CHAPTER FOUR ISSUE AND TRANSFER OF STOCKS OF A JOINT STOCK COMPANY LIMITED

　　SECTION ONE ISSUE OF STOCKS

　　Article 129 The capital of a joint stock company limited shall be divided into shares of equal value. Shares in a company take the form of share certificates, which are signed and issued by the company to certify that the shares are held by shareholders.

　　Article 130 The shares shall be issued on the basis of the principle of public, fair and impartial. Shares of the same class must have the same rights and benefits.

　　For share certificates issued at the same time should be equal in price and each share should have the same issue terms. The price of each share purchased by any organization or individual must be the same.

　　Article 131 The shares may be issued in par value or above the par value, but not lower than the par value.

　　Share certificates with an issued price above the par value shall get the approval of the securities administration department of the State Council.

　　The premium arising from issue of stocks in prices above the par value shall be allocated to the company's capital common reserve fund.

　　The specific regulations governing the issue of share certificates at a premium shall be separately issued by the State Council.

　　Article 132 Share certificates take the form of paper certificates or other forms as provided for by the securities administration department of the State Council.

　　The following items shall be set out in the share certificates:

　　1. Name of the company;

　　2. Date of registration and establishment of the company;

　　3. The class of share certificate, the par value and number of shares represented by the share certificate;

　　4. Serial number of the share certificate.

　　The share certificates shall be signed by the chairman of the board of directors and sealed by the company.

　　Share certificates of promoters shall bear the notation promoters share certificate.

　　Article 133 Shares issued to promoters, State authorized investment institutions and legal persons shall be in the form of registered share certificates and shall bear the names of such promoters, investment institutions or legal persons but not other names or the latter's representatives.

　　The shares issued to the general public may be in the form of registered certificates or bearer certificates.

　　Article 134 In issuing registered shares, the company shall keep a list of shareholders, with the following items set out:

　　1. Names or both names and addresses of the shareholders;

　　2. Number of shares held by each shareholder;

　　3. Serial number of the shares held by the shareholders;

　　4. Date for acquiring the shares by shareholders.In issuing bearer shares, the company shall record the number, serial numbers and date of issue of the shares.

　　Article 135 The State Council may formulate separate regulations governing the issue of classes of shares not covered by this law.

　　Article 136 A joint stock company limited shall official deliver the share certificates to shareholders immediately after its registration and establishment. No share certificates shall be delivered to shareholders before the official establishment of the company.

　　Article 137 In issuing new shares, a joint stock company limited must meet the following conditions:

　　1. The previous issue of shares has been fully subscribed and at least one year has elapsed since the issue;

　　2. The company has been continuously taking profits and paying dividends to shareholders in the last three successive years; 3. There has not been any false reporting in the financial and accounting documents of the company in last three years;

　　4. The projected profit rate of the company equals to or exceeds the interest on bank deposit for the same term.

　　A company which uses profit of a given year to issue new shares is not subject to item 2 above.

　　Article 138 For issuing new shares, resolutions must be passed on the following matters by the shareholders meeting:

　　1. Class and quantity of the new shares to be issued;

　　2. Issue price of the new shares;

　　3. The starting and closing time for the issue; and

　　4. Class and quantity of the new shares to be issued to existing shareholders.

　　Article 139 After the meeting of shareholders approved the revolutions, the board of directors shall file an application for approval with the departments authorized by the State Council or the people's governments at the provincial level for the new issue. If the new shares are to be issued by means of public offer, an approval should be acquired from the securities administration department of the State Council.

　　Article 140 If a joint stock company limited has been approved to make public offer of new shares, the company must publish a prospectus for the new shares and the company's financial statements with detailed schedules attached and prepare application forms for subscription.

　　The new shares to be issued shall be underwritten by a legally established securities institution and an underwriting agreement shall be executed.

　　Article 141 In issuing new shares, a joint stock company limited shall determine the pricing plan according to the profitability of the company and the increase in the value of its property.

　　Article 142 After fully collecting the payment for shares newly issued, the company shall go through the procedures of alteration of registration with the company registration department and make a public announcement.