Chinese Limited Liability Companies Under the New Company Law

On 1 January 2006 the amended Company Law of the People's Republic of China came into effect. The Law contains many provisions on limited liability companies which are substantially different from their Hong Kong counterparts. They include: setting company policies by shareholders, inspection of board decisions by shareholders, disregarding majority shareholders' views in shareholders' meetings, directors elected by staff, passing resolutions without a majority vote in supervisory boards and overriding shareholders' wills by articles of association. This paper was prepared after having reviewed 50 recently published works on the new Law. They were obtained from leading book stores in Beijing, Shanghai, Guangzhou and Shenzhen. It will be seen that all these works fail to address the operational mechanisms of the above special features. This paper aims at discussing these unexplored issues and making suggestions where appropriate