MACAU SAR, CHINA Law and Practice Contributed by: João Nuno Riquito, Bruno Almeida, Belmiro Leong and Kimberley Cheong, Riquito Advogados
until the following annual general meeting. The chair of the supervisory board (when applicable) must be designated by the shareholders as well. Shareholders may not take the duty of the single supervisor, but may be elected as members of the supervisory board, provided that there is still a place left for an auditor or audit firm (or respective repre- sentative). The shareholders are only entitled to terminate the single supervisor or the members of the supervisory board with cause and subject to prior hearing (Article 241, paragraph 6).
• they induce a director, manager, attorney, member of a supervisory board or secretary to practise an unlawful act; • they enter into contracts with a company they dominate in favourable and discriminatory condi- tions, to their own benefit or to the benefit of a third party, either by themselves or by inducing the directors of the company to do so; or • they pursue the approval of resolutions with the purpose of obtaining an advantage, for themselves or for a third party, to the detriment of the compa- ny, the other shareholders or the creditors thereof. Shareholders who intentionally compete with their votes for the approval of resolutions with the purpose of obtaining an advantage are jointly liable alongside the dominant shareholder for the damage caused, whilst the directors, managers, members of the super- visory board or secretary who contribute to the situa- tions mentioned in the second and third points above are liable to the company and minority shareholders under the same terms as the dominant shareholder (Section 212, paragraphs 4 and 5). 9. Insolvency 9.1 Rights of Shareholders If the Company Is Insolvent At the end of the financial year, if the directors find that the company’s net asset value (NAV) is lower than half of the nominal value of the registered share capital, the directors shall call the matter to the attention of the shareholders and propose the winding-up of the com- pany or the reduction of its respective share capital, unless the shareholders pay an amount necessary to reinstate the company’s NAV up to the nominal value of its registered share capital (such payment must occur within 60 days from the resolution being passed by the shareholders on the directors’ proposal). As a general rule, the matter shall be discussed and sub- jected to a vote in the annual general meeting. If the directors do not act in the manner so prescribed, or if the shareholders do not pass either of the resolu- tions above, any shareholder or creditor may request the winding-up of the company at court during any time the capital situation persists. However, the share-
7. Corporate Governance Arrangements 7.1 Duty to Report
At the end of each company’s financial year, and before the annual general meeting, directors have to provide a report to the shareholders on the company’s corporate governance arrangements and accounts of the year (Section 254). This report is subject to the analysis and comment of the supervisory board of the company (Section 256), and to discussion and resolu- tion by the shareholders (Section 216, paragraph b).
8. Controlling Company 8.1 Duties of a Controlling Company
As the dominant shareholder, the controlling share- holder of a company has no special duties and lia- bilities to the minority shareholders. If the controlling shareholder abuses its controlling power, it may incur responsibility for compensating any loss caused to the company and shareholders (Section 212). Pursuant to Section 212, paragraphs 2 and 3, the controlling shareholder may have to compensate the company and the minority shareholders when: • they elect a director or member of a supervisory board despite knowing that the individual is mor- ally or technically incapable of complying with the duties;
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