Taiwan Companies Act

(Articles 151 to 200)

Article 151
The inauguration meeting may amend the Articles of Incorporation or resolve not to incorporate the company.
The provisions of Article 277, Paragraphs 2 through 4 shall apply, mutatis mutandis, to the aforesaid amendment of Articles of Incorporation; and the provisions of Article 316 shall apply, mutatis mutandis, to the aforesaid resolution not to incorporate the company.

Article 152
Where three months have elapsed after the total number of shares in the first issue has been contributed but the payment for which has not been fully met, or, where the payment has been fully met but the promoters have not called the inaugural meeting within two months, the subscribers may rescind their subscription.

Article 153
After the conclusion of the inaugural meeting, no subscriber may rescind his subscription.

Article 154
The liability of shareholders to the company shall be limited to payment in full of the shares they have subscribed.

Article 155
The promoters shall be jointly and severally liable to the company for compensation for loss or damage in consequence of an neglect on their part in the performance of their duties connected with the formation of the company.
The promoters shall, even after incorporation, be jointly and severally liable for debts of the company incurred prior to incorporation.

Section 2 Shares

Article 156
The capital of a company limited by shares shall be divided into shares, and each share shall have the same par value. A portion of the shares may be designated as special shares, with the kind of such special shares to be specified in the Articles of Incorporation.
The total number of shares as classified under the preceding Paragraph may be issued in installments.
A company may, in pursuance of the resolution adopted by its board of directors, apply to the authority in charge of securities for an approval of public issuance of its shares. However, in the case of a government owned company, the public issuance of its shares shall require a special approval of the authority in charge of such enterprise.
Equity capital to be contributed other than cash by shareholders may be in the form of monetary credit extended to the company, or the technical know-how or good-will required by the company, provided, however, that the amount of such substitutive capital contribution shall require a prior approval of the board of directors, without being subject to the restriction set out in Article 272 hereof.
After its incorporation, the company may, pursuant to a resolution adopted by a majority vote of a meeting of the board of directors attended by two-thirds or more of all the directors, issue new shares as the consideration payable by the company for its acquisition of the shares of another company, without being subject to the restrictions set out respectively in Paragraphs One through Three, Article 267 of this Act.
After its incorporation, for improving its financial structure or resuming its normal operation, the company participating in the special approval of the governmental bailout program may issue and transfer new shares to the government as the consideration for receiving governmental financial help. Such issuing procedure shall not be subject to the restrictions regarding issuance of new shares set forth in this Act and the regulations thereof shall be prescribed by the central competent authority.
In the case that the bailout program under the preceding paragraph reaches NTD 1 billion, the competent authority of the special approval and the company receiving such bailout shall report its self-help plan to the Legislative Yuan.
For shares to be issued at the same time and under the same conditions of issuance, the issuance price thereof shall be the same, unless otherwise provided for by the authority in charge of securities in respect of the shares to be issued by companies offering the shares to be public.

Article 157
Where a company is to issue special shares, it shall include in its Articles of Incorporation provisions concerning:
1. Order, fixed amount or fixed ratio of allocation of dividends and bonus on special shares;
2. Order, fixed amount or fixed ratio of allocation of surplus assets of the company;
3. Order of or restriction on or no voting right on the exercise of voting power by special shareholders; and
4. Other matters concerning rights and obligations incidental to special shares.

Article 158
All special shares issued by a company shall be redeemable out of surplus profits or proceeds realized from issue of new shares, provided that the privileges accorded to special shareholders by the Articles of Incorporation shall not be impaired.

Article 159
In case a company has issued special shares, any modification or alteration in the Articles of Incorporation prejudicial to the privileges of special shareholders shall be adopted in a resolution by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares and shall also be adopted by a meeting of special shareholders.
For a company whose share certificates have been publicly issued, if the total number of shares represented by shareholders attending a shareholders?meeting is not sufficient to meet the criteria as specified in the preceding paragraph, the said resolution may be adopted by a large majority representing two thirds of the votes at a shareholders?meeting attended by shareholders representing a majority of the total number of issued shares, and a favorable resolution to be adopted by a meeting of special shareholders shall be also be required.
In case stricter criteria for the total number of shares represented by the attending shareholders and the number of votes at the shareholders?meetings referred to in the preceding two paragraphs are specified in the Articles of Incorporation of a company, such stricter criteria shall govern.
The provisions governing shareholders?meetings shall apply.

Article 160
Where there are several persons owning the same share or shares, such co-owners shall select one of them for the exercise of their shareholders rights.
The co-owners of a share shall be jointly and severally liable to the company to pay for the share so owned.

Article 161
A company shall not issue share certificates, unless it has completed the procedure for incorporation registration or for company alteration registration as required for issuance of new shares.
However, this clause shall not apply to the companies whose share certificates are to be issued under the provisions otherwise provided for by the authority in charge of securities.
Share certificate issued in violation of the provisions set out in the preceding Paragraph shall be null and void. However, holders of such share certificates may claim for damages against the issuers of such share certificates.

Article 161- 1
When the total amount of capital stock of a company aggregates or exceeds the amount specifically fixed by the central competent authority, the company shall, within three months after having completed the procedures for company incorporation registration or for company alteration registration as required for issuance of new shares, issue its capital shares. Any company with a total amount of capital stock of less than the amount specifically fixed by the central competent authority shall not issue any share certificate, unless otherwise provided for in its Articles of Incorporation.
The responsible persons of a company who violate the provisions set out in the preceding Paragraph for failing to issue share certificates shall be ordered by the competent authority to effect the issuance of share certificate within a given time limit, and each of them shall further be subject to a fine in an amount not less than NT$ 10,000 but not more than NT$ 50,000; and upon failure to comply with the said order, they shall be ordered again to issue the share certificates within another given time limit and in addition thereto, each of them shall be subject to a fine in an amount not less than NT$ 20,000 but not more than NT$ 100,000. The foregoing penal clause for the second violation may be enforced successively each time against any further violation thereafter until the time the issuance of share certificates is effected as required.

Article 162
Share certificates shall be assigned with serial numbers, shall indicate thereon the following particulars, shall be affixed with the signatures or personal seals of three or more directors of the issuing company, and shall be duly certified or authenticated by the competent authority or a certifying institution appointed by the competent authority before issuance thereof:
1. The name of the company;
2. The date of incorporation registration, or the date of company alteration registration for issuance of new shares;
3. The total number of shares issued and the par value per share;
4. The number of shares issued this time;
5. The words "share certificates of promoters" shall be marked on the share certificates to be issued to promoters;
6. In the case of special share certificates, the words describing the class of such special shares shall be marked thereon; and
7. The date of issue of the share certificate.
A registered share certificate shall bear the true name of the shareholder thereof. Where a plural number of share certificates are held by a same person, his/her name shall be indicated on all such share certificates. For share certificate(s) to be held by a government agency or a corporate shareholder, the name of such government agency or such corporate shareholder shall be indicated thereon, and no other shareholder’s name nor only the name of the representative
of such government shareholder or corporate shareholder may be indicated thereof.
The rules governing certification or authentication of share certificates to be issued under Paragraph One of this Article shall be prescribed by the central competent authority. However, the provision set out in this Paragraph shall not apply to the companies offering their respective share certificates to the public in accordance with the rules otherwise prescribed by the authority in charge of securities.

Article 162- 1
For the new shares to be issued by a company offering its shares to the public, the issuing company may print a consolidated share certificate representing the total number of the new shares to be issued at the same time of issue.
The share certificate to be issued under the provision of the preceding Paragraph shall be placed under the custody of a centralized securities custody enterprise.
The provision requiring assignment of serial numbers to share certificates as set out in Paragraph One of Article 162, and the provision governing share assignment by endorsement as set out in Article 164 of this Act shall not apply to the new shares to be issued under the provision set out in Paragraph I of this Article.

Article 162- 2
For the shares to be issued to the public by a company, the issuing company may be exempted from printing any share certificate for the shares issued.
For the shares to be issued in accordance with the provision of the preceding Paragraph, the issuing company shall appoint a centralized securities custody enterprise/ institution to make recordation of the issue of such shares.

Article 163
Assignment/transfer of shares of a company shall not be prohibited or restricted by any provision in the Articles of Incorporation of the issuing company, but shall not be effected until the incorporation registration of the company.
Assignment/transfer of the shares owned by promoters of the issuing company shall not be effected until the elapse of one year after the incorporation registration of the issuing company; except for the shares owned by the promoters of a company newly incorporated after the completion of a company merger or splitting process.

Article 164
Registered share certificate shall be assigned only by the holder thereof by way of endorsement, and the name or title of the assignee shall be indicated on the share certificate. Bearer share certificate may be assigned by way of delivery of the share certificate.

Article 165
Assignment/transfer of shares shall not be set up as a defence against the issuing company, unless name/title and residence/domicile of the assignee/transferee have been recorded in the shareholders?roster.
The entries in the shareholders?roster referred to in the preceding Paragraph shall not be altered within 30 days prior to the convening date of a regular shareholders?meeting, or within 15 days prior to the convening date of a special shareholders?meeting, or within 5 days prior to the target date fixed by the issuing company for distribution of dividends, bonus or other benefits.
In the case of a company whose shares are issued to the public, the entries in its shareholders?roster shall not be altered within 60 days prior to the convening date of a regular shareholders?meeting, or within 30 days prior to the convening date of a special shareholders?meeting.
The periods specified in the preceding two Paragraphs shall commence from the applicable convening date of shareholders?meeting or from the applicable target date, as the case may be.

Article 166
A company may, by its Articles of Incorporation, issue bearer share certificates, provided that such issue shall not be more than one half of the total number of shares already issued.
A company may, upon request of its shareholders, issue bearer share certificates or change the bearer share certificates to registered share certificates.

Article 167
Subject to the provisions otherwise set out in Article 158, Article 167-1, Article 186 and Article 317 of this Act, a company may not, at its own discretion, redeem or buy back any of its outstanding shares, nor may it accept any of its outstanding shares as a security in pledge, unless a shareholder is in liquidation or adjudged bankrupt, in which case, the shares being held by the said shareholder may be bought back by the issuing company at the market price, with the buy-back price payable to the said shareholder to be withheld for off-setting the debt owed to the company by said shareholder prior to the process of the foregoing liquidation or bankruptcy pronouncement.
The shares redeemed or bought back by the issuing company in accordance with the proviso of the preceding Paragraph or the provisions of Article 186 hereof shall be sold at the then current market price within six months. If the shares so redeemed or bought back remain unsold after expiry of the foregoing time limit, such shares shall be deemed as the shares which have never been issued by the company; and under such circumstance, the company shall apply for an alteration of the entries of the then existing corporate registration in respect of such shares accordingly.
Where a majority of the total number of outstanding voting shares or of the total amount of the capital stock of a subordinate company are held by its holding company, the shares of the holding company shall not be purchased nor be accepted as a security in pledge by the said subordinate company.
Where the holding company and its subordinate company as referred to in the preceding Paragraph jointly hold or possess a majority of the total number of outstanding shares or of the total amount of the capital stock of another company, the shares of the said holding company and its subordinate company shall also not be purchased nor be accepted as a security in pledge by the said another company.
Where the responsible person of a company has acted contrary to any provisions set out in the preceding four Paragraphs by redeeming or buying back its outstanding shares, or accepting such shares as the security in pledge, or raising the share price for offsetting its outstanding debt, or reducing the selling price of such shares, he/she shall be liable for the damage to the company.

Article 167- 1
Unless as otherwise provided for in the law, a company may, upon adoption of a resolution by a majority voting of the directors present at a meeting of its board of directors attended by two-thirds of the directors of the company, buy back its shares in a number not exceeding 5% of the total number of its outstanding shares provided, however, that the total amount of the price for buying back such shares shall not exceed the sum of the amount of its reserved surplus earnings plus the amount of the realized capital reserve.
The shares bought back by the issuing company under the preceding Paragraph shall be assigned or transferred to its employees within three years. If such shares have not been transferred as required after expiry of the foregoing time limit, such shares shall be deemed as the shares which have never been issued; and under this circumstance, the company shall apply for a necessary alteration registration in respect of such shares accordingly.
The issuing company of the shares bought back under Paragraph I of this Article shall not be entitled to exercise the rights of a shareholder in respect of such shares.

Article 167- 2
Unless as otherwise provided for in the law or in the Articles of Incorporation, a company may, upon adoption of a resolution by a majority of the directors present at a meeting of the board of directors attended by two-thirds of more of the total number of directors of the company, enter into a share subscription right agreement with its employees whereby the employees may subscribe, within a specific period of time, a specific number of shares of the company. Upon execution of the said agreement, the company shall issue to each employee a share subscription warrant.
The share subscription warrant obtained by any employee of the issuing company shall be non-assignment, except to the heir(s) of the said employee.

Article 168
A company shall not cancel its shares, unless a resolution on capital reduction has been adopted by its shareholders?meeting; and capital reduction shall be effected based on the percentage of shareholding of the shareholders pro rata, unless otherwise provided for in this Act or any other governing laws.
Where a company cancels its shares in a manner in violation to the provisions set out in the preceding paragraph, the responsible person(s) of the company shall (each) be imposed with a fine in an amount not less than NT$ 20,000 but not more than NT$ 100,000.

Article 168- 1
Where a company has a need to reduce and to increase its capital stock before the end of any fiscal year in order to offset its loss, the board of directors shall, at least 30 days prior to the convening date of the shareholders?meeting, forward the financial statements and a loss offsetting proposal to the supervisors for their auditing before submitting the audited version thereof to the shareholders?meeting for review and approval by a resolution.
In case the audited financial statements and the loss offsetting proposal are submitted to a special shareholders?meeting under the provisions of the preceding Paragraph, the provisions of Articles 229 through 231 of this Act shall apply mutatis mutandis.

Article 169
The shareholders?roster of a company shall be assigned with serial numbers and shall contain the following particulars:
1. The name or title and the domicile or residence of the shareholders;
2. The number of shares held by each shareholder; and the serial number(s) of share certificate(s), if issued, by that shareholder;
3. The date of issuance of the share certificates;
4. The number of shares, the serial number of share certificate(s), and the date of issuance of the bearer share certificate(s), if bearer stocks are issued; and
5. The words describing the type of special shares, if special shares are issued.
Where computerized operation or machine processing operation is used in the company, then the information as required in the preceding Paragraph may be annexed to the shareholders?roster with relevant supplemental tables.
The director who is authorized to represent the company shall make the shareholders?roster(s) available at the head office of the company or the business place of the agency appointed by the company to handle the share-related affairs for the company.
Violation of this clause shall be subject to a fine in an amount not less than NT$ 10,000 but not more than NT$ 50,000. Successive violations of this clause shall be subject to a fine to be imposed at the rate of not less than NT$ 20,000 but not more than NT$ 100,000 for each successive violation.

Section 3 Shareholders?Meeting

Article 170
Shareholders?meeting shall be of the following two kinds:
1. Regular meeting of shareholders: to be held at least once every year.
2. Special meeting of shareholders: to be held when necessary.
The regular meeting of shareholders referred to in the preceding Paragraph shall be convened within six months after close of each fiscal year, unless otherwise approved by the competent authority for good cause shown.
The director who is authorized to represent the company and fails to call a regular shareholders?meeting within the time limit specified in the preceding Paragraph shall be imposed with a fine in an amount not less than NT$ 10,000 but not more than NT$ 50,000.

Article 171
A shareholders meeting shall, unless otherwise provided for in this Act, be convened by the Board of Directors.

Article 172
A notice to convene a regular meeting of shareholders shall be given to each shareholder no later than 20 days prior to the scheduled meeting date; while a public notice shall be given to holders of bearer share certificates no later than 30 days prior to the scheduled meeting date.
A notice to convene a special meeting of shareholders shall be given to each shareholder no later than 10 days prior to the scheduled meeting date; while a public notice shall be given to holders of bearer share certificates no later than 15 days prior to the scheduled meeting date.
For a company offering its shares to the public, a notice to convene a regular meeting of shareholders shall be given to each shareholder no later than 30 days prior to the scheduled meeting date, and to the holders of bearer share certificates no later than 45 days prior to the scheduled meeting date. In case a company offering its shares to the public intends to convene a special meeting of shareholders, a meeting notice shall be given to each shareholders no later than 15 days prior to the scheduled meeting date, and to the holders of bearer share certificates no later than 30 days prior to the scheduled meeting date.
The cause(s) or subject(s) of a meeting of shareholders to be convened shall be indicated in the individual notice and the public notice to be given to shareholders; and the notice may, as an alternative, be given by means of electronic transmission, after obtaining a prior consent from the recipient(s) thereof.
Matters pertaining to election or discharge of directors and supervisors, alteration of the Articles of Incorporation, and dissolution, merger, spin-off, or any matters as set forth in Paragraph I, Article 185 hereof shall be itemized in the causes or subjects to be described in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions.
The director who is authorized to represent the company and fails to convene the shareholders?meeting as required in Paragraph I, Paragraph II or Paragraph III under this Article shall be imposed with a fine in an amount not less than NT$ 10,000 but not more than NT$ 50,000.

Article 172- 1
Shareholder(s) holding one percent (1%) or more of the total number of outstanding shares of a company may propose to the company a proposal for discussion at a regular shareholders?meeting, provided that only one matter shall be allowed in each single proposal, and in case a proposal contains more than one matter, such proposal shall not be included in the agenda.
Prior to the date on which share transfer registration is suspended before the convention of a regular shareholders?meeting, the company shall give a public notice announcing the place and the period for shareholders to submit proposals to be discussed at the meeting; and the period for accepting such proposals shall not be less than ten (10) days. The number of words of a proposal to be submitted by a shareholder shall be limited to not more than three hundred (300) words, and any proposal containing more than 300 words shall not be included in the agenda of the shareholders?meeting. The shareholder who has submitted a proposal shall attend, in person or by a proxy, the regular shareholders?meeting whereat his proposal is to be discussed and shall take part in the discussion of such proposal.
Under any of the following circumstances, the board of directors of the company may exclude the proposal submitted by a shareholder from the list of proposals to be discussed at a regular meeting of shareholders:
1. Where the subject (the issue) of the said proposal cannot be settled or resolved by a resolution to be adopted at a meeting of shareholders;
2. Where the number of shares of the company in the possession of the shareholder making the said proposal is less than one percent (1%) of the total number of outstanding shares at the time when the share transfer registration is suspended by the company in accordance with the provisions set out in Paragraph II or Paragraph III, Article 165 of this Act,; and
3. Where the said proposal is submitted on a day beyond the deadline fixed and announced by the company for accepting shareholders?proposals.
The company shall, prior to preparing and delivering the shareholders?meeting notice, inform, by a notice, all the proposal submitting shareholders of the proposal screening results, and shall list in the shareholders?meeting notice the proposals conforming to the requirements set out in this Article. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of such proposals and explanation shall be made by the board of directors at the shareholders?meeting to be convened.
The responsible person of a company who violates the provisions set out in Paragraph II or the preceding Paragraph shall be imposed with a fine in an amount not less than New Taiwan Dollar Ten Thousand (NT$10,000) but not more than New Taiwan Dollar Fifty Thousand (NT$50,000).

Article 173
Any or a plural number of shareholder(s) of a company who has (have) continuously held 3% or more of the total number of outstanding shares for a period of one year or a longer time may, by filing a written proposal setting forth therein the subjects for discussion and the reasons, request the board of directors to call a special meeting of shareholders.
If the board of directors fails to give a notice for convening a special meeting of shareholders within 15 days after the filing of the request under the preceding Paragraph, the proposing shareholder(s) may, after obtaining an approval from the competent authority, convene a special meeting of shareholders on his/their own.
A special meeting of shareholders convened in accordance with the provisions set out in the preceding two Paragraphs may appoint an inspector to examine the business and financial condition of the company.
When the board of directors fails or cannot convene a shareholders?meeting on account of share transfer or any other causes, the shareholder(s) holding 3% or more of the total number of outstanding shares of the company may, after obtaining an approval from the competent authority, convene a shareholders?meeting.

Article 174
Resolutions at a shareholders?meeting shall, unless otherwise provided for in this Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

Article 175
When the number of shareholders present does not constitute the quorum prescribed in the preceding article, but those present represent one-third or more of the total number of issued shares, a tentative resolution may be passed by a majority of those present. A notice of such tentative resolution shall be given to each of the shareholders, and reconvene a Shareholders?meeting within one month. If bearer share certificates have been issued, such tentative resolution shall also be publicly announced.
In the aforesaid meeting of shareholders, if the tentative resolution is again adopted by a majority of those present who represent one-third or more of the total number of issued shares, such tentative resolution shall be deemed to be a resolution under the preceding article.

Article 176
A holder of bearer share certificates shall not attend a meeting of shareholders unless he shall have deposited his share certificates with the company five days before the meeting.

Article 177
A shareholder may appoint a proxy to attend a shareholders?meeting in his/her/its behalf by executing a power of attorney printed by the company stating therein the scope of power authorized to the proxy.
Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted.
A shareholder may only execute one power of attorney and appoint one proxy only, and shall serve such written proxy to the company no later than 5 days prior to the meeting date of the shareholders?meeting. In case two or more written proxies are received from one shareholder, the first one received by the company shall prevail; unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later.
After the service of the power of attorney of a proxy to the company, in case the shareholder issuing the said proxy intends to attend the shareholders?meeting in person, a proxy rescission notice shall be filed with the company at least one day prior to the date of the shareholders?meeting as scheduled in the shareholders?meeting notice so as to rescind the proxy at issue, otherwise, the voting power exercised by the authorized proxy at the meeting shall prevail.

Article 177- 1
The voting power at a shareholders?meeting may be exercised in writing or by way of electronic transmission, provided, however, that the method for exercising the voting power shall be described in the shareholders?meeting notice to be given to the shareholders if the voting power will be exercised in writing or by way of electronic transmission.
A shareholder who exercises his/her/its voting power at a shareholders meeting in writing or by way of electronic transmission as set forth in the preceding Paragraph shall be deemed to have attended the said shareholders?meeting in person, but shall be deemed to have waived his/her/its voting power in respective of any extemporary motion(s) and/or the amendment(s) to the contents of the original proposal(s) at the said shareholders?meeting.

Article 177- 2
In case a shareholder elects to exercise his/her/its voting power in writing or by way of electronic transmission, his/her/its declaration of intention shall be served to the company no later than the fifth day prior to the scheduled meeting date of the shareholders?meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.
In case a shareholder who has exercised his/her/its voting power in writing or by way of electronic transmission intends to attend the shareholders?meeting in person, he/she/it shall, at least one day prior to the meeting date of the scheduled shareholders?meeting and in the same manner previously used in exercising his/her/its voting power, serve a separate declaration of intention to rescind his/her/its previous declaration of intention made in exercising the voting power under the preceding Paragraph II. In the absence of a timely rescission of the previous declaration of intention, the voting power exercised in writing or by way of electronic transmission shall prevail.
In case a shareholder has exercised his/her/its voting power in writing or by way of electronic transmission, and has also authorized a proxy to attend the shareholders?meeting in his/her/its behalf, then the voting power exercised by the authorized proxy for the said shareholder shall prevail.

Article 177- 3
Where a company offering its shares to be public convenes a shareholders?meeting, the company shall prepare a manual for shareholders?meeting proceedings and shall disclose such manual together with other information related to the said shareholders?meeting in a public notice to be published prior to the scheduled meeting date of that shareholders?meeting.
Regulations governing the time and manner for publishing the public notice as required in the preceding Paragraph, the particulars to be contained in the manual for shareholders?meeting, and other governing rules shall be prescribed by the government authority in charge of securities affairs.

Article 178
A shareholder who has a personal interest in the matter under discussion at a meeting, which may impair the interest of the company, shall not vote nor exercise the voting right on behalf of another shareholder.

Article 179
Except in the circumstances set forth in Item 3, Article 157 hereof, a shareholder shall have one voting power in respect of each share in his/her/its possession. The shares shall have no voting power under any of the following circumstances:
1. The share(s) of a company that are held by the issuing company itself in accordance with the laws;
2. The shares of a holding company that are held by its subordinate company, where the total number of voting shares or total shares equity held by the holding company in such a subordinate company represents more than one half of the total number of voting shares or the total shares equity of such a subordinate company; or
3. The shares of a holding company and its subordinate company(ies) that are held by another company, where the total number of the shares or total shares equity of that company held by the holding company and its subordinate company(ies) directly or indirectly represents more than one half of the total number of voting shares or the total share equity of such a company.

Article 180
The shares held by shareholders having no voting right shall not be counted in the total number of issued shares while adopting a resolution at a meeting of shareholders.
In passing a resolution at a shareholders?meeting, shares for which voting right cannot be exercised as provided in Article 178 shall not be counted in the number of votes of shareholders present at the meeting.

Article 181
When the government or a juristic person is a shareholder, its proxy shall not be limited to one person, provided that the voting right that may be exercised shall be calculated on the basis of the total number of voting shares it holds.
In case the aforesaid proxies are two persons or more, they shall exercise their voting right jointly.

Article 182
The provisions of Article 172 shall not apply where a meeting of shareholders resolves to postpone the meeting for not more than, or to reconvene the meeting within, five days.

Article 182- 1
For a shareholders?meeting convened by the board of directors, the chairman of the meeting shall be appointed in accordance with the provisions of Paragraph Three, Article 208 of this Act; where as for a shareholders?meeting convened by any other person having the convening right, he/she shall act as the chairman of that meeting provided, however, that if there are two or more persons having the convening right, the chairman of the meeting shall be elected from among themselves.
A company shall establish the rules governing the proceedings of meetings. During the session of a shareholders?meeting, if the chairman declares the adjournment of the meeting in a manner in violation of such rules governing the proceedings of meetings, a new chairman of the meeting may be elected by a resolution to be adopted by a majority of the voting rights represented by the shareholders attending the said meeting to continue the proceedings of the meeting.

Article 183
Resolutions adopted at a shareholders?meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chairman of the meeting and shall be distributed to all shareholders of the company within twenty (20) days after the close of the meeting.
The preparation and distribution of the minutes of shareholders?meeting as required in the preceding Paragraph may be effected by means of electronic transmission.
With regard to a company offering its shares to the public, the distribution of the minutes of shareholders?meeting as required in the preceding Paragraph to the registered stock shareholders whose shareholding is less than one thousand shares may be effected by means of a public notice.
The minutes of shareholders?meeting shall record the date and place of the meeting, the name of the chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The minutes shall be kept persistently throughout the life of the company.
The attendance list bearing the signatures of shareholders present at the meeting and the powers of attorney of the proxies shall be kept by the company for a minimum period of at least one year.
However, if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 hereof, the minutes of the shareholders?meeting involved shall be kept by the company until the legal proceedings of the foregoing lawsuit have been concluded.
The director authorized to represent the company who violates the provisions of Paragraph I, Paragraph IV or the preceding Paragraph of this Article shall be imposed with a fine of not less than NT$ 10,000 but not more than NT$ 50,000.

Article 184
The shareholders?meeting may examine the statements and books prepared and submitted by the board of directors and the auditing reports submitted by the supervisors, and may decide, by resolution, the surplus earning distribution and deficit off-setting plan.
In order to conduct the examination set forth in the preceding Paragraph, the shareholders?meeting may select and appoint inspectors as required.
Any person who commits any act of impeding, refusing or evading the examination set forth in the preceding two Paragraphs shall be imposed with a fine of not less than NT$ 20,000 but not more than NT$ 100.000.

Article 185
A company shall not do any of the following acts without a resolution adopted by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares:
1. Enter into, amend, or terminate any contract for lease of the company’s business in whole, or for entrusted business, or for regular joint operation with others;
2. Transfer the whole or any essential part of its business or assets; or
3. Accept the transfer of another’s whole business or assets, which has great bearing on the business operation of the company.
For a company which has had its share certificates publicly issued, if the total number of shares represented by the shareholders present at shareholders?meeting is not sufficient to meet the criteria specified in the preceding paragraph, the resolution to be made thereto may be adopted by two-thirds or more of the attending shareholders who represent a majority of the total number of its outstanding shares.
Where stricter criteria for the total number of attending shareholders and for the number of votes required to adopt a resolution at a shareholders?meeting referred to in the preceding two paragraphs are specified in the Articles of Incorporation of the company, such stricter criteria shall govern.
Essential facts of the acts referred to in Paragraph 1 shall be stated in the notice or public announcement to be given under Article 172 hereof.
A proposal for doing any of the acts specified in Paragraph 1 shall be submitted by the Board of Directors by a resolution adopted by a majority vote at a meeting of the Board of Directors attended by over two-thirds of the directors.

Article 186
A shareholder, who has served a notice in writing to the company expressing his intention to object to such an act prior to the adoption of a resolution at a shareholders?meeting in accordance with the provisions of the preceding article, and also has raised his objection at the shareholders?meeting, may request the company to buy back all of his shares at the then prevailing fair price, provided, however, that this shall not apply if, at the time of adopting a resolution under Item 2, Paragraph 1 of the preceding article, the shareholders?meeting also adopts a resolution for dissolution.

Article 187
The request mentioned in the preceding article shall be brought forth in writing within twenty days after the adoption of resolution under Article 185, stating therein the kinds and number of shares.
In case an agreement on the price of shares is reached between the shareholder and the company, the company shall pay for the shares within ninety days from the date on which the resolution was adopted. In case no agreement is reached within sixty days of the date on which the resolution was adopted in accordance with Article 185, the shareholder may, within thirty days from the date on which the sixty-day period expired, apply to court for a ruling on the price.
The company shall pay legal interest on the price ruled by the court from the date of expiration of the period referred to in Paragraph 2.
The payment of price shall be made at the same time against the delivery of share certificates, and the transfer of such shares shall be effective at the time when payment is made.

Article 188
The request of a shareholder as provided in Article 186 shall lose its effect at the time when the company calls off its act as specified in Article 185, paragraph 1.
The same shall apply where a shareholder fails to make request within the period prescribed in Paragraphs 1 and 2 of the preceding article.

Article 189
In case the procedure for convening a shareholders?meeting or the method of adopting resolutions thereat is in contrary to any law, ordinance or the company’s Articles of Incorporation, a shareholder may, within 30 days from the date of adoption of the said resolution, enter a petition in the court for annulment of such resolution.

Article 189- 1
Upon receipt of the petition for annulment of a resolution filed under the preceding Article, if the court considers that the fact of violation described in the said petition is insignificant and will do nothing to the prejudice of the resolution, the court may dismiss such petition.

Article 190
In case a resolution already registered is annulled by an irrevocable judgment of a court, the authority shall annul the registration upon notice by the court or application of an interested party.

Article 191
In case the substance of a resolution adopted at a meeting of shareholders is contrary to law or ordinance or the company’s Articles of Incorporation, the resolution shall be null and void.

Section 4 Directors and Board of Directors

Article 192
The board of directors of a company shall have at least three directors who shall be elected by the shareholders?meeting from among the persons with disposing capacity.
For a company whose shares are issued to the public, if the percentage of shareholdings of all the directors selected in accordance with the preceding Paragraph is subject to the provisions separately prescribed by the competent authority in charge of securities affairs, such provisions shall prevail.
The provisions set out in Article 85 of The Civil Code shall not apply to the disposing capacity set forth in Paragraph I of this Article.
Unless otherwise provided for in this Act, the relations between the company and its directors shall be governed by the provisions of the Civil Code pertaining to the mandate.
The provisions set out in Article 30 hereof shall apply mutatis mutandis to the directors of a company.

Article 192- 1
In case a candidates nomination system is adopted by a company offering its shares to the public for election of the directors of the company, the adoption of such system shall be expressly stipulated in the Articles of Incorporation of the company; and the shareholders shall elect the directors from among the nominees listed in the roster of director candidates.
The company shall, prior to the share transfer suspension date dedicated before the meeting date of a shareholders?meeting, announce in a public notice, the period for accepting the nomination of director candidates, the quota of directors to be elected, the place designated for accepting the roster of director candidates nominated, and other necessary matters. The length of the period for accepting the nomination of director candidates shall not be shorter than ten (10) days.
Any shareholder holding 1% or more of the total number of outstanding shares issued by the company may submit to the company in writing a roster of director candidates, provided that the total number of director candidates so nominated shall not exceed the quota of the directors to be elected. This restrictive condition shall also be applicable to the roster of director candidates nominated by the board of directors of the company.
The roster of director candidates submitted by a shareholder as prescribed in the preceding Paragraph shall be annexed with the name, education background and past work experience of the director candidates, the letter of understanding issued by each director candidate to consent to act as director after he/she/it has been elected as such, a written statement issued by each director candidate assuring that he/she/it is not under any of the circumstances set forth in Article 30 of this Act, and other evidential documents executed and provided by each director candidate. If a director candidate is a juristic person shareholder or its representative, additional information and documents reflecting the basic registration information of the said juristic person shareholder and the document certifying the number of shares of the company in its possession.
The board of directors or other authorized conveners of shareholders?meetings shall examine and/or screen the data and information of each director candidate nominated; and shall, unless under any of the following circumstances, include all qualified director candidates in the final roster of director candidates accordingly:
1. Where the roster of director candidates is submitted by the nominating shareholder beyond the deadline fixed for accepting such candidates roster;
2.Where the number of shares of the company being held by the nominating shareholder is less than 1% of the total number of outstanding shares of the company at the time when the share transfer registration is suspended by the company in accordance with the provisions set out in Paragraph II or Paragraph III, Article 165 of this Act;
3. Where the number of director candidates nominated exceeds the quota of the directors to be elected; or
4. Where the relevant evidential documents required in Paragraph IV of this Article are not submitted along with the roster of director candidates.
The processes of the operation for examining and/or screening the director candidates nominated shall be recorded in writing and such records shall be retained in the file for a period of at least one year, provided, however, that if any shareholder has instituted a lawsuit against the result of directors election, the foregoing records shall be retained in the file until the legal proceedings of the foregoing lawsuit have been concluded.
The company shall, no later than 40 days prior to the scheduled meeting date of a regular shareholders?meeting or no later than 25 days prior to the scheduled meeting date of a special shareholders?meeting, have the roster of director candidates and their education background and past work experience, the number of shares of the company held by them, the name(s) of the government agency or the juristic person shareholder represented by them, and other relevant and essential information published in a public notice; and shall inform the nominating shareholders of the examination /screening results. With regards to the director candidates not included in the list of qualified director candidates, if any, the cause thereof shall also be made known to the nominating shareholders of such disqualified director candidates.
The responsible person of a company who violates the provisions set out in Paragraph II or the preceding two Paragraphs of this Article shall be imposed with a fine of not less than NT$10,000, but not more than NT$50,000.

Article 193
The Board of Directors, in conducting business, shall act in accordance with laws and ordinances, the Articles of Incorporation, and the resolutions adopted at the meetings of shareholders.
Where any resolution adopted by the Board of Directors contravenes the preceding Paragraph, thereby causing loss or damage to the company, all directors taking part in the adoption of such resolution shall be liable to compensate the company for such loss or damage; however, those directors whose disagreement appears on record or is expressed in writing shall be exempted from liability.

Article 194
In case the board of directors decide, by resolution, to commit any act in violation of any law, ordinance or the company’s Articles of Incorporation, any shareholder who has continuously held the shares of the company for a period of one year or longer may request the board of directors to discontinue such act.

Article 195
The term of office of a director shall not exceed three years; but he/she may be eligible for re-election.
In case no election of new directors is effected after expiration of the term of office of existing directors, the term of office of out-going directors shall be extended until the time new directors have been elected and assumed their office. However, the competent authority may, ex officio, order the company to elect new directors within a given time limit; and if no re-election is effected after expiry of the given time limit, the out-going directors shall be discharged ipso facto from such expiration date.

Article 196
The remuneration of directors, if not prescribed in the Articles of Incorporation, shall be determined by a meeting of shareholders and cannot be ratified by a meeting of shareholders.
The provision set forth in Article 29, Paragraph 2 hereof shall apply mutatis mutandis to the directors of a company.

Article 197
Each director shall, after having been elected, declare to the competent authority the number and amount of the shares of the company being held by him/her at the time when he/she is elected.
In case a director of a company whose shares are issued to the public that has transferred, during the term of office as a director, more than one half of the company’s shares being held by him/her at the time he/she is elected, he/she shall, ipso facto, be discharged from the office of director.
If the number of company’s shares held by a director is increased or reduced during his/her term of office as a director, he/she shall declare such change to the competent authority and shall place a public notice of such fact.
After re-election of directors effected prior to the expiration date of the term of office of existing directors, if any new director elect has, before his/her inauguration of the office of director, assigned more than one half of the total number of shares of the company he/she holds at the time of his/her election as such; or had transferred more than one half of the total number of shares he/she held within the share transfer prohibition period fixed prior to the convention of a shareholders?meeting, then his/her election as a director shall become invalid.

Article 197- 1
Upon creation or cancellation of a pledge on the company’s shares held by a shareholder, a notice of such action shall be given to the company, and the company shall, in turn and within 15 days after such pledge creation/ cancellation date, have the change of pledge over such shares reported to the competent authority and declared in a public notice; unless otherwise provided for in any rules or regulations separately prescribed by the authority in charge of securities affairs.

Article 198
Subject to the provisions otherwise provided for in the Articles of Incorporation, in the process of electing directors at a shareholders?meeting, the number of votes exercisable in respect of one share shall be the same as the number of directors to be elected, and the total number of votes per share may be consolidated for election of one candidate or may be split for election of two or more candidates. A candidate to whom the ballots cast represent a prevailing number of votes shall be deemed a director elect.
The provision of Article 178 hereof shall not apply to the voting power referred to in the preceding Paragraph.

Article 199
A director may be discharged at any time by a resolution adopted at a shareholders?meeting provided, however, that if a director is discharged during the term of his/her office as a director without good cause shown, the said director may make a claim against the company for any and all damages sustained by him/her as a result of such discharge.
A resolution required for discharging a director under the preceding Paragraph may be adopted only by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares by the company.
For a company whose shares are issued to the public, if the total number of shares represented by the shareholders present at a
shareholders?meeting is less than the quorum set forth in the preceding Paragraph, the resolution required for discharging a director may be adopted by two-thirds (2/3) of the total votes of the shareholders present at the shareholders?meeting attended by the shareholders representing a majority of the total number of outstanding shares issued by the company.
Where higher requirements of the quorum of a shareholders?meeting and the number of votes are specified in the Articles of Incorporation of a company, such higher requirements shall prevail.

Article 199- 1
Where re-election of all directors is effected, by a resolution adopted by a shareholders?meeting, prior to the expiration of the term of office of existing directors, and in the absence of a resolution that existing directors will not be discharged until the expiry of their present term of office, all existing directors shall be deemed discharged in advance.

Article 200
In case a director has, in the course of performing his/her duties, committed any act resulting in material damages to the company or in serious violation of applicable laws and/or regulations, but not discharged by a resolution of the shareholders?meeting, the shareholder(s) holding 3% or more of the total number of outstanding shares of the company may, within 30 days after that shareholders?meeting, institute a lawsuit in the court for a judgment in respect of such matter.