What are the functions of company guarantee? How to calculate?

The effectiveness of the company's external guarantee: the company's provisions on external guarantee shall be decided by the board of directors or shareholders' meeting according to the company's articles of association; Where the articles of association have limits on the total amount of guarantee or the amount of individual guarantee, they shall not exceed the prescribed limits. However, if the external guarantee amount of a listed company exceeds 30% of the company's total assets, it shall be decided by the shareholders' meeting and approved by more than two thirds of the voting rights held by the shareholders present at the meeting.

legal ground

Article 16 of the Company Law

Where a company invests in other enterprises or provides guarantees for others, it shall be decided by the board of directors or the shareholders' meeting in accordance with the articles of association; Where the articles of association stipulate limits on the total amount of investment or guarantee and the amount of individual investment or guarantee, it shall not exceed the prescribed limits.

Where a company provides a guarantee for the company's shareholders or actual controllers, it must be resolved by the shareholders' meeting or the shareholders' meeting.

Shareholders specified in the preceding paragraph or shareholders controlled by actual controllers specified in the preceding paragraph shall not participate in voting on matters specified in the preceding paragraph. The voting shall be passed by more than half of the voting rights held by other shareholders present at the meeting.