Part Ⅰ General Principles
Chapter Ⅱ Persons
Section Ⅱ Juridical Persons
Sub-section Ⅰ General Provisions
A juridical person is established only according to this code or any other acts.
Within the limits prescribed by acts and regulations, a juridical person is capable of enjoy rights and assume duties with the exception of those rights and obligations which are exclusively appertaining to natural persons.
A juridical person must have at least one director. If there is more than one director, the execution of affairs of the juridical person shall be decided by a majority of all directors unless otherwise provided by its bylaw.
The director represents the juridical person within the management of its affairs. If there is more than one director, each director may represent the juridical person unless otherwise provided by its bylaw.
No restriction imposed upon the representative right of a director may be a valid defense against any bona fide third party.
A juridical person may have one or more controllers to control the execution of its affairs. If there is more than one controller, each controller may exercise his right of control respectively unless otherwise provided by its bylaw.
A juridical person is jointly liable with the wrongdoer for the injury caused by its directors or other persons who are entitled to represent the juridical person in the performance of their duties.
The domicile of a juridical person is the location of its principal office.
A juridical person can not be established unless it has been registered with the authorities concerned.
If a juridical person, after its registration, fails to register any entry which should have been registered, or to register any amendment to any of the entries already registered, such entry or amendment therein should not be a valid defense against any third party.
The activities of a licensed juridical person are subject to the supervision of the authorities concerned. The authorities concerned may examine the juridical person's financial situation and ascertain whether it has violated the conditions of the license and other legal requirements.
The director or controller of a licensed juridical person who disobeys the supervising order of, or obstructs the inspection by the authorities concerned, may be punished with a fine not exceeding five thousand Yuan.
If the director or controller set forth in the preceding paragraph violates the act, regulation, or bylaw to such an extent that may endanger interests of the public or the juridical person, the authorities concerned may apply to the court for dismissing his position and make other necessary arrangement.
If a juridical person violates any conditions under which the license has been granted, the authorities concerned may revoke the license to the juridical person.
When a juridical person is in a state of insolvent, the director shall immediately apply to the court for the declaration of bankruptcy.
If the director fails to make the preceding application, so that the creditors of the juridical person incur the injury, he who is negligent shall be liable for the injury. If more than one director is negligent, they shall be liable for the injury jointly.
When the purpose or the activity of a juridical person violates the act, public policy or morals, the court may declare to dissolve the juridical person upon the application of the authorities concerned, the public prosecutor, or any interested person.
The liquidation of a dissolved juridical person shall be dealt with by its director, unless otherwise provided its bylaw or by the resolution of the general meeting of members.
If the appointment of the liquidator cannot be made under the preceding article, the court may appoint the liquidator by its authority or upon the application of the authorities concerned, public prosecutor, or interested person.
Whenever necessary, the court may discharge the liquidator from his duties.
A liquidator shall do the following duties:
(1) Wind up the business or affairs of the juridical person.
(2) Claim the obligatory rights and discharge the debts.
(3) Deliver the remaining assets to the persons entitled thereto.
The dissolved juridical person, before the end of its liquidation, is deemed to continue existence insofar as it is necessary for the liquidation.
Unless otherwise provided by this General Provisions, the procedure of liquidation shall be carried out in conformity mutatis mutandis with the provisions governing the liquidation of a company limited by shares.
The liquidation of a juridical person shall be subject to the supervision of the court. The court may at any time make inspection and disposition necessary for its supervision.
Whenever to revoke the license to or order the dissolution of a juridical person, the authorities concern shall notify the court simultaneously.
If a juridical person was dissolved in accordance with its bylaw or the resolution of its general meeting of members, the director shall report to the court within fifteen days after the dissolution.
A liquidator who violates the supervising order of the court or obstructs the inspection of the court may be punished with a fine not exceeding five thousand Yuan. A director who violates the provision in the third paragraph of the preceding article may be punished with the same fine.
After a juridical person has been dissolved and its debts have been discharged, unless otherwise provided by the act, the remaining assets shall be assigned according to its bylaw, or the resolution of the general meeting of members. Upon the dissolution of a charitable juridical person, its remaining assets shall not be assigned to any natural person or profit-seeking group.
Without such provisions in the act, in the bylaw, or of a resolution of the general meeting of members as provided in the preceding paragraph, the remaining assets of a juridical person shall be assigned to the municipal corporation in which the juridical person is domiciled.
Sub-section Ⅱ Corporations
A business corporation acquires juridical personality according to the particular act.
Before the registration, a charitable corporation shall obtain the license of its authorities concerned.
Those who want to establish a corporation shall draw up its bylaw which shall contain the following entries:
(3) The number, term of office, appointment and dismissal of the director; and same of the controller, if any;
(4) The conditions and procedures for calling the general meeting of members and the method for authentication of its resolution;
(5) The contributions of the members;
(6) The acquisition and loss of membership;
(7) The date of the bylaw be drawn up;
When a corporation is established, the following entries shall be registered:
(3) The principal and branch offices;
(4) The name and domicile of the director; and same of the controller, if any;
(5) The total assets;
(6) The date of the license, if the corporation should be licensed;
(7) The way of contributions, if any;
(8) The name of the director who represents the juridical person, if any;
(9) The period of duration, if any;
The application for the registration of a corporation shall be submitted by the director to the authorities concerned where its principal and branch offices are located. A copy of its bylaw shall be annexed to the application for registration.
Without violating the provisions of articles 50 to 58, the bylaw may provide for the organization of the corporation and the relations between the corporation and its members.
The supreme organ of a corporation is the general meeting of its members.
The following entries shall be passed by the resolution of the general meeting of members:
(1) The alteration of the bylaw;
(2) The appointment and dismissal of the director and the controller;
(3) The supervision of the director and the controller in doing of their duties;
(4) The removal of members for good causes.
The general meeting of members shall be called at least once a year by the director; if the director does not call the general meeting, the controller may call it.
When over one-tenth of the members of a corporation request the director to call a general meeting, expressing the purpose of the meeting and the reason for its calling, the director shall call the meeting accordingly.
After the receipt of above request, if the director does not call the meeting within one month, the member, who have made the request, with the authorization of the court, may call the meeting.
The notice of calling, unless otherwise provided by the bylaw, shall be given to the members 30days in advance. The agenda of the general meeting shall be specified in the notice.
Unless otherwise provided by this Code, the resolution of the general meeting of members shall be passed if it passed by a majority of its members present.
The voting right of each member is equal.
Unless otherwise limited by the bylaw, a member may delegate another with a written document to exercise his voting right, but each person may act as proxy for one member only.
Any member who has conflict of interests in the matter under resolution of the general meeting of members which may damage the corporation shall not vote or exercise as a proxy to vote.
The resolution concerning the alteration of the bylaw of a corporation shall be passed at a meeting at which the majority of the members of the corporation are present, and by a majority of over three-fourths of the members present, or when over two-thirds of the members of the corporation declare their consent in writing.
The alteration of the bylaw of a licensed corporation shall be approved by the authorities concerned.
The members may withdraw from the corporation at any time unless the bylaw requires that the members have to remain until the end of the business year, or the expiration of notice period of withdrawal.
The period of notice in the preceding paragraph shall not exceed six months.
The member who is withdrew or dismissed has no claim for the property of the corporation unless otherwise provided by the bylaw of a non-charitable corporation.
The member in the preceding paragraph continues to be liable for his share of the contributions which has become due before his withdrawal or dismissal.
If the calling procedure or the method of a resolution of a general meeting of members violates the act, regulations, or the bylaw of the corporation, any member may apply to the court to revoke the resolution within three months after the resolution, except the member who was present and did not make objection against the calling procedure or the method of the resolution at the meeting.
The content of the resolution passed by the general meeting of members which violates the act, regulations, or the bylaw of the corporation shall be void.
A corporation may be dissolved, at any time, by a resolution of the general meeting of members passed by a majority vote of over two-thirds of the members of the corporation.
When the affairs of a corporation can not be proceeded any more according to its bylaw, the corporation may be dissolved by the court upon the application of the authorities concerned, public prosecutor, or any interested person.
Sub-section Ⅲ Foundation
Before registration, a foundation shall be licensed by the authorities concerned.
Those who want to establish a foundation shall draw up an act of endowment, except in the case of endowment by will.
The act of endowment shall provide the purpose of the foundation and the assets endowed.
When a foundation is established with endowment by will, and there is no executor, the court may appoint an executor upon the application of the authorities concerned, public prosecutor, or any interested person.
When a foundation is established, the following entries shall be registered:
(3) The principal and branch offices;
(4) The total assets;
(5) The date of the license;
(6) The name and domicile of the director, and same of the controller, if any;
(7) The name of the director who represents the juridical person, if any;
(8) The period of duration, if any.
The application for the registration of a foundation shall be submitted by the director to the authorities concerned of the place where its principal and branch offices are located. A copy of its act of endowment or the will shall be annexed to the application for registration.
The organization and method of administration of a foundation shall be stipulated by the founder in the act of endowment or will. If the organization or the important method of administration, as provided in the act of endowment or will, is insufficient, the court may take necessary disposition upon the application of the authorities concerned, public prosecutor or any interested person.
In order to maintain the purpose of a foundation or preserve its assets, the court may alter the foundation's organization upon the application of the founder, the director, authorities concerned, public prosecutor, or any interested person.
The act of the director of a foundation, which violates the act of endowment, may be declared void by the court, upon the application of the authorities concerned, public prosecutor or any interested person.
If the purpose of a foundation can not be completed because of change of circumstances, the authorities concerned may, after considering the intent of the founder, change the purpose and the necessary organization of the foundation, or dissolve it.