shall not have a board of shareholders. When the shareholder makes a decision that falls under Paragraph 1 of Article 37 hereof, it shall be in writing and be kept in the company after it is signed by the shareholder.

Article 62 A one-person limited liability company shall prepare, at the end of each fiscal year, a financial and accounting report that is audited by an accounting firm.

Article 63 If the shareholder of a one-person limited liability company is unable to prove that the property of the company is independent from the shareholder's own property, the shareholder shall bear joint and several liability for the debts of the company.

Section 4 Special Provisions on Wholly State-owned Companies

Article 64 The provisions of this Section shall apply to the establishment and the organizational structure of wholly State-owned companies. For any matter uncovered in this Section, the provisions of Section 1 and Section 2 of this Chapter shall apply.

For the purposes of the Law, the term "wholly State-owned company" refers to a limited liability company of which the State is the sole investor and the State Council or a local people’s government authorizes a State-owned assets supervision and administration authority of the people’s government at the same level to perform the responsibilities of the investor.

Article 65 The articles of association of a wholly State-owned company shall be formulated by the State-owned assets supervision and administration authority or drafted by the board of directors and submitted to the State-owned assets supervision and administration authority for approval.

Article 66 A wholly State-owned company shall not have a board of shareholders. The functions and powers of the board of shareholders shall be exercised by the State-owned assets supervision and administration authority. The State-owned assets supervision and administration authority may authorize the company's board of directors to exercise part of the functions and powers of the board of shareholders and to decide on the major matters of the company. However, merger, division, dissolution, increase or reduction of registered capital and issuance of corporate bonds of the company shall be decided by the State-owned assets supervision and administration authority. Merger, division, dissolution or bankruptcy application of important wholly State-owned companies shall, after examination and verification by the State-owned assets supervision and administration authority, be reported to the people’s government at the same level for approval.

The “important wholly State-owned companies” referred to in the preceding paragraph shall be determined in accordance with the provisions of the State Council.

Article 67 A wholly State-owned company shall have a board of directors, which shall exercise functions and powers in accordance with Articles 47 and 67 hereof. The term of office of directors shall not exceed three years. The members of the board of directors shall include representatives of the staff and workers.

The members of the board of directors shall be appointed by the State-owned assets supervision and administration authority. However, the representatives of the staff and workers among the members of the board of directors shall be elected by the staff and workers’ congress of the company.

The board of directors shall have one chairman of the board, and may have a vice-chairman of the board. The chairman of the board and vice-chairman of the board shall be designated by the State-owned assets supervision and administration authority from among the members of the board of directors.

Article 68 A wholly State-owned company shall have a manager, who shall be engaged or dismissed by the board of directors. The manager shall exercise functions and powers in accordance with Article 50 hereof.

Subject to approval by the State-owned assets supervision and administration authority, a member of the board of directors may serve concurrently as manager.

Article 69 The chairman of the board, vice-chairman of the board, directors or senior officers of a wholly State-owned company may not concurrently serve in another limited liability company, company limited by shares or other business organization without the approval of the State-owned assets supervision and administration authority.

Article 70 The board of supervisors of a wholly State-owned company shall have no fewer than five members, among which the ratio of representatives of staff and workers shall not be lower than one third. The specific ratio shall be specified in the articles of association of the company.

The members of the board of supervisors shall be appointed by the State-owned assets supervision and administration authority. However, the representatives of the staff and workers amongst the members of the board of supervisors shall be elected by the staff and workers’ congress of the company. The chairman of the board of supervisors shall be designated by the State-owned assets supervision and administration authority from among the members of the board of supervisors.

The board of supervisors shall exercise the functions and powers stipulated in Items (1) to (3) of Article 54 hereof and other functions and powers stipulated by the State Council.

Chapter III Transfer of Equity Interests in Limited Liability Companies

Article 71 The shareholders of a limited liability company may transfer all or part of their equity interests among them.

Where a shareholder transfers its equity interests to a person other than a shareholder, it shall obtain the consent of more than half of the other shareholders. The shareholder shall notify the other shareholders in writing of the transfer of equity interests and seek their consent. Where the other shareholders do not reply within 30 days of receipt of the written notice, they shall be deemed to consent to the transfer. If more than half of the other shareholders do not consent to the transfer, the dissenting shareholders shall purchase the equity interests to be transferred. If they do not purchase the equity interests, they shall be deemed to consent to the transfer.

Provided all conditions are equal, the other shareholders shall have the priority purchase right for the equity interests the transfer of which has been consented by the shareholders. If two or more shareholders exercise the priority purchase right, they shall determine their respective purchase ratio upon consultation. If consultation fails, they shall exercise the priority purchase right in proportion to their respective ratio of capital contribution at the time of the transfer.

Where the articles of association of the company otherwise provide for transfer of equity interests, such provisions shall prevail.

Article 72 When a people’s court transfers the equity interests of a shareholder pursuant to the enforcement procedures stipulated in law, it shall notify the company and all shareholders, and the other shareholders shall have the priority purchase right under equal conditions. Where the other shareholders fail to exercise the priority purchase right within 20 days of the date of notice of the people’s court, they shall be deemed to waive their priority purchase right.

Article 73 After an equity interest is transferred pursuant to Article 72 or Article 73 hereof, the company shall cancel the capital contribution certificate of the original shareholder, issue a capital contribution certificate to the new shareholder and amend the records of the relevant shareholder and its capital contribution in the articles of association and the register of shareholders of the company. Such amendment to the articles of association of the company does not require a resolution by the board of shareholders.

Article 74 In any of the following circumstances, a shareholder that votes against the resolution of the board of shareholders may request the company to purchase its equity interests at a reasonable price:

(I) the company has not distributed its profits to the shareholders for five consecutive years, while the company has been profitable for five consecutive years and meets the conditions for distribution of profit stipulated herein;

(II) the company is merged or divided, or transfers its major property; or

(III) the term of operation specified in the articles of association of the company expires or any other reason for dissolution specified in the articles of association arises, and the general meeting has adopted a resolution to amend the articles of association to allow the continual existence of the company.

If the shareholder and the company fail to reach an agreement on the purchase of equity interests within 60 days of the adoption of the resolution of the general meeting, the shareholder may institute proceedings in a people’s court within 90 days of the adoption of the resolution of the general meeting.

Article 75 After a natural person shareholder dies, his legal heir may inherit his shareholder status, except where the articles of association of the company stipulate otherwise.

Chapter IV Establishment and Organizational Structure of Companies Limited By Shares

Section 1 Establishment

Article 76 The following conditions shall be fulfilled for the establishment of a company limited by shares:

(I) the number of promoters conforms to the quorum requirement;

(II) the total amount of share capital subscribed for or the total paid-up share capital raised by all the sponsors specified in the articles of association of the company;

(III) the share issue and preparation matters conform to laws and regulations;

(IV) the company's articles of association have been formulated by the promoters; in the case of establishment by means of share offer, the articles of association shall have been adopted at the inaugural meeting;

(V) the company has a name, and an organizational structure established in accordance with the requirements for companies limited by shares; and

(VI) the company has a domicile.

Article 77 Companies limited by shares may be established by means of promotion or by means of share offer.

The term “establishment by means of promotion” refers to establishment of a company by means of subscription by the promoters for all the shares to be issued by the company.

The term “establishment by means of share offer” refers to establishment of a company by means of subscription by the promoters for a portion of the shares to be issued by the company, and offer of the balance to the public or to specified targets.

Article 78 For the establishment of a company limited by shares, there shall be more than two and less than 200 promoters, of which more than half shall have their domicile within the territory of the People's Republic of China (hereinafter referred to as "China").

Article 79 The promoters of a company limited by shares shall undertake the matters concerning preparation of the establishment of the company.

They shall conclude a promoters’ agreement that stipulates the rights and obligations of each party during the process of establishment of the company.

Article 80 Where a company limited by shares is established by means of promotion, the registered capital shall be the total share capital subscribed for by all promoters as registered with the company registration authority. Before the capital for the equity shares subscribed for by all promoters are paid in full, the offer of shares to others may not be carried out.

Where a company limited by shares is established by means of share offer, the registered capital shall be the total paid-up share capital as registered with the company registration authority.

Where laws, administrative regulations and the decisions of the State Council otherwise stipulate the actual paid registered capital and the minimum registered capital of companies limited by shares, such provisions shall prevail.

Article 81 The articles of association of a company limited by shares shall specify the following particulars:

(I) the name and domicile of the company;

(II) the scope of business of the company;

(III) the method of establishment of the company;

(IV) the total number of shares of the company, the price per share and the registered capital;

(V) the names of and number of shares subscribed for by the promoters, and their methods and time of capital contribution;

(VI) the composition, functions and powers and rules of procedure of the board of directors;

(VII) the legal representative of the company;

(VIII) the composition, functions and powers and rules of procedure of the board of supervisors;

(IX) the method of distribution of company profit;

(X) the reasons for dissolution of the company and method of liquidation;

(XI) methods for notices and announcements of the company; and

(XII) other matters that the general meeting considers necessary to be specified.

Article 82 The methods of capital contribution of promoters shall be governed by Article 27 hereof.

Article 83 Where a company limited by shares is established by means of promotion, the promoters shall subscribe in writing for all the shares for which they subscribe as specified in the company’s articles of association, and pay the capital contribution according to the articles of association of the company. Where capital contribution is made in non-currency property, procedures for transfer of their property rights shall be handled according to the law.

Where a promoter does not make capital contribution according to the provisions in the preceding paragraph, it shall be liable for breach of contract according to the promoters’ agreement.

After the promoters subscribe the contribution for which they subscribe as specified in the company’s articles of association, they shall elect the board of directors and board of supervisors. The board of directors shall submit to the company registration authority the company’s articles of association and other documents specified in laws and administrative regulations, and apply for registration of establishment.

Article 84 If a company limited by shares is established by means of share offer, the shares subscribed for by the promoters may not be less than 35% of the total number of company shares, unless where there are other stipulations in laws and administrative regulations, such stipulations shall prevail.

Article 85 When promoters offer shares to the public, they shall publish the share prospectus and prepare subscription forms. The subscription forms shall specify the particulars listed in Article 87 hereof. The subscribers shall enter the number and amount of shares subscribed for and their domiciles on the forms, and shall sign and seal such forms. Subscribers shall pay subscription monies in accordance with the number of shares they subscribed for.

Article 86 A share prospectus shall have the company's articles of association formulated by the promoters attached, and shall specify the following particulars:

(I) the number of shares subscribed for by the promoters;

(II) the face value and issue price of each share;

(III) the total number of bearer shares issued;

(IV) the purpose of the funds raised;

(V) the rights and obligations of subscribers; and

(VI) the opening and closing dates of the share offer and a statement to the effect that subscribers may withdraw their share subscriptions if all the shares are not taken up within the time limit.

Article 87 When promoters offer shares to the public, the shares shall be distributed by a securities company established according to the law, with which a distribution agreement shall be concluded.

Article 88 If promoters are to offer shares to the public, they shall conclude an agreement with a bank on the collection of subscription monies on behalf of the company.

The bank accepting subscription monies on behalf of the company shall accept and keep the subscription monies on behalf of the company in accordance with the agreement, and issue receipts to subscribers paying their subscription monies. In addition, the bank shall assume an obligation to issue certification of receipt of subscription monies to the relevant authority.

Article 89 After full payment of the subscription monies for a share issue, capital verification shall be carried out by a capital verification institution established according to the law, which shall issue certificates. The promoters shall convene and preside over the inaugural meeting of the company within 30 days after full payment of subscription monies. The inaugural meeting shall be composed of the promoters and subscribers.

If the shares issued are not fully taken up by the cut off time specified in the share prospectus or if the promoters fail to convene the inaugural meeting within 30 days after full payment of the subscription monies for the share issue, the subscribers may claim a refund from the promoters according to the subscription monies paid plus bank deposit interest calculated for the same period.

Article 90 The promoters shall notify all subscribers or make an announcement 15 days prior to convening of the inaugural meeting, which may be held only if attended by the promoters and subscribers representing more than half of the total number of shares.

The following functions and powers shall be exercised at an inaugural meeting:

(I) to deliberate the promoters’ report concerning preparation of the establishment of the company;

(II) to approve the articles of association of the company;

(III) to elect the members of the board of directors;

(IV) to elect the members of the board of supervisors;

(V) to examine and approve the establishment fees of the company;

(VI) to examine and approve the value at which promoters substituted property for subscription monies; and

(VII) if force majeure or a major change in business conditions occurs and directly affects the establishment of the company, a resolution of not establishing the company may be passed.

For the inaugural meeting to pass resolutions concerning the matters stated in the preceding paragraph, they shall be adopted by subscribers present at the meeting representing more than half of the voting rights.

Article 91 After promoters and subscribers pay their subscription monies or make their capital contributions as substitutes for subscription monies, they may not withdraw their share capital, except where the shares are not fully taken up on time, the promoters fail to convene the inaugural meeting on time or a resolution not to establish the company is adopted at the inaugural meeting.

Article 92 The board of directors shall, within 30 days after the end of the inaugural meeting, submit the following documents and apply for registration of establishment to the company registration:

(I) the application for company registration;

(II) the minutes of the inaugural meeting;

(III) the articles of association of the company;

(IV) the capital verification certificates;

(V) the employment documents for the legal representative, directors and supervisors, and their proof of identity;

(VI) the proof of legal person status of the promoters or the proof of identity of natural persons; and

(VII) the proof of domicile of the company.

Where the company limited by shares that is established by means of share offer issues shares to the public, it shall also submit the verification and approval document of the State Council’s securities regulatory authority to the company registration authority.

Article 93 Where a promoter fails to make his capital contribution in full according to the stipulations of the company’s articles of association after the company limited by shares is established, he shall make up the outstanding sum, and the other promoters shall bear joint and several liability.

Where, after the company limited by shares is established, it is discovered that the actual price of the non-currency property contributed as capital for establishment of company is markedly lower than the price specified in the company’s articles of association; the discrepancy shall be made up by the promoter that delivered the capital contribution. Other promoters shall bear joint and several liability.

Article 94 The promoters of a company limited by shares shall bear the following liabilities:

(I) if the company cannot be established, joint and several liability for the debts and expenses occasioned during the establishment activities;

(II) if the company cannot be established, joint and several liability for refunding the subscription monies already paid by subscribers plus bank deposit interest calculated for the same period; and

(III) if during the course of establishment of the company, the company's interests are harmed due to the fault of the promoters, liability towards the company for compensation.

Article 95 When a limited liability company is converted into a company limited by shares, the total amount of paid-up share capital converted shall not exceed the amount of net assets of the company. When a limited liability company that is converted into a company limited by shares offers shares to the public in order to increase its capital, such issue shall be carried out according to the law.

Article 96 Companies limited by shares shall keep at their office the company’s articles of association, register of shareholders, counterfoil of corporate bonds, minutes of general meetings, minutes of the meetings of the board of directors, minutes of the meetings of the board of supervisors, and financial and accounting reports.

Article 97 Shareholders shall have the right to examine the articles of association of the company, register of shareholders, counterfoil of corporate bonds, minutes of general meetings, minutes of the meetings of the board of directors, minutes of the meetings of the board of supervisors, and financial and accounting reports, and to give suggestions for or inquire about the operation of the company.

Section 2 General Meeting

Article 98 The general meeting of a company limited by shares shall be composed of all shareholders. The general meeting shall be the organ of authority of the company and shall exercise its functions and powers in accordance with the Law.

Article 99 The provisions of Paragraph 1 of Article 38 hereof on the functions and powers of the board of shareholders of limited liability companies shall apply to the general meeting of companies limited by shares.

Article 100 The annual general meeting of the general meeting shall be held once every year. An extraordinary general meeting shall be convened within two months of the occurrence of any of the following circumstances:

(I) the number of directors is less than the number stipulated herein or less than two thirds of the number specified in the articles of association of the company;

(II) the losses of the company that have not been made up reach one third of the total paid-up share capital;

(III) it is requested by a shareholder that independently holds, or by the shareholders that hold in aggregate, 10% or more of the company's shares;

(IV) it is considered necessary by the board of directors;

(V) it is proposed by the board of supervisors; or

(VI) other circumstances specified by the articles of association of the company.

Article 101 The general meeting shall be convened by the board of directors and presided over by the chairman of the board. If the chairman of the board is unable to or does not perform his duty, the meeting shall be presided over by the vice-chairman of the board. If the vice-chairman of the board is unable to or does not perform his duty, the meeting shall be presided over by a director jointly designated by more than half of the directors.

If the board of directors is unable to or does not perform the duty of convening the  general meeting, the meeting shall be convened and presided over by the board of supervisors in a timely manner. If the board of supervisors does not convene and preside over the meeting, a shareholder that has independently held, or the shareholders that have held in aggregate, 10% or more of the shares of the company for 90 or more consecutive days may themselves convene and preside over the meeting.

Article 102 If a general meeting is to be convened, all shareholders shall be notified of the time and venue of the meeting and the matters to be considered at the meeting 20 days before the meeting is held. In the case of an extraordinary general meeting, the shareholders shall be notified 15 days before the meeting is held. If bearer shares are to be issued, the time and venue of the meeting and the matters to be considered at the meeting shall be announced 30 days before the meeting is held.

A shareholder that independently holds, or the shareholders that hold in aggregate, 3% or more of the shares of the company may submit an extraordinary resolution in writing to the board of directors at least 10 days before a general meeting is held. The board of directors shall notify the other shareholders within two days of receipt of the resolution and submit the extraordinary resolution to the general meeting for consideration. The contents of the extraordinary resolution shall be within the scope of authority of the general meeting and shall have a clear subject and specific matters for resolution.

No resolution may be adopted by a general meeting on any matter uncovered in the notices specified in the preceding two paragraphs.

Holders of bearer shares that intend to attend a general meeting shall deposit their share certificates with the company for a period beginning from five days before the meeting is held to the adjournment of the meeting.

Article 103 Shareholders present at a general meeting shall be entitled to one vote for each share held. However, there shall be no voting right for the shares of the company held by the company itself.

Resolutions of a general meeting shall be adopted by more than half of the voting rights held by the shareholders present at the meeting. However, resolutions of a general meeting to amend the company’s articles of association, to increase or reduce the registered capital, or on merger, division, dissolution or change of the corporate form of the company shall be adopted by two thirds or more of the voting rights held by the shareholders present at the meeting.

Article 104 If it is stipulated in the Law and the articles of association of the company that a resolution shall be adopted by the general meeting on matters such as transfer of major assets by or to the company or provision of security for an external party, the board of directors shall promptly convene a general meeting, and the general meeting shall vote on such matters.

Article 105 In the case of election of directors and supervisors of a general meeting, the cumulative voting system may be implemented in accordance with the provisions of the articles of association of the company or the resolution of the general meeting.

For the purposes of the Law, the term “cumulative voting system” refers to that when a general meeting elects a director or supervisor, the number of voting rights attached to each share is the same as the number of directors or supervisors to be elected, and that the voting rights held by a shareholder may be exercised collectively.

Article 106 A shareholder may appoint a proxy to attend a general meeting on his behalf. The proxy shall submit the shareholder's power of attorney to the company and exercise voting rights within the scope of authorization.

Article 107 The general meeting shall keep minutes of the decisions on the matters under its consideration, and the presiding person and the directors present at the meeting shall sign the minutes of the meeting. The minutes of the meeting shall be kept together with the sign-in book of the attending shareholders and the powers of attorney of the attending proxies.

Section 3 Board of Directors and Manager

Article 108 A company limited by shares shall have a board of directors of five to 19 members.

The members of the board of directors may include representatives of the staff and workers of the company. The representatives of the staff and workers among the members of the board of directors shall be democratically elected by the staff and workers of the company through the staff and workers’ congress, the staff and workers’ general meeting or other means.

The provisions of Article 46 hereof on the term of office of the directors of limited liability companies shall apply to the directors of companies limited by shares.

The provisions of Article 47 hereof on the functions and powers of the board of directors of limited liability companies shall apply to the board of directors of companies limited by shares.

Article 109 The board of directors shall have one chairman of the board and may have a vice-chairman (or vice-chairmen) of the board. The chairman and vice-chairman (or vice-chairmen) of the board shall be elected by more than half of all directors.

The chairman of the board shall convene and preside over the meetings of the board of directors and inspect the implementation of the resolutions of the board of directors. The vice-chairman of the board shall assist the chairman of the board in his work. Where the chairman of the board is unable to or does not perform his duties, his duties shall be performed by the vice-chairman. If the vice-chairman is unable to or does not perform his duties, his duties shall be performed by a director jointly designated by more than half of the directors.

Article 110 The board of directors shall convene at least two meetings each year. All directors and supervisors shall be notified 10 days before each meeting is held.

An extraordinary meeting of the board of directors may be proposed by shareholders representing 10% or more of the voting rights or one third or more of the directors or the board of supervisors. The chairman of the board shall convene and preside over the meeting of the board of directors within 10 days of receipt of the proposal.

The notification method and time limit for giving notice of the convening of extraordinary meetings of the board of directors may be decided separately.

Article 111 Meetings of the board of directors may be held only if attended by more than half of the directors. Resolutions of the board of directors shall be adopted by more than half of all directors.

When voting on a resolution of the board of directors, each member shall have one vote.

Article 112 Meetings of the board of directors shall be attended by the directors in person. If a director for any reason is unable to attend the meeting, he may appoint another director in writing to attend the meeting on his behalf, and the power of attorney shall specify the scope of authorization.

The board of directors shall keep minutes of its decisions on the matters under its consideration, and the directors present at the meeting shall sign the minutes of the meeting.

The directors shall bear liability for the resolutions of the board of directors. If a resolution of the board of directors violates any law or administrative regulation, or the company's articles of association or a resolution of the general meeting, thereby causing the company to incur serious losses, the directors that took part in such resolution shall be liable to the company for compensation. However, if a director is proved to have expressed his objection to the resolution at the time of voting and the objection is recorded in the minutes of the meeting, such director may be released from such liability.

Article 113 A company limited by shares shall have a manager, who shall be engaged or dismissed by the board of directors.

The provisions of Article 50 hereof on the functions and powers of the manager of limited liability companies shall apply to the manager of companies limited by shares.

Article 114 The board of directors of a company may decide that a member of the board of directors shall serve concurrently as the manager.

Article 115 A company shall not directly or through a subsidiary provide any loan to its directors, supervisors or senior officers.

Article 116 A company shall periodically disclose to its shareholders the remuneration received by its directors, supervisors and senior officers from the company.

Section 4 Board of Supervisors

Article 117 A company limited by shares shall have a board of supervisors of no fewer than three members.

The board of supervisors shall include representatives of the shareholders and an appropriate ratio of the representatives of the company's staff and workers, where the ratio of the staff and workers’ representatives shall not be less than one third. The specific ratio shall be specified in the articles of association of the company. The staff and workers' representatives on the board of supervisors shall be democratically elected through the staff and workers’ congress, the staff and workers’ general meeting or other means.

The board of supervisors shall have a chairman and may have a vice-chairman (or chairmen). The chairman and vice-chairman of the board of supervisors shall be elected by more than half of all supervisors. The chairman of the board of supervisors shall convene and preside over the meetings of the board of supervisors. If the chairman of the board of supervisors is unable to or does not perform his duty, the meetings of the board of supervisors shall be convened and presided over by the vice-chairman of the board of supervisors. If the vice-chairman of the board of supervisors is unable to or does not perform his duty, the meetings of the board of supervisors shall be convened and presided over by a supervisor jointly designated by more than half of the supervisors.

Directors and senior officers may not concurrently serve as supervisors.

The provisions of Article 53 hereof on the term of office of the supervisors of limited liability companies shall apply to the supervisors of companies limited by shares.

Article 118 The provisions of Articles 54 and 55 hereof on the functions and powers of the board of supervisors of limited liability companies shall apply to the board of supervisors of companies limited by shares.

The costs and expenses necessary for the board of supervisors to exercise its functions and powers shall be borne by the company.

Article 119 The board of supervisors shall convene at least one meeting every six months. The supervisors may propose to convene an extraordinary meeting of the board of supervisors.

The method of deliberation and the voting procedures of the board of supervisors shall be specified in the articles of association of the company, except where stipulated herein.

Resolutions of the board of supervisors shall be adopted by more than half of the supervisors.

The board of supervisors shall keep minutes of its decisions on the matters under its consideration. The supervisors present at the meeting shall sign the minutes of the meeting.

Section 5 Special Provisions on the Organizational Structure of Listed Companies

Article 120 For the purposes of the Law, the term “listed company” refers to a company limited by shares whose shares are listed and traded on a stock exchange.

Article 121 If the amount of the major assets purchased or sold or the amount of security provided by a listed company within one year exceeds 30% of the total assets of the company, a resolution shall be passed by the general meeting and adopted by two thirds or more of the voting rights held by the shareholders present at the meeting.

Article 122 A listed company shall have independent directors. The specific procedures thereon shall be stipulated by the State Council.

Article 123 A listed company shall have a secretary to the board of directors to be in charge of matters such as the preparation of the general meetings and the meetings of the board of directors of the company, the safekeeping of documents as well as the administration of the shareholders' information of the company and the handling of information disclosure.

Article 124 If a director of a listed company is affiliated with an enterprise involved in a resolution matter of the meeting of the board of directors, he may not exercise his voting right on such resolution or the voting right of any other director as proxy. Such meeting of the board of directors may be held if attended by more than half of the directors without such affiliation, and the resolution of the meeting of the board of directors shall be adopted by more than half of the directors without such affiliation. If the number of directors without such affiliation present at the meeting of the board of directors is less than three, the matter shall be submitted to the general meeting of the listed company for consideration.

Chapter V Issuance and Transfer of Shares in Companies Limited by Shares

Section 1 Issuance of Shares

Article 125 The capital of companies limited by shares shall be divided into shares of equal amount.

The shares of companies shall take the form of share certificates. Share certificates shall be the vouchers issued by companies evidencing the shares held by their shareholders.

Article 126 Shares shall be issued in accordance with the principles of equitability and fairness. Each share of the same type shall carry the same rights and benefits.

Shares of the same type in the same issue shall be issued on the same conditions and at the same price. The same price shall be payable for each of the shares subscribed for by any work unit or individual.

Article 127 Shares may be issued at or above par but not below par.

Article 128 Share certificates shall be of paper or in such other form as determined by the State Council’s securities regulatory authority.

The following main particulars shall be clearly stated on a share certificate:

(I) the name of the company;

(II) the date of establishment of the company;

(III) the class and face value of the share certificate and the number of shares it represents; and

(IV) the serial number of the share certificate.

Share certificates shall be signed by the legal representative and sealed by the company.

The words “promoters’ share certificate” shall be clearly indicated on share certificates of promoters.

Article 129 Shares issued by a company may be registered shares and may also be bearer shares.

Shares issued by a company to a promoter or a legal person shall be registered shares and shall bear the name of such promoter or legal person. No separate account with a different name may be opened for such shares, nor may such shares be registered in the name of a representative.

Article 130 Companies that issue registered shares shall establish share registers, in which the following particulars shall be recorded:

(I) the names and domiciles of the shareholders;

(II) the number of shares held by each shareholder;

(III) the serial numbers of the share certificates held by each shareholder; and

(IV) the date on which each shareholder obtained the shares.

Companies that issue bearer shares shall record the number, serial numbers and issue date of the share certificates.

Article 131 The State Council may formulate separate regulations for the issue by companies of shares of types other than those provided for in the Law.

Article 132 Companies limited by shares shall formally deliver the share certificates to their shareholders immediately upon establishment. Companies may not deliver share certificates to their shareholders prior to establishment.

Article 133 When a company issues new shares, resolutions in respect of the following matters shall be adopted by the general meeting:

(I) the class and amount of the new shares;

(II) the issue price of the new shares;

(III) the opening and closing dates of the new share issue; and

(IV) the class and amount of new shares issued to existing shareholders.

Article 134 When a company issues new shares to the public upon verification and approval by the State Council’s securities regulatory authority, it shall announce a prospectus for the new shares and financial and accounting reports, and prepare subscription forms.

The provisions of Articles 88 and 89 hereof shall apply to the issue of new shares to the public by companies.

Article 135 The pricing proposal for new shares to be issued by a company may be determined on the basis of its operation and financial status.

Article 136 After a company has raised the full amount of subscription monies from a new share issue, it shall register the change with the company registration authority and make an announcement.

Section 2 Transfer of Shares

Article 137 Shares held by shareholders may be transferred according to the law.

Article 138 Transfer of shares by shareholders shall be conducted at a securities trading place established according to the law or by other means as stipulated by the State Council.

Article 139 Registered shares shall be transferred by means of endorsement by the shareholder or by other means stipulated in laws and administrative regulations. After the transfer, the company shall record the name and domicile of the transferee in the register of shareholders.

No change registration shall be carried out in respect of the register of shareholders specified in the preceding paragraph within 20 days prior to convening a general meeting or within 5 days prior to the reference date determined by the company for the distribution of dividends. However, where the law has stipulated otherwise on the change registration of the register of shareholders of listed companies, such stipulations shall prevail.

Article 140 A transfer of bearer shares shall become effective immediately upon delivery of the shares by the shareholder to the transferee.

Article 141 Shares held by the promoters in the company promoted may not be transferred within one year of the date of establishment of the company. Shares issued by a company prior to the public offer of its shares may not be transferred within one year of the date of listing of its shares on a stock exchange.

A director, supervisor or senior officers of a company shall declare to the company the number of shares in the company held by him and any change thereof, and may not transfer more than 25% of the shares in the company held by him each year during his term of office. The shares held by him may not be transferred within one year of the date of listing of the company’s shares. The aforementioned person may not transfer the shares in the company he holds within six months after he leaves office. The articles of association of the company may specify other restrictive provisions on the transfer of the company’s shares held by the directors, supervisors and senior officers of the company.

Article 142 A company may not purchase its own shares except in any of the following circumstances:

(I) to reduce the registered capital of the company;

(II) to merge with another company (companies) that hold(s) its shares;

(III) to reward the staff and workers of the company with shares; or

(IV) a shareholder requests the company to purchase the shares held by him since he objects to a resolution of the general meeting on the merger or division of the company.

Where a company purchases its own shares for reasons specified in Items (I) to (III) of the preceding paragraph, a resolution of the general meeting shall be adopted. Shares purchased by the company pursuant to the preceding paragraph shall be cancelled within 10 days of the date of purchase if the circumstances fall under Item (I), or transferred or cancelled within six months if the circumstances fall under Item (II) or (IV).

A company’s own shares purchased by the company pursuant to Item (III) of Paragraph One shall not exceed 5% of the total issued shares of the company. The funds used for the purchase shall be taken from the after-tax profits of the company, and the shares purchased shall be transferred to the staff and workers within one year.

A company may not accept its own shares as the subject matter of a pledge.

Article 143 If a registered share certificate is stolen, lost or destroyed, the shareholder may petition to a people's court to declare the certificate void in accordance with the procedures for public invitation to assert claims as specified in Civil Procedure Law of the People's Republic of China. After the people’s court has declared such share certificate void, the shareholder may apply to the company for a new share certificate.

Article 144 Shares of a listed company shall be listed and traded in accordance with the relevant laws, administrative regulations and the trading rules of stock exchanges.

Article 145 A listed company shall disclose its financial status, business condition and major litigation according to the provisions of laws and administrative regulations, and shall publish a financial and accounting report once every six months in each fiscal year.

Chapter VI Qualifications and Obligations of Directors, Supervisors and Senior Officers of Companies

Article 146 A person may not serve as a company's director, supervisor or senior officers if he is:

(I) a person with no or limited capacity for civil acts;

(II) a person that was sentenced to criminal punishment for the crime of corruption, bribery, encroachment of property, misappropriation of property or disruption of the order of the socialist market economy, and not more than five years has elapsed since the expiration of the enforcement period; or a person that was deprived of his political rights for committing a crime, and not more than five years has elapsed since the expiration of the enforcement period;

(III) a director, factory director or manager of a company or enterprise liquidated upon bankruptcy that was personally responsible for the bankruptcy of the company or enterprise, and not more than three years has elapsed since the date of completion of the bankruptcy liquidation;

(IV) the legal representative of a company or enterprise that had its business license revoked and had been closed down by order for violation of law, for which such representative bears individual liability, and not more than three years has elapsed since the date on which the business license of the company or enterprise was revoked; and

(V) a person with a comparatively large amount of personal debts due and unsettled.

If a company elects or appoints a director or supervisor or employs senior officers in violation of the preceding paragraph, such election, appointment or employment shall be invalid.

If a director, supervisor or senior officers falls under the circumstances specified in Paragraph One of this Article during his term of office, the company shall dismiss him from his office.

Article 147 Directors, supervisors and senior officers shall abide by laws, administrative regulations and the articles of association of the company, and have a fiduciary obligation and obligation of diligence to the company.

Directors, supervisors and senior officers may not take advantage of their positions and powers to collect or accept bribes or other illegal income, and may not encroach upon the property of the company.

Article 148 Directors and senior officers may not have the following acts:

(I) misappropriate the funds of the company;

(II) deposit the funds of the company in an account opened in his personal name or in the name of another individual;

(III) in violation of the articles of association of the company, lend the funds of the company to other persons or use the property of the company to provide security for other persons without the consent of the board of shareholders, general meeting or the board of directors;

(IV) enter into a contract or transaction with the company in violation of the articles of association of the company or without the consent of the board of shareholders or general meeting;

(V) take advantage of the convenience of his position to seek for himself or other persons commercial opportunities that belong to the company or to operate by himself or for another person the same type of business as that of his company without the consent of the board of shareholders or general meeting;

(VI) accept as his own the commissions of a transaction between another person and the company;

(VII) disclose the secrets of the company without authorization; or

(VIII) other acts that violate his fiduciary obligation to the company.

The income derived by a director or senior officers from violating the provisions of the preceding paragraph shall belong to the company.

Article 149 If a director, supervisor or senior officers violates the provisions of laws, administrative regulations or the articles of association of the company in the execution of company duties, thereby causing losses to the company, he shall be liable for compensation.

Article 150 If a director, supervisor or senior officers is required by the board of shareholders or general meeting to attend the meeting as non-voting attendee, the director, supervisor or senior officers shall attend the meeting as a non-voting attendee and accept inquiries from the shareholders.

Directors and senior officers shall truthfully provide the relevant information and materials to the board of supervisors or, in the case of a limited liability company without a board of supervisors, the supervisor, and may not obstruct the board of supervisors or supervisors in exercising its/their functions and powers.

Article 151 If a director or senior officers is in the circumstances specified in Article 150 hereof, the shareholders in the case of a limited liability company, or a shareholder that has independently held, or the shareholders that have held in aggregate, 1% or more of the shares of the company for more than 180 consecutive days in the case of a company limited by shares, may request in writing the board of supervisors or, the supervisors, in the case of a limited liability company without a board of supervisors, to institute proceedings with the people’s court; where the supervisors fall under the circumstance set forth in Article 150 hereof, the foregoing shareholders may request in writing the board of directors or, the executive directors, in the case of a limited liability company without a board of directors, to institute proceedings with the people’s court.

If the board of supervisors or, in the case of a limited liability company without a board of supervisors, the supervisor, or the board of directors or executive director refuses to institute proceedings after receipt of the written request of the shareholder as specified in the preceding paragraph, or fails to institute proceedings within 30 days of the date of receipt of the request, or if the matter is urgent and failure in the immediate institution of proceedings would result in damage to the interests of the company that is difficult to remedy, the shareholder(s) specified in the preceding paragraph shall have the right to directly institute proceedings in his or their name in a people’s court for the interests of the company.

If any other person infringes upon the lawful rights and interests of the company and thereby causing losses to the company, the shareholder(s) specified in Paragraph One of this Article may institute proceedings in a people’s court pursuant to the provisions of the preceding two paragraphs.

Article 152 If, in violation of the provisions of laws, administrative regulations or the articles of association of the company, a director or senior officers harms the interests of the shareholders, the shareholders may institute proceedings in a people’s court.

Chapter VII Corporate Bonds

Article 153 For the purposes of the Law, the term "corporate bonds" refers to valuable securities issued by a company in accordance with statutory procedure, the principal of which such company agrees to repay, together with interest, within a definite time limit.

Issue of corporate bonds by companies shall comply with the conditions for issue stipulated in Securities Law of the People's Republic of China.

Article 154 After an issuing company’s application for issuing corporate bonds has been verified and approved by the department authorized by the State Council, it shall announce the method of offer of the corporate bonds.

The method of offer of corporate bonds shall specify the following main particulars:

(I) the name of the company;

(II) the purpose of the funds from the offer of the corporate bonds;

(III) the total amount and the face value of the bonds;

(IV) the method of determining the interest rate of the bonds;

(V) the time limit for and method of repayment of the principal together with the interest thereon;

(VI) the details of the guarantee for bonds;

(VII) the bond price and the opening and closing dates of the bond issue;

(VIII) the amount of the company's net assets;

(IX) the total amount of previously issued corporate bonds that have not yet matured; and

(X) the distributor of the corporate bonds.

Article 155 When a company issues corporate bonds in scrip form, it shall clearly record particulars such as the name of the company, the face value of the bond, the interest rate and the time limit for repayment, and the bonds shall be signed by the legal representative and sealed by the company.

Article 156 Corporate bonds may be registered bonds and may also be bearer bonds.

Article 157 When issuing corporate bonds, a company shall prepare a corporate bond counterfoil book.

In the case of issuance of registered corporate bonds, the following particulars shall be recorded in the corporate bond counterfoil book:

(I) the names and domiciles of the bondholders;

(II) the dates on which the bondholders obtained the bonds and the serial numbers thereof;

(III) the total amount of the bonds, the face value and the interest rate of the bonds, and the time limit for and method of repayment of the principal together with the interest thereon; and

(IV) the date of issue of the bonds.

In the case of issuance of bearer corporate bonds, the following particulars shall be recorded in the corporate bond counterfoil book: the total amount of the bonds, the interest rate, the time limit for and method of repayment, the date of issue and the serial number of the bonds.

Article 158 Registration and clearing institutions of registered corporate bonds shall establish relevant systems such as systems for registration, keeping custody, payment of interest and exchange of bonds.

Article 159 Corporate bonds may be transferred. The transfer price of corporate bonds shall be agreed upon between the transferor and the transferee.

Where the corporate bonds are listed for trading on the stock exchange, they shall be transferred according to the trading rules of the stock exchange.

Article 160 Registered corporate bonds shall be transferred by means of endorsement by the bondholder or such other means as specified in laws and administrative regulations. After the transfer, the company shall record the name and domicile of the transferee in the corporate bond counterfoil book.

A transfer of bearer corporate bonds shall become effective immediately upon delivery of the bonds by the bondholder to the transferee.

Article 161 Upon adoption of a pertinent resolution by the general meeting, listed companies may issue corporate bonds convertible into shares. The specific method of conversion shall be stipulated in the method of offer of the corporate bonds. Any issuance of corporate bonds convertible into shares by a listed company shall be reported to the State Council’s securities regulatory authority for verification and approval.

When issuing corporate bonds convertible into shares, the words “convertible corporate bond” shall be clearly indicated on the bonds, and the amount of convertible corporate bonds shall be recorded in the corporate bond counterfoil book.

Article 162 A company that issues corporate bonds convertible into shares shall issue shares in exchange for such bonds to the bondholders in accordance with the conversion method. However, bondholders shall have an option as to whether or not to convert their bonds into shares.

Chapter VIII: Financial Affairs and Accounting of Companies

Article 163 Companies shall establish their own financial and accounting systems in accordance with laws, administrative regulations, and regulations of the finance department of the State Council.

Article 164 Companies shall prepare financial and accounting reports at the end of each fiscal year. Such reports shall be audited by an accounting firm according to the law.

Financial and accounting reports of companies shall be prepared according to laws, administrative regulations and regulations of the finance department of the State Council.

Article 165 Limited liability companies shall deliver their financial and accounting reports to each of their shareholders within the time limit specified in their articles of association.

The financial and accounting reports of companies limited by shares shall be made available at the company for the perusal of shareholders 20 days before the annual general meeting is held. Companies limited by shares that issue shares to the public shall announce their financial and accounting reports.

Article 166 When companies distribute their after-tax profits for a given year, they shall allocate 10% of profits to their statutory common reserve. Companies shall no longer be required to make allocations to their statutory common reserve once the aggregate amount of such reserve exceeds 50% of their registered capital.

If a company’s statutory common reserve is insufficient to make up its losses of the previous years, such losses shall be made up from the profit for the current year prior to making allocations to the statutory common reserve pursuant to the preceding paragraph.

Companies may, if so resolved by the board of shareholders or the general meeting, make allocations to the discretionary common reserve from their after-tax profits after making allocations to the statutory common reserve from the after-tax profits.

A company’s after-tax profits remaining after it has made up its losses and made allocations to its common reserve shall be distributed, in the case of a limited liability company, according to Article 35 hereof and, in the case of a company limited by shares, in proportion to the shareholdings of its shareholders, unless the articles of association of the company limited by shares stipulate that the profits shall not be distributed in proportion to the shareholdings.

If the board of shareholders, general meeting or board of directors violates the preceding paragraph by distributing profits to shareholders before the company has made up its losses and made allocations to the statutory common reserve, the profit distributed in violation of regulations shall be returned to the company by the shareholders.

Companies that hold the shares of their own company shall not be entitled to profit distribution.

Article 167 Companies shall enter under their capital common reserve the premiums earned from the issue of shares above par and such other revenue as the finance department of the State Council requires to be entered under the capital common reserve.

Article 168 Companies shall apply their common reserve to making up their losses, increasing their production and business operations, or increasing their capital by means of conversion. However, the capital common reserve may not be used to make up the losses of the company.

When funds from the statutory common reserve are converted to capital, the funds remaining in such reserve shall amount to not less than 25% of the increased registered capital.

Article 169 The employment and dismissal of accounting firms that handle company’s audit business by the companies shall be decided by the board of shareholders, general meeting and board of directors according to the stipulations of the company’s articles of association.

When the board of shareholders, general meeting or board of directors votes on the dismissal of accounting firms, it shall permit the accounting firm to state its opinion.

Article 170 Companies shall provide to the accounting firm they employ truthful and complete accounting vouchers, account books, financial and accounting reports and other accounting materials, and may not refuse to do so, or conceal or submit untruthful materials.

Article 171 Companies may not establish any account books in addition to those required by law.

No accounts may be opened in the name of any individual for the keeping of a company’s assets.

Chapter IX: Merger and Division, Increase and Reduction of Capital of Companies

Article 172 The merger of companies may take the form of merger by absorption or merger by new establishment.

The absorption by one company of one or more other companies shall be merger by absorption, in which case the absorbed company or companies shall be dissolved. The merger of two or more companies and establishment of a new company shall be merger by new establishment, in which case the parties to the merger shall be dissolved.

Article 173 When companies merge, the parties to the merger shall enter into a merger agreement and prepare balance sheets and schedules of property. The companies shall notify their creditors within a period of 10 days commencing from the date on which the merger resolution is passed and, within 30 days, make newspaper announcements of the merger. Such creditors may, within a period of 30 days commencing from the date of receipt of the written notification, or within a period of 45 days commencing from the date of the announcement for those who do not receive the written notification, claim full repayment or require the provision of a corresponding guarantee from the company concerned.

Article 174 When companies merge, the surviving company or the newly established company shall succeed to the claims and debts of each party to the merger.

Article 175 When a company is divided, its property shall be divided correspondingly.

When a company is to be divided, it shall prepare a balance sheet and a schedule of property. The company shall notify its creditors within a period of 10 days commencing from the date on which the division resolution is passed and, within 30 days, make newspaper announcement of the division.

Article 176 The joint and several liabilities for the debts existing before a company is divided shall be borne by the companies in existence following the division, except where the written agreement on payment of debts reached between the company and the creditors prior to the division stipulates otherwise.

Article 177 When a company needs to reduce its registered capital, it shall prepare a balance sheet and a schedule of property.

The company shall notify its creditors within a period of 10 days commencing from the date on which the resolution to reduce the registered capital is passed and, within 30 days, make newspaper announcement of the reduction. Such creditors shall, within a period of 30 days commencing from the date of receipt of the written notification, or within a period of 45 days commencing from the date of the announcement for those who do not receive the written notification, have the right to claim full repayment or require the provision of a corresponding guarantee from the company.

Article 178 When a limited liability company increases its registered capital, the capital contributions to the increase in capital subscribed for by its shareholders shall be handled in accordance with the relevant provisions hereof concerning payment of capital contributions in connection with the establishment of a limited liability company.

When a company limited by shares issues new shares to increase its registered capital, shareholders shall subscribe for the new shares in accordance with the relevant provisions hereof concerning the payment of subscription monies in connection with the establishment of a company limited by shares.

Article 179 When companies merge or a company is divided, causing some changes to relevant registered particulars, change of registration shall be handled with the company registration authority in accordance with the law. When a company is dissolved, the cancellation of registration shall be handled in accordance with the law. When a new company is established, its establishment shall be registered according to the law.

When a company increases or reduces its registered capital, it shall register the change with the company registration authority in accordance with the law.

Chapter X: Dissolution and Liquidation of Companies

Article 180 A company shall be dissolved due to the following reasons:

(I) when the term of operation as specified in the company's articles of association expires or another cause of dissolution as specified in the company's articles of association arises;

(II) if the board of shareholders or general meeting resolves to dissolve the company;

(III) if dissolution is necessary as a result of the merger or division of the company;

(IV) its business license has been revoked, or it is ordered to close down or to be revoked according to the law; or

(V) it is ordered to be dissolved by the people’s court according to Article 183 hereof.

Article 181 A company under the circumstance stated in Item (I) of Article 180 of the Law may continue to exist by modifying its articles of association.

The modification of the company's articles of association in accordance with the preceding paragraph shall be subject to adoption, in the case of a limited liability company, by the shareholders representing more than two thirds of the voting rights or, in the case of a company limited by shares, by the shareholders that are present at the general meeting of shareholders and represent more than two thirds of the voting rights.

Article 182 Where any severe difficulty occurs to the operation management of a company, in which case the interests of the shareholders may suffer heavy losses if the company continues to exist and there is no other way to solve the problem, the shareholders representing more than ten percent of the voting rights of all the shareholders of the company may file a request with the people's court to dissolve the company.

Article 183 Where a company is dissolved under Item (I), (II), (IV), or (V) of Article 180 of the Law, a liquidation group shall be formed to commence the liquidation within 15 days after a cause of dissolution occurs. The liquidation group shall be composed of shareholders, in the case of a limited liability company; or shall be composed of directors or the candidates determined by the general meeting of shareholders, in the case of a company limited by shares. Where a liquidation group has not been formed to carry out liquidation within the specified time limit, the creditors may apply to the people's court for its designation of relevant personnel to form a liquidation group and carry out liquidation. The people's court shall accept the application, and shall, in a timely manner, organize a liquidation group to carry out liquidation.

Article 184 The liquidation group may exercise the following powers during liquidation:

(I) to thoroughly examine the property of the company and prepare a balance sheet and a schedule of property respectively;

(II) to notify creditors by notice or announcement;

(III) to dispose of and liquidate relevant unfinished business of the company;

(IV) to pay all outstanding taxes in full as well as taxes arising in the course of liquidation;

(V) to clear the claims and debts;

(VI) to dispose of the property remained after full payment of the company's debts; and

(VII) to participate in civil litigation activities on behalf of the company.

Article 185 A liquidation group shall notify the creditors within a period of 10 days commencing from the date of its establishment and, within 60 days, make newspaper announcement of the liquidation. Such creditors shall, within a period of 30 days commencing from the date of receipt of the written notification, or within a period of 45 days commencing from the date of the announcement for those who do not receive the written notification, declare their claims to the liquidation group.

When declaring their claims, the creditors shall explain relevant particulars of their claims and provide supporting materials. Claims shall be registered by the liquidation group.

During the period of declaration of claims, the liquidation group may not repay the debts to the creditors.

Article 186 After a liquidation group has thoroughly examined the company's property and prepared a balance sheet and a schedule of property, it shall formulate a liquidation plan and submit the same to the board of shareholders, general meeting or the people’s court for confirmation.

The property of a company remained after the property is respectively applied to payment of the liquidation expenses, the wages, social insurance premiums and statutory compensation of staff and workers and the outstanding taxes, and to full payment of the debts of the company shall be distributed, in the case of a limited liability company, in proportion to the capital contributions of its shareholders and, in the case of a company limited by shares, in proportion to the shareholdings of its shareholders.

During liquidation, a company shall continue to exist, but it may not engage in new business activities unrelated to liquidation. Company property may not be distributed among its shareholders prior to full repayment in accordance with the stipulations of the preceding paragraph.

Article 187 If the liquidation group, having thoroughly examined the company's property and prepared a balance sheet and a schedule of property, discovers that the company's property is insufficient to pay its debts in full, it shall apply to the people's court for declaration of insolvency according to the law.

After the people's court has ruled to declare the company insolvent, the company's liquidation group shall turn over the liquidation matters to the people's court.

Article 188 Following the completion of liquidation, the liquidation group shall compile a liquidation report and submit the same to the board of shareholders, general meeting or the people’s court for confirmation, as well as to the company registration authority. In addition, the liquidation group shall apply for cancellation of the company's registration and announce the company's termination.

Article 189 Members of a liquidation group shall be devoted to their duties and perform their liquidation obligations according to the law.

Members of a liquidation group may not abuse their authority to accept bribes or other illegal income and may not seize company property.

If members of a liquidation group willfully or through gross negligence cause losses to the company or its creditors, they shall be liable for compensation.

Article 190 Where a company is declared bankrupt according to the law, it shall be subject to insolvency liquidation according to the laws on enterprise insolvency.

Chapter XI: Branches of Foreign Companies

Article 191 For the purposes of the Law, the term “foreign companies” refers to companies incorporated outside China in accordance with a foreign country’s law.

Article 192 To establish a branch in China, a foreign company shall file an application with China's competent authority and submit relevant documents such as its articles of association, the company registration certificate issued by its country, etc. Upon approval, it shall go through registration procedures with the company registration authority according to the law and obtain a business license.

Measures for examination and approval of branches of foreign companies shall be separately stipulated by the State Council.

Article 193 A foreign company that establishes a branch in China shall designate a representative or an agent in China to be responsible for such branch and shall allocate an amount of funds to such branch commensurate with the business activities in which it is to engage.

If it is necessary to prescribe a minimum amount of operating funds of branches of foreign companies, such amount shall be separately prescribed by the State Council.

Article 194 The name of a branch of a foreign company shall indicate the nationality and form of liability of such foreign company.

The branch of a foreign company shall keep at its office a copy of such foreign company's articles of association.

Article 195 Branches established in China by foreign companies shall not have the status of Chinese legal persons.

Foreign companies shall be civilly liable for the business activities carried out in China by their branches.

Article 196 The business activities engaged in within China by foreign companies' branches that have been established upon approval shall comply with the law of China and may not harm China's social public interests. The lawful rights and interests of such branches shall be protected by the laws of China.

Article 197 When a foreign company closes its branch in China, it shall pay its debts in full according to the law and carry out liquidation in accordance with the provisions of the Law concerning company liquidation procedure. Such foreign company may not transfer its branch's property out of China prior to full payment of its debts.

Chapter XII: Legal Liability

Article 198 If, in violation of the provisions hereof, company registration is obtained by means of reporting a false amount of registered capital or by submitting false materials or resorting to other fraudulent methods to conceal major facts, the company registration authority shall order rectification and, in the case of a company that reported a false amount of registered capital, the company shall be fined not less than 5% and not more than 15% of the false amount of registered capital and, in the case of a company that submitted false materials or resorted to other fraudulent methods to conceal major facts, the company shall be fined not less than RMB 50,000 and not more than RMB 500,000. In serious cases, the company’s registration or the business license shall be revoked.

Article 199 If promoters or shareholders of a company make false capital contributions by failing to pay or deliver or pay or deliver according to schedule monetary or non-monetary property as capital contribution, the company registration authority shall order rectification, and a fine of not less than 5% and not more than 15% of the amount of false capital contribution shall be imposed.

Article 200 If promoters or shareholders of a company surreptitiously withdraw their capital contributions after the company has been established, the company registration authority shall order rectification, and a fine of not less than 5% and not more than 15% of the amount of capital contribution withdrawn surreptitiously shall be imposed.

Article 201 If a company violates the Law by establishing account books in addition to those required by law, the finance department of the people’s government at county level or above shall order rectification, and a fine of not less than RMB 50,000 and not more than RMB 500,000 shall be imposed.

Article 202 If a company makes false record or conceals major facts in the materials provided to the relevant department in charge such as the financial and accounting reports, the relevant department in charge shall impose a fine of not less than RMB 30,000 and not more than RMB 300,000 on the personnel in charge that are directly responsible and other directly responsible personnel.

Article 203 If a company fails to make allocations to the statutory common reserve in accordance with the provisions hereof, the finance department of the people’s government at county level or above shall order the company to allocate the full amount to be allocated, and may impose a fine of not more than RMB 200,000 on the company.

Article 204 If a company, when being merged or divided, reducing its registered capital or carrying out liquidation, fails to notify its creditors or to announce the same to its creditors in accordance with the provisions hereof, the company registration authority shall order rectification, and the company shall be fined not less than RMB 10,000 and not more than RMB 100,000.

If a company in liquidation conceals its property, records false information in its balance sheet or schedule of property or distributes company property prior to full payment of its debts, the company registration authority shall order rectification, and the company shall be fined not less than 5% and not more than 10% of the amount of property concealed or the amount of company property distributed prior to full repayment of its debts. The personnel in charge that are directly responsible and other directly responsible personnel shall be fined not less than RMB 10,000 and not more than RMB 100,000.

Article 205 If a company, during the period of liquidation, engages in business activities unrelated to liquidation, the company registration authority shall issue a warning and confiscate the illegal income.

Article 206 If a liquidation group fails to submit a liquidation report to the company registration authority in accordance with the provisions hereof or if the liquidation report submitted conceals major facts or contains major omissions, the company registration authority shall order rectification.

If members of a liquidation group use their authority to engage in graft, seek illegal income or seize company property, the company registration authority shall order them to return company property, confiscate the illegal income and may impose a fine of not less than the amount of the illegal income and not more than five times of the illegal income.

Article 207 If an organization undertaking asset valuation, capital verification or other verification provides false materials, the company registration authority shall confiscate its illegal income, impose a fine of not less than the amount of the illegal income and not more than five times of the illegal income, and the relevant departments in charge may order the organization to cease business, revoke the qualification certificates of the personnel directly responsible and revoke the business license according to the law.

If an organization undertaking asset valuation, capital verification or other verification provides a report containing serious omissions due to negligence, the company registration authority shall order rectification. If the circumstances are relatively serious, it shall be fined not less than the amount of the revenue obtained and not more than five times of the revenue obtained and, in addition, the relevant departments in charge may order the organization to cease business, revoke the qualification certificates of the personnel directly responsible and revoke the business license according to the law.

If the valuation result, certificate of capital verification or other verification issued by an organization undertaking asset valuation, capital verification or other verification is proved to be false, thereby causing losses to the creditors of a company, the organization shall bear the liability for compensation to the extent of the amount of the false valuation or verification unless it is able to prove that it is not at fault.

Article 208 If the company registration authority grants registration to an application for registration that does not satisfy the conditions set forth herein, or does not grant registration to an application for registration that satisfies the conditions set forth herein, administrative sanctions shall be given to the personnel in charge that are directly responsible and other directly responsible personnel according to the law.

Article 209 If the superior authorities of the company registration authority force the company registration authority to grant registration to an application for registration that does not satisfy the conditions set forth herein or not to grant registration to an application for registration that satisfies the conditions set forth herein, or if they cover up an illegal registration, administrative sanctions shall be given to the personnel in charge that are directly responsible and other directly responsible personnel according to the law.

Article 210 If an entity that has not been registered according to the law as a limited liability company or company limited by shares passes itself off as a limited liability company or company limited by shares, or an entity that has not been registered according to the law as the branch of a limited liability company or company limited by shares passes itself off as the branch of a limited liability company or company limited by shares, the company registration authority shall order rectification or close down the entity, and may impose a fine of not more than RMB 100,000.

Article 211 If a company, without proper reason, fails to commence business within six months following its establishment or, after having commenced business, voluntarily suspends business for more than six months, its business license may be revoked by the company registration authority.

If a change occurs in a particular of company registration and the relevant change is not registered in accordance with the provisions hereof, the company registration authority shall order registration within a time limit and, if registration is not carried out within such time limit, a fine of not less than RMB 10,000 and not more than RMB 100,000 shall be imposed.

Article 212 If a foreign company violates the provisions hereof by establishing a branch in China without authorization, the company registration authority shall order rectification or shut down the branch, and may impose a fine of not less than RMB 50,000 and not more than RMB 200,000.

Article 213 If serious illegal acts that harm State security and social and public interests are carried out in the name of the company, the business license shall be revoked.

Article 214 Companies that violate the provisions hereof shall assume civil liability for compensation and be subject to fines, and in case that such company's property is insufficient to pay such compensation and fine, it shall first assume civil liability for compensation.

Article 215 Where the provisions hereof are violated and a crime is constituted, such crime shall be subject to criminal prosecution according to the law.

Chapter XIII: Supplementary Provisions

Article 216 The meanings of the following terms in the Law are defined as follows:

(I)"senior officers" refer to the manager, deputy manager and person in charge of financial affairs of a company and, in the case of a listed company, the secretary to the board of directors and other personnel specified in the articles of association.

(II)"controlling shareholder" refers to the shareholder whose capital contribution accounts for 50% or more of the total capital of a limited liability company or whose shareholding accounts for 50% or more of the total share capital of a company limited by shares; or the shareholder whose capital contribution or shareholding is less than 50% but whose voting rights pursuant to such capital contribution or shareholding are sufficient to have a major impact on the resolutions of the board of shareholders or general meeting.

(III)"de facto controller" refers to a person who, although is not a shareholder of the company, is capable of actually controlling the conduct of the company through investment relations, agreements or other arrangements.

(IV)"affiliation" refers to the relationship between the controlling shareholder, de facto controller, director, supervisor or senior officers of a company and an enterprise directly or indirectly controlled by him as well as any other relationship that may lead to a transfer of the interests of the company. However, there shall be no affiliation between State-controlled enterprises merely due to the fact that the State has a controlling interest in them.

Article 217 The Law shall apply to foreign-funded limited liability companies and companies limited by shares. Where laws on foreign investment have other stipulations, such stipulations shall apply.

Article 218 The Law shall come into force as of January 1, 2006.

This English version is only for reference. To learn more, please refer to the authoritative Chinese version.