Taiwan Companies Act

(Articles 251 to 300)

Article 251
After approval to issue corporate bonds is granted to a company, if any of the particulars in the application shall be found contrary to law or ordinance, or fraudulent, the authority in charge of securities affairs may annul the approval.
In the event of the aforesaid annulment of approval, the invitation to subscriptions in respect to unissued bonds shall be called off, and all issued bonds shall be redeemed immediately. The responsible persons of the company shall be jointly liable to compensate the company and the subscribers for loss or damage resulting there-from.
The provisions of Article 135, Paragraph 2, shall apply, mutatis mutandis, to the circumstances specified in this article, Paragraph 1.

Article 252
After approval of the application for issuing corporate bonds, the board of directors shall, within thirty days after receipt of the notice of such approval, start inviting subscriptions by preparing forms of subscription, setting forth therein all the particulars enumerated in Paragraph I, Article 248, and the title of the authority in charge of securities affairs granting the approval, together with the date and the reference number of the approval letter, and by making a public announcement thereof. But the financial statements as required in Item 11, the covenants set out in the mandate as required in Items 12 and 14, the evidentiary documents as required in Items 15 and 16, and the minutes of the meeting as required in Item 20 under Paragraph I, Article 248 of this Act need not be declared in the public announcement.
Where the company has failed to begin inviting subscriptions during the aforesaid time limit but still desires to invite subscriptions, a new application shall be filed therefore.
If the director designated to represent the company fails to prepare the forms of subscription in accordance with the provisions of Paragraph I, such director shall be subject to a fine of not less than NT$ 10,000 but not more than NT$ 50,000 to be imposed by the authority in charge of securities affairs.

Article 253
Subscribers shall fill in the forms of subscription by indicating therein the amount of subscription and their domiciles or residences, affixing their respective signatures or seals thereon, and assume the obligation to pay the amount they have filled in the forms of subscription.
Subscribers who buy bearer corporate bonds with cash on the spot of subscription need not fill in the aforesaid forms of subscriptions.

Article 254
The Board of Directors shall after subscriptions have been made by subscribers, request such subscribers to pay in full the amounts they have subscribed.

Article 255
Before making the request provided for in the preceding article, the Board of Directors shall prepare a complete list, setting forth therein the name and domiciles or residences of and the amount subscribed by, all subscribers or registered corporate bonds and also the number, serial numbers and amount of money of all bearer corporate bonds already issued, and send the list together with the documents set forth in Article 248, Paragraph 1, to trustees of corporate bondholders.
The aforesaid trustees shall, for the interest of subscribers, have the right to check and supervise the performance by the company of the obligation arising from the issue of corporate bonds.

Article 256
Mortgages or pledges established by the company for the purpose of issuing corporate bonds may be taken over by the trustees for the bondholders and may be established prior to the issue of corporate bonds.
The trustees shall be responsible for the enforcement and safe-keep of the aforesaid mortgages or pledges or the securities furnished under the mortgages or pledges.

Article 257
Certificates of corporate bonds shall, prior to their issuance, bear serial numbers, issuing dates and all the particulars as required Items 1 to 4, and Item 18 and Item 19 under Paragraph I of Article 248 of this Act. If the corporate bonds to be issued are issued under guarantee, or are convertible to shares, or may be used for subscribing shares, they shall be marked with the words of "Guaranteed", "Convertible" and/or "share subscription allowed", and shall be affixed with signature or seal of three or more directors, and they shall be certified by the authority in charge of securities affairs or by the securities issuance and registration agencies authorized by such authority.
In addition to the particulars to be indicated on the certificates of corporate bonds as required by the preceding Paragraph, the name or title and the signature or seal of the guarantor(s) shall also be indicated and affixed on the face of the secured corporate bond certificates.

Article 257- 1
In issuing corporate bonds, the company may print a single consolidated corporate bond certificate to cover the total amount of the corporate bonds to be issued at each time.
The corporate bond certificate to be issued under the preceding Paragraph shall be placed under the custody of a centralized securities custody institution.
The provisions set out in Item 2, Paragraph I of Article 248; Article 257; Article 258, and Article 260 of this Act regarding the value, the serial number, and the endorsement for assignment shall not apply to the issuance of corporate bonds to be effected in accordance with the provisions of Paragraph I of this Article.

Article 257- 2
The company issuing corporate bonds may be exempted from printing the certificate(s) in respect of the corporate bonds issued by it, but shall register with a centralized securities custody the corporate bonds issued by it.

Article 258
The counterfoil of corporate bonds shall bear the serial numbers of all such bonds and set forth the following particulars:
1. The names or titles and domiciles or residences of corporate bondholders;
2.Particulars as required in Items 2 to 4, the names of trustees as required in Item 12, the security/ collaterals and guarantors as required in Items 15 and 16, the particulars concerning conversion as required in Item 18; and the subscription as required in Item19 of Paragraph I, Article 248 of this Act.
3. The date of issue of the corporate bonds; and
4. The date on which each corporate bond is procured by a corporate bondholder.
Bearer corporate bond certificates shall be marked with the word "bearer" in lieu of the statement required under Item 1 of the preceding paragraph.

Article 259
If the proceeds realized from the issue of corporate bonds are applied for usage other than that stipulated without first applying for approval of such change, the responsible persons of the company shall be subject to imprisonment for a period not exceeding one year, detention and/or a fine not exceeding NT$60,000, and shall be liable to compensate the company for any loss or damage resulting there-from.

Article 260
Registered corporate bond certificates may be transferred with endorsement thereon by the holders; unless the name or title of the transferee is recorded in the bond certificate, and the name or title and domicile or residence of the transferee are recorded in the counterfoil of the corporate bonds, such transfer shall not be set up as a defense against the company.

Article 261
Holders of bearer bonds may at any time request to have them converted into registered bonds.

Article 262
Where it is prescribed that corporate bonds may be converted into shares, the company shall have the obligation to allot shares in accordance with the prescribed method of conversion; however, the corporate bondholders shall have the right to choose.
Where the corporate bond is vested with share subscription right, the issuing company shall have the obligation to allot, in accordance with the subscription regulations, the shares for the holder of corporate bond to exercise the subscription right provided, however that the holder of the share subscription warrant shall have the option whether to exercise such right or not.

Article 263
The company, which issues corporate bonds, or the trustees of corporate bondholders, or the bondholders holding more than five per cent of the total corporate bonds in the same issue, may, for matters concerning the common interest of corporate bondholders convene meetings of corporate bondholders in the same issue.
Resolutions at the aforesaid meeting shall be adopted by two-thirds or more of the votes of bondholders present who hold bonds representing over three-fourths of the total number of corporate bonds and each bondholder shall have one vote for each minimum par value of the bonds.
The provisions governing the attendance at the meetings of shareholders by shareholders of bearer share certificates of a company limited by shares shall apply mutatis mutandis to holders of bearer corporate bond certificates in attending the meetings referred to in Paragraph 1.

Article 264
The resolutions adopted at the meeting of corporate bondholders as provided in the preceding article shall be recorded in the minutes of meeting, signed by the chairman, and reported to the local court for approval and publication, after which such resolutions shall then bind of all corporate bondholders and shall be executed by trustees of corporate bondholders, unless otherwise designated by the meeting of corporate bondholders.

Article 265
The court shall not approve the resolutions of a meeting of corporate bondholders under any of the following certificates:
1. The procedure in convening a meeting of corporate bondholders or the method of adopting resolutions at the meeting is in violation of law or ordinance or statement contained in the subscription forms;
2. The resolution is not led to adoption in a proper way;
3. The resolution is apparently unjust and unfair; or
4. The resolution is contrary to the general interest of corporate bondholders.

Section 8 Issue of New Shares

Article 266
The provisions contained in this section shall govern the issue of new shares by installments under Article 156, Paragraph 2 and the issue of new shares after increase of capital under Article 278, Paragraph 2.
The issue of new shares of a company shall be determined by the Board of Directors by a resolution adopted by a majority vote at a meeting attended by over two-thirds of the directors.
The provisions of Article 141 and Article 142 shall apply mutatis mutandis to the issue of new shares.

Article 267
Unless otherwise approved specifically by the central authority in charge of the object enterprise, when a company issues new shares, there shall be ten to fifteen per cent of such new shares reserved for subscription by employees of the company.
When a government operated enterprise issues new shares, it may, after obtaining the special approval from the competent authority in charge of the said enterprise, reserve no more than ten per cent of such new shares for subscription by its employees.
In issuing new shares, a company shall make public announcement and advise, by notice, its original shareholders to subscribe for, with preemptive right, the new shares, except those reserved under either of the preceding two paragraphs, in proportion respectively to their original shareholding and shall state in the notice that if any shareholder fails to subscribe for new shares, his right shall be forfeited. Where a fractional percentage of the original shares being held by a shareholder is insufficient to subscribe for one new share, the fractional percentages of the original shares being held by several shareholders may be combined for joint subscription of one or more integral new shares or for subscription of new shares in the name of a single shareholder. New shares left unsubscribed by original shareholders may be open for public issuance or for subscription by specific person or persons through negotiation.
The right to subscription of new shares as provided for in the preceding three paragraphs, except those reserved for subscription by employees, may be separated from the rights in original shares and transferable independently.
The provisions provided in Paragraphs One and Two under this Article for reserving the right of subscribing new shares by employees shall not apply to the case where the new shares are distributed to original shareholders as dividend shares capitalized with the reserve fund or the value increments of assets.
A company may restrain the shares subscribed by its employees under Paragraph One or Paragraph Two of the article from being transferred or assigned to others within a specific period of time which shall in no case be longer than two years.
The provisions set out in this Article shall not apply to the company which is merged by or with another company, or is split up, or is under reorganization, or is issuing new shares in accordance with the provisions set out in Article 167-2, Article 262, or Paragraph I, Article 268-1 of this Act.
The responsible person of a company violating the provisions of Paragraph I under this Article shall be subject to a fine of not less than NT$ 20,000 but not more than NT$ 100,000.

Article 268
For issue of new shares, a company shall, unless such new shares are fully subscribed by its original shareholders and employees or by specific persons by agreement without any new share being open for public issuance, file an application, setting forth therein the following particulars, with the authority in charge of securities affairs for approval of public issuance:
1. The name of the company;
2. The originally authorized total number of shares, number of shares issued, and the value thereof;
3. The total number of new shares to be issued, par value of each share and other terms of issue;
4. The financial statements as required by the authority in charge of securities affairs;
5. The capital increase plan;
6. Where special (preference) shares are to be issued, the kinds and number of such shares, and the par value of each share, together with the matters specified in various Items of Article 157;
7. The number and amount of shares can be subscribed by each holder of a share subscription warrant or the person entitled to subscribe preferred shares;
8. The name and address of bank or post office to collect payment on shares on behalf of the company;
9. The name of the underwriter or distribution agency, if any, and matters agreed upon between the company and the underwriter or distributing agency;
10. The minutes indicating the resolution for the issue of new shares;
and
11. Other matters as may be required by the authority in charge of securities affairs.
In the event of any change in any of the particulars required under the preceding paragraph, the company shall apply to the authority in charge of securities affairs for correction. The responsible person of the company who fails to apply for such correction shall be subject to a fine of not less than NT$ 10,000 but not more than NT$ 50,000.
All matters specified in Items 2 to 4 and 6 of Paragraph I shall be examined and certified by a certified public accountant, and those in Items 8 and 9, Paragraph I under this Article shall be examined and certified by a practicing lawyer.
The provisions of Paragraphs I and II under this Article shall not apply to the issue of new shares as referred to in Paragraph V of Article 267 of this Act.
In case the aggregate of the number of new shares to be issued under the preceding Paragraph and the number and amount of share subscription warrants or the shares subscribable under the ancillary special share subscription rights plus the total number of outstanding shares, the total number of shares which can be acquired under outstanding convertible corporate bonds, the total number of shares subscribable under outstanding corporate bonds vested with share subscription rights, the total number of special shares subscribable under outstanding ancillary special share subscription warrants, and the total number of shares subscribable under outstanding share subscription warrants exceeds the total number of shares authorized by the Articles of Incorporation, such excessive number of shares may be issued only after completing the procedure for capital increase by making necessary changes or alterations in the Articles of Incorporation.

Article 268- 1
The company issuing share subscription warrants or special shares under ancillary share subscription rights shall have the obligation to allot the shares in accordance with the share subscription regulations, without being bond by the provisions set out in Article 269 and Article 270 of this Act provided, however, that the holders of such share subscription rights shall have the option whether to exercise such subscription rights or not.
The provisions set out in Paragraph II, Article 266; Paragraphs I and II, Article 271; Article 272; and Paragraphs II and III, Article 273 hereof shall apply, mutatis mutandis, to company issuing share subscription warrants.

Article 269
Under any of the following circumstances a company shall not publicly issue special shares with preference;
1. Where its average net profit of the most recent three years or, in case the company has commenced its business for less than three years, of the years the company is in operation, after paying taxes, is not sufficient to pay dividends on special shares already issued and intended to be issued;
2. Where it has been in default in making regular payment of dividends on special shares already issued.

Article 270
Under any of the following circumstances a company shall not publicly issue new shares:
1. Where it has incurred losses in the most recent two consecutive years; this, however, shall not apply where the nature of business requires a longer period for preparation or it has a sound business plan under which its profit-making capability will be improved; or
2. Where its assets are not sufficient to meet liabilities.

Article 271
After approval to issue new shares publicly is granted to a company, if any of the particulars in the application shall be found contrary to law or ordinance or to be fraudulent, the authority in charge of securities affairs may annul the approval.
In case of the annulment in accordance with the preceding paragraph, all unissued shares shall be withheld from issuing and holders of issued shares may, from the time of annulment, demand repayment at the original fixed value of the shares together with legal interest and may claim compensation for loss or damage resulting there-from.
The provisions of Article 135, Paragraph 2 shall apply, mutatis mutandis, to this article.

Article 272
When a company publicly issues new shares, the payment on such shares shall be in cash; where such shares are not issued to the public; however, but rather subscribed to by shareholders or by particular persons by agreement, any property necessary to the business of the company may be in lieu thereof

Article 273
When a company publicly issues new shares, the Board of Directors shall prepare forms of subscription, setting forth therein the following particulars, to be filled by each subscriber with the number of shares subscribed, the kind and value thereof, and his domicile or residence, and to be signed and sealed by the subscriber:
1. Particulars specified in Article 129, Paragraph 1, Items 1 to 6 and Article 130;
2. The total number of shares originally authorized or the number of shares already issued out of the total number of authorized shares after increase of capital and the value thereof;
3. Particulars specified in Article 268, Paragraph 1, Items 3 to 11;
and
4. The time of payment for shares subscribed.
When a company publicly issues new shares, the company shall insert in the aforesaid forms of subscription the serial number of the document of approval and the date of approval by the authority in charge of securities affairs and shall, within thirty days after receipt of the notice of approval from such authority, publicly announce the particulars specified in the preceding paragraph together with the serial number of the document of approval and the date of approval and issuance of such shares. The business report, inventory, meeting minutes and the matters agreed upon with underwriter or distributing agency need not be publicly announced.
After the expiration of the time-limit set forth in the preceding paragraph, if a company still desires to invite public subscriptions, a new application shall be filed.
Subscribers who buy bearer share certificates with cash on the spot need not fill in the forms of subscription required by Paragraph 1.
If the director designated to represent the company fails to prepare the forms of subscription in accordance with the provisions of Paragraph I under this Article, such director shall be subject to a fine of not less than NT$ 10,000 but not more than NT$ 50,000 to be imposed by the authority in charge of securities affairs.

Article 274
Where a company issues new shares other than to the public, under the proviso to Article 272, it shall still be required to make the forms of subscription available as required by Paragraph I of the preceding Article. If property other than cash is paid by subscribers, additional particulars such as the name/title of the subscriber, the type, the quantity and the value of or the standards for evaluation of the value of the property furnished by the subscriber, and the number of shares allotted to the subscriber by the company shall also be stated in the form of subscription.
After accepting property other than cash payment, the Board of Directors shall pass it on to the supervisor for inspection and comment, and shall report to the authority for approval.

Article 275
(Deleted)

Article 276
Upon expiration of the time limit set forth for payment on new shares, if there are still some not subscribed or some subscribed but withdrawn or not yet paid for, the shareholders who subscribed the new shares and paid for them may set a time limit of over one month to press the company for full subscription and full payment on shares, failing which the shareholders may withdraw their subscriptions and the company shall refund the money paid on shares together with legal interest.
Directors whose acts are responsible for loss or damage to the company under the aforesaid circumstance shall be jointly liable for compensation.

Section 9 Modification or Alteration of the Articles of Incorporation

Article 277
A company shall not modify or alter its Articles of Incorporation without a resolution adopted at a meeting of shareholders.
The aforesaid resolution at the meeting of shareholders shall be adopted by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares.
For a company that has had its share certificates publicly issued, if the total number of shares represented by shareholders present at a shareholders?meeting is not sufficient to meet the criteria specified in the preceding paragraph, the resolution may be adopted by two-thirds of the votes of the shareholders present at a shareholders?meeting who represent a majority of the total number of issued shares.
Where stricter criteria for the total number of shares represented by shareholders present at a shareholders?meeting and the number of votes required to pass a resolution as referred to in the preceding two paragraphs are specified in the Articles of Incorporation, such stricter criteria shall govern.

Article 278
A company shall not increase the amount of its capital until the total number of its authorized shares has been fully issued.
After increase of the amount of capital, the number of new shares to be issued may be issued in installments.

Article 279
In case of replacement of old share certificates by new ones as a result of a reduction in capital, the company shall, after the registration of such reduction in capital, serve a notice upon each shareholder and require all shareholders to exchange their share certificates for new ones within a period of not less than six months, and shall make it known to all shareholders that any person who fails to effect such exchange within the time limit may forfeit all rights he shall otherwise enjoy as a shareholder. In case bearer share certificates have been issued, the foregoing information shall also be publicly announced.
Any shareholder who fails to make the exchange within the aforesaid time-limit shall forfeit all rights and privileges he shall otherwise enjoy as a shareholder, and the company may dispose of his shares by auction and pay the proceeds realized there-from to such shareholder.
Responsible persons of the company who violate the provision of this article pertaining to the time limit for notice or public announcement shall be severally subject to a fine of not less than NT$3,000 but not more than NT$15,000.

Article 280
In the event of a consolidation of shares as a result of reduction in capital, the provisions of Paragraph 2 of the preceding article shall apply mutatis mutandis to the disposition of shares which cannot be consolidated.

Article 281
The provisions of Article 73 and Article 74 shall apply mutatis mutandis to reduction of capital.

Section 10 Reorganization of a Company

Article 282
Where a company which publicly issues shares or corporate bonds suspends its business due to financial difficulty or there is an apprehension of suspension of business thereof, but there is a possibility for the company to be constructed or rehabilitated, the company or any of the following interested parties may apply to the court for reorganization:
1. Shareholders who have been continuously holding shares representing ten per cent or more of the total number of issued shares for a period of six months or longer; or
2. Creditors of the company who have claims equivalent to ten per cent or more of the capital from the total number of issued shares.
For filing the reorganization application by a company under the preceding Paragraph, the Board of Directors of the company shall adopt a resolution by a majority vote of the directors present at a meeting of the Board of Directors attended by over two-thirds of all directors.

Article 283
The application for reorganization of a company shall be filed to the court in writing in five copies by the applicant(s) and shall state therein the following particulars:
1. The name and domicile or residence of the applicant and a statement on the status of the petitioner as such; in case the applicant is a juristic person, or an organization or agency, the title, the business place of office of the applicant;
2. The name or title and the location of the statutory representative or the agent, if any, and the relationship between the statutory representative and the applicant;
3. The name, location, office, business place, and the name, domicile or residence of the responsible person representing the company;
4. The cause and the fact of the application;
5. The business undertaken by the company and the condition of such business;
6. The reports, financial statements, records and books prepared by the company for the most recent year in accordance with the provisions set out in Article 282 hereof. If the application date falls beyond the sixth month after commencement of a year, a separate semi-annual balance sheet for the first half of the current year shall also be submitted; and
7. Opinions on the reorganization of the company.
The matters as required in Items 5 through7 of the preceding Paragraph may be supplemented by attachments.
In case the application is filed by the company, a substantial reorganization proposal shall be submitted.
In case the application is filed by shareholders or creditors, the documents identifying the qualification of the applicants shall be filed along with the application, but particulars as required in Items 5 and 6 of Paragraph I under this Article need not be stated.

Article 283- 1
Under any of the following circumstances, an application for reorganization shall be dismissed by the court:
1. Where the application is not filed in accordance with the proper procedure provided, however, that if the improper filing procedure can be rectified, the applicant shall be ordered to take corrective action;
2. Where the company has not made public issuance of shares or corporate bonds;
3. Where the company has been adjudicated bankrupt by a final ruling;
4. Where the settlement resolution made by the company in accordance with the Bankruptcy Law has become final;
5. Where the company has been dissolved; or
6. Where the company has been ordered to wind up and to liquidate within a given time limit.

Article 284
Subject to the dismissal of the application as provided for in the preceding Article, the court shall, when it receives an application for reorganization, forthwith send copies of such application to the competent authority, the central authority in charge of end-enterprise concerned, and the authority in charge of securities affairs, and shall solicit their substantial opinions as to whether the reorganization shall be effected or not.
The court may also solicit the opinions on the proposed reorganization from the taxation authority and other relevant authorities at the locality of the company.
The authorities whose opinions are solicited by the court in accordance with the provisions of the preceding two Paragraph shall give their opinions within 30 days.
In case the applicants are shareholders or creditors of a company, the court shall send a notice with a copy of the application to the company.

Article 285
In addition to the requests for opinions as provided in the preceding article, the court may also select and appoint a person with specialized knowledge or experience in the operation of the business of the company but without any interest therein as the inspector who shall, within thirty days after appointment, complete the following examinations and submit a report accordingly:
1. The actual business, financial condition, and evaluation of the assets of the company;
2. To examine in the light of the analysis of the business and financial conditions, the assets and production equipment of the company to see whether the reconstruction or rehabilitation of the company is possible or not;
3. To examine the merits and demerits of the previous business operation of the company and the records of management of the operation by the responsible person of the company to see whether there was any neglect or improper practices;
4. To examine whether there is any fraudulent or false statement in the application;
5. To examine the feasibility of the reorganization proposal, if the applicant is the company; and
6. To examine other relevant reorganization proposals.
The inspector may inspect all books, records of accounts, documents and property relating to the business or finance of the company.
The directors, supervisors, managerial personnel, or other staff personnel shall have the obligation to answer the enquiries made by the inspector regarding the operation and financial activities.
Directors, supervisors, managerial officers and other employees of the company who refuse the aforesaid examination or refuse to answer the aforesaid questions without reason or make false statements shall be severally subject to a fine not less than NT$ 20,000 but not more than NT$ 100,000.

Article 285- 1
Based on the report made by the inspector and by making reference to the opinions provided by the central authority in charge of the end enterprise concerned, the authority in charge of securities affairs, the central authority in charge of financial affairs, and other relevant authorities and organizations, the court shall, within 120 days after its receipt of a reorganization application filed by a company, render a ruling to approve or to dismiss the said re-organization application and shall notify all authorities concerned of such ruling accordingly.
The 120-day reviewing period fixed in the preceding Paragraph may be extended by a ruling to be made by the court for an additional 30 days provided that no more than two extensions may be made.
Under either of the following circumstances, the court may dismiss a company re-organization application:
1. Where any statement or information contained in the written application documents is found false or untrue; or
2. Where reconstruction and/or rehabilitation as proposed by the applicant is deemed unfeasible after considering the business and financial conditions of the company.
When dismissing a company reorganization application by a ruling to be rendered in accordance with the provisions set out in the preceding Paragraph, the court may, ex officio, make a bankruptcy pronouncement, if the conditions for bankruptcy are met.

Article 286
Prior to a ruling for reorganizers of a company, the court may order responsible persons of the company to prepare and submit lists of creditors and shareholders of the company within seven days according to the nature of their rights respectively, stating therein also their domiciles or residences and the total amount of credits or the total amount of money in shares.

Article 287
Prior to rendition of a ruling for reorganization of a company, the court may, at the request of the company or an interested party or ex officio, render a ruling for the following disposal:
1. Disposal for preservation of the company’s property;
2. Restriction on the business of the company;
3. Restriction on performance of obligation of the company and exercise of claim against the company;
4. Suspension of proceedings for bankruptcy, com- position, or compulsory execution and others;
5. Prohibition of transfer of registered share certificates; and
6. Assessment of the liabilities of responsible persons of the company to compensate the company for loss or damage and preservation of their property.
The term of validity of the ruling to be made under the preceding Paragraph shall not exceed 90 days, unless otherwise fixed by the court; and may be extended when necessary by the court at the request of the company or an interest party provided that the duration of each extension shall not exceed 90 days.
In case the ruling for dismissing a company reorganization application becomes final prior to the expiry of the term of validity referred to in the preceding Paragraph, then the ruling rendered under Paragraph I under this Article shall become null and void.
In rendering a ruling under the provisions of Paragraph I of this Article, the court shall inform, by a notice, the authority in charge of securities affairs and the central authority in charge of the relevant end enterprise.

Article 288
(Deleted)

Article 289
At the time of ruling for reorganizers, the court shall select and appoint a person with specialized knowledge and experience in the operation of the business of such company or a banking institution as reorganization supervisor and decide on the following matters:
1. The period and place for declaring rights of creditors and
shareholders, and the period shall not be less than ten days nor more than thirty days from the date of ruling;
2. The date and place to examine rights of creditors and shareholders thus declared, and the date shall be within ten days of the date of expiration of the aforesaid period for declaration; and
3. The date and place of the first meeting of parties concerned, and the date shall be within 30 days of the date after expiration of the period for declaration mentioned in Item 1.
The aforesaid reorganization supervisor shall act under the supervision of the court and may be discharged by the court at any time.
In case there is a plural number of reorganization supervisors, supervision on the execution of all matters relating to reorganization shall be effected by a majority vote of them.

Article 290
The reorganizers of the company shall be selected and appointed by the court from among the relevant experts recommended by creditors, shareholders, directors, the central authority in charge of the relevant end enterprise, and/or the authority in charge of securities affairs.
The provisions set out in Article 30 hereof shall apply mutatis mutandis to reorganizers.
In the meeting of interested parties, if the result of the voting conducted in groups under Article 302 shows that two or more groups prefer a change of reorganizers, a list of candidates may be submitted to the court along with an application for such change.
In case there is a plural number of reorganizers, execution of all matters relating to reorganization shall be effected by a majority vote of them.
In the execution of duties, the reorganizers shall act under the supervision of the reorganization supervisors. In case a reorganizer Acts in violation of the laws or improperly, the reorganization supervisors may apply to the count for discharging his/her office and selecting a new one In the execution of duties, the reorganizers shall secure the prior consent of the reorganization supervisor:
1. Disposal of property of the company outside the scope of its business;
2. Change of the business of the company or in the ways of operation;
3. Contract of loans;
4. Conclusion or rescission of important or long term contracts, the scope of which shall be determined by the reorganization supervisor;
5. Proceeding in litigation or arbitration;
6. Waiver or assignment of rights of the company;
7. Dealing in cases where others exercise rights of retrieval, rescission or set-off;
8. Appointment and removal of important officers of the company; and
9. Other acts restricted by the court.

Article 291
After rendering a ruling of company reorganization, the court shall publish the following particulars by means of a public notice:
1. The text and the date of the ruling of company reorganization;
2. The name or title and the domicile or address of the reorganization supervisor and the reorganizers;
3. The period, date and place as fixed in accordance with the provisions of Paragraph I, Article 289 hereof; and
4. The legal consequences which may result from the negligence of the creditors and shareholders of bearer share certificates of the company to declare their claims and rights.
The court shall still be obligated to serve notice in writing of the ruling and the particulars contained therein to the reorganization supervisor, the reorganizers, the company and the known creditors and the shareholders.
At the time the court sends the aforesaid notice of ruling to the company, the court shall send a court clerk to write down in the accounting books the account-closing decision, to affix thereon his signature or seal, and to write down a brief statement describing the condition of such accounting books.

Article 292
The court shall, after rendering ruling for reorganization, notify the competent authority with a copy of such ruling for registration of the institution of reorganization; the company shall post the copy of the aforesaid ruling on the notice board of the its registered office.

Article 293
After delivery of the ruling for reorganization of the company, the operation of the business of the company and the power of controlling and disposing of the property thereof shall be transferred to reorganizers, and the reorganization supervisor shall supervise such transfer, which shall then be reported to the court. Upon such transfer, the shareholders?meeting, directors and supervisors shall cease to perform their duties and to exercise their powers.
At the time of the aforesaid transfer, the directors and managerial officers of the company shall hand over to the reorganizers all statements and records of accounts and documents relating to the business and finance of the company and all property thereof.
The directors, supervisors, managerial personnel, or other staff personnel shall have the obligation to answer the enquiries made by the reorganization supervisors or reorganizers regarding the operation and financial activities.
Directors, supervisors, managerial officers or other members of the staff of the company, for any of the following acts, shall be severally subject to imprisonment for a period not exceeding one year, detention and/or a fine not exceeding NT$60,000:
1. Refusal to transfer;
2. Concealment, destruction or damage of statements, records of accounts or documents relating to the business or financial condition of the company;
3. Concealment, destruction, or removal of property of the company, or the disposal of such property a manner prejudicial to creditors;
4. Refusal to answer questions mentioned in the aforesaid paragraph without reason; and
5. Fabrication of debts or acknowledgement of untrue debts.

Article 294
After a ruling for reorganization is rendered, all procedures of bankruptcy, composition, compulsory execution and other litigation involving property shall be suspended in due course.

Article 295
The disposition made by the court in accordance with the provisions of Article 287, Paragraph 1, Items 1, 2, 5 and 6 shall remain in effect regardless of the ruling for reorganization, and in the absence of such disposition, the court may still render such rulings on the application of an interested party or the reorganization supervisor or ex officio after having rendered the ruling for reorganization.

Article 296
All rights of creditors of the company established prior to the ruling for reorganization shall be rights of creditors in reorganization; all rights with preference for repayment according to law shall be preferred rights of creditors in reorganization; all rights secured by mortgages, pledges or rights of retention shall be secured rights of creditors in reorganization; and all rights without such security shall be rights of creditors without security. All such rights of creditors shall not be exercised unless in a accordance with reorganization procedures.
The provisions of the Bankruptcy Law relating to the rights of creditors in bankruptcy, with the exception of provisions governing right of discriminative, and preferential rights shall apply mutatis mutandis to the aforesaid rights of creditors.
Rights of retrieval, rescission or set off shall be exercised against the reorganizers.

Article 297
All creditors in reorganization shall produce documents to sufficiently prove the existence of their rights for declaring their rights to the reorganization supervisor and, if so declared, the prescription is interrupted and, if not declared, no repayment shall be made according to the reorganization procedures.
Rights of registered shareholders of the company shall be based on records in the shareholders?roster. The provision of the preceding paragraph governing declaration shall apply mutatis mutandis to rights of unregistered shareholders and, if not declared, no such right shall be exercised according to the procedures of reorganization.
In case of failure to declare as provided in the two preceding paragraphs for causes not attributable to the persons of whom declaration is required, such persons may make good the declaration within fifteen days after extinction of the cause; however, no declaration shall be accepted after the reorganization plan has been adopted at a meeting of the concerned parties.

Article 298
The reorganization supervisor shall, after the expiration of the period for declaring rights, in accordance with findings in the preliminary examination, prepare lists of preferred creditors in reorganization secured creditors in reorganization, unsecured creditors in reorganization and shareholders respectively, stating therein the nature of their rights, sums of money and number of votes, and shall submit a report to the court, keep all of the above at a suitable place, and publicly announce the date and place of such keeping so that the creditors in reorganization, shareholders and other interested persons may inspect, all to be done three days before the date mentioned in Article 289, Paragraph 1, Item 2.
The number of votes of creditors in reorganization shall be determined in proportion to the amounts of money involved in their credits. The number of votes of shareholders shall be provided in the Articles of Incorporation.

Article 299
In the court’s session of hearing rights of creditors in reorganization and rights of shareholders, the reorganization supervisor, reorganizers, and responsible persons of the company shall be present to answer inquiries, and the creditors in reorganization, shareholders and other interested persons may be present to express their opinions.
In the event of any objection to the right of creditor or the right of shareholder, the court shall render a ruling on such right.
Any interested person who substantially contests the right of creditor or the right of shareholder shall institute an action for determination within twenty days after the service of the ruling referred to in the preceding paragraph, and prove to the ruling court that such action has been instituted. After instituting such action and before a judgment thereto becomes irrevocable, the right concerned shall be exercised according to the contents of, and in the amount allowed by the ruling referred to in the preceding paragraph; however, in receiving the repayment in accordance with the plan of reorganization, the amount received shall be deposited with a court.
A right of creditor or a right of shareholder shall be deemed final and shall have the same effect as an irrevocable judgment against the company and all the shareholders and creditors of the company if prior to the end of hearing in court no objection was raised against such right.

Article 300
All creditors in reorganization and shareholders shall be concerned persons in the reorganization of the company and shall attend meetings of concerned persons. They may appoint a proxy to attend such meetings if they are unable to do so in person for any cause.
The reorganization supervisor shall be the chairman of all meetings of concerned persons and shall convene all such meetings with the exception of the first meeting.
The reorganization supervisor, in calling meetings as provided in the preceding paragraph, shall serve notice and public announcement five days prior to the meeting, stating therein the purpose of the meeting. In the event that no conclusion can be reached at one meeting, and announcement to adjourn or postpone the meeting is made on the spot by the reorganization supervisor, then no service of notice or public announcement is required.
At the meeting of concerned persons, the reorganizers and responsible persons of the company shall be present to answer inquiries.
Responsible persons of the company who refuse to answer inquiries as aforesaid without reason or make false statement in their replies shall be severally subject to imprisonment for a period not exceeding one year, detention and/or a fine not exceeding NT$60,000.