萬國法律事務所

The amended Taiwan Company Act related to a new company form, the close company, was enacted on September 4, 2015. We summarize some of the features of a close company below:

1. A close company is a non-public offered company and the number of its shareholders is limited to no more than 50.

2. Equity capital of a close company can be in the form of cash, assets required in the business of a close company, technical know-how, service, and or goodwill. But, in order to ensure the safety of transactions, the government announced limitations on the percentages of equity capital made in the forms of service or goodwill (“Limited Percentage”). For a close company whose paid-in capital is less than NTD 30,000,000, the Limited Percentage shall be no more than 50% of its paid-in capital; and, for a close company whose paid-in capital is more than NTD 30,000,000, the Limited Percentage shall be no more than 25% of its paid-in capital.

3. A close company can issue shares without par value or special shares with multiple voting rights.

4. A close company may resolve the surplus earning distribution and/or loss offsetting after the close of each semi fiscal year.

The new company form offers new ventures more flexible mechanisms for the operation of their businesses.