MACAU SAR, CHINA Law and Practice Contributed by: João Nuno Riquito, Nelson de Azevedo, Belmiro Leong and Kimberley Cheong, Riquito Advogados
duties, provided such liabilities were not caused by voluntary misconduct or gross negligence. 3.10 Payments to Directors/Officers Unless the articles of association specify a fixed amount or a specific calculation formula, the remu - neration of directors must be determined by a reso - lution at a general meeting of shareholders (Article 387, paragraph 1 of the MCC; and Article 459, para - graph 2). All remuneration must be reported to the tax authority for professional tax purposes. Payments made without proper shareholder resolution may be deemed null and void, and the company can demand a full refund of the unauthorised earnings. Directors who approve or receive excessive or unau - thorised remuneration may be liable for damages to the company for breach of their duty of diligence and loyalty, apart from criminal liability. Shareholders fulfill - ing legal threshold may initiate a civil claim to recover misspent corporate funds if the company fails to act. Details of remuneration and benefits must be dis - closed to shareholders during the annual general meeting as part of the annual report or financial state - ments. Companies in which the Macau government is a shareholder are subject to stricter regulations and must disclose more detailed operational and financial data to the public. Please refer to 1.2 Corporate Gov- ernance Legislation and Regulation . The MCC governs the relationship between a compa - ny and its shareholders. The company is an independ - ent legal entity that is separate from the identity of its shareholders. The fundamental obligation of a share - holder is to contribute capital to the company, while they also have the right to share in the company’s dividends. Shareholders exercise their rights by par - ticipating in the general meeting, where they decide on major corporate matters such as amending the articles of association, approving annual reports and appointing directors. Regarding shareholder rights, it is essential to note that the company has a legal obli - 4. Shareholders 4.1 Companies and Shareholders
gation to treat all shareholders equally. Please refer to 3.6 Legal Duties of Directors/Officers . The general public can access company records, depending on the type of company. • Limited liability companies by quotas: Anyone can apply for a company search at the Commercial and Movable Property Registry to view the most up-to- date list of shareholders and check their names, addresses and the specific amount of capital (quo - tas) held by each shareholder (Article 69 of Com - mercial Registration Code). • Limited liability companies by shares: Except for the founding shareholders at the time of incorpo - ration, subsequent changes in shareholding are generally not disclosed to the public. The identi - ties of shareholders are recorded in the company’s internal “Share Register”, and the public cannot access details regarding these subsequent share - holders through the official registry. 4.2 Role of Shareholders Generally, the MCC follows the principle of separation of ownership and management. The board of directors is responsible for daily operations, while shareholders exercise authority through resolutions. However, the involvement of shareholders in a company’s manage - ment is possible, depending on the legal type of the company. • Mandatory resolutions: For matters that fall under the exclusive competence of the shareholders by law, such as amending the articles of association, capital increases, mergers, dissolution or approval of annual accounts, shareholder resolutions are binding. Management must execute these resolu - tions taken by general meeting; otherwise, the actions lack legal validity. • Limited companies by quotas: Shareholders exert stronger control over management. The law allows the general meeting to issue specific instructions to the directors, though directors must still adhere to their duties of acting as reasonable businesspeo - ple. • Limited companies by shares: Unless invited by the board of directors, the general meeting can - not issue specific directives to the board regarding
453 CHAMBERS.COM
Powered by FlippingBook