(Draft for Comment)
Paragraph 1 of Article 142 is amended as: A company may purchase its shares under any of the following circumstances:
(1) Reduce the registered capital of the company.
(2) Merging with other companies holding shares of the Company;
(3) Used for employee stock ownership plan or equity incentive;
(4) Shareholders request the company to purchase their shares because they disagree with the resolution of merger or division made by the shareholders' meeting.
(5) Listed companies are used for equity conversion to cooperate with the issuance of convertible corporate bonds and warrants;
(6) The need for listed companies to safeguard their own credit and shareholders' rights and interests;
(seven) other circumstances stipulated by laws and administrative regulations.
The company's acquisition of shares of the company under the circumstances mentioned in Items (1) and (2) of the preceding paragraph shall be decided by the shareholders' meeting. Where a company purchases its shares under the circumstances specified in Item (3), Item (5) and Item (6) of the preceding paragraph, it may purchase no more than 10% of the total issued shares of the company in accordance with the provisions of the Articles of Association or the authorization of the general meeting of shareholders, provided that more than two thirds of the directors of the board of directors are present and more than half of all directors agree.
After the company purchases its shares in accordance with the provisions of the first paragraph, if it falls into the circumstances of the first paragraph, it shall cancel it within 10 days from the date of acquisition; In case of items (2) and (4), it shall be transferred or cancelled within six months; In the case of items (3), (5) and (6), the shares may be transferred, cancelled or held in the form of shares, and the holding period shall not exceed three years.
A company may not accept its own shares as the object of pledge.
This decision shall come into force as of.
The Company Law of People's Republic of China (PRC) is revised and re-promulgated according to this decision.
Legal basis: Company Law of People's Republic of China (PRC) Article 1 This Law is formulated for the purpose of regulating the organization and behavior of companies, protecting the legitimate rights and interests of companies, shareholders and creditors, maintaining social and economic order and promoting the development of socialist market economy.