Article 21
The highest authority of the cooperative venture company shall be its board of directors. It shall decide all major issues concerning the cooperative venture company. Unanimous approval shall be required for any decisions concerning major issues. As for other matters, approval by majority or a simple majority shall be required.
Article 22
The board of directors shall convene at least one meeting every year. The meeting shall be called and presided over by the chairman of the board. The chairman may convene an interim meeting based on a proposal made by more than one third of the total number of directors. Minutes of the meetings shall be placed on file.
Article 23
The meeting shall be valid only when more than two thirds of the total number of directors attend. In case of absence, the director shall entrust another person to attend and vote for him with a trust deed.
Article 24
The chairman of the board is the legal representative of the cooperative venture company. Should the chairman be unable to exercise his responsibilities for any reason, he shall authorize the vice-chairman or any other directors to represent the joint venture company temporarily.
Chapter 10 Business Management Office
Article 25
The cooperative venture company shall establish a management office which shall be responsible for its daily management. The management office shall have a general manager, appointed by Party,_______________deputy general managers,_________by Party_________;
by Party_______________. The general manager and deputy general managers whose term of office is_________years shall be appointed by the board of directors.
Article 26
The responsibility of the general manager is to carry out the decisions of the board and organize and conduct the daily management of the cooperative venture company. The deputy general managers shall assist the general manager in his work.
Article 27
The general manager shall report to the board of directors the operation conditions of the cooperative company every three months, and make a financial report every six months.
Article 28
In case of graft or serious dereliction of duty on the part of the general manager and deputy general managers, the board of directors shall have the power to dismiss them at any time.
Chapter 11 Labor Management
Article 29
Labor contract covering the recruitment, employment, dismissal and resignation, wages, labor insurance, welfare, rewards, penalties and other matters concerning the staff and workers of the cooperative venture company shall be drawn up between the cooperative venture company and the trade union of the cooperative venture company as a whole, or the individual employees in the cooperative venture company as a whole or individual employees in accordance with the law of the Peoples Republic of China on Chinese-Foreign Cooperative Joint Ventures. The labor contracts shall, after being signed, be filed with the local labor management department.
Article 30
The appointment of high-ranking administrative personnel recommended by both parties, their salaries, social insurance, welfare and the standard of traveling expenses etc. shall be decided by the meeting of the board of directors.
Chapter 12 Taxes, Finance and Audit
Article 31
The cooperative venture company shall pay taxes in accordance with the provisions of Chinese laws and other relative regulations.
Article 32
Staff members and workers of the cooperative venture company shall pay individual income tax according to the Individual Income Tax Law of the Peoples Republic of China.
Article 33
The fiscal year of the joint venture company shall be from January 1 to December 31. All vouchers, receipts, statistic statements and reports shall be written in Chinese.
(Note: A foreign language can be used concurrently with mutual consent.)
Article 34
Financial checking and examination of the cooperative venture company shall be conducted by an auditor registered in China and reports shall be submitted to the board of directors and the general manager.
In case Party B considers it necessary to employ a foreign auditor registered in another country to undertake annual financial checking and examination, Party A shall give its consent. All the expenses thereof shall be borne by Party B.
Article 35
In the first three months of each fiscal year, the manager shall prepare the previous years balance sheet, profit and loss statement and proposal regarding the disposal of profits, and submit them to the board of directors for examination and approval.
Chapter 13 Duration of the Cooperative Venture
Article 36
The duration of the cooperative venture company is_______________years. The establishment date of the joint venture company shall be the date on which the business license of the cooperative venture company is issued.
An application for the extension of the duration, proposed by one party and unanimously approved by the board of directors, shall be submitted to the Ministry of Commerce of the Peoples Republic of China, six months prior to the expiry date of the joint venture.
Chapter 14 The Disposal of Assets after the Expiration of the Duration
Article 37
Upon the expiration of the duration, the assets shall belong to Party A.
Chapter 15 Insurance
Article 38
Insurance policies of the joint venture company on various kinds of risks shall be underwritten with the Peoples Republic of China. Types, value and duration of insurance shall be decided by the board of directors in accordance with the provisions of the Peoples Insurance Company of China.
Chapter 16 The Amendment, Alteration and Termination of the Contract
Article 39
The amendment of the contract or other appendices shall come into force only after a written agreement has been signed by Party A and Party B and approved by the original examination and approval authority.
