1. Shareholders’ Voting Rights Suzie

2. Facts  Company A （ 2 million ）  B （ Director, Legal Rep ） Company C  （ 0.9 million ） （ 1.1 million ）

3. Facts  Company A’s Shareholder meeting:  Include D as a new shareholder with 8 million  Increase registered capital from 2 million to 10 million and the new  Capital subscribed by previous shareholders remain unchanged  Amend articles of association which is agreed by all shareholders

4. Facts  Resolution signed by D and B  E, the previous Legal Representative of Company C, singed the resolution with company’s seal. （ without his own signature because he was no longer the Legal Rep ）

5. Facts  Business registration authority confirmed the changes.   Company A （ 10 Million ）  B （ 0.9 M ） Company C （ 1.1 M ） D （ 8 M ）

6. Cause of action  Company C sues for resolution null and void by the reason that  E can not vote on behalf of Company C.  Company C actually weren’t present at the shareholders meeting and therefore didn’t vote.  The resolution failed to be reached by 2 thirds of the shareholders, which violates corporation law.

7. Legal Points  Signature requirement when shareholder is a company  Voting procedure and requirement in this case  Validity of shareholder meeting resolution when it is in violation of corporation law

8. Legal Points  Legal status of Legal Rep  General principles of the civil law of People’s Republic of China Article 38 ：  “In accordance with the law or the articles of association of the legal person, the responsible person who acts on behalf of the legal person in exercising its functions and powers shall be its legal representative ”  Signature requirement when voting on behalf of the company  Signature of the Legal Rep  Company seal

9. Legal Points  Voting procedure and requirement  Art 43 :The voting rights exercisable by shareholders at a shareholders’ meeting shall be based on the ratio of capital contribution, unless otherwise provided in the articles of association of the company.  Art 44 :Resolutions passed by a shareholders’ meeting on amendment to the articles of association of the company, increase or reduction of registered capital, and company merger, division, dissolution or change of company structure shall be passed by shareholders holding two-thirds or more of the voting rights.

10. Legal Points  Validity of shareholder meeting resolution:  Art 22:  A resolution passed by the shareholders’ meeting or a shareholders’ meeting or the board of directors which violates the provisions of laws and administrative regulations shall be void.

11. Legal Points  Validity of shareholder meeting resolution:  Art 22:  Where the convening procedures and voting method of a meeting of the shareholders’ meeting or board of directors or a shareholders’ meeting violates the provisions of laws and administrative regulations or the articles of association of the company or the contents of the resolution violate the articles of association of the company, the shareholders may apply to a people’s court within 60 days from the date of resolution for rescission of the resolution.

12. Interpretation of Art 22  Void: content violates law and administrative provisions  Regulatory Provision  （管理性规范）  Mandatory  （强制性规范）  Validity Provision  （效力性规范）  Void When in Violation

13. Interpretation of Art 22  Judicial Support of this interpretation  Interpretation of certain issues concerning the application of the contract law  Art 14: mandatory provision stipulated in Art 52 refers to validity provision.  《合同法》解释二  第十四条 : 《合同法》第五十二条第（五）项规 定的 “ 强制性规定 ” ，是指效力性强制性规定。

14. Interpretation of Art 22  Revocable  convening procedures and voting method violates the provisions of laws and administrative regulations or AOA  contents of the resolution violate AOA  Initiation  Shareholder suit

15. Attributive Character Corp Law Provisions  How to figure out mandatory provisions from voluntary provisions?  强制性规范与任意性规范的区分  How to figure out regulatory provisions from validity provisions?  强制性规范中管理性规范与效力性规范的 区分

16. Issues unsettled..  Liabilities of Business Registration Authority  Who can sue it?  What kind of procedures should be adopted?