〖上接中华人民共和国公司法(3)〗

Article 173

    A company which issues corporate bonds convertibleinto  shares  shall

issue share certificates tobondholders in accordance with its conversion

procedures, provided that thebondholder has the option whether or not  to

convert.

    Chapter 6 Financial Affairs and Accounting of ACompany

Article 174

    A company  shall  establish  its financial  and  accounting  systems

according to laws,administrative regulations and the regulations  of  the

responsible finance departmentof the State Council.

Article 175

    At the end of each fiscal year, the company shallprepare a  financial

statement which shall beexamined and verified as provided by law.

    The  company's  financial  statements shall  include  the  following

accounting statements andschedules:

    (1) balance sheet;

    (2) profit and loss statement;

    (3) statement of financial changes;

   (4) explanation of financial condition; and

    (5) profit distribution statement.

Article 176

    A limited liability company shall present itsfinancial statements  to

the shareholders in accordancewith the  time periods  specified  in  the

company's articles ofassociation.

    A company limited by shares shall deposit itsfinancial statements  at

the company for inspection bythe shareholders at least twenty days before

the convening of the annualgeneral meeting of shareholders.

    A company limited by shares established by the offermethod shall make

public its financialstatements.

Article 177

    When distributing each year's after-tax profits, thecompany shall set

aside ten per cent of itsafter-tax profits for  the company's  statutory

common reserve fund and five percent to ten per cent of its profits  for

the company's statutory commonwelfare fund. When the aggregate balance in

the statutory common reservefund  is  fifty per  cent  or  more of  the

registered capital of thecompany, the company need not make any  further

allocations to thatfund.

    When the company's statutory common reserve fund isnot sufficient  to

make up for thecompany's  losses of  the  previous  year, current  year

profits shall be used to make upfor the losses before allocations are set

aside for thestatutory  common reserve  fund  or  the statutory  common

welfare fund in accordance withthe previous clause.

    Subject to a resolution  of  the  shareholders'  meeting,   after  the

company has set asidefunds  from after-tax  profits  for  the statutory

common reserve fund, the companymay set aside funds for a  discretionary

common reserve fund.

    After the company has made up its losses and madeallocations  to its

common reserve fundand  statutory  common welfare  fund,  the  remaining

profits  are  distributed  in  proportion  to the  shareholders'  capital

contributions if the  company  is a  limited  liability  company and  in

proportion to the number ofshares held by the shareholders if the company

is a company limited byshares.

    If a shareholders meeting or the board of directorsviolates the above

provisions and profits aredistributed  to the  shareholders  before  the

company makes up for losses ormakes allocations to the statutory  common

fund  and  the statutory  common  reserve  welfare fund,   the   profits

distributed inviolation  of the  provisions  must  be returned  to  the

company.

Article 178

    In accordance with this Law, the premium a companylimited  by shares

obtains when it issues shares ata price which exceeds par value, and  any

other incomedesignated  for the  capital  common  reserve fund  by  the

regulations of the responsiblefinance department  of the  State  Council

shall be allocated to thecompany's capital common reserve fund.

Article 179

    The common reserve fund of a company is used tomake  up  its losses,

expand its production andoperations or  for conversion  into  additional

capital of thecompany.

    When the common reserve fund  of a  company  limited  by shares  is

converted to capital inaccordance with a resolution passed at  a  general

meeting of theshareholders,  the company either distributes new shares in

proportion to the shareholders,number of shares,  or increases  the  par

value of each share, provided,however, that  when the  statutory  common

reserve fund is converted tocapital, the balance of the statutory  common

reserve fund may not fallbelow  twenty-five  percent  of  the registered

capital.

Article 180

    The company's statutory common welfare fund is usedfor the collective

welfare of the company's staffand workers.

Article 181

    A company shall not keep accounting books and recordsother than those

provided by law.

    The company's assets shall not be held inan  account  opened in  the

name of anyindividual.

    Chapter 7 Merger and Division of A Company

Article 182

    A resolution to effect the merger and division of acompany  shall be

passed at a meeting of theshareholders.

Article 183

    The merger and division of  a  company limited  by  shares  shall be

approved by the authorizeddepartment of  the State  Council  or  by the

provincial government.

Article 184

    The merger of a  company  may  take the  form  of  either merger  by

absorption or merger by theestablishment of a new company.

    Where one company is absorbed by another ina  merger  by absorption,

the absorbed company isdissolved. Where two or more companies establish a

new company in a  merger  by re-establishment,  all  merged  parties are

dissolved.

    In the event of a merger, the merging parties shallexecute  a merger

agreement and prepare a balancesheet and an inventory  of property.  The

company shall notify itscreditors within ten days of  the  date  of the

company's resolution tomerge  and shall  publish  public  notices in  a

newspaper at least three timeswithin thirty  days of  the  date  of the

company's resolution to merge. Acreditor has the right within thirty days

of receiving such notice fromthe company (or, for creditors who  do  not

receive the notice, withinninety days of the date of  the  first  public

notice) to demand that thecompany repay its debts to  that  creditor  or

provide a correspondingguarantee for such debt. A company which does  not

repay its debts or providecorresponding guarantees for such debts  shall

not be merged.

    At the time of merger, the creditors' rights andindebtedness of  each

of the merged parties shall beassumed by the company which survives  the

merger or the newly establishedcompany.

Article 185

    When a company is divided, its property shall be splitup accordingly.

    At the time a company is divided, the company shallprepare a  balance

sheet and an inventory ofproperty. The company shall notify its creditors

within ten days of the date ofthe  company's  resolution to  divide  and

shall publish public notices ina newspaper at least  three times  within

thirty days of the date of thecompany's resolution to divide. A creditor

has the right within thirty daysof receiving such notice from the company

(or, for creditors who do notreceive the notice, within ninety  days  of

the date of the first publicnotice) to demand that the company repay  its

debts to that creditor orprovide a corresponding guarantee for such debt.

A company  which  does not  repay  its  debts or  provide  corresponding

guarantees for such debts shallnot be divided.

    Debts  of  the  company prior  to  division  are assumed   by   the

post-division companies inaccordance with the  agreements entered  into.

Article 186

    When a company needs to reduce its registered capital,it  prepares  a

balance sheet and an inventoryof property.

    The company shall notify its creditors within ten daysof the date  of

the company'sresolution  to reduce  its  registered  capital and  shall

publish public notices in anewspaper at least three times within  thirty

days of the date of thecompany's  resolution to  reduce  its  registered

capital. A creditor has theright within thirty  days of  receiving  such

notice from the company (or, forcreditors  who do  not  receive  notice,

within ninety days of the dateof the first public notice) to demand  that

the company repay its debts tothat creditor or  provide a  corresponding

guarantee for suchdebt.

    The registered capital of a company followingsuch  capital  reduction

shall not be less than theminimum levels set by law.

Article 187

    When a limited liability company increases itsregistered capital, the

shareholders' subscription andpayment  of contributions  for  the newly

increased  capital  are carried  out  in  accordance with  the  relevant

provisions of this Law governingpayment of capital contributions for  the

establishment of a limitedliability company.

    When a company limited  by  shares  issues new  shares  in  order to

increase  its  registered capital,  the  process  by which  shareholders

subscribe for new shares shallbe  carried  out in  accordance  with  the

relevant provisions of thisLaw  governing  payment for  shares  for  the

establishment of a companylimited by shares.

Article 188

    When a company merges or divides and there is a changein any item  in

its registration, thecompany  shall change  its  registration  with the

company registration authorityin accordance with the law. When a company

dissolves, the company shallcancel its registration in  accordance  with

the law. When a new company inestablished,  its establishment  shall  be

registered in accordance withthe law.

    When a company increases or  decreases  its registered  capital,  the

company shall  carry  out a  change  of  registration  with  the  company

registrationauthority.

    Chapter 8 Insolvency, Dissolution and Liquidation of ACompany

Article 189

    In the case of a company  legally  declared  bankrupt because  it  is

unable to repay debtsdue,  the people's court shall, in accordance  with

the provisions of  relevant  laws, organize  the  shareholders,  relevant

organizations  and  relevant professional  personnel   to  establish   a

liquidation group tocarry  out bankruptcy  liquidation  procedures  with

respect to thecompany.

Article 190

    A company may dissolve in any of the followingsituations:

    (1)  pursuant  to  the provisions  of  the  company's articles   of

association, the term of thecompany has  expired or  one  of  the other

events which are grounds fordissolution has occurred;

    (2) a resolution for dissolution is passed by ashareholders' meeting;

and

    (3) dissolution is necessary due  to  a merger  or  division  of the

company.

Article 191

    A liquidation group shall be set up within fifteendays of  a company

being dissolvedpursuant  to provisions  (1)  or  (2) of  the  preceding

article. The liquidation groupof a limited liability company is made  up

of its shareholders. Thecomposition of the liquidation group of a company

limited by shares is determinedby a general meeting of the shareholders.

If a liquidation group to carryout liquidation procedures is not set  up

within the specified time limit,the creditors may apply to the  people's

court to have it designaterelevant persons to form a liquidation group in

order to carry out liquidationprocedures. The people's court shall accept

and hear such  applications  and timely  designate  the  members of  the

liquidation group in order tocarry out liquidation procedures.

Article 192

    A company which  is  ordered  according to  law  to  close down  for

violating laws andadministrative regulations shall be dissolved, and  the

relevant responsible authorityshall organize the  shareholders,  relevant

institutions and professionalpersonnel to establish a liquidation  group

to carry out liquidationprocedures.

Article 193

    During the liquidation period, theliquidation  group shall  exercise

the following powers:

    (1) to check the company's property and separatelyprepare  a balance

sheet and an inventory ofproperty;

    (2) to send notices to creditors or notify them bypublic notice;

    (3) to deal with and liquidate relevantuncompleted  business matters

of the company;

    (4) to pay off outstanding taxes;

    (5) to clear creditors' rights andindebtedness;

    (6) to deal with the property remaining after thecompany's debts have

been repaid; and

    (7) to represent the company  in  any civil  litigation  proceedings.

Article 194

    The liquidation group shall, within ten  days  of its  establishment,

send notices to creditors, andwithin  sixty days  of  its  establishment

publish public notices in anewspaper at least  three times.  A  creditor

shall, within thirtydays  of  receiving notice,  report  its  creditors'

rights to the liquidation group,or  for  creditors who  do  not  receive

notice, within ninety days ofthe date of the first public notice.

    When reporting creditors'  rights,  the creditor  shall  provide  and

explanation of matters relevantto the creditor's rights and shall provide

evidentiary materials. Theliquidation group shall carry out registration

of creditors' rights.

Article 195

    After checking the company's property andpreparing  a balance  sheet

and an inventory of property,the  liquidation  group shall  formulate  a

liquidation plan and present itto a meeting of the shareholders or to the

relevant responsible authorityfor confirmation.

    To the extent that the company is able to repayits  debts,  it shall

respectively pay all liquidationexpenses,  wages of staff  and  workers,

labour insurance fees andtaxes  owing, and  shall  repay  the company's

debts.

    The assets of the company remaining after its debtshave  been  repaid

in accordance with theprovisions of the previous clause are  distributed

in proportion to theshareholders capital contributions if the company  is

a limited liability company andin proportion to the number of shares held

by the shareholders if thecompany is a company limited by shares.

    During the liquidation period, a company shallnot  commence  any new

operational  activities.  The property  of  the  company shall  not   be

distributed to the shareholdersuntil the settlement provided for in  the

second paragraph of this articleis complete.

Article 196

    After putting the company's property in order andpreparing a  balance

sheet and an inventory ofproperty in connection with liquidation  of  the

company resulting fromdissolution, the liquidation group discovers  that

the company's assets areinsufficient to repay the company's  debts,  the

liquidation group shallimmediately apply to  the people's  court  for  a

bankruptcydeclaration.

    After a company is declared bankrupt  by  a ruling  of  the  people's

court, the liquidation groupshall transfer  liquidation  matters  to  the

people's court.

Article 197

    After liquidation of the company is completed,the  liquidation  group

shall prepare a liquidationreport and present it for confirmation  to  a

meeting of the shareholdersor  to  the relevant  responsible  authority,

apply to the  company  registration  authority  for  cancellation  of  the

company's registration andpublish by public notice of the termination  of

the company.  Where  no application  is  made  for cancellation  of  the

company's registration, thecompany's business license is revoked  by  the

company registration authorityand a public notice is published.

Article 198

    The members of a liquidation group shallfaithfully  attend to  their

duties and carry out theirliquidation tasks in accordance with the law.

    Themembers of a liquidation group shall not exploit their position to

accept bribes or other illegalincome, nor shall they wrongfully take over

the property of thecompany.

    The members of a liquidation group who intentionallyor through  gross

negligence  cause  losses to  the  company  or its  creditors  shall  be

responsible for providingcompensation.

    Chapter 9 Branches of Foreign Companies

Article 199

    Pursuant to this Law, a foreign companymay  set  up branches  within

Chinese  territory,  and  may  engage  in production   and   operational

activities.

    Under this Law, "foreign  company"  means  a company  registered  and

establishedoutside Chinese territory in accordance  with  the  law of  a

foreign country.

Article 200

    To set up a branch or branches within  Chinese  territory, a  foreign

company  shall  file an  application   with   the  responsible   Chinese

authorities, and  present  its company's  articles  of  association,  the

company's registrationcertificate issued by its home country  and  other

relevant documents. Afterreceiving approval, the company shall  register

with the company registrationauthority as provided by law and obtains  a

business license.

    The  approval  procedures  for branches  of  foreign  companies are

separately providedfor  in  regulations  issued  by  the State  Council.

Article 201

    A foreign company which establishes a branch withinChinese  territory

shall appoint a representativeor  agent  in charge  of  the  branch and

allocate to the branchappropriate funds for the operational activities it

is engaged in.

    Where it is necessary to provide for a minimumamount  of operational

funds for branches of foreigncompanies, separate regulations are  issued

by the State Council.

Article 202

    The branch of a  foreign  company  shall indicate  in  its  name the

nationality of the foreigncompany and whether it has limited or unlimited

liability.

    The articles of association of the foreign companyshall be  available

at its branches.

Article 203

    A foreign  company  is  a foreign  legal  person  and its  branches

established within Chineseterritory do not have  the status  of  Chinese

legal persons.

    A  foreign  company  assumes civil  liability  for  the operational

activities of its brancheswithin Chinese territory.

Article 204

    A branch of a foreign company established withapproval  and engaging

in business activities withinChinese territory shall abide by the laws of

China and shall not harm thesocial and public  interests of  China.  Its

legitimate rights and interestsshall be protected by the laws of  China.

Article 205

    When a foreign company withdraws its branches fromChinese  territory,

it shall repay its debtsaccording to law and  carry out  liquidation  in

accordance  with  the provisions  of  the  relevant company  liquidation

procedures set out in this Law.Until such debts are repaid, the property

of the branch shallnot  be  transferred  outside  of  Chinese territory.

    Chapter 10 Legal Liabilities

Article 206

    A company which violates this Law by falsely reportingits  registered

capital whenregistering,  presenting false  documentation  or  employing

other  deceptions  to conceal  important  factsin   order   to   obtain

registration of the companyshall be ordered to remedy the  situation.  A

company that falsely reports itsregistered  capital shall  be  fined  at

least five per cent and no morethan ten per cent of  the amount  of  the

registered  capital  falsely reported.  A  company  that presents  false

documentation or employs otherdeceptions to conceal important facts shall

be fined at least RMB 10,000 andno more  than RMB  100,000.  In  serious

cases, the company'sregistration shall  be canceled.  If  the  violation

constitutes a criminal offence,criminal liability shall be  investigated

in accordance with thelaw.

Article 207

    A company which  prepares  a  false prospectus,  share  subscription

application or corporate bondoffer procedure in connection with the issue

of shares or corporate bondsshall be  ordered to  halt  such  issue and

return all funds raised togetherwith interest, and is fined an amount  of

at least one per cent and nomore than five per cent of the amount of  the

funds illegally raised. If theviolation constitutes a criminal  offence,

criminal liability shallbe  investigated  in accordance  with  the  law.

Article 208

    A promoter or shareholder who does not pay cash orproperty in kind or

does not transfer propertyrights, so making a false capital contribution

and committing fraud againstcreditors and the general public,   shall  be

ordered to remedy his wrongs andis fined at least five per cent  and  no

more than ten per cent of thecapital which he falsely contributed. If the

violation constitutes acriminal  offence, criminal  liability  shall  be

investigated in accordance withthe law.

Article 209

    A  promoter  or  shareholder  who  illicitly  withdraws his  capital

contribution after theestablishment of the company shall be  ordered  to

correct his wrongs and is finedat least five per cent and no  more  than

ten per cent of the  capital  contribution  illicitly  withdrawn.  If the

violation constitutes acriminal  offence, criminal  liability  shall  be

investigated in accordance withthe law.

Article 210

    A company which, without having obtained approval asprovided by  this

Law from the relevantresponsible authority, arbitrarily issues shares  or

corporate bonds is ordered tohalt such issue and return all funds  raised

together with interest, andshall be fined at least one per cent  and  no

more than five per cent of theamount of the funds  illegally raised.  If

the violation constitutes acriminal offence, criminal liability shall  be

investigated in accordance withthe law.

Article 211

    A company which violates this Law  by  keeping accounting  books  and

records other than thoseprovided for by law shall be ordered  to  remedy

the situation and shall be finedat least RMB 10,000 and no more than  RMB

100,000.  If  the violation  constitutes  a  criminal offence,  criminal

liability shall be investigatedin accordance with the law.

    Where assets of the company are held in an accountopened in the  name

of an individual, illegal incomeshall be confiscated and there shall  be

fine of at least the same amountand less than five times the  amount  of

the illegal income.If  the  violation constitutes  a  criminal  offence,

criminal liability shallbe  investigated  in accordance  with  the  law.

Article 212

    If a company furnishes to shareholders or the generalpublic financial

statements which are false orwhich conceal important facts, the personnel

in charge of the matter who havedirect responsibility and other personnel

with direct responsibility shallbe fined at least RMB 10,000 and no more

than RMB  100,000.  If the  violation  constitutes  a criminal  offence,

criminal liability shallbe  investigated  in accordance  with  the  law.

Article 213

    If in violation of this Law, state assets areconverted into shares or

sold at a low price orgiven  to individuals  without  compensation,  the

personnel in charge of thematter who have direct responsibility and other

personnel  with  direct responsibility  are subject  to   administrative

sanctions in accordance withthe  law.  If the  violation  constitutes  a

criminal offence, criminalliability shall be investigated in  accordance

with the law.

Article 214

    If a director, supervisor or manager exploits hisposition  to accept

bribes or other  illegal  income or  to  take  property of  the  company

wrongfully, the illegal incomeis confiscated,  he shall  be  ordered  to

return the company's propertyand  he  is subject  to  sanctions  by the

company. If  the  violation constitutes  a  criminal  offence,   criminal

liability shall be investigatedin accordance with the law.

    If a director  or  manager  misappropriates  company  funds  or takes

company funds and lends them toanother,  he shall be  ordered  to  return

the funds to the company, issubject to  sanctions by  the  company,  and

turns  over  to the  company  all  income obtained.  If  the   violation

constitutes a criminal offence,criminal liability shall be  investigated

in accordance with thelaw.

    When a director or manager in violation of this Lawuses the company's

assets to provide a guaranteefor the debts of its shareholders or  other

individuals, he  is  ordered to  cancel  the  guarantee, is  responsible

according to law for providingcompensation, and turns over to the company

all income derived from theillegal provision of  the guarantee.  If  the

circumstances areserious,  he shall  be  subject  to sanctions  by  the

company.

Article 215

    If a director or manager in violation of this Lawoperates for himself

or on behalf of another abusiness in the same line of  business  as  the

company in which he holds aposition, in  addition to  turning  over  all

income obtained, he shall besubject to sanctions by the company.

Article 216

    If a company does not make allocations to itsstatutory common reserve

fund or its statutory commonwelfare fund in accordance with this Law, the

company shall be ordered to makeup the exact  amount which  should  have

been allocated and shall besubject to a fine of at least RMB 10,000  and

no more than RMB100,000.

Article 217

    In the event of a merger, division,  reductionof  registered  capital

or liquidation, if the companydoes not send notice to or publish  public

notices for its creditors inaccordance with the provisions of this  Law,

the company shall be ordered toremedy the situation and shall be subject

to a fine of at least RMB10,  000 and no more than RMB 100,000.

    If at the time of liquidation, a company conceals itsproperty,  makes

false entries on itsbalance  sheet or  its  inventory  of property,  or

distributes the company'sproperty before repaying its debts, the  company

shall be ordered to remedy thesituation and shall be subject to a fine of

at least one per cent andno  more  than five  per  cent  of the  assets

concealed or the debts notrepaid before distribution. The  personnel  in

charge of  the  matter who  have  direct  responsibility  and  the  other

personnel with directresponsibility shall be subject to  a  fine  of at

least  RMB  10,000 and  no  more  than RMB  100,000.  If  the violation

constitutes a criminal offence,criminal liability shall be  investigated

in accordance with thelaw.

Article 218

    If a liquidation group does not file a  liquidation  report with  the

company registration authorityin accordance with the provisions of  this

Law, or the  liquidation  report conceals  important  facts  or contains

significant omissions, thewrongs shall be ordered to be remedied.

    If a member of the liquidation group exploits hisposition for corrupt

or improper ends, obtainsillegal income or wrongfully takes over  assets

belonging to the company,he shall be  ordered to  return  the  company's

property, the illegally obtainedincome shall be confiscated, and he shall

be fined at least the amount ofand no more than five times the amount  of

the income illegally obtained.If the  violation constitutes  a  criminal

offence, criminal liabilityshall be investigated in accordance with the

law.

Article 219

    If an institution responsible for assessing,verifying,  or examining

and certifying assets providesfalse documentation, its unlawful income is

confiscated and it is subject toa fine of at least the amount of and  no

more than five times the amountof the unlawful  income. The  institution

shall also be ordered to ceasedoing business, and  the certification  of

the qualifications of thepersonnel directly responsible shall be  revoked

by the relevant responsibleauthority.  If the  violation  constitutes  a

criminal offence, criminalliability shall be investigated in  accordance

with the law.

    If an institution responsible for assessing,verifying,  or examining

and certifying assets, as aresult of negligence, prepares a report  which

contains important omissions,the institution shall be ordered to  remedy

the situation. If thecircumstances are relatively serious,  it  shall  be

subject to a fine of at leastthe amount of and no more than three  times

the amount of the incomereceived. The institution shall also  be  ordered

to cease doing business, and thecertification of  the qualifications  of

the personneldirectly  responsible  shall  be  revoked by  the  relevant

responsible authority.

Article 220

    If the relevant department authorized by the StateCouncil approves an

application for theestablishment of a company which does  not  meet  the

requirements of this Law orapproves an application for an issue of shares

which does not meet therequirements of this Law, and  the  circumstances

are serious, thepersonnel  in charge  of  the  matter who  have  direct

responsibility and otherpersonnel with  direct responsibility  shall  be

subject to administrativesanctions in accordance with the  law.  If  the

violation constitutes acriminal  offence, criminal  liability  shall  be

investigated in accordance withthe law.

Article 221

    If the securities administration  departments  of the  State  Council

grant approval for share offers,listings of shares and  issues of  bonds

which do not meet therequirements of this Law, and the circumstances  are

serious,  the  personnel in  charge  of  the matter  who   have   direct

responsibility and otherpersonnel with direct responsibility are  subject

to administrative sanctions inaccordance with the law. If the  violation

constitutes a criminal offence,criminal liability shall be  investigated

in accordance with thelaw.

Article 222

    If the company registration authority registers acompany  which does

not meet the registrationrequirements of this Law, and the circumstances

are serious, thepersonnel  in charge  of  the  matter who  have  direct

responsibility and otherpersonnel with  direct responsibility  shall  be

subject to administrativesanctions in accordance with the  law.  If  the

violation constitutes acriminal  offence, criminal  liability  shall  be

investigated in accordance withthe law.

Article 223

    If a higher level department orders the companyregistration authority

to register a company which doesnot meet the registration requirements of

this Law, or covers up anunlawful registration, the personnel  in  charge

of the matter who have directresponsibility and such other persons  with

direct responsibility shallbe  subject  to administrative  sanctions  in

accordance with the law. If theviolation constitutes a criminal offence,

criminal liability shall beinvestigated  in accordance  with  the  law.

Article 224

    A company not lawfully registered as a limitedliability company or  a

company limited by shares whichfalsely makes use of  the title  "limited

liability company" or "companylimited by shares" is ordered to remedy the

situation or is canceled. It mayalso shall be subject to a  fine  of  at

least  RMB  10,000 and  no  more  than RMB  100,000.  If  the violation

constitutes a criminal offence,criminal liability shall be  investigated

in accordance with thelaw.

Article 225

    A company which without justification fails tocommence business  more

than six months afterestablishment or ceases to do business for more than

six consecutive months aftercommencing business, has its business license

revoked by the companyregistration authority.

    When items in a company's registration have changed,and  the  company

fails to carry out a change ofregistration as required by this Law,  the

company shall be ordered toregister such changes within a  certain  time

period, and if the company failsto do so, it shall be subject to a  fine

of at least RMB 10,000 and nomore than RMB 100,000.

Article 226

    If a foreign company in violation  of  the provisions  of  this  Law,

arbitrarily establishes a branchor branches within Chinese territory,  it

shall be ordered to remedy thesituation or to close down, and may  shall

be subject to a fine of at leastRMB 10,000 and no more than RMB 100,000.

Article 227

    If the responsible authority whose duty it  is  to process  approvals

pursuant to this Law fails togrant approval to an application which meets

the requirements of this Law orthe company registration authority  fails

to register a company whoseapplication meets  the requirements  of  this

Law, the interested party mayapply for reconsideration according to  law

or may bring an administrativesuit.

Article 228

    If a company which violates  the  provisions of  this  Law  shall be

subject to civil claims forcompensation  and to  payment  of  fines and

penalties, but has insufficientassets, it  first assumes  responsibility

for payment of the civilclaims.

    Chapter 11 Supplementary Articles

Article 229

    Companies registered and established prior tothe  effective  date of

this Law pursuant tolaws,  administrative regulations, local  regulations

and pursuant to the "StandardOpinion on Limited Liability Companies"  or

the "Standard Opinionon  Companies  Limited by  Shares"  issued  by the

relevant responsible departmentof the State Council  continue to  exist.

Those companies not completelysatisfying the  requirements  of  this  Law

shall meet the requirements ofthis Law within the specified time  limit.

Specific methods forimplementation of this Law are  to  be  set out  in

separate regulations issued bythe State Council.

Article 230

    This Law comes into effect on July 1,  1994.