Provisions of the Company on Borrowing from Shareholders

Legal analysis: Whether the company borrows money from shareholders is legal or not depends on whether it conforms to the legal borrowing procedures. If it does not violate the relevant articles of association, it is unanimously recognized and agreed by other shareholders on this basis, and it has passed relevant legal procedures, it will be protected by law, otherwise it will not be protected by law. When a company borrows money from individual shareholders, it first needs to hold a general meeting of shareholders to vote on the loan. Borrowing is the act of bringing debts to the company. According to the Company Law and Articles of Association, it is necessary to convene a shareholders' meeting to vote. The shareholders' meeting of the company shall convene shareholders in accordance with the provisions of the Company Law and the Articles of Association and form a resolution agreeing to borrow money from individual shareholders. If the articles of association clearly stipulate that the company shall not borrow money from individual shareholders, the borrowing behavior is invalid because it violates the articles of association.

Legal basis: Article 115th of the Company Law of People's Republic of China (PRC). The company may not provide loans to directors, supervisors and senior managers directly or through subsidiaries.

Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases

Article 1 The term "private lending" as mentioned in these Provisions refers to the financing behavior between natural persons, legal persons and unincorporated organizations. These provisions shall not apply to financial institutions and their branches engaged in loan business established with the approval of the financial supervision department, as well as disputes arising from loans and other related financial businesses.

Article 9 A loan contract between natural persons may be deemed to be established under any of the following circumstances: (1) If the loan is paid in cash, it shall start when the borrower receives the loan; (2) If the payment is made by bank transfer or online electronic remittance, it shall be counted from the time when the funds reach the borrower's account; (3) If the bill is delivered, it shall be from the date when the borrower obtains the bill right according to law; (4) When the lender authorizes the borrower to control a specific fund account, the borrower obtains actual control over the account; (5) The lender provides the loan in other ways agreed with the borrower and actually performs it.

Article 679 of the Civil Law of People's Republic of China (PRC) stipulates that a loan contract between natural persons shall be established when the lender provides the loan.