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  • Interpretation
  • No.100
  • Date
  • 1963/02/27
  • Issue
    • Is it legal for the rules of a company’s Articles of Incorporation to stipulate the number of stockholders present and the number of votes required higher than the number of the legal minimum?
  • Holding
    •        The number of stockholders present and the number of votes required stipulated in Article 246, Paragraph 2 (as amended Article 277, Paragraph 2, of the current Company Act) and Article 264 of the Company Act (as amended Article 316 of the Act) refer to a minimum number required.  As a result, it is not illegal to have the number of stockholders present and the number of votes required under a company’s Articles of Incorporation higher than the legal minimum requirement.
  • Reasoning
    •        Pursuant to Article 246, Paragraph 2, of the Company Act, the resolution of the meeting of shareholders to amend its Articles of Incorporation should be adopted by a majority of shareholders at a meeting attended by shareholders representing over two-thirds of the total number of issued shares.  In addition, pursuant to Article 264 of the Company Act, a resolution for the dissolution or merger of the company shall be adopted by a majority vote at a meeting of shareholders attended by shareholders representing over three-fourths of the total number of issued shares.  These indicate the minimum number of stockholders present and the number of votes required.  These two Articles also do not stipulate any restriction on raising a minimum number.  As a result, where stricter criteria for the total number of shares represented by shareholders presented at a shareholders’ meeting and the number of votes required to pass a resolution as referred to in the aforementioned two Articles are specified in the Articles of Incorporation, such stricter criteria are not illegal. 
      
    • *Translated by John C. Chen, Attorney at Law.
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