1000 Business Lessons Every Businessman Must Know

Chapter 114 The Boss Must Know the Common Sense of Company Law (1)
[-]. Limited Liability Company
932. What is a limited liability company?
According to the provisions of the "Company Law", the so-called limited liability company refers to the company whose shareholders are limited to the amount of their capital contribution.

An enterprise that is responsible for the company, and the company is responsible for the company's debts with all its assets.

1. Conditions for establishing a limited liability company

To establish a limited liability company, the following conditions shall be met:
(1) The number of shareholders is not less than 2 but not more than 50;
(2) The shareholder's capital contribution reaches the minimum statutory capital limit, that is, RMB 50 for companies that focus on production and operation, RMB 50 for companies that focus on commercial wholesale, and no less than RMB 30 for companies that focus on commercial retail 10 yuan, and [-] yuan for technology development, consulting, and service companies;

(3) The shareholders jointly formulate the articles of association of the company;
(4) Have a company name and establish an organizational structure that meets the requirements of a limited liability company;

(5) Having a fixed production and business site and necessary production and business conditions.

933. Registration of establishment of a limited liability company

The establishment of a limited liability company generally goes through the following three stages:

(1) Application name pre-approval.

To establish a limited liability company, a representative designated by all shareholders or an agent jointly entrusted by the company shall first apply to the administrative department for industry and commerce at the place where the company is located for pre-approval of the name.To apply for name pre-approval, the following documents shall be submitted:

①The company name pre-approval application signed by all shareholders of the limited liability company;

②The identity certificate of the shareholder;

③Other documents required by the administration for industry and commerce.The administration for industry and commerce shall make a decision on approval or rejection within 10 days from the date of receipt of the above-mentioned application documents, and if it is approved, it shall issue a "Notice of Pre-approval of Enterprise Name".The pre-approved company name reservation period is 6 months.During the reservation period, the pre-approved company name shall not be used for business activities and shall not be transferred.Where laws and administrative regulations stipulate that the establishment of a company must be submitted for approval, or if there are items in the company's business scope that must be submitted for approval as required by laws and administrative regulations, it can be submitted for approval under the pre-approved company name.

(2) Apply for establishment registration.

After all the shareholders' capital contributions have been verified by the statutory capital verification institution, the representative designated by all shareholders or the agent jointly entrusted by all shareholders shall apply to the industrial and commercial administration for registration of establishment.Where laws and administrative regulations stipulate that the establishment of a limited liability company must be submitted for approval, an application for registration of establishment shall be made within 90 days from the date of approval; if the application is overdue, the applicant shall report to the approval authority to confirm the validity of the original approval document or submit another report for approval.The following documents should be submitted with the application:
①Application for establishment registration signed by the chairman of the company;

②Certificate that all shareholders designate a representative or jointly entrust an agent;
③ Articles of Association;
④ A capital verification certificate issued by a legally qualified capital verification institution;
⑤The shareholder's legal person qualification certificate or natural person identity certificate;

⑥Documents specifying the names and addresses of directors, supervisors, and managers of the company, and certificates of appointment, election, or employment;

⑦The employment documents and identity certificate of the legal representative of the company;
⑧ enterprise name pre-approval notice;
⑨ Proof of company address;

⑩Where laws and administrative regulations stipulate that the application for the establishment of a limited liability company has been approved, relevant approval documents shall also be submitted.

(3) Approval and registration.

After receiving all the application documents submitted by the applicant, the administrative department for industry and commerce shall issue a "Notice of Acceptance of Company Registration" to the applicant, and within 30 days from the date of issuing the notice, make a decision to approve the registration or not to register .If the registration is approved, the applicant shall be notified within 15 days from the date of approval and registration, and the "Business License of Enterprise Legal Person" shall be issued; Notice of Refusal”, the parties concerned may apply for administrative reconsideration or file an administrative lawsuit against the decision.

① The company establishment registration fee shall be paid at 1% of the total registered capital;

②②If the registered capital exceeds 1000 million yuan, the excess part shall be paid at 0.5%;

③ If the registered capital exceeds 1 million yuan, the excess part will not be paid.If a limited liability company needs to obtain a copy of the "Business License of Enterprise Legal Person", a production cost of 10 yuan will be charged for each copy; if the "Business License of Enterprise Legal Person" needs to be reissued (replaced) due to loss, damage, etc., 50 yuan will be charged for each copy.

934. Capital requirements for limited liability companies
The capital contributions of shareholders of a limited liability company form the initial capital of the company.Different countries have different regulations on the amount of shares subscribed by shareholders and the equity they enjoy.Our country's "Company Law" stipulates that each shareholder is responsible according to the amount of capital contribution he subscribed, and shareholders exercise voting rights according to the number of shares they hold.

The registered capital of a limited liability company can be increased and decreased according to law, but it needs to meet statutory conditions and proceed according to legal procedures.According to Article 38 of my country's "Company Law", the company's increase or decrease of registered capital must be resolved by the shareholders' meeting, and the resolution must be passed by shareholders representing more than 2/3 of the voting rights. Article 46 of the "Company Law" stipulates that the board of directors shall formulate a plan for increasing or decreasing the registered capital of the company.

935. Rights enjoyed by shareholders of a limited liability company

The "Company Law" stipulates that shareholders of a company, as investors, enjoy the rights to benefit from the owner's assets, make major decisions and choose managers according to the amount of capital invested in the company.Specifically, shareholders of a limited liability company have the following rights:

(1) Have the right to participate or elect representatives to participate in the shareholders' meeting, and enjoy voting rights according to the proportion of capital contribution.

(2) Have the right to elect and be elected as members of the board of directors and the board of supervisors.

(3) Have the right to transfer capital contributions according to law.Shareholders of a limited liability company may transfer capital contributions to each other.When a shareholder transfers the contribution to someone other than the shareholder, it must be approved by more than half of all shareholders; shareholders who do not agree to the transfer shall purchase the transferred capital contribution, and if they do not purchase the transferred capital contribution, it is deemed to have agreed to the transfer.

(4) The right to preferentially purchase capital contributions transferred from other shareholders to non-shareholders.

(5) The right to review the minutes of the shareholders' meeting and the company's financial accounting report.

(6) The right to receive dividends according to the proportion of capital contribution.

(7) The right to preemptively subscribe for the newly increased registered capital of the company.

(8) After the company is terminated, it has the right to share the remaining property according to law.

(9) Other rights stipulated in the articles of association of the company.

936. Obligations of shareholders of a limited liability company

Specifically, the obligations that shareholders of a limited liability company need to perform are:
(1) Capital contribution obligation.Shareholders are responsible for the company within the limit of their subscribed capital contributions. Therefore, shareholders should pay in full the respective subscribed capital contributions stipulated in the company's articles of association.If a shareholder fails to pay the subscribed capital contribution in accordance with the law, it shall bear the liability for breach of contract to the shareholder who has paid in full.After the shareholder has paid the capital contribution, the company shall issue a capital contribution certificate to the shareholder.

(2) Shareholders of a limited liability company are not allowed to withdraw their capital contributions after the company is registered.

(3) Responsibility for capital contribution.After the establishment of a limited liability company, if it is found that the actual value of the physical objects, industrial property rights, non-patented technology, and land use rights used as capital contributions is significantly lower than the amount specified in the company's articles of association, the shareholder who delivered the capital contribution should make up the difference. The other shareholders of the company shall be jointly and severally liable for it.

[-]. Limited by Share Ltd
937. Characteristics of joint stock companies

A company limited by shares means that the promoters who meet the quorum shall raise all of their registered capital by issuing stocks to the public in accordance with the statutory procedures stipulated in the Company Law, and all of their capital shall be divided into equal shares. The company assumes responsibility, and the company is an enterprise legal person that is liable for the company's debts according to its entire assets.Among them, a joint-stock company whose stock can be listed and traded on the stock exchange is also called a "listed company".

The main characteristics of a company limited by shares are:

(1) There should be more than 2 but less than 200 promoters, and more than half of the promoters must have domiciles in China;

(2) The entire capital is divided into a number of equal-amount shares, and shareholders are responsible for the company based on the number of shares they subscribed for, and determine the size of their rights; the company is responsible for the company's debts within the limit of all its assets;

(3) The shares of the company are embodied in the form of shares.Stock is a kind of securities that can be issued and circulated in the stock market;
(4) The company has a strict internal organization.The company's general meeting of shareholders, board of directors, and board of supervisors exercise the company's major event decision-making power, management power and supervision power.The company's rules of procedure and procedures are clearly defined.The organizational structure fully embodies the principle of separation of ownership and management.A joint stock limited company is a typical joint venture company, and the company's credit is entirely based on capital.It has advantages that other company forms do not have. First, it can absorb idle funds in the society and has strong financing capabilities. Second, shares can flow freely, which greatly disperses the investment risks of investors.

938. Conditions for the establishment of a joint stock limited company

According to the "Company Law", the establishment of a joint stock limited company shall meet the following conditions:
(1) The promoters meet the quorum.According to the provisions of my country's "Company Law", there should be at least 5 promoters, and more than half of them must have residences in China; if a state-owned enterprise is converted into a joint stock company, the promoters can be less than 5, but it should be established through public offering. Way.

(2) The share capital subscribed by the promoters and publicly offered by the public has reached the minimum legal capital limit.According to the provisions of my country's "Company Law", the minimum registered capital of a joint stock limited company is RMB 1000 million. During the company's existence, the company's capital cannot be changed at will. If it needs to be increased or decreased, it must be strictly followed by legal procedures.

(3) The issue of shares and preparations are in compliance with legal requirements.

(4) The promoters formulate the company's articles of association, which are approved by the founding meeting.

(5) Have a company name and establish an organizational structure that meets the requirements of a joint stock company.

(6) Having a fixed production and business site and necessary production and business conditions.

939. Procedures for the establishment of a joint stock limited company

The procedures for the establishment of a joint stock limited company are as follows:
1. Preparation for establishment
The preparatory work that promoters should do to apply for the establishment of a joint stock limited company mainly includes:
(1) The promoters sign the company establishment agreement on the basis of consultation and agreement, draft the company's articles of association, and prepare important approval documents such as the establishment application, feasibility study report, and prospectus.

(2) If the original state-owned enterprise is reorganized into a company, the creditor's rights and debts of the original state-owned enterprise shall be cleaned up, and a legally qualified asset evaluation agency and capital verification agency shall be entrusted to conduct asset evaluation and capital verification, and the net asset rights of the original state-owned enterprise shall be defined.

2. Establishment application and approval

After the promoters complete the preparatory work for establishing the company, they may jointly entrust one promoter to handle the application procedures for establishing the company.The entrusted party shall submit important approval documents such as the company establishment agreement, application, feasibility study report, draft articles of association, asset evaluation report to the department authorized by the State Council or the provincial people's government, and the department authorized by the State Council or the provincial government shall examine and determine Whether to approve.

3. Raise capital
To establish a joint stock limited company, there are two establishment methods: initiation establishment and fundraising establishment:

(1) Initiation and establishment refers to the way in which promoters subscribe for all the shares to be issued by the company and establish the company.Where a joint stock limited company is established by way of initiation, the promoters shall pay all the shares immediately after they have subscribed in writing for the shares issued in accordance with the company's articles of association. If the capital contribution is made in kind, industrial property rights, non-patented technology or land use rights, it shall Handle the formalities for the transfer of property rights according to law.

(2) Fundraising establishment refers to the method in which the promoters only subscribe for a part of the company's issued shares, and the rest is publicly raised to the public to establish a company.Where a joint stock limited company is established by way of public offering, the shares subscribed by the promoters shall not be less than 35% of the total number of shares in the company, and the remaining shares shall be publicly offered.When the promoters publicly offer shares to the public, they must submit a stock offering application to the securities management department of the State Council. After approval, they must publish a prospectus and prepare a subscription.

4. Election of the company's organizational structure or holding a founding meeting
(1) Where a joint stock limited company is established by way of initiation, the promoters shall elect the board of directors and the board of supervisors after paying all the capital contributions to form the organizational structure of the company.

(2) Where a joint stock limited company is established by means of public offering, after the company has paid in full for the shares issued by the company, the promoters shall preside over the company’s inaugural meeting within 30 days, which shall be composed of subscribers.The promoters shall notify all subscribers of the date of the meeting or make an announcement 15 days before the inaugural meeting is held.The founding meeting shall be held only if subscribers representing more than 1/2 of the total number of shares are present.

The functions and powers of the founding meeting are: to review the sponsor's report on the company's preparation; to approve the company's articles of association; to elect members of the board of directors and the board of supervisors; to review the company's establishment expenses; A resolution to establish a company.The resolution of the founding meeting on the above matters must be passed by more than half of the voting rights held by the subscribers present at the meeting.

5. Apply for establishment registration
(1) Where a joint stock limited company is established by way of initiation, after the company’s organizational structure is elected, the board of directors shall submit the company’s establishment approval document, company articles of association, capital verification certificate and other documents to the company registration authority to apply for establishment registration.

(2) Where a joint stock limited company is established by way of public offering, the board of directors shall apply to the company registration authority for establishment registration within 30 days after the conclusion of the founding meeting.The company registration authority shall make a decision on whether to register within 30 days from the date of receipt of the application for registration of a joint stock limited company.Those who meet the conditions stipulated in the "Company Law" shall be registered and issued a company business license; those who do not meet the conditions stipulated in the "Company Law" shall not be registered.The date of issuance of the business license of the company is the date of establishment of the company.After the company is established, it shall make an announcement.

940. General meeting of shareholders of a company limited by shares

The general meeting of shareholders is the highest authority of the company, and all major issues of the company must be resolved by the general meeting of shareholders.

A joint stock limited company has a large number of shareholders, except for a few elected board members or supervisors, who have no opportunity to directly participate in company affairs. It is clearly stipulated that a joint stock limited company must have a general meeting of shareholders, as the organ of authority for shareholders to express their opinions on major matters of the company, and all major matters related to the company shall be resolved by the general meeting of shareholders composed of shareholders.The general meeting of shareholders is not a general meeting of shareholders and should be composed of all shareholders.

The functions and powers of the general meeting of shareholders are basically the same as those of the shareholders meeting of a limited liability company.The only difference is that when a shareholder of a limited liability company transfers capital contributions to someone other than the shareholder, a resolution must be made by the shareholders' meeting.In a joint stock limited company, shareholders can freely transfer their capital contributions according to law, without the approval of the general meeting of shareholders.

There are two forms of general meeting of shareholders: annual meeting and extraordinary meeting.The annual meeting (also known as the ordinary shareholders meeting) refers to the general meeting of all shareholders that must be convened at least once a year according to the law. Unscheduled general shareholder meetings that are convened temporarily according to the actual situation.Article 104 of my country's "Company Law" stipulates: "In any of the following circumstances, an extraordinary general meeting of shareholders shall be held within two months:

(1) When the number of directors is less than 2/3 of the number stipulated in this Law or the company's articles of association;
(2) When the unrecovered losses of the company reach 1/3 of the share capital;
(3) When requested by shareholders holding more than 10% of the company's shares;

(4) When the directors deem it necessary;

(5) When the board of supervisors proposes to convene. "

The convener of the general meeting of shareholders shall be the chairman.

941. Board of directors of companies limited by shares
The board of directors is the company's permanent body and executive business body.The members of the board of directors are elected by the general meeting of shareholders and must be accountable to the general meeting of shareholders.Members of the board of directors may include employee representatives of the company.According to my country's "Company Law", the board of directors of a joint-stock company shall have 5-19 members, and the directors shall be elected by the general meeting of shareholders.The term of office of directors is stipulated in the articles of association of the company, and each term of office shall not exceed 3 years.

According to my country's "Company Law", the convener of the board meeting should be the chairman.The resolutions of the board meeting should be attended by more than 1/2 of the directors and passed by more than half of all the directors.

The functions and powers of the board of directors mainly include: responsible for convening the general meeting of shareholders and reporting to the general meeting of shareholders; implementing the resolutions of the general meeting of shareholders; deciding on the company's business plan and investment plan; formulating the company's annual financial budget plan, final account plan, profit distribution plan and making up for losses Plans, plans for increasing or reducing the registered capital of the company, and plans for issuing corporate bonds; drafting plans for company mergers, divisions, and dissolution; Manager and financial person in charge; decide on their remuneration; formulate the company's basic management system; apply for company registration, elect the chairman and vice chairman; apply for the issuance of new shares, etc.

942. Supervisory board of a joint stock company
(End of this chapter)