What Is a Stock Corporation?

Stock corporation (Stock corporation) refers to a company whose company capital is composed of shares, and the shareholder is a corporate legal person who is liable to the company within the limits of the shares it subscribes for. China's "Company Law" stipulates that to establish a joint stock limited company, there should be more than two people and less than 200 as promoters. As all joint-stock companies must be limited companies with limited liability (but not all limited companies are joint-stock companies), they are generally referred to as "joint stock companies". Joint stock companies originated in Europe in the 18th century, and were widely popular in capitalist countries around the world in the second half of the 19th century. Until now, joint stock companies have dominated the economies of capitalist countries. ^[1]

Company limited by shares

Stock corporation means

1. The promoters meet the statutory qualifications and reach the quorum.

The sponsor's qualification refers to the qualification obtained by the promoter to establish a company limited by shares according to law. The promoters of a company limited by shares may be natural or legal persons, but more than half of the promoters must have a domicile in China.

To establish a joint stock limited company, it must reach a quorum, and there should be more than two sponsors and less than 200 promoters. When a state-owned enterprise is converted into a company limited by shares, the promoters may be less than five, but it shall be established by means of fundraising. It is the international practice of establishing a company limited by shares to set a minimum amount for the promoters. If the minimum amount of the promoters is not specified, one is too small to fulfill the obligations of the promoters, and the other prevents a small number of promoters from harming the legitimate rights and interests of other shareholders. There is no need for a cap on the sponsor. ^[3]

The establishment methods of a company limited by shares are:

1. Application for pre-approval registration of name

All shareholders (promoters) designated representatives or jointly-trusted agents submit application names to the Industry and Commerce Bureau for pre-approval.

(1) Application for pre-approval of company name signed by all shareholders (promoters);

(2) Certificates designated by all shareholders or jointly entrusted agents;

(3) Other materials specified by the Bureau of Industry and Commerce;

2. Business registration

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The main ways of raising funds for a company limited by shares are:

1. Application for Registration of Company Establishment signed by the legal representative of the company;

2. "Certificate of Designated Representative or Co-Agent" signed by the Board of Directors (signed by all directors) and a copy of the ID card of the designated representative or authorized agent;

The matters, authority and period of authorization of the designated representative or jointly-appointed agent shall be indicated.

3. Minutes of the shareholders' meeting or founding meeting signed by the sponsor or signed by the chairperson of the meeting and the directors present at the meeting (submission of the fundraising establishment)

4. The articles of association signed by all founders or signed by all directors;

5. The sponsor's main qualification certificate or a copy of the natural person's ID;

If the initiator is an enterprise, submit a copy of the business license; if the initiator is a business legal person, submit a copy of the registration certificate of the business legal person; if the shareholder of the initiator is a corporate legal person, submit a copy of the registration certificate of the corporate legal person; Submit a copy of the certificate of the private non-enterprise unit; if the sponsor is a natural person, submit a copy of the ID card; other sponsors shall submit the qualification certificates required by relevant laws and regulations.

6. Capital verification certificate issued by a capital verification institution established according to law;

7. If the sponsor's first capital contribution is non-monetary property, submit proof of the property rights transfer formalities;

8. If the investment is made by equity, submit the "Subscription for Capital Contribution";

9. Duties of directors, supervisors and managers, and copies of their identity documents;

In accordance with the provisions and procedures of the Company Law and the Articles of Association, submit resolutions of shareholders' general meetings signed by the promoters or signed by the chairperson of the meeting and the directors present at the meeting (recruitment and establishment of the minutes submitted to the founding meeting), board resolutions, or other relevant material. The resolutions of the shareholders' general meeting (the minutes of the founding meeting) can be combined and submitted in item 3. The resolutions of the board of directors are signed by the directors.

10. Copy of the legal representative's appointment document and identity card;

According to the provisions and procedures of the Company Law and the Articles of Association, the appointment documents are submitted to the board of directors for resolution, and the board of directors shall sign the resolutions of the board of directors.

11. Proof of use of residence;

Submit a copy of the house property right certificate for the owned property; submit a copy of the lease agreement for the leased house and a copy of the house property right certificate of the lessor. If the relevant house has not obtained the house property right certificate, it belongs to the urban house, and submits the certificate of the real estate management department or the completion acceptance certificate, the purchase contract and the copy of the house sales permit; if it is a non-urban house, it shall submit the relevant certificate stipulated by the local government. If the lessor is a hotel or restaurant, submit a copy of the hotel or restaurant's business license. If you use military real estate as your residence, submit a copy of the Military Real Estate Lease Permit.

Those who change their dwellings into commercial houses, which are urban houses, should also submit the "Registration Schedule-Registration Form for Residence (Business Premises)" and the interested owner issued by the local residents' committee (or owner's committee) agree to change the residence. Documents that have been changed to business-use houses; if they are non-urban houses, submit relevant certificates as required by the local government.

12. "Notification of Advance Approval of Enterprise Name";

13. The public offering of shares of a company limited by shares shall also submit the approval document of the securities regulatory authority of the State Council;

14. In the business scope of the company applying for registration, there are laws, administrative regulations and decisions of the State Council that require approval before registration, and submit relevant approval documents or license copies or license certificates;

15. Where laws, administrative regulations and decisions of the State Council stipulate that the establishment of a joint stock limited company must be submitted for approval, a copy of the relevant approval document or license shall be submitted.

note:

1. A company limited by shares established in accordance with the "Company Law" and the "Regulations on the Administration of Company Registration" applies to the establishment of a company applying for registration.

2. The "Application for Registration of Company Establishment", "Certificate of Designated Representative or Co-Agent", "Registration Schedule-Commitment for Equity Subscription", "Registration Schedule-Registration Form for Residence (Business Place)" Download the China Enterprise Registration Network of the State Administration for Industry and Commerce or obtain it from the Administration for Industry and Commerce.

3. Submitted applications and other application materials should use A4 paper.

If the above items are not specified to submit a photocopy, the original should be submitted; if the photocopy is submitted, it should be marked "consistent with the original" and signed by the sponsor or stamped by the representative designated by the sponsor or an authorized agent Or sign.

4. For the signatures mentioned above, the promoters of natural persons shall sign the signatures of themselves; promoters other than natural persons shall affix their official seals.

The organizational structure of a company limited by shares includes:

Liquidation of stock companies

Reorganization

To protect the company's existence and revitalization when the company's finances are in serious distress or are in danger of bankruptcy, and to protect the shareholder company

Dissolution of a joint stock company

Difference between a limited company and a limited liability company

To change a limited company to a limited company, follow these steps:

1. The board of directors drafts the company's overall change plan

When the company changes as a whole, the company's board of directors should first draw up a plan to change the company's form, and make preliminary plans and designs for the company's changes in objectives, basis and other technical issues. The company change plan should generally include the following:

(1) The name and business scope of the company after the change;

(2) the changed rules and conditions;

(3) The method and basis for converting the investment shares of the shareholders of the original limited liability company into shares of the company limited by shares;

(4) A statement of changes to the company's articles of association;

(5) Other terms related to company changes.

2. The shareholders' meeting makes a resolution

The overall change of the company is a major issue for the company. According to Article 44 of the Company Law, a special resolution must be made by the shareholders' meeting, and the resolution must be passed on behalf of shareholders with more than two-thirds of the voting rights.

3. Change of Articles of Association

The change of the company's articles of association is a necessary procedure for the change of the company's organizational form. Article 44 of the "Company Law" stipulates the change of the company's articles of association as a special resolution of the company. Changes in the articles of association shall not be legally effective until the company registration authority has reviewed the registration.

4.Share conversion or fundraising

After amending the articles of association of a limited liability company, the amount of capital contributed by the original shareholders shall be converted into the shares of the company limited by shares in accordance with the provisions of the articles of association. After all the original shareholders' capital contributions have been converted into shares, if there is still a need for capital increase, after the approval of the State Council, public shares can be raised to the public, but it must be handled strictly in accordance with the "Company Law" relevant public offer of shares.

5. Register change with the company registration authority

After the above steps are completed, the board of directors shall apply to the company registration authority for registration of the company change. After the company registration authority approves the registration and obtains the business license issued by the company registration authority, the work of the company as a whole shall be completed.

6.Announcement

After the overall change of the company, an announcement shall be made. The method of announcement shall be carried out in accordance with the relevant legal provisions or the articles of association of the company. Under normal circumstances, the announcement is published by way of report.

The role of a company limited by shares includes:

1. Effect on the country's economic development. Promote the horizontal integration of funds and the horizontal connection of the economy, and improve the overall efficiency of resource allocation.

2. Establish and improve self-restraint and self-development management mechanisms for joint-stock enterprises.

3. Opening up investment channels for stock investors and expanding the scope of investment options, which meets the needs of investor diversity, investment motivation, and trading needs. Generally speaking, it can provide investors with the possibility of obtaining higher returns.