Specially used for setting up of Executive Director
Articles of Association
Fuzhou X X X Co., Ltd.
Chapter One General Provisions
Article 1 To regulate the organization and the activities of the company and formulate a self-development and self-discipline mechanism and to protect the legitimate rights and interests of the shareholders and the creditors, this Articles of Association is formulated in the spirit of P.R.C. Company Law and Regulations on Company Registration and administration .
Article 2 Name of the company: Fuzhou X X X X Materials Co., Ltd.
Article 3 Address of the company: Riverside to the back of Gangkou Technical School, Luoxing Tower, Mawei District, Fuzhou City.
Article 4 Legal representative: X X X .
Article 5 Scope of business: wholesale and retail of construction materials, steel, hardware and house appliances (the above scope of business shall be subject to the approval of the industry and commercial administration authority).
Article 6 The Company takes the form of limited liability, wherein the shareholders assume liability towards the company to the extent of their respective capital contributions and the company shall be liable for its debts to the extent of all its assets.
Article 7 The Company shall possess the right to the entire property of the legal person formed by the investments of the shareholders and enjoy the civil rights and bear the civil liabilities in accordance with the law.
Article 8 The Company shall conduct all its business activities within their registered scope of business and, be subjected to the supervision and administration of industry and commerce administration bodies and the tax bureau.
Article 9 The Company shall, with all its legal person assets, operate independently and be responsible for its own profits and losses according to law. The company shall be registered in the industry and commerce body and obtain the qualification of an enterprise legal person. Its lawful rights and interests shall be protected by the laws and regulations of the State.
Chapter Two Registered Capital, Contribution: the Way, Amount and Terms
Article 10 The registered capital of the company is RMB500,000.00 yuan, among which the cash RMB500,000.00, the kinds 0 , non patent technology 0 , industry property right 0 , land use right 0 . .
Article 11 Name of shareholders, name of institution and way of contribution:
(1) Name of shareholder: X X X ; Address: 63 Qi Lane, Yuanshan Rd., Mawei District, Fuzhou City; capital contributed: 300,000, taking up 60% of the total amount;
(2) Name of shareholder X X X , Address: 49 Xichen, Kuai’an Village, Mawei Town, Mawei District, Fuzhou City; capital contributed: 200,000, accounting for 40%;
Article 12 Time limitation of the registered capital:
Each shareholder shall pay up its contribution to the registered capital of the Company in the following terms:
1) Within 5 days from the date on which the Articles of Association is formulated, to contribute all the registered capital.
2) Within years to contribute all the registered capital in installments; the first installment of , accounting for % of the total registered capital, shall be paid within days after the formulation of this Articles of Association; the second installment , accounting for % of the total registered capital, shall be paid before the date ; the third installment , accounting for % of the total registered capital, shall be paid before the date ; and ; the fourth installment , accounting for % of the total registered capital, shall be paid before the date .
Article 13. Delay of contribution constitutes breach of contract and the breaching party shall bear the resulting liabilities.
Article 14 After the company is established, it shall issue a Certificate of Capital Contribution to the shareholders, which is not allowed to circulate and transact in the market.
Chapter Three Shareholders and the Shareholders’ Meeting
Article 15 The shareholders of the Company enjoy the following rights and bear the following responsibilities:
I) The shareholders of the Company enjoy the following rights:
1) to vote in proportion to its contribution of capital;
2) to access to the information of the position and financial status of the company;
3) to elect or to be elected as member of the board of directors, supervisors, or manager;
4) to draw the dividends in proportion to its contribution of capital;
5) to enjoy the priority in purchasing the capital contribution to be assigned by other shareholders;
6) to enjoy the priority in subscription for new shares where the Company increases its registered capital;
7) to share the remaining property or bear the responsibilities from the risks of the Company in proportion to its contribution of capital upon the termination of the Company;
8) to participate in the formulation and amending the Articles of Association, and
9) other rights provided by the Articles of Association.
II) The shareholders of the Company bear the following liabilities:
1) to observe the Articles of Association;
2) to pay up its contribution of capital in time;
3) to bear the responsibilities of the Company to the extent of its contribution of capital to the company;
4) not to withdraw the capital contributions once the company is registered.
Article 16 The shareholders’ meeting is composed of all the shareholders and is the organ of power of the company.
It shall exercise the following functions and powers:
1) to decide on the operation policy and investment plan of the Company;
2) to elect and remove members of the executive director and to decide on matters concerning the remuneration of the person;
3) to elect or replace the supervisors who are representatives of the shareholders and to decide upon matters concerning the remuneration of the supervisors;
4) to examine and approve the reports of the directors or the supervisors;
5) to examine and approve the annual financial budget plan, final accounts plan;
6) to adopt resolutions on the increase or reduction of the registered capital of the company and on the assignment of capital contribution to a party other than shareholder of the company;
7) to adopt resolutions on matters such as the merger, division, transformation, dissolution, termination and liquidation of the company;
8) to amend the Articles of Association of the company.
Article 17 The first shareholders; general meeting is to be presided by the shareholder with the largest contribution; the regular and interim meetings shall be presided over by the executive director. Where special circumstances preclude the executive director from performing his function, the meeting shall be presided over by shareholder designated by the chairman.
The shareholders shall exercise the right to vote in proportion to their contribution.
Article 18 Resolution(s) of the shareholders’ meeting regarding the increase or decrease of registered capital, division, merger, dismissal or change of company forms, amendment of it shall be adopted by shareholders of the company representing two-thirds or more of the voting rights.
Chapter Four Executive Director and the General Manager
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Article 19 The Company shall have an executive director, who shall be responsible to the shareholders’ meeting.
Article 20 The executive director exercises the following functions and powers:
1) to be responsible for convening shareholders’ meetings and to report its work to the shareholders’ meetings;
2) to implement the resolutions of the shareholders’ meetings and decide on the business strategy and development plan and the formation of the administration of the company;
3) to decide on the establishment of the company’s internal management organs;
4) to formulate the annual financial budget plan and final accounts plan of the company and plans for profit distribution and plans for making up losses of the company;
5) to formulate plans for the increase or reduction of the registered capital of the company and plans for major issues such as the merger, division, termination and liquidation of the company;
6) to decide on the establishment of the company’s internal management organs;
7) to appoint or dismiss the company’s general manager and other high ranking officers of the company and decide their numeration;
8) to formulate the basic administration system of the company.
Article 21 The executive director of the company shall be elected with over half of the vote of the whole shareholders, which shall also be the conditions for removal.
Article 22 The shareholders’ meeting have elected the executive director X X X as the legal representative of the company, who shall represent the company to exercise the right of signing the legal documents. The legal entity shall bear the liability of the representative’s activities in the name of the company.
Article 23 The Company shall have a General Manager, who is appointed by the shareholders’ meeting (or to be served by the executive director concurrently). The General Manager will be responsible for the daily operation and management of the company and exercise the following functions and powers:
1) to be in charge of the daily operation and management of the company and to organize the implementation of resolutions of the directors’ meeting;
2) to organize the implementation of the company's annual business plan and investment plan;
3) to propose plans for the putting in place of the company's internal management structure; basic management system; and to formulate specific rules and regulations for the company;
4) to propose the appointment or dismissal of the company's deputy manager(s), financial officers and department managers and management officers other than those required to be appointed or dismissed by the executive director;
5) other powers conferred by the company's articles of association.
Article 24 The Company shall have one supervisor, which shall be taken up by X X X The term of office of the supervisor is three years. At the end of a supervisor's term, the supervisor may serve another term, if reelected
The supervisor exercises the following powers:
(1) to inspect the company's financial situation;
(2) to exercise supervision over the acts of the executive director and manager carried out while performing their corporate functions;
(3) to demand remedies from the director or manager when the acts of such director or manager are harmful to the company's interests;
(4) to propose the convening of an interim shareholders' meeting;
(5) other powers conferred by the company's articles of association
Article 25 The directors, supervisors and the manager of the company shall not use their positions, functions and powers in the company to seek personal gains. If there any violation, the concerning person shall bear the civil responsibilities according to the Company Law.
Chapter Five Financial, Accounting and Employment & Wage System
Article 26 The Company shall formulate the financial and accounting system in accordance with the governing laws, regulations and rules of the competent financial authorities and submit the reports and statements to the governing departments.
Article 27 The fiscal year of the company is the Christian year, which begins from January 1st and ends on the 31st of December.
Article 28 The financial department of the Company shall make the balance sheet and the profits and losses statement for the financial year within the first month of the next year. The statements shall be audited by the certified public accountant and be approved by the shareholders’ meeting.
Article 29 The Company may employ and dismiss staff members and decide upon their salaries as demanded by the operation and production of the company in accordance with the rules of the labor and personnel administration department.
Article 30 According to the national regulations concerned the company is entitled to take administrative disciplinary measures against, dismiss or even expel those personnel involved in breach of discipline. All is to be carried out according to the articles included in the worker-recruiting contract when the workers are dismissed or resign voluntarily.
It is temporarily fixed that the number of staff members in the company is eight, which is to be increased or cut down in the light of the business situation after start of business.
Chapter Six Rights and Obligations of the Staff
Article 31 The Company shall protect the staff’s legitimate rights, strengthen the efforts to ensure labor and production safety in conformity with legal provisions.
Article 32 The Company shall organize basic labor union in accordance with the law so as to protect the workers’ legitimate rights and interests.
Article 33 According to the laws and regulations, the staffs enjoy the following rights in this company:
1. to participate in democratic management and supervise the activities of the company as well as the work of the management.
2. to take part in work and enjoy pay, labor protection, labor insurance, medical insurance and holidays.
3. to resign
Article 34 Obligations of the staff:
1. to abide by national laws, observe the rules, regulations and working disciplines of the company, and safeguard the interests of the company.
2. to study the political, cultural and scientific knowledge so as to have their quality promoted.
Article 35 Establishment of the system of workers and staff congress. Workers and staff congress is to be held regularly, no less than twice each year. The legal representative should report to the workers and staff congress the performance of the company and discuss with the congress upon the opinions respecting the democratic management of the company.
Article 36 The public welfare fund drawn by the company shall be utilized to promote the collective well being of the staff. The management of the employees’ pay, welfare, insurance and other financial affairs shall be conducted in the light of the laws and administrative regulations concerned.
Chapter Seven Distribution of Profits
Article 37 To ensure the development of the company and safeguard the rights and interests of the shareholders, 10% of the profits after deduction of tax involved is to be set aside as the statutory common reserve fund of the company, and 5%-10% of the profits as the statutory common welfare fund.
Article 38 When the aggregate balance in the statutory common reserve fund adds up to fifty per cent or more of the registered capital of the company, the company need not make any further allocations to that fund. If the statutory common reserve fund is not enough to offset the deficit of previous years, the profits should first be used to make up the loss before the former two funds are drawn in conformity with the previous article.
The profit for distribution is to be allocated according to the proportion of the shares.
Chapter Eight Transfer of Contributed Capital, Modification of the Registered Capital, Merger and Division
Article 39. Shareholders may transfer among themselves all or part of their capital contributions.
Where a shareholder transfers its capital contribution to a person other than a shareholder, the consent of more than half of all shareholders shall be required. A shareholder objecting to such transfer shall purchase the capital contribution to be transferred and such shareholder is deemed to have agreed to the transfer if he does not purchase the capital contribution.
For a transfer of capital contribution which is transferred with the consent of the shareholders, other shareholders have a pre-emptive right to purchase it on the same conditions.
Article 40 If the company is to increase the registered capital the shareholders have the privilege to subscribe the increased registered capital. If the company is to decrease of the registered capital, the creditors shall be informed within ten days from the day of the resolution; the decrease shall be announced at least three times on the newspapers within thirty days from the day of the resolution.
Article 41 For the merger or division of the company, the creditors of the company shall be informed of the same within ten days from the day of the resolution; the merger or division shall be announced at least three times on the newspapers within thirty days from the day of the resolution.
Chapter Nine Time Limit, Termination and Liquidation
Article 42 The date on which the license of the company is issued is the date of foundation of the company. The operation term of the company is 20 years, from the date of issuance by the company registration authority.
Article 43 The operation of the company is to be terminated and the liquidation should be carried out under one of the following situations:
1) The company is announced to go bankruptcy;
2) The company is ordered according to law to close down
3) The term of operation expiration or other circumstances arise resulting in the dissolution of the company as stipulated in the Articles of Association;
4) A resolution for dissolution is passed by a shareholders' meeting; and
5) The company is dissolved owing to merger or division
Article 44 A liquidation committee shall be set up by the shareholders within fifteen days after the termination of the company. The committee shall carry out the work in accordance with the liquidation regulations and relevant procedures stipulated by the national departments concerned.
Article 45 After the liquidation is completed, the company shall submit the original documents and instruments to the registration authority with respect to completion of clearing up debts and creditor’s rights, and apply for canceling of registration. The company shall be terminated after examination and approval by the original registration body.
Chapter Ten Modification of the Articles of Association
Article 46 The articles of association can be modified in accordance with the need of the company. The modification should be adopted at the shareholders’ meeting with the agreement of more than two thirds of the voting rights. The resolution of the meeting becomes effective only when examined and approved by the registration department.
Article 47 The regulations are to be modified under any of the following situations:
1) the change of company name, the address or the legal representative of the company;
2) the change of the business scope and/or operation form of the company;
3) the increase or decrease of the registered capital;
4) the changes of shareholder’s name, way of contribution and amount of contribution;
5) the changes of shareholder’s rights and duties
6) the changes of conditions for shareholder to transfer its contribution
7) the changes of in formation of the company’s organization, power and rules for resolution making;
8) other changes stipulated in the articles of association.
Chapter Eleven Supplementary Articles
Article 48 The Articles of Association has equal binding force on the company, the shareholders, the directors, the supervisors and the managers. The resolutions and rules agreed upon by the shareholders’ meeting are taken as components of the articles of association and therefore have equal effects.
Article 49 The Articles of Association shall not be effective until they are adopted by the shareholders’ meeting and examined and approved by the registration department (or the verification department). The same procedures shall be undertaken for the modification.
Article 50 As for the matters not included in these regulations, they are to be dealt with in the light of the laws and regulations concerned.
Article 51 The Articles of Association is made in two original copies and several duplicated copies. One original is to be submitted to the registration authority, the other is to be kept for file of the company, and several duplicated copies are to be sent to the departments concerned in handling of formalities. All the copies have the equal effects.
Signatures (seals) of all the shareholders:
Fuzhou X X X X Co., Ltd.(Sealed)
Date:
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