Prof Wang Boashu of Tsinghua University proposed Saturday that China's six-year-old Corporate Law needs amendment, by introducing more internationally-accepted rules.
He made the remark at a law lecture attended by members of the Standing Committee of the National People's Congress (NPC), which was presided over by Li Peng, chairman of the NPC Standing Committee.
The bottom line of the registered capital, that is required by the Corporate Law to found a limited company or joint-stock company, will be too high for overseas investors if China enters the World Trade Organization (WTO), Wang said.
The country now has special laws and rules for overseas companies, but both the domestic and foreign companies will obey the same laws when China enters the WTO.
The registered capital to found a limited company in the production or wholesale sectors must top 500,000 yuan (about 60, 000 US dollars), according to the present Corporate Law.
Wang also suggested that the law add clearer items to help improve companies' internal supervision systems.
The law should stipulate rules making it easy for shareholders to exercise their right of supervision, especially when company directors misuse their power, he added.
The law should give minority shareholders the opportunity to select directors they trust, in order to protect their interests, as many Chinese boards of directors usually do not include such directors at the moment, Wang said.
"Introducing independent directors onto the board may be another solution," he said.
The Corporate Law was the first law formally stipulating corporations, and it took effect on July 1, 1994.
(Xinhua 04/29/2001)
