CONTENTS

CHAPTER ONE GENERAL PROVISIONS
CHAPTER TWO ESTABLISHMENT AND ORGANIZATIONAL SETUP OF A LIMITED
LIABILITY COMPANY
SECTION ONE ESTABLISHMENT
SECTION TWO ORGANIZATIONAL SETUP
SECTION THREE SOLELY STATE-OWNED COMPANIES
CHAPTER THREE ESTABLISHMENT AND ORGANIZATIONAL SETUP OF JOINT STOCK COMPANY LIMITED
SECTION ONE ESTABLISHMENT
SECTION TWO SHAREHOLDER'S MEETING
SECTION THREE BOARD OF DIRECTORS, MANAGER
SECTION FOUR SUPERVISORY COMMITTEE
CHAPTER FOUR ISSUE AND TRANSFER OF SHARES OF A JOINT STOCK LIMITED COMPANY
SECTION ONE ISSUE OF SHARES
SECTION TWO TRANSFER OF SHARES
SECTION THREE LISTED COMPANIES
CHAPTER FIVE CORPORATE BONDS
CHAPTER SIX FINANCIAL AFFAIRS AND ACCOUNTING OF A COMPANY
CHAPTER SEVEN MERGER AND DIVISION OF A COMPANY
CHAPTER EIGHT BANKRUPTCY, DISSOLUTION AND LIQUIDATION
CHAPTER NINE BRANCHES OF FOREIGN COMPANIES
CHAPTER TEN LEGAL RESPONSIBILITIES
CHAPTER ELEVEN SUPPLEMENTARY PROVISIONS

CHAPTER ONE GENERAL PROVISIONS

Article 1 The law is formulated in conformity with the Constitution in view to establishing a modern enterprise system, standardizing the organization and operation of companies,protecting the legitimate rights and interests of companies, shareholders and creditors, maintaining the socialist economic order and promoting the development of the socialist market economy.

Article 2 The term "company" used in this law refers to a limited liability company or a joint stock company limited set up within the territory of the People's Republic of China according to the provisions of this law.

Article 3 A limited liability company and a joint stock company limited are enterprise legal persons.

For a limited liability company, a shareholder bears the responsibility to the company within the limit of the amount of investment made by the shareholder per se and the company shall bear the responsibility for its debts with all its assets.

For a joint stock company limited the entire capital is divided into shares of equal amount and the shareholders bear responsibilities to their company within the scope of the number of shares they hold and the company shall bear responsibilities for its debts with all its assets.

Article 4 Shareholders of a company, as capital contributor, shall have the right to enjoy capital gains, take major policy decisions and choose managers in proportion to share of the investment they make in the company.

A company shall enjoy all legal person property rights formed by the investment by shareholders, enjoy civil rights, and bear the civil responsibilities according to law.

Ownership of the State-owned property rights in a company belongs to the State.

Article 5 A company shall operate independently with all its assets, and be responsible for its own profits and losses.

Under the macro-economic control and regulation by the State, a company shall have the autonomy in organizing its own production and operations according to market demand so as to raise its economic efficiency, step up its productivity and preserve and accrete the value of its assets.

Article 6 A company shall institute an internal management system that is of a clear division of power and responsibility, a scientific management, and a combine mechanism of incentives and restrictions.

Article 7 In changing over to a company, a State-owned enterprise shall first of all change its original operational mechanism, gradually and sysmatically make an inventory of its own assets, define its own property right, clear its own credits and debts, appraise its own assets and establish a standard internal organizational setup according to law and administrative decrees concerned.

Article 8 A limited liability company or a joint stock company limited shall be set up according to this law. Only those that can meet the requirements as set in this law can be registered as limited liability companies or joint stock companies limited those that cannot meet such requirements cannot be registered as a limited liability company or joint stock company limited.

Article 9 A limited liability company established according to this law shall include the words "limited liability" in its name.
A joint stock company limited established according to this law shall be clearly indicated as a joint stock company limited in its
name.

Article 10 A company shall make the location of its main office as its address.

Article 11 A company established according to this law shall
formulate its articles of association that have a binding force on the company, its shareholders, directors, supervisors and managers alike.

The scope of business shall be defined in the articles of association and registered according to law. If the scope of business covers items restricted by law or administrative decrees, it shall be subject to approval according to
law.

A company shall conduct its business activities within the scope registered. If a company has revised its articles of association according to legal procedures and registered for alteration with the registration authorities, it may change the scope of business.

Article 12 A company may invest in other limited liability
companies or joint stock companies limited and bear responsibility to the companies in which it has invested in proportion to the amount of investment it has made.

Except for investment companies and holding companies as specified by the State Council, where a company invests in other limited liability companies or joint stock companies limited, the aggregate amount of the investment shall not exceed 50% of the net assets of the company, not including the capital gains of the latters put in by the company from its profits gained from the latters.

Article 13 A company may set up branches, which shall not enjoy the
status of enterprise legal persons, and the parent company shall be responsible for civil liabilities of its branches.

A company may set up subsidiaries which shall enjoy the status of enterprise legal persons and be independently responsible for their own civil liabilities.

Article 14 In conducting business operations, a company shall abide by law, observe business ethics, promote socialist culture and ethics, and accept the supervision by the government and the public.

The legitimate rights and interests of a company shall be
protected by law against any infringement.

Article 15 A company shall protect the legitimate rights and
interests of its staff and workers, strengthen labor protection, and ensure safe production.

A company shall provide its workers with vocational education and in job training in various forms to improve their working
quality.

Article 16 Workers of a company shall organize a trade union in
accordance with the law to carry out trade union activities and protect their legitimate rights and interests. A company shall provide the necessary conditions for activities of its trade union.

A solely State-owned company or a limited liability company established by more than two State-owned enterprises or by more than two State-owned investment entities shall exercise democratic management in accordance with the provisions of the Constitution and relevant laws through the general meetings of the staff and workers or otherwise.

Article 17 The grassroots organizations of the Communist Party of
China in a company shall carry out their activities according to the Constitution of the Communist Party of China.

Article 18 This law applies to limited liability companies
established with foreign investment except otherwise provided foreign the laws concerning Sino-foreign joint equity ventures, Sino-foreign joint cooperative ventures and foreign enterprises.

CHAPTER TWO ESTABLISHMENT AND ORGANIZATIONAL SETUP OF A LIMITED LIABILITY COMPANY

SECTION ONE ESTABLISHMENT

Article 19 The establishment of a limited liability company shall be subject to the fulfillment of the following conditions:

1. The number of shareholders tallies with that provided for by law;
2. The investment contributed by shareholders reaches the minimum amount of capital required by law;

3. Shareholders participate in the formulation of articles of
association;

4. The company has a suitable name and its organizational setup
complies with that of a limited liability company.

5. The company has fixed production or operational site(s) and
necessary conditions for production or operations.

Article 20 A limited liability company shall be set up by capital
contributions made up by at least two and no more than 50 shareholders. Investment entities or departments authorized by the State may set up limited liability companies with sole State
investment.

Article 21 A State-owned enterprise set up before the
implementation of this law if can fulfill the condition of a limited liability company under this law may be reorganized into a solely State-owned limited liability company in the case of an investment entity with a single investor, or into a limited liability company as provided for in the first paragraph of the preceding Article in the case of an investment entity with many investors.

The steps and specific methods for State-owned enterprises to convert into companies shall be formulated separately by the State Council.

Article 22 The articles of association of a limited liability company shall specify clearly:

1. Name and address of the company;

2. Scope of business of the company;

3. Registered capital of the company;

4. Names of shareholders;

5. Rights and obligations of shareholders;

6. Forms and amount of investment made by shareholders;

7. Conditions for shareholders to transfer their investment;

8. The organizations of the company and the methods of
establishment, their powers and functions and rules of procedures for meetings;

9. Legal representative of the company;

10.Grounds for dissolution of the company and liquidation methods; and

11.Other matters deemed necessary by shareholders.Shareholders should sign and seal the articles of association of the company.

Article 23 The registered capital is the total amount of
investment paid in by all the shareholders registered with the registration department.

The amount of registered capital should not be less than the amount specified below:

1. for a company mainly engaging in production operations, RMB500,000;

2. for a company mainly engaging in wholesales, RMB500,000;

3. for a company mainly engaging in retail sales, RMB300,000;

4. for a company engaging in technology development, consulting and
services, RMB100,000.

If the minimum amount of registered capital of a limited liability company of a given trade should be higher than those provided for in the preceding paragraph, it shall be determined separately by law or administrative decrees.

Article 24 Shareholders may make their investment in cash, in kind,
in industrial property rights, in non-patented technology or land use rights must be correctly assessed and verified in value terms without any over or under-valuation. The assessment of land use rights in value shall be made according to law or administrative
decrees.

The amount of industrial property rights or non-patented technology in value shall not exceed 20 percent of the total value of the registered capital of a limited liability company, except otherwise provided for by the State for the use of high and new technology.

Article 25 Shareholders shall pay in full their subscribed capital contributions as specified in the articles of association. In cases of making investment in cash, the contribution in cash should be deposited in full into a temporal account opened by the proposed limited liability company in a bank. In cases of using investment in kind, industrial property rights, non-patented technology or land use rights, the procedures for transfer of the property rights shall be completed according to law.
Shareholders who fail to pay in the subscribed amount of investment as provided for in the preceding paragraph should be liable to breach of contract.

Article 26 After all the shareholders have paid in their
investment, the investment shall be verified by a legal investment verification institution and a certificate shall be produced by the institution.

Article 27 After all the investment paid in by shareholders is
verified, a representative designated or an agent commonly commissioned by all the shareholders shall apply for registration of establishment of the company with the registration department with an application form for registration, the articles of association, investment verification documents and other documents of the company.

If an examination and approval procedure is required by law or administrative decrees, the document of approval should be submitted when the applications for establishment and registration are filed.

The company registration department should grant registration if all the requirements provided for by this law are met and issue business licenses but if the requirements provided for by this law are not met, the registration shall be refused.

The date of issue of the company business license shall be the date of establishment of the limited liability company.

Article 28 After the establishment of a limited liability
company, if the actual value of the investment in kind, industrial property rights, non-patented technology or land use rights are found to be apparently lower than the values set for in the articles of association of the company, the shortage shall be made good by the shareholder(s) concerned with the other shareholder bearing joint responsibility.

Article 29 If a limited liability company sets up branches at the
time of its establishment, it should apply for registration to obtain business licenses for the branches.

If a limited liability company sets up a branch or branches after its establishment, the legal representative of the company shall apply for registration of the branch of branches to obtain business license(s).

Article 30 After the establishment, a limited liability company shall issue certificates of investment to shareholders.A certificate of investment should specify clearly:

1. Name of the company;

2. Date of registration of the company;

3. Registered capital of the company;

4. Names of shareholder, amount of investment paid in and the date of payment; and

5. Serial number and date of issue of the certificates of investment.Certificates of investment shall be affixed with the seal of the company.

Article 31 A limited liability company should keep a list of its
shareholders with the following specified items:

1. Names or both names and address of shareholders;

2. Amount of investments paid in by the shareholders;

3. Serial number of the certificates of investment.

Article 32 Shareholders of a company have the right to review the
minutes of meetings of shareholders and the financial and accounting statements of their company.

Article 33 Shareholder shall get dividends in proportion to the
amount of investment they have made. If a company wants to increase its capital, its shareholders have the priority of subscription.

Article 34 Shareholders are not allowed to withdraw their
investment after the registration of the company.

Article 35 Shareholders may transfer to each other all or part of
their investment.

For transferring the investment to other people other than other shareholders of the company, a shareholder must get the consent of the simple majority of the shareholders. Shareholders who disapprove of the transfer should buy the shares of investment to be transferred. If they fail to buy the shares, it shall be regarded as approval of the transfer.

For the investment shares having been approved to be transferred, other shareholders shall have the priority for the purchase under the same conditions.

Article 36 After a shareholder has transferred its investment
according to law, the company shall record the name(s) and address(es) of the transferee(s) and the amount of investment transferred in the list of shareholders.

SECTION TWO ORGANIZATIONAL SETUP

Article 37 The meeting of shareholders of a limited liability company shall be made up of all shareholders. The meeting of shareholders shall be the authoritative organization of the company and exercises its powers according to this law.

Article 38 The meeting of shareholders shall exercise the
following powers:

1. To decide upon the operation policies and investment plans of the company.

2. To elect and replace directors and decide on matters relating to remuneration to directors.

3. To elect and replace the supervisors who are the
representatives of shareholders and decide on the payment to supervisors.

4. To examine and approve the reports by the board of directors.

5. To examine and approve the reports by the supervisory committee or individual supervisors.

6. To examine and approve the annual financial and budget plan and financial accounting plan of the company.

7. To examine and approve the plans for company's profit distribution and losses recovery.

8. To pass resolutions on the increase or decrease of registered capital.

9. To pass resolutions on the issue of bonds.

10. To pass resolutions on the transfer of investment by shareholders to people other than shareholders.

11. To pass resolutions on issues as merger, division, change in
corporate form, dissolution and liquidation and other affairs of the company.

12. To revise the articles of association of the company.
Article 39 Methods of discussion and voting procedures of the meeting of shareholders shall be provided for in the articles of association except otherwise provided for by this law.

The resolution on the increase or decrease of registered capital, division, merger, dissolution or change of corporate form of the company must be agreed by shareholders representing two-thirds of the voting rights.

Article 40 A company may revise its articles of association. The
resolution on the revision of the articles of association must be agreed by shareholders representing over two-thirds of the voting rights.

Article 41 In a meeting of shareholders, the voting rights shall be
exercised in proportion to the amount of investment made by shareholders.

Article 42 The first meeting of the shareholders shall be convened
and presided over by the shareholder whose capital contribution is the largest. Such shareholder shall exercise its rights according to the provisions of this law.

Article 43 Meetings of shareholders shall be divided into regular meetings and irregular meetings.

Regular meetings shall be called according to the provisions of the articles of association of the company. Irregular meetings may be called upon the motion by shareholders who represent over one-fourth of the voting rights or by over one-third of the directors or supervisors.

If a limited liability company has a board of directors, the meeting of shareholders shall be called by the board of directors and presided over by the chairman of the board of directors. If the chairman of the board of directors is unable to perform the duty due to special reasons, the meetings shall be presided over by a vice-chairman of the board of directors or a director designated by the chairman of the board of directors.

Article 44 If a meeting of shareholders is to be held, notice shall
be given to all the shareholders 15 days before the meeting is held.
The meeting of shareholders shall keep minutes on matters discussed and to be signed by shareholders present.

Article 45 The board of directors of a limited liability company
shall be made up of 3 to 13 persons.

For a board of directors established by at least two State owned enterprises or by at least two State owned investment entities, members of its board of directors should include representatives of workers, who are to be elected by the workers through democratic processes.

A board of directors shall have a chairman and may have one to two vice-chairmen. The method of election of the chairman and vice- chairmen of the board of directors shall be provided for in the articles of association of the company.

The chairman of the board of directors is the legal representative of the company.

Article 46 The board of directors shall be responsible to the meeting of shareholders and exercises the following powers:

1. To call meetings of shareholders and report work to the meetings of shareholders.

2. To execute the resolutions passed by the meetings of shareholders.

3. To decide on the operation and investment plans.

4. To formulate the company's annual financial budget and final accounts.

5. To formulate the profit distribution and losses recovery
plans.

6. To formulate plans for increasing or decreasing registered capital of the company.

7. To draft plans for merger, division, change of corporate form and dissolution of the company.

8. To decide on the organizational setup of the company.

9. To appoint or dismiss manager (general manager) of the company (hereinafter referred to as "manager"), appoint or dismiss deputy managers and financial officers of the company according to the recommendation by the manager and decide on their
remuneration.

10. To formulate the basic management systems of the company.

Article 47 The term of office for the chairman of the board of
directors shall be provided for in the articles of association, in case that each term of the office shall not be longer than three years. The chairman of the board of directors may be re-elected upon the expiration of the term to serve another term.

Before the term of office of a director expires, the meeting of shareholders shall not dismiss him (her) from his (her) posts without justifiable reasons.

Article 48 The meetings of the board of directors shall be called
and presided over by the chairman of the board of directors. If the chairman of the board of directors is unable to perform his (her) duty due to special reasons, a vice-chairman of the board of directors or a director designated by the chairman of the board of directors shall call and preside over the meetings. A meeting of the board of directors may be called upon the motion by at least one-third of the
directors.

Article 49 The method of discussion and the procedures of voting
at the meeting of the board of directors shall be provided for in the articles of association except otherwise provided for in this law.
In concerning a meeting of the board of directors, a notice shall be given to the directors concerned 10 days before the meeting is held.

The board of directors shall keep minutes of meetings made on the matters discussed and being signed by the directors present.

Article 50 A limited liability company shall have a manager, subject to appointment or dismissal by the board of directors. The manager shall be responsible to the board of directors and exercise the following powers:

1. To be in charge of the company's production operations and
management of the company and organize the implementation of the decisions of the board of directors.

2. Implementation of the annual operation and investment plans of the
company.

3. Formulate the internal organizational setup plan.

4. Formulate the basic management system of the company.

5. Formulate specific rules and regulations of the company.

6. Propose the appointment or dismissal of deputy managers and
financial officers of the company.

7. Appoint or dismiss management officers other than those
required to be appointed or dismissed by the board of directors.

8. Other powers conferred by the articles of association and the board of directors.The manager shall attend the meeting of the board of directors as a non-voting member.

Article 51 If a limited liability company with a small number of
shareholders and a small scale of operation, it may have one sole executive director instead of the board of directors. The executive director may concurrently serve as the manager of the
company.

The powers and functions of the managing director shall be defined in the articles of association pursuant to the provisions of Article 46 of this law.

If a limited liability company has no board of directors, the managing director shall be the legal representative.

Article 52 A limited liability company with a relatively large scale of operation shall have a supervisory committee made up of not less than three members and a convenor elected among the members.

The supervisory committee shall include representatives of shareholders and a certain proportion of workers' representatives. The specific proportion shall be specified in the articles of
association.

The workers' representatives to the supervisory committee shall be elected by workers through democratic process.

A limited liability company with a relatively small number of shareholders and of a small operation scale may have one to two supervisors.

Director, manager and financial officer of a company shall not concurrently serve as supervisors.

Article 53 The term of office of a supervisor is three years, upon
the expiration of the term, a supervisor may be reappointed and serve another term.

Article 54 The supervisory committee or individual supervisors of a
company exercise the following powers:

1. To check up on the financial affairs of the company;

2. To supervise the law and regulation violating acts or the
articles of association of directors and manager in performing their duties;

3. To request directors or manager to remedy their acts whenever such
acts harm the interests of the company;

4. To propose the convening of an interim shareholders' meeting; and

5. To exercise other powers as provided for in the articles of
association.Supervisors shall attend the meeting of the board of directors as non-voting members.

Article 55 Whenever considering and deciding on wages, welfares, production safety of the staff and workers and labor protection and labor insurance and other issues converning the personal interests of the staff and workers, opinions of the trade union and the workers of the company should first of all be solicited and representatives of the trade union or workers should be invited as observers to meetings concerned.

Article 56 Opinions and suggestions of the trade union and workers of the company should also be solicited when considering and deciding on major issues concerning the operation of the company and when major rules and regulation are formulated for the company.

Article 57 The following persons may not serve as the director,
supervisor or manager of a company:

1. persons without or with restricted civil capacity;

2. persons who have committed the offences of corruption,
bribery, infringement of property, misappropriation of property or sabotaging the social economic order, and have been sentenced to criminal penalties, where less than five years have elapsed since the date of completion of the sentence; or persons who have been deprived of their political rights due to criminal offense, where less than five years have elapsed since the date of the completion of
this
deprivation;

3. persons who are former directors, factory directors of managers of a company or enterprise which has become bankrupt and been liquidated as a result of mismanagement and are personally liable of bankruptcy of such company or enterprise, where less than three years have elapsed since the date of completion of the bankruptcy and liquidation of the company or enterprise.

4. persons who were legal representatives of a company or
enterprise which had its business licence revoked due to a violation of the law and who are personally liable, where less than three years have been elapsed since the date of the revocation of the business licence;

5. persons who have a relatively large amount of debts due and outstanding.

The election or appointment for directors, supervisors or manager of a company shall become invalid if not in comformity with the preceding provisions.

Article 58 Civil servants of the State are not allowed to serve as
directors, supervisors or managers of companies.

Article 59 Directors, supervisors and manager of a company shall
abide by the articles of association, perform their duties faithfully, and safeguard the interests of the company. They are not allowed to exploit their positions and powers in the company for personal gains.

Directors, supervisors or manager of a company are not allowed to exploit their position to accept bribes or other illegal income or wrongfully take over the company property.

Article 60 Directors or manager of a company are not allowed to
misappropriate the funds of the company or loan such funds to others.
Directors or manager of a company are not allowed to deposit the assets of the company in their own or other personal bank
accounts.

Directors or manager of a company shall not provide assets of the company as guarantee for the debts owed by shareholders of the company or by others.

Article 61 Directors or manager of a company shall not engage on
their own behalf or on behalf of others in any businesses that are the same of that of the company or activities that are harmful to their own company. The proceeds from any such businesses or activities shall belong to the company.

A director or a manager shall not enter into any contracts or transactions with the company except otherwise provided for in the articles of association or with the consent of the meeting of association or with the consent of meeting of shareholders.

Article 62 A director, a supervisor, or a manager of a company shall
not divulge secrets of the company except according to law or with the consent of the meeting of shareholders.

Article 63 Where a director, a supervisor, or a manager of a company violates the law, administrative decrees, or the company's articles of association in performing his (her) official corporate duties resulting in harm of the company, such director, supervisor, or manager is liable for compensation for the
damage.

SECTION THREE SOLELY STATE-OWNED COMPANIES

Article 64 The term "solely State-owned companies" used in this law
refers to the limited liability companies established solely by State authorized investment institution or department.

Companies designated by the State Council to produce special products or belonging to a special trade as set should be solely State- owned.

Article 65 The articles of association of a solely State-owned
company shall be formulated by the State authorized investment institution or department in accordance with the law or by the board of directors and be submitted to the investment institution or department concerned authorized by the State for
approval.

Article 66 A solely State-owned company shall not set up the
meeting of shareholders but the board of directors which is empowered by the investment organization or department authorized by the State to exercise part of the powers and functions of the meeting of shareholder and decide on major matters concerning the company. But merger, division, dissolution or the increase or decrease of capital and issuing of bonds shall be determined by the investment institution or department concerned authorized by the State.

Article 67 The State authorized investment institution or
department shall supervise over and manage the assets of the solely State-owned company according to law or administrative
decrees.

Article 68 The board of directors of a solely State-owned company
shall exercise its powers and functions according to the provisions of Article 46 and Article 66 of this law. The term of office of the board of directors shall be three years.

The board of directors shall be made up of three to nine persons, who are subject to the appointment or replacement by the investment institution or department authorized by the State according to the term of office for the board of directors. Workers in the company should elect through democratic processes representatives to the board of directors.

The board of directors shall have a chairman or may have a vice- chairmen if necessary. The chairman and vice-chairmen of the board shall be designated from among the directors by the investment institution or department authorized by the State.

The chairman of the board is the legal representative of the company.

Article 69 A solely State-owned company shall have a manager who shall be subject to the appointment or dismissal by the board of directors and exercises the powers according to the provisions of Article 50 of this law.

With the consent of the investment institution or department authorized by the State, a member of the board may concurrently serve as the manager of the company.

Article 70 Chairman, vice-chairmen or directors of the board and
the manager of a solely State-owned company may not serve concurrently as officers of other limited liability companies, joint stock companies limited or other business organizations without the consent of the investment institution or department authorized by the State.

Article 71 In transferring the assets of a solely State-owned
company, the procedures of examination and approval and transfer shall be completed by the investment institution or department authorized by the State according to law or administrative
decrees.

Article 72 Large solely State-owned companies with sound
operational and management system and in good operational conditions may be authorized by the State Council to exercise rights as the owners of the assets.

CHAPTER THREE ESTABLISHMENT AND ORGANIZATIONAL SETUP OF JOINT STOCK COMPANIES LIMITED

SECTION ONE ESTABLISHMENT

Article 73 The establishment of a joint stock company limited shall
meet the following conditions:

1. The number of promoters shall meet the requirement of the law;

2. The share capital subscribed by the promoters and public offer meets the minimum amount of capital required by law;

3. Issue of stocks and the related preliminary matters conform to the
provisions of the law;

4. Articles of association are formulated by the promoters and adopted at the establishment meeting;

5. The company has a name and has established the organizational setup that meets the requirements of a joint stock company;

6. The company has fixed production or operational sites and
necessary conditions for production or operations.

Article 74 A joint stock company limited may be set up by means of
promotion or public offer.

By promotion, it means the establishment of a company by the subscription by promoters for all the shares to be issued by the company.

By public offer, it means the establishment of the company by the subscription by the promoters of part of the shares to be issued and a public offer of the remaining shares.

Article 75 In setting up a joint stock company limited, there should at least be five promoters with over half of them living within the territory of China.

For a joint stock company limited reorganized from a State owned enterprise, the number of promoters may be less than five, but the method of public offering should be adopted.

Article 76 The promoters of a joint stock company limited shall
subscribe to the shares due to them according to this law and be responsible for the preparations for the establishment of the company.

Article 77 The establishment of a joint stock company limited shall have the approval of the department authorized by the State Council or by the people's governments at the provincial level.

Article 78 The registered capital of a joint stock company limited shall be the total share capital which has been registered with the registration department and which has been actually received. The minimum amount of registered capital of a joint stock company limited shall be RMB10 million. Requirements for the minimum amount of the registered capital of a joint stock company limited to be higher than the above amount are provided for in separate laws or administrative decrees.

Article 79 The articles of association of a joint stock company
limited shall define the following:

1. Name and address of the company;

2. Scope of business of the company;

3. Method of establishment;

4. Total shares, par value of each share and the amount of
registered capital of the company;

5. Names of promoters and the shares they have subscribed to;

6. Rights and obligations of shareholders;

7. Composition, powers, term of office and rules of procedure of the
board of directors;

8. Legal representative of the company;

9. Composition, powers, term of office and rules of procedure of the
supervisory committee;

10.Method of distribution of profits of the company;

11.Reasons for dissolution of the company and liquidation
methods;

12.Methods for issuing public notices or announcement; and

13.Other matters deemed necessary by the meeting of shareholders.

Article 80 Shareholders may pay in their investment in cash, in kind, in industrial property rights, non-patented technology or land use rights. The investment in kind, industrial property rights, non- patented technology or land use rights must be assessed in value and be converted into shares according to their assessed value without over or under valuation. The value assessment of land use rights shall be handled according to law or administrative decrees.
The industrial property rights or/and non-patented technology in value terms shall not exceed 20 percent of the registered capital of the company.

Article 81 When reorganise a State-owned enterprise into a joint
stock company limited, it is strictly prohibited to under-value State- owned assets for conversion into shares, sell them at prices below their value, or distribute them without compensation to
individuals.

Article 82 When establishing a joint stock company limited through promotion, the promoters shall subscribe in written form the amount of shares provided for in the articles of association in full payment. In cases of paying investment in kind, industrial property rights, non-patented technology or land use rights, procedures for the transfer of the property rights shall be completed according to law.

After the promoters all pay in their capital, they should elect the board of directors and the supervisory committee. The board of directors shall apply for registration of establishment of the company with the registration department with the document of approval for establishment, the articles of association, capital verification and other documents.

Article 83 When establishing a joint stock company limited through public offer of shares, the amount of shares subscribed to by promoters shall not less than 35 percent of the total. The rest shall be offered to the public for subscription.

Article 84 In public offer, an application for the offer must be
submitted to the securities administration of the State Council, together with the following documents:

1. Document of approval for establishing the company;

2. Articles of association;

3. Operating budget;

4. Names of promoters and the number of shares by the promoters, the
method of capital contribution, and capital verification
certificate;

5. Prospectus;

6. Names and addresses of the receiving bankers; and

7. Names of underwriters and the relevant agreement.Promoters shall not make a public offer without the approval of the securities administration of the State Council.

Article 85 With the approval of the securities administration of
the State Council, a joint stock company limited may make a rally abroad. The specific method for the rally shall be formulated by the State Council.

Article 86 Securities administration of the State Council shall
approve the application on public offer which meets the conditions prescribed in this law. If the application does not comply with the conditions prescribed in this law, no approval is
granted.
If, after approval is given, the application is found not to meet the conditions prescribed by this law, the approval shall be revoked. If shares have not been offered, the offer will not be carried out. If shares have already been offered, the subscribers may demand the promoters to refund their payments for shares with interests at the bank's deposit rate of the same term.

Article 87 The prospectus should have the articles of association
attached and define the followings:

1. Number of shares subscribed to by promoters;

2. Par value and issue price of each share;

3. Total number of non-registered shares issued;

4. Rights and obligations of subscribers;

5. The time limit for the public offer and the notification that
subscribers may revoke their subscription to share if the offer is under-subscribed at the close of the offer.

Article 88 The promoters shall publish prospectus and prepare
application forms during public offers. In the application forms, the items listed in the preceding article should be set out and the subscribers shall fill in the number of shares subscribed to total amount of payment, address and sign or seal the forms. Subscribers shall make payment for the shares they have
subscribed.

Article 89 Public offers of shares shall be underwritten by
securities institution established according to law and an underwriting agreement shall be entered.

Article 90 In a public offer of shares the promoters shall enter
into an agreement with the receiving banker.

The receiving banker shall receive and hold as agent the payments for shares according to the provisions of the agreement, produce receipts to subscribers who have made the payments and shall be obliged to produce evidence of receipt of payments to relevant
departments.

Article 91 After full payments have been made to the share issued, an authorized investment verification organization mustverify the investments and issue investment verification certificate. The promoters shall convene a meeting for founding the company within 30 days. The meeting shall be attended by all share
subscribers.

If the shares issued are not fully subscribed after the closing date as prescribed in the prospectus or the promoters fail to call the meeting for founding the company within 30 days, subscribers of shares may demand return of the payments for the shares, plus interests at the bank's rate for deposits of the same term.

Article 92 Promoters shall notify all the subscribers or make an
announcement of the date of the establishment meeting 15 days before the meeting should be held. The meeting shall be held only if subscribers representing over half of the total shares are
present.
The establishment meeting shall exercise the following powers:

1. To examine the report on the preparation for the establishment of the company submitted by the promoters;

2. To adopt the articles of association;

3. To elect directors of the baord;

4. To elect the supervisory committee;

5. To examine the expenses on the establishment of the company;

6. To examine and verify the valuation of property which is used by the promoters as their payments for shares; and

7. To make a resolution of not setting up the company in the case of the occurrence of force majeure or substantial changes to operating conditions that will affect the establishment of the
company.

A resolution on matters listed in the preceding paragraph requires the approval of the subscribers with half or more of the voting rights present at the meeting.

Article 93 Promoters and subscribers may not withdraw their share
capital after making payments for shares they subscribed, or making their contribution of capital as payment for shares, except where the shares have not been fully subscribed within the offer period, the promoters fail to convene the establishment meeting within the period specified, or the establishment meeting has decided not to set up the company.

Article 94 The board of directors should apply for registration on
the establishment of the company within 30 days of the conclusion of the establishment meeting together with the following documents:

1. Document of approval issued by the department in charge;

2. Mintues of the establishment meeting;

3. Articles of association of the company;

4. Auditor's report on the financial affairs concerning the
preparations for the establishment of the company;

5. Investment verification certificate;

6. Names and addresses of the members of the board of directors and of the supervisory committee;

7. Name and address of the legal representative.

Article 95 Company registration department shall decide on whether to give approval to the registration within 30 days after the application is received. If all the conditions prescribed in this law are met, approval shall be granted and business license shall be issued; if the conditions prescribed in this law are not met, approval shall not be granted.

The date of the issue of the business license shall be the date of establishment of the company. After the company has been established, it should make a public announcement.

After the establishment of the company through public offer of shares, a report on the offer should be submitted to the securities administration of the State Council for the record.

Article 96 When a branch or branches to be set up at the same time
of the establishment of the joint stock company limited, application shall be made for the registration of the branch or branches and business license(s) should be obtained.

If the branch(es) is set up after the establishment of the joint stock company limited, the legal representative of the company shall apply for the registration of the branch(es) and obtain business
license(s).

Article 97 Promoters of a company shall have the following
liabilities:

1. To be jointly liable for the debts and expenses arising from actions to establish the company if the company fails to be
established;

2. To be jointly liable to refund payments of subscribers for the
shares, plus interests at the bank's rate for deposits of the same term; and

3. To be liable to compensate the company for damage the company caused by negligence of promoters in the process of establishing the company.

Article 98 A limited liability company to be reorganized into a joint stock company limited should conform to the conditions as prescribed in this law and go through the procedures prescribed by this law.

Article 99 When a limited liability company has been approved to be reorganized into a joint stock company limited, the total shares converted should be equal to the value of the net assets of the former company. If a limited liability company needs to increase its capital through a public offer after it has been approved for converting into a joint stock company limited, provisions of their law converning public offers must be abided by.

Article 100 After being converted into a joint stock company limited according to law, the creditor's rights and indebtedness of the original limited liability company shall be assumed by the joint stock company limited converted into.

Article 101 A joint stock company limited shall safekeep in the
company a copy of the articles of association, the list of shareholders, minutes of meetings of shareholders and financial and accounting statements.

SECTION TWO SHAREHOLDERS' MEETING

Article 102 A joint stock company limited shall have meeting of
shareholder, which is authorized by the company to exercise its powers according to this law.

Article 103 The meeting of shareholders shall exercise the
following powers:

1. To decide upon the operational policies and investment plans of the company.

2. To elect and replace directors and decide on matters relating to the remunerations of directors.

3. To elect and replace supervisors who are the representatives of
shareholders and decide on matters relating to remunerations of supervisors.

4. To examine and approve reports by the board of directors.

5. To examine and approve reports by supervisory committee or
individual supervisors.

6. To examine and approve the company's proposed annual financial budget and final accounts.

7. To examine and approve the company's profit distribution plan and
plan for recovery of losses.

8. To pass resolutions on the increase or decrease of registered
capital.

9. To pass resolutions on the issuing of bonds.

10.To pass resolutions on merger, division, dissolution and liquidation and other matters.11. To amend the articles of association of the company.

Article 104 The meeting of the shareholders shall hold an annual
meeting every year. An interim meeting of shareholder shall be held within two months in one of the following cases:

1. The number of directors is less than two-thirds of the number of directors as required by this law or the number of directors as specified in the articles of association;

2. The uncovered losses of the company capital reach one-third of the total share capital;

3. Upon request by the shareholders holding 10% or more of the company's total share capital;

4. The board of directors deems it necessary; and

5. Upon request by the supervisory committee.

Article 105 The meeting of shareholders shall be convened by the board of directors according to the provisions of this law and presided over by the chairman of the board. In the absence of the chairman of the board due to special reasons, the meeting shall be presided over by a vice-chairman of the board or a director designated by the chairman. If a meeting of shareholders is to be convened, a notice should be served to all shareholders 30 days before the meeting stating matters to be discussed in the meeting. An interim meeting of shareholders shall not take resolutions on matters not specified in the notice.

When bearer's shares are issued, a public announcement shall be made on the matters listed in the preceding paragraph 45 days before the meeting.

If holders of bearer's shares attend the shareholder's meeting, they should have their shares deposited with the company from 5 days prior to the meeting to the end of the meeting.

Article 106 Every share has a vote at the shareholders' meeting.

The resolution at the shareholders' meeting must be adopted with half or more of the voting rights held by shareholders present at the meeting. Resolutions on merger, division or dissolution of the company shall be adopted with two-thirds or more of the voting rights held by shareholders present at the meeting.
Article 107 The resolution on amendment to the articles of
association shall be adopted with two-thirds or more of voting rights held by the shareholders present at the meeting.

Article 108 Shareholder may appoint approxies to attend the
shareholders' meeting. A proxy should submit to the company a power of attorney from the shareholder and exercise his(her) voting rights within the terms of reference.

Article 109 Minutes of the decisions made in matters discussed by the
shareholders' meeting shall be kept and signed by the directors present at the meeting. The minutes of the meeting shall be kept together with the list of shareholders present and powers of attorney of proxies present.

Article 110 Shareholders have the rights to examine the articles of
association, minutes of meetings of shareholders and financial and accounting statements and put forward proposals or enquiries in respect to the operation of the company.

Article 111 If the resolutions of a meeting of shareholders or the
board of directors have violated the law, administrative decrees or encroached upon the legitimate rights of shareholders, the shareholders concerned have the rights to sue at the people's courts, to demand that such acts of violation or infringement be stopped.

SECTION THREE BOARD OF DIRECTORS; MANAGER

Article 112 A joint stock company limited shall have a board of
directors with five to 19 members.

The board of directors shall be responsible to the meetings of shareholders and exercise the following powers:

1. To convene meetings of shareholders and report work to the
meeting.

2. To carry out the resolutions passed by the meetings of
shareholders.

3. To decide on the operational and investment plans.

4. To formulate the company's annual financial budget and final
accounts.

5. To formulate plans for profit distribution and recovery of losses.

6. To formulate plans for increasing or decreasing registered capital of the company and the plan for issuing bonds.

7. To draft plans for merger, division, or dissolution of the
company.

8. To decide on the organizational setup of the company.

9. To appoint or replace manager (general manager) of the company
(hereinafter referred to as "manager"), appoint or replace deputy managers and financial officers of the company according to the recommendation by the manager and decide on their
remunerations.

10. To formulate the basic management systems of the company.

Article 113 The board of directors shall have a chairman and one or two vice-chairmen. The chairman and vice-chairmen shall be elected by majority vote of directors.

Article 114 The chairman of the board shall be exercise the
following powers;

1. To preside over the meeting of shareholders and convene and preside over the meetings of the board of directors;

2. To examine the implementation of the resolutions adopted by the
board of directors;

3. To sign on shares and bonds issued by the company.

Vice-chairmen of the board shall assist the chairman of the board in his(her) work. If the chairman of the board is unable to perform his(her) duties, he(she) shall designate a vice-chairman to act in his(her) behalf.

Article 115 The term of office for the chairman of the board of
directors shall be provided for in the articles of association, but each term of office shall not exceed three years. The chairman of the board of directors may serve another term of office upon reelection after expiration of the former term.

The shareholders meeting may not without reason remove a director from office before the term of office of the director expires.

Article 116 The meeting of the board of directors shall be held at
least twice a year. All the directors shall be notified of the meeting 10 days before the meeting.

For an interim meeting, the method of notification and the time limited for the notification may be formulated separately.

Article 117 A meeting of the board of directors shall be held only
if half of the directors present and resolutions to the board require the approval of more than half of all directors.

Article 118 The directors shall attend the meeting of board of
directors in person. If a director is unable to attend a meeting for some reasons, he(she) may appoint another director by a written power of attorney to attend the meeting on his(her) behalf. The power of attorney shall set out the scope of the authorization.

The board of directors shall keep minutes of meetings on the decisions on matters discussed and the directors present at the meetings and the person who records the minutes shall sign the minutes of meetings.

Directors shall bear the responsibilities for the resolutions adopted at the meeting of the baord of directors. If the resolutions adopted at the board meeting have violated the law, administrative decrees, or the articles of association and incurred serious losses to the company, the directors that participate in the resolution are liable to compensate the company. But if a director can be proven expressly objecting to the resolutions and that the objection had been recorded in the minutes of meetings, the director per se may be exempt from the responsibilities.

Article 119 A joint stock company limited shall have a manager,
subject to the appointment or dismissal by the board of directors. The manager shall be responsible to the board of directors and exercise the following powers:

1. To be in charge of the company's production and operation and organize the implementation of the decisions of the board of directors.

2. To organize the implementation of the annual operational and investment plans of the company.

3. To draft the internal organizational setup plan.

4. To draft the basic management system of the company.

5. To formulate specific rules and regulations of the company.

6. To propose the appointment or dismissal of deputy managers and financial officers.

7. To appoint or dismiss management personnel other than those whose appointment or dismissal shall be decided upon by the board of directors.

8. Other powers granted by the articles of association and the board of directors.The manager shall attend the meeting of the board of directors as a non-voting member.

Article 120 The board of directors may authorize its chairman to
exercise part of the powers of the board when the meeting of the board is not in session.

Article 121 In considering the wages, welfare of the workers and safe
production, labor protection and labor insurance and other issues concerning the personal interests of staff and workers, the company should first of all solicit and consider opinions of the trade union and the workers of the company and invite representatives of the trade union or workers to attend the relevant meetings as observes.

Article 122 In considering and deciding on major issues
concerning the operation of the company and in formulating major rules and regulations, the company should solicit and consider opinions and suggestions of the trade union or workers of the company.

Article 123 Directors and manager of a company shall abide by the
provisions of the articles of association, faithfully perform their duties, protect the interests of the company and may not exploit their positions and powers to seek personal gains.

The provisions of Article 57 through Article 63 on persons not eligible for serving as directors and managers and about the obligations and liabilities of directors and managers also apply to directors and managers of joint stock companies limited.

SECTION FOUR SUPERVISORY COMMITTEE

Article 124 A joint stock company limited shall have a
supervisory committee made up of at least three persons with one of them to be elected as the convener.

The supervisory committee is made up of representatives of shareholders and an appropriate proportion of representatives of staff and workers. The specific proportion of workers shall be provided for in the articles of association. The representatives of workers shall be elected by workers through democratic processes.

Directors, the manager and financial officers shall not serve concurrently as supervisors.

Article 125 The term of office of a supervisor is three years. The
supervisor may be re-elected to serve another term upon expiration of the term.

Article 126 The supervisory committee or individual supervisors
exercise the following powers:

1. To check up on the financial affairs of the company;

2. To supervise over acts of directors and manager while
performing their duties which violate laws, regulations or articles of association of the company;

3. To request remedies from directors or manager for their acts which
have made harm to the interests of the company;

4. To propose the convening of interim meetings of the board of
directors;

5. To exercise other powers provided for in the articles of
association.

Supervisors shall attend the meeting of the board of directors as non- voting members.

Article 127 The discussion methods and the procedures of voting at the meeting of the supervisory committee shall be provided for in the articles of association

Article 128 Supervisors shall faithfully perform their duties of
supervision according to law, administrative decrees and articles of association.

The conditions listed in Article 57 through Article 59 and Article 62 and Article 63 of this law on persons not eligible for the position of supervisors and on the obligations and duties of supervisors also apply to supervisors of joint stock companies limited.

CHAPTER FOUR ISSUE AND TRANSFER OF STOCKS OF A JOINT STOCK COMPANY LIMITED

SECTION ONE ISSUE OF STOCKS

Article 129 The capital of a joint stock company limited shall be
divided into shares of equal value.
Shares in a company take the form of share certificates, which are signed and issued by the company to certify that the shares are held by shareholders.

Article 130 The shares shall be issued on the basis of the
principle of public, fair and impartial. Shares of the same class must have the same rights and benefits.

For share certificates issued at the same time should be equal in price and each share should have the same issue terms. The price of each share purchased by any organization or individual must be the
same.

Article 131 The shares may be issued in par value or above the par
value, but not lower than the par value.

Share certificates with an issued price above the par value shall get the approval of the securities administration department of the State Council.

The premium arising from issue of stocks in prices above the par value shall be allocated to the company's capital common reserve fund.

The specific regulations governing the issue of share certificates at a premium shall be separately issued by the State Council.

Article 132 Share certificates take the form of paper
certificates or other forms as provided for by the securities administration department of the State Council.

The following items shall be set out in the share certificates:

1. Name of the company;

2. Date of registration and establishment of the company;

3. The class of share certificate, the par value and number of shares represented by the share certificate;

4. Serial number of the share certificate.

The share certificates shall be signed by the chairman of the board of directors and sealed by the company.

Share certificates of promoters shall bear the notation promoters share certificate.

Article 133 Shares issued to promoters, State authorized investment institutions and legal persons shall be in the form of registered share certificates and shall bear the names of such promoters, investment institutions or legal persons but not other names or the latter's representatives.

The shares issued to the general public may be in the form of registered certificates or bearer certificates.

Article 134 In issuing registered shares, the company shall keep a list of shareholders, with the following items set out:

1. Names or both names and addresses of the shareholders;

2. Number of shares held by each shareholder;

3. Serial number of the shares held by the shareholders;

4. Date for acquiring the shares by shareholders.In issuing bearer
shares, the company shall record the number, serial numbers and date of issue of the shares.

Article 135 The State Council may formulate separate regulations
governing the issue of classes of shares not covered by this law.

Article 136 A joint stock company limited shall official deliver the
share certificates to shareholders immediately after its registration and establishment. No share certificates shall be delivered to shareholders before the official establishment of the company.

Article 137 In issuing new shares, a joint stock company limited must
meet the following conditions:

1. The previous issue of shares has been fully subscribed and at least one year has elapsed since the issue;

2. The company has been continuously taking profits and paying dividends to shareholders in the last three successive years;
3. There has not been any false reporting in the financial and accounting documents of the company in last three years;

4. The projected profit rate of the company equals to or exceeds the interest on bank deposit for the same term.

A company which uses profit of a given year to issue new shares is not subject to item 2 above.

Article 138 For issuing new shares, resolutions must be passed on the
following matters by the shareholders meeting:

1. Class and quantity of the new shares to be issued;

2. Issue price of the new shares;

3. The starting and closing time for the issue; and

4. Class and quantity of the new shares to be issued to existing
shareholders.

Article 139 After the meeting of shareholders approved the
revolutions, the board of directors shall file an application for approval with the departments authorized by the State Council or the people's governments at the provincial level for the new issue. If the new shares are to be issued by means of public offer, an approval should be acquired from the securities administration department of the State Council.

Article 140 If a joint stock company limited has been approved to make public offer of new shares, the company must publish a prospectus for the new shares and the company's financial statements with detailed schedules attached and prepare application forms for subscription.

The new shares to be issued shall be underwritten by a legally established securities institution and an underwriting agreement shall be executed.

Article 141 In issuing new shares, a joint stock company limited shall
determine the pricing plan according to the profitability of the company and the increase in the value of its property.

Article 142 After fully collecting the payment for shares newly issued, the company shall go through the procedures of alteration of registration with the company registration department and make a public announcement.

SECTION TWO TRANSFER OF SHARES

Article 143 A shareholder may transfer his (her) shares according to
law.

Article 144 The transfer of shares shall be conducted in legally
established stock exchanges.

Article 145 Registered share certificates shall be transferred by way
of endorsement or other forms provided for by law and administrative decrees.

After the registered share certificates are transferred, the company shall record the names or both the names and addresses of the transferees in the list of shareholders.

No changes in the registration of shareholders shall be made pursuant to previous paragraph 30 days before the convening of the meeting of shareholders or five days before the record date for the issue of dividends.

Article 146 The transfer of bearer shares shall come into effect upon
the delivery of the share certificates by shareholders to the transferre(s) at the stock exchanges.

Article 147 The promoters' shares may not be transferred within three years starting from the date of establishment of the
company.

Directors, supervisors and managers of the company shall declare to the company the quantity of shares they hold and the shares concerned may not be transferred during the terms of their
offices.

Article 148 State authorized investment institutions may transfer the
shares they hold according to law and may also purchase shares held by other shareholders. The approval limits and management regulatory regions for such transfers shall be provided for separately by law or administrative decrees.

Article 149 A joint stock company limited may not buy shares issued
by itself, except in order to decrease its capital by cancelling its shares or when it merges with other companies that hold its shares.
After purchasing shares issued by itself according to the provisions of the preceding paragraph, a company shall cancel that portion of its shares, change its registration and make a notice to the public according to law and administrative decrees within ten
days.

A company may not accept its own share certificates as collateral.

Article 150 In cases of shares being stolen, lost of destroyed, the
shareholder concerned may request the people's court to declare the shares invalid pursuant to procedures for public invitation to assert claims contained in the Code of Civil Procedures.

After the people's court declares the shares invalid according to the prescribed procedure, the shareholder concerned may apply for re-issue of the share certificates with the company.

SECTION THREE LISTED COMPANIES

Article 151 The term "listed companies" used in this law refers to
companies whose shares have been approved for trading at stock exchanges by the State Council or by the securities administration department authorized by the State Council.

Article 152 In applying for its shares to be listed, a joint stock
company limited shall meet the following requirements:

1. Securities administration departments of the State Council have approved the company's stock being issued to the public;

2. The total share capital of the company shall be no less than RMB50 million;

3. The company has opened business for at least three years and has been profitable over the last three years. For companies reorganized from an original State-owned enterprise according to law or newly established with the major promoters being the large or medium-sized State owned enterprises after this law comes into effect, the three year period can be calculated continuously;

4. Number of shareholders who each holds shares of a par value totally at least RMB1,000 shall be no less than one thousand and the shares of the company already issued to the public account for more than 25 percent of the total shares. For companies whose share capital has exceeded RMB400 million, the shares already issued to the public shall account for no less than 15 percent of the total shares of the company;

5. The company has not committed any significant law violating acts and there are no false records in the financial statements over last three years;

6. Other requirements as prescribed by the State Council.

Article 153 For listing its shares to public for trade, a joint stock company limited shall get the approval of the State Council or of a securities administration department of the State Council by submitting relevant documents prescribed by law and administrative decrees.

The State Council or its authorized securities administration department shall grant approval to the listing applications which meet all the requirements specified in this law or deny approval to those listing applications which do not meet such requirements.

After the approval has been obtained, a company shall publish a share listing report and keep its application documents at a designated place for public inspection.

Article 154 The shares of listed companies approved shall be traded
according to law and administrative decrees.

Article 155 With the approval of the a State Council authorized
securities administration department, a joint stock company limited may have its stocks listed abroad. The special regulations there of shall be formulated by the State Council.

Article 156 A listed company must periodically make public its
financial and operational condition according to law and administrative decrees and publish the financial statements once every six months in each fiscal year.

Article 157 The securities administration department authorized by the State Council may decide to temporarily suspend the listing of a company under the following circumstances:

1. The total share capital, share distribution or other circumstances have changed such that the company no longer meets the listing requirements.

2. The company does not make public its financial condition as required by the regulations or false entries have been found in its financial statements.

3. The company has committed significant law violation acts.

4. The company has sustained losses in each of the last three years.

Article 158 A securities administration department of the State
Council may decide to terminate the listing of a company if the company is found to have committed one of the cases listed in items 2 and 3 of the preceding article with serious consequences or has committed one of the cases listed in items 1 and 4 of the preceding articles and is unable to correct within a limited time so as to lose the conditions for listing.

The securities administration department of the State Council may decide to terminate the listing of a company if the company has decided to dissolve itself or has been ordered by the responsible administrative departments to close down or declared bankrupt.

CHAPTER FIVE CORPORATE BONDS

Article 159 A joint stock company limited or a limited liability
company established with investment by a solely State owned company or by two or more State owned enterprises or by more than two State owned investment institutions may issue corporate bonds in order to raise funds for production or operations according to this law.

Article 160 The term "corporate bond" used in this law refers to the
valuable securities issued by a company according to legally prescribed procedures and pursuant to which the company convenants to repay principal and interest within a certain period of time.

Article 161 In issuing corporate bonds, a company shall meet the
following requirements:

1. The net assets of the company shall be no less than RMB30 million in case of a joint stock company and no less than RMB60 million in case of a limited liability company.

2. The aggregate amount of bonds issued does not exceed 40 percent of the total net assets of the company.

3. The average distributable profits over the last three years are sufficient to defray one year's interest payment on the company bonds.

4. The use of funds raised conforms to the industrial policy of the State.

5. The interest rate payable on the corporate bonds shall not exceed the levels set by the State Council.

6. Other requirements prescribed by the State Council.

The funds raised by issuing corporate bonds must be used for the purposes approved by the authorized authorities and shall not be used to cover losses or for non-production expenditure.

Article 162 A company may not reissue corporate bonds under the
following circumstances:

1. The corporate bonds issued at the previous time have not been fully subscribed;

2. The company has defaulted on previously issued corporate bonds or other indebetedness, or is late in the payment of principal or interest, and such situation is still continuing.

Article 163 When a joint stock company limited or a limited
liability company proposes to issue corporate bonds, its board of directors shall draft a plan for approval by meeting of shareholders.

When a solely State owned company proposes to issue corporate bonds, the decision is subject to the investment organization or department authorized by the State.

After the resolution or decision is made according to the preceding paragraphs, the company shall apply for approval with the securities administration department of the State Council.

Article 164 The scale of an issue of corporate bonds shall be
determined by the State Council. In granting an approval by the securities administration department of the State Council to issue corporate bonds, it must ensure that scale of issue is not exceed that set by the State Council.

The securities administration department of the State Council shall grant approval if an application for issuing bonds conforms to provisions of this law and deny the approval if the provisions are not met.

If an approval previously been granted for an application has been found not to conform to the requirements of this law, the approval shall be revoked. If the corporate bonds have not been issued, the issuing shall not be carried out. If the corporate bonds have been in the process of issuing, the company in question shall return the payment to subscribers plus the interests calculated on bank deposits rates for the same term.

Article 165 In applying for issuing bonds with the securities
administration department of the State Council, a company shall submit the following documents:

1. Certificate of registration of the company;

2. Articles of association of the company;

3. Corporate bonds offer procedures;

4. Asset appraisal report and capital verification report.

Article 166 After the bond issue applciation has been approved, a
company shall make public the procedures for bond offer.

The procedures shall have the following matters set out:

1. Name of the company;

2. Total amount of bonds and face value of the bonds;

3. Bond's interest rate;

4. Period and method for payment of principal and interests;

5. Starting and closing date of the issue;

6. Net assets of the company;

7. Total amount of corporate bonds having been issued but not yet due; and

8. Underwriters of the bonds.

Article 167 In issuing bonds, the bond shall bear the name, face value, interest rate, and time of repayment, the signature of the chairman of the board of directors and seal of the company.

Article 168 Corporate bonds may be divided into registered bonds and
bearer bonds.

Article 169 The issuing company shall keep a corporate bonds registered.

For issuing registered bonds, the bond register shall have the following items set out:

1. Names or both names and addresses of the bondholders;

2. Date of issue and serial numbers of bonds acquired by bondholders;

3. Total amount of bonds issued, the face value of the bonds, interest rate of the bonds, payment dates of principal and interests, and method of payment; and

4. Date of issue of the bonds.

In issuing bearer bonds, the bond register shall set out the total amount of bonds, interest rate, payment time and method, date of issue and serial numbers.

Article 170 Corporate bonds can be transferred. Transfer of
corporate bonds shall be made at legally established securities exchanges.

When transfer, prices of corporate bonds shall be agreed upon between transferers and transferees.

Article 171 Registered bonds shall be transferred by the bondholders through endoresement or other ways provided for by law and administrative decrees.

After registered bonds are transferred, the company shall register the names or both the names and addresses of the transferes in the bond register.

The transfer of bearer bonds shall become effective after delivery of the bonds to the transferees by the bondholders at the legally establishment securities exchanges.

Article 172 Subject to resolutions a meeting of shareholders, of a
listed company may issue corporate bonds convertible into shares and specify the conversion procedures in the corporate bond offer procedures.

The issuing of convertible bonds is subject to the approval of the securities administration department of the State Council. For issuing convertible corporate bonds, a listed company shall meet the requirements for issuing stocks apart from the conditions for issuing common corporate bonds.

Corporate bonds convertible into shares shall be marked "convertible bonds" and the amount of such bonds issued shall be recorded in the bond register.

Article 173 In issuing convertible bonds, a listed company shall issue share certificates to bondholders in accordance with its conversion procedures, but the bondholders have the option whether or not to convert.

CHAPTER SIX FINANCIAL AFFAIRS AND ACCORDING OF A COMPANY

Article 174 A company shall establish its financial and
accounting system according to law and administrative decrees and provisions of the financial department in charge under the State Council.

Article 175 A company shall produce a financial and accounting report at the end of each fiscal year, which is subject to examination and verification according to law.

A financial and accounting statement shall include the following accounting statements and schedules:

1. Balance sheets;

2. Profit and loss statement;

3 .Statement of financial changes;

4. Statement of financial situation;and

5. Statement of profit distribution.

Article 176 A limited liability company shall, according to the
provisions of the articles of association, submit the financial and accounting statements to shareholders within the prescribed time
limit.

A joint stock company limited shall deposit its financial and accounting statements at the company for inspection by shareholders at least 20 days prior to the general meeting of shareholders.

A joint stock company limited established by public offers must make public its financial and accounting statements.

Article 177 When distributing each year's after-tax profits, a company shall set aside 10 percent of the profits for the company's statutory reserve funds and 5 to 10 percent as the company's statutory public welfare funds. It may not set aside common reserve funds if the aggregate balance of the funds has already accounted for over 50 percent of the company's registered
capital.

If the aggregate balance of the company's common reserve funds are not enough to make up for the losses sustained by the company of the previous year, current year profits shall be used to make up for the losses before allocations are set aside for the statutory common reserve funds and public welfare funds according to the provisions of the preceding paragraph.

Subject to a resolution of meeting of shareholders, after the company has set aside funds from after-tax profits for the statutory common reserve funds, the company may set aside funds for a discretionary common reserve funds.

The remaining profits after the losses have been made up for and statutory common reverve funds and public welfare funds have been drawn shall be distributed to shareholders according to the proportion of their capital constribution as in the case of a limited liability company and according to the number of shares held by shareholders as in the case of a joint stock company limited.

If the meeting of shareholders or board of directors has distributed the profits before the losses are made up for and the statutory common reserve funds and public welfare funds are drawn in violation of the provisions of the preceding paragraph, the profits distributed must be returned to the company.

Article 178 In accordance with this law, the premium obtained by a
joint stock company limited by issuing shares at a price exceeding par value, and any other income designated for the capital deserve funds by the regulations of the responsible financial department of the State Council shall be allocated to the company's capital common reverse fund.

Article 179 The company's common reserve funds shall be used to make
up for the losses of the company, expand its production and operations or as additional capital of the company.

When a joint stock company limited converts its common reserve funds into capital upon the resolution of shareholder's meeting, it shall either distribute new shares in proportion to the number of shares held by sharesholders or increase the par value of the shares, provided, however, that when the statutory common reserve funds are converted to capital, the balance of the common reserve fund may not fall below 25 percent of the registered capital.

Article 180 The statutory common welfare fund of a company is used
for the collective welfare of the company's staff and workers.

Article 181 A company may not keep accounting books and records other than those provided for by law.

The assets of a company shall not be deposited in accounts opened in the name of any individual person.

CHAPTER SEVEN MERGE AND DIVISION OF A COMPANY

Article 182 The merger or division of a company is subject to a
resolution passed by the meeting of shareholders of the company.

Article 183 The merger or division of a joint stock company limited must have the approval of the department authorized by the State Council or by the people's government at the provincial
level.

Article 184 Merger of a company may be made by means of
absorption or creation.

Merger by absorption is a company absorbs one or more other companies with the companies being absorbed dissolved. Merger by creation is the unification of two or more companies by dissolution of existing ones and creation of a single new company.

When merger, a merger agreement shall be signed among the parties concerned and the balance sheets and list of assets of the companies concerned shall be compiled. The companies concerned shall notify their creditors within ten days starting from the date when the merger resolutions of the companies are taken and announce in the newspapers at least three times within 30 days. Creditors have the right to demand the companies to clear their debts or provide corresponding guarantees within 30 days after the notifications received or within 90 days starting from the date of the first announcement in cases in which notifications have not been received. Without clearing debts or providing guarantee, merger may not be carried out.

The company after merged or the newly created company shall be responsible for the credits and debts of the companies involved in merger.

Article 185 If a company is to divided into one or more
companies, its assets shall be divided accordingly.

When a company divided, it shall compile balance sheet and list of assets and notify its creditors of the division within 10 days starting from the date when the division resolution is taken and announce in newspapers at least three times within 30 days. Creditors have the right to demand the companies to clear their debts or provide corresponding guarantees within 30 days after the notifications received or within 90 days starting from the date of the first announcement in cases in which notifications have not been received. Without clearing debts or providing guarantee, division may not be carried out.

The debts of a company before division shall be borne by the companies separated according to the agreement reached.

Article 186 When reduce its registered capital, a company shall
compile its balance sheet and list of assets.

The company shall notify its creditors of the resolution for reducing registered capital within 10 days starting from the date when the resolution is taken and make an announce in newspapers at least three times within 30 days. Creditors have the right to demand the companies to clear their debts or provide corresponding guarantees within 30 days after the notifications received or within 90 days starting from the date of the first announcement in cases in which notifications have not been
received.

The remaining registered capital shall not be less than the minimum set by law.

Article 187 When capital accretion by a limited liability company, the contribution of shareholders shall be made in accordance with relevant provisions on the payment of capital for a limited liability company as set by this law.

When capital accretion by a joint stock company limited by issuing new shares, the contribution of share capital by original shareholders shall be made in accordance with provisions on the payment of share capital for establishing joint stock company limited as set by this law.

Article 188 After merger or division, a company shall change its registration with the registration department in case of changes of registered items, and cancel the registration in case of dissolution, and register for a new company in case a new company is created.

When a company increases or decreases its share capital, a change of registration shall be made with registration department of the
company.

CHAPTER EIGHT BANKRUPTCY, DISSOLUTION AND LIQUIDATION

Article 189 When a company is declared bankruptcy according to law
due to insolvent of debt payment, the people's court shall organize a liquidation group composed of shareholders, relevant departments and specialized personnel according to the provisions of relevant laws and conduct liquidation of the company.

Article 190 A company may dissolve in one of the following cases:

1. The term of operation prescribed in the articles of association has expired or other conditions for dissolution as provided for in the articles of association have appeared;

2. A resolution on dissolution has been adopted by meeting of shareholders;

3. Dissolution is necessary for merger or division of the company.

Article 191 When a company is decided to be dissolved according to
the items 1 and 2 of the preceding article, a liquidation group shall be formed within 15 days of the decision. The liquidation group for the liquidation of a limited liability company shall be formed by shareholders and the members of the liquidation group for the liquidation of a joint stock company limited shall be determined by the meeting of shareholder. If a liquidation group is not formed within the prescribed time limit, creditors may request the people's court to designate relevant personnel to form a liquidation group to carry out liquidation. The people's court shall accept such request and timely designated members of the liquidation group to conduct liquidation.

Article 192 A company shall be dissolved if it has been ordered to
close down for violating the law or administrative decrees and a liquidation group shall be formed by the department in charge.

Article 193 The liquidation group shall exercise the following powers during the period of liquidation:

1. To carry out clearance of the assets of the company and compile the balance sheet and list of assets.

2. To notify creditors or make a public announcement about liquidation;

3. To handle the remaining businesses of the company;

4. To pay taxes overdue;

5. To clear credits and debts;

6. To dispose the remaining assets after all the debts are paid off;

7. To participate in civil proceedings on behalf of the company.

Article 194 The liquidation group shall, within ten days after its
establishment, notify the creditors and make a public announcement in newspapers at least three times within 60 days. Creditors shall declare their credits with the liquidation group within 30 days after the notifications received or within 90 days starting from the date of the first announcement in cases in which notifications have not been received.

In declaring credits, creditors shall specify the relevant matters about the credits and provide verifications. The liquidation group shall registered the credits.

Article 195 After clearing the assets and compiling the balance sheet and list of assets, the liquidation group shall formulate a liquidation plan and submit it to the meeting of shareholders or department in charge for confirmation.

If the assets of the company are sufficient for payment of debts, the assets may be used to pay the liquidation fee, the wages and labor insurance fees of workers, taxes overdue and clear debts.

The remaining assets after liquidation according to the preceding paragraph can be distributed to shareholders according to their proportion of investment in the case of a limited liability company and according to the proportion of shares held by the shareholders in the case of a joint stock company limited.

During the period of liquidation, the company shall not engage in new operating activities. The assets of the company may not be distributed to shareholders the assets before payments be made in accordance with provisions in second paragraph of this article.
Article 196 If after clearance of the assets and compilation of the
balance sheet and list of assets of a company to be liquidated due to dissolution or liquidation, the assets of the company are found to be insufficient for the debt payments, the liquidation group shall immediately apply for declaration of bankruptcy of the company with the people's court.

If the company has been declared bankruptcy by the people's court, the liquidation group shall hand over the liquidation affairs to the people's court.

Article 197 After the liquidation, the liquidation group shall compile a liquidation report and submit it to the meeting of shareholders or department in charge for confirmation and to the registration department for canceling registration of the company and make a public announcement about the termination of operation of the company. If the cancellation of the business license of the company has not been applied, the company registration department shall revoke its business license and make a public announcement on the matter.

Article 198 Members of a liquidation group shall be faithful to their office and perform their duties according to law.

Members of a liquidation group may not abuse their powers to accept bribes or other illegal income or convert property of the company into their own.

Members of a liquidation group shall be liable to compensation for the losses caused to the liquidated company or creditor due to their deliberate acts or serious faults.

CHAPTER NINE BRANCHES OF FOREIGN COMPANIES

Article 199 Foreign companies may set up their branches to engage in
production and business operations inside China according to provisions of this law.

The term "foreign companies" used by this law refers to companies incorporated outside the territory of China according to foreign laws.

Article 200 In establishing a branch, a foreign company shall file
an application with the Chinese department in charge and submit its articles of association, registration certificate issued by the country of register and other related documents. After the approval is given, the branch of the company shall go through the registration procedures according to law and obtain business license.

The procedures for the examination and approval of branches of foreign companies shall be formulated separately by the State Council.

Article 201 In establishing a branch in China, a foreign company shall appoint a representative or agent in charge of the branch in China and appropriate the necessary funds compatible with the operations of the branch.

When it is necessary to set a minimum for the operation fund for a branch of a foreign company, it shall be provided for separately by the State Council.

Article 202 A branch of a foreign company shall mark in its name the
original country and form of its liability.

A branch of a foreign company shall deposit a copy of the articles of association of the parent company in the branch.

Article 203 Though a foreign company is a legal person of the said
foreign country, its branch in China shall not enjoy the status of a legal person in China.

A foreign company shall bear the civil responsibility for the operational activities of its branch in China.

Article 204 In carrying out operational activities in China, a branch of a foreign company shall abide by the laws of China and shall not harm the public interests. The legitimate rights and interests of the branch shall be protected by law in China.

Article 205 Before closing its branch in China, a foreign company shall clear the debts of the branch according to law and conduct liquidation according to the liquidation procedures provided for by this law. It is not allowed to more the assets of the branch out of China before the debts are fully paid.

CHAPTER TEN LEGAL RESPONSIBILITIES

Article 206 If a company is found to have reported false capital
amount, provided false certificates, or concealed important facts by means of deception during registration in violation of the provisions of this law, it shall be ordered to correct and imposed a fine 5 to 10 percent of the capital amount over-reported in case of a false report of registered capital amount and a fine of more than RMB10,000 and less than RMB100, 000 in case provision of false certificates or concealed important facts by means of deception. If a case is very serious, its registration shall be revoked. If a case is serious enough to constitute a crime, criminal responsibilities shall be affixed according to law.

Article 207 If a company is found to have issued shares or
corporate bonds by falsifying prospectus or application forms using improper procedures in issuing shares, it shall be ordered to stop the issue, return the payment of shares with interest, and imposed with a fine one to five percent of the amount of share capital raised illegally. If a case is serious enough to constitute a crime, criminal responsibilities shall be affixed according to law.

Article 208 If a promoter or shareholder is found to have deceived
creditors or the public by denying to pay in cash or kind or failing to transfer property rights or making false constribution for his (her) shares subscribed, he (she) shall be ordered to correct and imposed a fine 5 to 10 percent of the falsified amount of payment. If the case becomes so serious as constituting a crime, criminal responsibility shall be affixed according to law.

Article 209 If a promoter or shareholder is found to have drawn his
(her) share of capital away after the establishment of a company, he (she) shall be ordered to correct and imposed a fine 5 to 10 percent of the capital drawn away. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 210 If a company is found to have issued stocks or bonds
without the approval of the department in charge as provided for by this law, it shall be ordered to stop the issue and return the share capital raised together with interests and shall be imposed a fine one to five percent of the share capital raised. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 211 If a company is found to have set up separate
accounting books apart from those set up according to law, it shall be ordered to correct and imposed a fine ranging from RMB10, 000 to RMB100,000. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

If a personal bank account is deposited with the assets of a company, the illegal proceeds shall be confiscated, together with a fine more than one time and less than five times the amount of the illegal proceeds. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 212 If a company is found to have provided false financial and accounting statements or concealed important facts in the reports to shareholders or the public, the responsible person(s) directly in charge and other persons directly responsible shall be imposed of a fine of RMB10,000 to RMB100,000. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 213 If a company is found to have converted State owned
property into shares or sold the property at low prices or distributed the property to individuals in violation of this law, the responsible persons in charge and persons directly responsible shall be given administrative punishments. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 214 If a director, supervisor or manager is found to have
abused he (her) powers to accept bribes or other illegal proceeds or peculate property of his(her) company, the illegal proceeds shall be confiscated and the property be ordered to return and the person in question shall be punished by the company concerned. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

If a director or a manager of a company is found to have used the company's funds for personal purpose or as loan to others, he(she) shall be ordered to return the funds and punished by the company, with the illegal proceeds returning to the company. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

If a director or a manager is found to have violated this law by using the property of the company to provide collateral for the debts of shareholders or other individuals, he (she) shall be ordered to cancel the collacteral and be liable to compensation and the proceeds arising from illegal provision of the collateral shall belong to the company. If the case is very serious, punishments shall be meted out by the company.

Article 215 If a director or a manager is found to have violated this
law by conducting, in person or in cooperation with others, businesses similar to the company's, he (she) shall be punished by the company concerned and the proceeds arising from the businesses concerned shall belong to the company.

Article 216 If a company is found to have failed to draw from its
profits statutory common reserve or public welfare funds as provided for by this law, it shall be ordered to make good the due amount and imposed a fine ranging from RMB10,000 to RMB100,000.

Article 217 If a company fails to notify creditors or make a public
announcement about its merger or division or reduction of registered capital or liquidation as provided for by this law, it shall be ordered to correct and imposed a fine ranging from RMB10, 000 to
RMB100,000.

If a company is found in the process of liquidation to have concealed its property, made false reports about its balance sheet or list of assets or distributed its property before clearing debts, it shall be ordered to correct and imposed a fine from one to five percent of the amount of property concealed or distributed before clearing debts. The person(s) in charge and other people directly responsible shall be fined for a sum RMB10,000 to RMB100,000. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 218 If a liquidation group fails to submit its
liquidation report to the company registration department as provided for by this law or concealed important facts or missed important items, it shall be ordered to correct.

If a member of a liquidation group is found to have abused his (her) power to seek personal gains by resorting to deception, or peculated the company's property, he (her) shall be ordered to return the property to the company, have the illegal proceeds confiscated and be imposed a fine one time to five times the amount of the illegal proceeds. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 219 If an organization undertaking assets or investment
appraisal or inspection is found to have provided false certificates, the illegal proceeds shall be confiscated and a fine one time to five times the illegal proceeds shall be imposed and the organization shall be ordered by department in charge to stop operation. Qualification certificate(s) to the person(s) directly in charge shall be revoked. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

If an organization undertaking assets or investment appraisal or inspection is found to have provided reports with major omissions due to negligence, it shall be ordered to correct and if the case is fairly serious, a fine one time to three times the income shall be imposed and the organization shall be ordered to stop operation by department in charge according to law. The qualification certificate(s) of the person(s) directly in charge shall be revoked.

Article 220 If the department in charge authorized by the State
Council is found to have granted the approval to applications for establishing a company which fails to meet the requirements as provided for by this law or granted approval to applications for issuing stocks falling short of the requirements, administrative punishments shall be meted out to people in charge and other persons directly responsible if the case is serious. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 221 If the securities administration department of the State
Council is found to have granted approval to application for public offers of shares, a stock listing or issue of bonds which does not conform to the prescribed conditions, people in charge and other persons directly responsible shall be subject to administrative punishments if the case is serious. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 222 If a company registration department is found to approve registration that does not meet the prescribed requirements, people in charge and other persons directly responsible shall be subject to administrative punishments if the case is serious. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 223 If a higher-level department is found to have forced the
company registration department to approve a registration that does not conform to the requirements or cover up the illegal registration, people in charge and other persons directly responsible shall be subject to administrative punishments if the case is serious. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 224 If a company without a legal registration is found to have used the name of a limited liability company or a joint stock company limited, it shall be ordered to correct and may also be fined from RMB10,000 to RMB100,000. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law.

Article 225 If a company fails to open business after six months or
more of its establishment without justifiable reasons or has suspended its operations for more than six months in succession after starting operation, its business license shall be revoked.

If a company fails to go through alteration registration procedures as provided for by this law when changes have taken place, it shall be ordered to register within a prescribed time limit. If it fails to register within the time limit, a fine ranging from RMB10,000 to RMB100,000 shall be imposed.

Article 226 If a foreign company has violated the provisions of this
law and set up branches inside China without approval, it shall be ordered to correct or close down the branch and be imposed a fine ranging from RMB10,000 to RMB100,000.

Article 227 If a department in charge for examination and approval according to this law refuses to grant an approval to the establishment or a company registration department refuses to grant the approval to the registration of a company which has meet prescribed requirement for establishment or registration, a review may be applied or an administration suit may be filed for the case.

Article 228 If a company has violated the provisions of this law, it
shall bear the civil responsibility of compensation and pay fines and pecuniary penalty and if the amount of property is not enough to pay for the three, it should firstly make compensation for civil
responsibility.

CHAPTER ELEVEN SUPPLEMENT PROVISIONS

Article 229 If a company is registered before the implementation of
this law in accordance with a provious law, administrative decrees or local regulations and the provisions of "Convention on Limited Liability Company" and "Convention on Joint Stock Company" formulated by the department of the State Council in charge, it may continue its operation and those company which cannot meet the requirements as provided for by this law should create the conditions so as to meet the necessary requirements. Specific procedures for the implementation of this law shall be separated formulated by the State Council.

Article 230 This law shall come into effect as of July 1, 1994.