(a) What are the main form of business organisation for medium and large scale enterprises in this economy?

 

Most medium and large scale enterprises are incorporated in the form of (i) limited company or (ii) company limited by shares.

 

(b) Is there a system of registration for these business organizations? If so, briefly describe.

 

Yes. Each company must be registered with the Ministry of Economic Affairs ("MOEA"). A company license will be issued to evidence its valid existence.

 

(c) Are there any minimal capitalisation requirements for these enterprises?

 

Each company limited by shares must have a paid-up capital no less than NT$1 million. In addition, there are other minimal capitalization requirements for companies in certain industries. For example, NT$ 10 billion for a commercial bank, NT$ 1 billion for a securities house which operate the business of underwriting, brokerage and dealing, and NT$ 5 million for export and import company.

 

(d) Briefly describe the main features of each type of these business organisations, by reference to public/private/state ownership and management; accounting and auditing responsibilities (particularly the standards which apply to accounting and auditing practices); director and management responsibility (including, if relevant, possible liability for debts); and the role of regulatory authorities regarding these enterprises.

 

• In terms of ownership, the companies limited by shares can be divided into two main categories: one is state owned, in which more than fifty percent of its shares is held by the government, and the other is private owned, in which the shares held by the government is less than fifty percent.
• In terms of the reporting and disclosure requirements, the companies limited by shares may be further divided into two categories: one is a public company, the paid-in capital of which exceeds two hundred million New Taipei,China dollars, and the others are non-public (private) companies. A public company is subject to the periodical reporting and disclosure requirements by the Securities and Futures Commission ("SFC"). The limited companies are not qualified to become public company and therefore, are not subject to the reporting and disclosure requirements.
• All the limited companies and companies limited by shares are required to adopt the same accounting principle, the General Accepted Accounting Principle ("GAAP"), except for the state-owned companies, to which different accounting principles are adopted.
• A limited company may either have one director, or have more than one director (but shall not exceed three) to manage the business of such company. As to a company limited by shares, no less than three directors are required to form a board of directors to manage the business of such company. In addition, all the companies shall have a supervisor, who is elected from the shareholders to supervise the operations of company, and the activities made by director(s) or a board of directors.
• The MOEA is the regulatory authority of all the limited companies and companies limited by shares, except for some companies located in the science industrial park or export processing zone, which is regulated by the park administration or the zone administration, as the case may be. In addition, depending on the business engaged in by companies, companies are further subject to the supervision of different governmental authorities, such as industrial companies being further regulated by the Industrial Bureau, and financial related companies (such as banks, securities houses, etc.) being further regulated by the Ministry of Finance ("MOF") and SFC. Besides, public companies are also regulated by the SFC and most of the state-owned companies, by the Commission of National Corporations.

(a) Are there any relevant observations to make concerning political, social (powerful family), financier (bank equity or involvement) or cultural controls or influences in respect of these types of business organisation?

 

In Taipei,China, a number of conglomerates are owned or controlled by powerful families or political parties (such as Kuo-Ming Tang, the ruling party, owning or controlling certain companies). In addition, there are a lot of small and medium scale-companies in Taipei,China due to the cultural background that most people are eager to own their companies. Such families or parties have certain formal or informal channels with the government and thus have certain influence as to the formation of governmental policy.