23 Provisions That Can Be Easily Included in a Company’s Articles of Association: Part I

In China, the Articles of Association (AOA) define a company’s structure and governance, protecting shareholder rights. It designates a legal representative—usually the director or manager—who represents the company legally, while governance power lies with directors or managers.

According to the Company Law of the People’s Republic of China  (“Company Law”):

The AOA represents the collective intention of all shareholders, laying out the fundamental principles for the company’s structure and activities. For this reason, the AOA is often referred to as the “constitution” of the company. It plays a vital role in ensuring the company’s smooth operation, standardizing corporate governance, preventing deadlocks, and safeguarding shareholders’ rights.

In this article, we introduce 23 matters that can be freely agreed upon in a company’s AOA in China.

Legal provision

Article 10 of the Company Law provides that the company’s legal representative shall be the director who executes the company’s business on behalf of the company or manager as specified in the AOA. According to the Regulations on Market Subject Registration Administration of the People’s Republic of China, a company’s legal representative shall be registered with the competent Administration of the Market Regulation (“AMR”).

A legal representative is the principal person who exercises civil rights and fulfills civil obligations on behalf of a company according to the law. This individual can directly and naturally represent the company in all activities. The legal representative is theoretically a nominal position –the governance power of a company is held by the director(s) or the manager within the company’s governance structure. However, since the legal representative legally represents the company, the company is held accountable for their actions.

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