What are the duties that are applicable to shareholders in a foreign-invested enterprise in China?

The shareholders are those who contribute capital to the company. For a wholly-foreign owned enterprise, shareholders are the supreme authority. The shareholders have the power to exercise such functions and powers, as below:

• Decide on the operational policy and investment plan of the company;
• Elect or replace directors or supervisors who are not staff representatives;
• Decide on remuneration of directors or supervisors;
• Examine and approve reports from board of directors, supervisors, and annual financial budget plan and final accounts plan of the company;
• Examine and approve profit distribution and loss covering of the company;
• Adopt resolutions for the company in relation to capital requirements, corporate bonds, merger, division, liquidation and dissolution of the company;
• Initiate legal proceedings against senior officials through the supervisors or the board thereof;
• Amend company’s articles of association; and
• Any other functions stipulated by the law.

The meetings of shareholders can be divided into regular one, which is annual general meeting, or the interim one, which is concocted by more than one-tenth of the voting rights, one-third of the directors and the supervisors, if any.