1000 Business Lessons Every Businessman Must Know

Chapter 115 The Boss Must Know the Common Sense of Company Law (2)
The board of supervisors is the supervisory organ that must be established by a joint-stock company.According to the "Company Law" of our country, the members of the board of supervisors shall not be less than 3, which shall be composed of shareholders' representatives and an appropriate proportion of company employee representatives.Among them, the proportion of employee representatives shall not be lower than 1/3, and the specific proportion shall be stipulated by the company's articles of association.The term of office of supervisors is 3 years, and upon expiration of the term, they can be re-elected.

The functions and powers of the board of supervisors mainly include: inspecting the company's finances; supervising directors and managers who violate laws, regulations or the company's articles of association when performing company duties; requiring directors and managers to correct when their behavior damages the interests of the company; proposing Convene an extraordinary general meeting of shareholders, etc.

943. Manager of a company limited by shares

The manager is the agent of the limited company who is responsible for the daily operation and management internally and represents the company externally.According to the "Company Law" of our country, managers are appointed or dismissed by the board of directors.Upon decision of the board of directors, members of the board of directors may concurrently serve as managers, but supervisors shall not concurrently serve as managers.

The duties and powers of the manager mainly include: presiding over the production and operation management of the company, organizing the implementation of the resolutions of the board of directors and the company's annual business plan and investment plan; drafting the company's internal management organization setup plan and the company's basic management system; formulating the company's specific regulations; Dismiss the company's deputy manager and person in charge of finance; appoint or dismiss managers other than those who should be appointed or dismissed by the board of directors; the company's articles of association and other functions and powers granted by the board of directors.

944. Shareholders of companies limited by shares

Shareholders are the share holders whose shares are in the company.A shareholder can be a promoter, or a person who accepts the transfer of shares from others, and a shareholder can be a natural person, a legal person, or a country.

The promoters are converted into shareholders when the company is established, enjoying shareholder rights and undertaking corresponding obligations.If the company cannot be established, the promoters shall bear the following responsibilities:
(1) Jointly subscribed shares.A joint stock limited company is established by public offering. When the inaugural meeting is held, the shares that should be issued by the company have not been fully subscribed, or if a third party has subscribed and withdrawn, the promoters shall pay jointly and severally.

(2) Jointly and severally responsible for compensation.If the promoters cause damage to the company due to their negligence during the process of establishing the company, all promoters shall be jointly and severally liable for compensation to the company.

(3) Jointly bear the company establishment expenses.

(4) Jointly and severally responsible for the return of share capital and interest.When the company cannot be established, the promoters shall be responsible for returning the shares paid by the subscribers and adding the bank deposit interest for the same period.

(5) The promoter and the company's joint compensation to the third party.During the process of company establishment, the promoters shall be jointly and severally liable with the company as joint debtors to the third party if they violate the legal provisions and cause damage to the third party in the implementation of the business of company establishment.

A company limited by shares must prepare a register of shareholders in the company or its agency, recording the names and addresses of shareholders, shares held, stock codes, dates of acquisition of shares, etc.

945. Conditions for stock listing
According to Article 152 of the Company Law, a joint stock company must meet the following conditions when applying for the listing of its shares:

(1) The stock has been publicly issued to the public with the approval of the securities management department of the State Council;

(2) The total share capital of the company is not less than RMB 5000 million;

(3) If the company has been in business for more than 3 years and has made continuous profits in the last 3 years, the original state-owned enterprise was restructured and established according to law, or it was newly established after the implementation of the "Company Law", and its main sponsor is a state-owned large and medium-sized enterprise, it can be counted continuously;
（4）持有股票面值达人民币1000元以上的股东人数不少于1000人，向社会公开发行的股份达到股份总数的25%以上。公司股本总额超过人民币4亿元的，其向社会公开发行股份的比例为15%以上；

(5) The company has no major illegal acts in the last 3 years, and the financial and accounting reports have no false records;
(6) Other conditions stipulated by the State Council.

However, for a joint stock limited company belonging to a high-tech company, the conditions for the company to issue new shares and apply for stock listing shall be separately stipulated by the State Council.

946. Procedures for stock listing

After meeting the necessary conditions for stock listing, a joint stock limited company applying for stock listing should also follow the following procedures:

(1) Apply for listing.A joint stock limited company applying for listing and trading its stocks shall report to the State Council or the securities management department authorized by the State Council for approval, and submit relevant documents in accordance with relevant laws and administrative regulations.

(2) Approval.The State Council or the securities management department authorized by the State Council approves the stock listing application that meets the statutory conditions, and does not approve the application that does not meet the statutory conditions.

(3) Publication of the stock listing report.After the stock listing application is approved, the approved listed company must announce its stock listing report and deposit the application documents in a designated place for public inspection.

(4) Listing of stocks.The stocks of approved listed companies are listed and traded in accordance with relevant laws and administrative regulations.With the approval of the securities management department of the State Council, the company's shares can also be listed outside China.

If a listed company falls under any of the following circumstances, the securities management department of the State Council shall decide to suspend its stock listing:
(1) Changes in the company's total share capital and equity distribution do not qualify for listing.

(2) The company does not disclose its financial status in accordance with the regulations or makes false records in the financial and accounting reports. The "Company Law" stipulates that listed companies must regularly disclose their financial status and operating conditions in accordance with the provisions of laws and administrative regulations, and publish financial and accounting reports every six months within each fiscal year.

(3) The company has committed major illegal acts.

(4) The company has suffered consecutive losses in the last three years.

Among them, if a listed company has one of the circumstances listed in items (2) and (3) and the consequences are serious after verification, or has one of the circumstances listed in items (1) and (4) and cannot be eliminated within the time limit, If the listing conditions are not met, the securities management department of the State Council shall decide to terminate the listing of its stocks.Where a listed company resolves to dissolve, is ordered to close down by the administrative department in accordance with the law, or is declared bankrupt, the securities management department of the State Council shall decide to terminate its stock listing.

947. What are the legal requirements for company directors, supervisors and managers?

The main requirements of the Company Law for company directors, supervisors and managers are:

1. Under any of the following circumstances, he shall not be a director, supervisor or manager of the company:
(1) No capacity for civil conduct or limited capacity for civil conduct;
(2) Sentenced to criminal punishment for corruption, bribery, embezzlement of state property, misappropriation of state property, or disrupting the socialist economic order, and the execution period has not expired within 5 years, or deprived of political rights due to crimes, and the execution period has not expired within 5 years;
(3) If he is a director or factory director or manager of a company or enterprise that is in bankruptcy liquidation and is personally responsible for the bankruptcy of the company or enterprise, it has not been three years since the date of completion of the bankruptcy liquidation of the company or enterprise;
(4) Serving as the legal representative of a company or enterprise whose business license has been revoked or ordered to close due to violation of the law, and who bears personal responsibility, it has not been more than 3 years since the day when the business license of the company or enterprise was revoked;
(5) A relatively large amount of debt owed by the individual has not been paid off when it is due.

If the company elects, appoints directors, supervisors or engages managers in violation of the above provisions, the election, appointment or appointment shall be invalid.

2. State civil servants are not allowed to concurrently serve as directors, supervisors, or managers of the company.

3. Directors, supervisors, and managers shall abide by the company's articles of association, faithfully perform their duties, safeguard the interests of the company, and shall not use their positions and powers in the company to seek personal gain for themselves.Directors, supervisors and managers shall not take advantage of their powers to accept bribes or obtain other illegal income, and shall not embezzle the company's property.

4. Directors and managers shall not misappropriate company funds or lend company funds to others.Directors and managers are not allowed to store company assets in accounts opened in their own names or in other personal names.Directors and managers shall not use company assets to provide guarantees for the company's shareholders or for other personal debts.

5. Directors and managers are not allowed to operate the same business as the company they work for themselves or for others or engage in activities that damage the interests of the company.Those who engage in the above-mentioned business or activities shall belong to the company.Except as stipulated in the company's articles of association or with the consent of the shareholders' meeting, directors and managers are not allowed to conclude contracts or conduct transactions with the company.

6. Directors, supervisors, and managers shall not disclose company secrets except in accordance with the law or with the consent of the shareholders' meeting.

7. Directors, supervisors, and managers who violate laws, administrative regulations, or the company's articles of association when performing their duties in the company and cause damage to the company shall be liable for compensation.

[-]. Bonds and stocks

948. Characteristics of corporate bonds

Bonds refer to bond certificates issued to investors by enterprises or governments to raise funds from the public.Corporate bonds refer to securities issued by a company in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time.Corporate bonds have the following characteristics:

(1) Corporate bond issuers are limited to joint-stock companies, wholly state-owned companies, and two or more state-owned enterprises or limited liability companies established by two or more state-owned investment entities;

(2) Corporate bonds must be issued in accordance with statutory procedures;
(3) The funds raised by issuing corporate bonds must be used for purposes approved by the examination and approval authority, and shall not be used to make up for losses and non-productive expenditures.

949. Classification of corporate bonds

According to different criteria, corporate bonds can be divided into:

(1) Registered bonds and bearer bonds
A corporate bond that records the name of the creditor is a registered bond; a bond that does not record the name of the creditor is a bearer bond.

(2) Convertible bonds and non-convertible bonds
Convertible bonds refer to the bonds that the creditor can convert the bonds into the stocks of the debt company within a certain period of time after holding the bonds, so as to become the company's shareholders.Non-convertible bonds are bonds that cannot be converted into stock in the debtor company. The "Company Law" stipulates that listed companies may issue corporate bonds that can be converted into stocks upon resolution of the general meeting of shareholders.To issue convertible bonds, a company shall, in addition to meeting the conditions for issuing bonds, also meet the conditions for issuing stocks, and shall report to the securities management department of the State Council for approval.The company shall issue shares to the bondholders according to the conversion method, but the bondholders have the option to convert to stocks or not to convert into stocks.

(3) Secured bonds and unsecured bonds
Guaranteed bonds are companies that provide creditors with a guarantee for repayment of principal and interest; unsecured bonds do not provide guarantees for repayment of principal and interest.

950. The difference between bonds and stocks
Both bonds and stocks are methods for companies to raise funds, and both are securities that can be circulated and transferred in the securities market.This is the similarity between bonds and stocks, and their main differences are:
(1) The legal status of the subject is different.Bond holders are creditors of the company and have no right to participate in the company's operation and management; stock holders are company shareholders and have the right to participate in the company's operation and management.

(2) The benefits are different.Bond holders receive interest at a fixed rate, and the company has to return the principal on the maturity date of the bond; stock holders receive dividends from the company's profits, and the amount they receive is proportional to the profit.

(3) The risks assumed are different.Regardless of whether the company is profitable or not, the bond interest must be paid at a fixed rate, and the principal must be returned when the company is dissolved. When the company is dissolved and liquidated, the bond is also paid off before the stock, so the bond is a less risky investment; You can only get a share when you make a profit, and the dividend rate is not fixed. The stock can only be transferred and cannot be withdrawn. Therefore, the stock is a relatively risky investment.

●Issuance of corporate bonds

951. Conditions for issuing corporate bonds

According to the relevant provisions of the "Company Law", joint stock companies, wholly state-owned companies, and limited liability companies invested and established by two or more state-owned enterprises or other two or more state-owned investment entities may issue corporate bonds in accordance with the law in order to raise funds for production and operation.

In order to protect the interests of creditors, the issuance of corporate bonds must meet certain conditions.There are:

(1) The net assets of a limited liability company shall not be less than RMB 3000 million, and the net assets of a limited liability company shall not be less than RMB 6000 million;

(2) The total amount of accumulated bonds does not exceed 40% of the company's net assets;

(3) The average distributable profit in the last three years is sufficient to pay the interest of corporate bonds for one year;

(4) The investment of the raised funds is in line with the national industrial policy;

(5) The interest rate of bonds shall not exceed the interest rate level set by the State Council;
(6) Other conditions stipulated by the State Council.

However, under any of the following circumstances, corporate bonds shall not be issued again:

(1) The corporate bonds previously issued have not been fully raised;
(2) There is a fact of default or delay in the payment of principal and interest on the issued corporate bonds or their debts, and the company is still in a continuous state.

952. Procedures for issuance of corporate bonds

Corporate bonds must be issued according to legal procedures. Articles 163 to 166 of my country's "Company Law" stipulate the procedures for issuing corporate bonds:
(1) A resolution is made by the company's authority.For joint stock companies and limited liability companies to issue corporate bonds, the board of directors shall formulate a plan, and the shareholders' meeting shall make a resolution; for wholly state-owned companies to issue corporate bonds, the investment institution or department authorized by the state shall make a decision.

(2) Submit to the securities management department of the State Council for approval.The company's board of directors shall submit the following documents to the securities management department of the State Council for approval to issue corporate bonds: ① company registration certificate; ② company articles of association; ③ corporate bond offering method; ④ asset evaluation report and capital verification report.

(3) The company announces the method for raising corporate bonds.

(4) Issue corporate bonds and raise funds.

953. Convertible corporate bonds
According to the provisions of the "Interim Measures for the Administration of Convertible Corporate Bonds" promulgated and implemented by the Securities Commission of the State Council on March 1997, 3, convertible corporate bonds are issued by the issuer in accordance with legal procedures and can be converted into shares within a certain period of time according to the agreed conditions. of corporate bonds.The issuance, listing, conversion of shares and related activities of convertible corporate bonds shall follow the principles of openness, fairness, impartiality and good faith.Before the convertible corporate bonds are converted into shares, the holders do not have the rights and obligations of shareholders.Convertible corporate bonds can be transferred, pledged and inherited according to law.

A listed company issuing convertible corporate bonds shall meet the following conditions:
(1) It has made profits continuously in the last three years, and the average profit margin on net assets in the last three years has been above 3%, which may be slightly lower for companies belonging to energy, raw materials, and infrastructure, but not less than 3%;

(2) After the issuance of convertible corporate bonds, the asset-liability ratio shall not be higher than 70%;

(3) The cumulative bond balance does not exceed 40% of the company's net assets;

(4) The investment of the raised funds is in line with the national industrial policy;

(5) The interest rate of convertible corporate bonds does not exceed the interest rate level of bank deposits over the same period;
(6) The issuance amount of convertible corporate bonds is not less than RMB 1 million;

(7) Other conditions stipulated by the Securities Commission of the State Council.

Convertible corporate bonds are issued in a registered paperless manner.To issue convertible corporate bonds, the issuer must publish the convertible corporate bond prospectus.

The issuance of convertible corporate bonds shall be underwritten by a securities business institution, and the securities business institution shall be qualified to underwrite stocks.The underwriting method shall be stipulated in the underwriting agreement between the issuer and the securities business institution.

Convertible corporate bonds have a minimum term of 3 years and a maximum term of 5 years.

Convertible corporate bonds shall not be issued if the previously issued bonds have not been fully raised, or if the payment of the principal and interest of the issued bonds has been delayed and the payment is still in a state of continued deferred payment.

For convertible corporate bonds issued by listed companies, the holders can convert the shares at any time according to the agreed conditions six months after the issuance.If the convertible corporate bond has not been converted upon maturity, the issuer shall repay the principal and interest within 6 working days after the maturity date in accordance with the provisions of the convertible corporate bond prospectus.

954. Provident fund of the company
The provident fund, also known as the reserve fund, is the net profit that the company does not distribute dividends and reserves for future use.The provident fund can be divided into statutory provident fund, discretionary provident fund and capital provident fund according to whether its extraction is compulsory or not and its source:

(1) Statutory provident fund.It is a provident fund that must be withdrawn by law.When the company distributes the after-tax profit of the year, it shall withdraw 10% of the profit as the statutory public reserve.If the accumulated statutory reserve fund reaches more than 50% of the company's registered capital, no further withdrawal is required.

(2) Any provident fund.It is a provident fund that is withdrawn by the company at its own discretion. Whether to withdraw and the proportion of withdrawal are decided by the company's shareholders' meeting.

(3) Capital reserve.It is income derived from sources other than corporate profits.Including: the premium received by the company from issuing shares at a price exceeding the par value of the shares, the company's acceptance of donations, and other income that should be included in the capital reserve according to regulations.The company's public reserve fund is used to make up for losses, expand the company's production and operation or increase the company's capital.Company's public welfare fund

955. Public welfare fund of the company
When the company distributes the after-tax profits of the year, it shall retain 5% to 10% of the profits as statutory public welfare funds.The public welfare fund is used for the collective welfare of the employees of the company.

Article 177 of my country's "Company Law" specifically stipulates the distribution order of the company's after-tax profits.That is, the company's after-tax profits must be distributed according to the law, and the order is as follows:
(1) If the company had a loss in the previous year, it should make up for the loss in the previous year with the profit of the current year.

(2) Withdraw statutory public reserve fund.

(3) Withdraw statutory public welfare funds.

(4) With the resolution of the shareholders meeting, any public reserve fund can be withdrawn.

(5) Distribution of dividends.

A limited liability company makes distributions according to the proportion of the shareholders' capital contribution; a joint stock limited company makes distributions according to the proportion of the shares held by the shareholders.If the company makes distributions illegally, the profits from the illegal distribution must be returned to the company.

(End of this chapter)