CHINA Law and Practice Contributed by: Kevin Wang, Global Law Office
4.4 Appointment and Removal of Directors/Officers
appointing and replacing the company’s legal representative. The new revision to Company Law expands the scope of candidacy of legal representatives beyond chairpersons or the CEO, and resolves a potential difficult situation that the legal rep - resentative may not be available for perform - ing duty if no successor to the chair or CEO is available. The new revision also encourages the diversity of members of board of directors. If there is no substantial interest relationship between the registered legal representative and the company, and the legal representative is not involved in any actual business operation, the legal representative can file a deregistration lawsuit. 4.5 Rules/Requirements Concerning Independence of Directors As a general rule of fiduciary duty, directors must act with good faith and independently for the best interests of the company. Regarding the rules or requirements concerning independence of directors, the current regulations about inde - pendent requirements are mainly for the inde - pendent directors. Independent Director Requirements Independent directors of publicly traded com - panies are required to meet the general require - ments for directors as stipulated in the Company Law, as well as the specific qualifications for independent directors under regulatory super - vision rules applicable for publicly traded com - panies. • Persons who work or provide services in the publicly traded company, its controlling shareholders, its actual control persons, or their respective subsidiaries and their related persons, or persons who have significant
The directors who are not representatives of the employees shall be appointed and removed by the shareholder meeting. The employees’ repre - sentatives shall be democratically elected by the employees through the employees’ congress, through the employees’ meeting or in other ways. The method of appointing the chair and vice-chair of the board of directors in a limited liability company shall be stipulated in the arti - cles of association of the company. In practice, the chair and vice-chair can be elect - ed or recommended by the shareholder meeting or the board of directors. The chair and vice- chair of the board of directors in a joint stock limited company are elected by more than half of all the directors on the board of directors. The manager shall be appointed and removed by the board of directors. The appointment and removal of the deputy manager and chief finan - cial officer shall be recommended by the man - ager and decided by the board of directors. Legal Representative For the legal representative, the new revision to Company Law has special provisions. • The legal representative of a company shall be a director or general manager who carries out business on behalf of the company. • If a director or manager who serves as the legal representative resigns, they shall be deemed to have resigned from the legal representative position at the same time. If the legal representative resigns, the company shall appoint a new legal representative within 30 days from the date of resignation. • The articles of association of a limited liabil - ity company shall specify the methods of
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