How Many Institutional Shareholders Must a Joint-Stock Company Have to Require a Board of Supervisors?

Based on Point a Clause 1 Article 137 of the 2020 Enterprise Law regarding the organizational management structure of joint-stock companies as follows:

Unless otherwise provided by securities law, a joint-stock company has the right to choose its management and operation structure according to one of the following models:

a) General Meeting of Shareholders, Board of Directors, Supervisory Board, and Director or General Director. In the case where the joint-stock company has fewer than 11 shareholders and the organizational shareholders own less than 50% of the total shares of the company, a Supervisory Board is not required;

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Thus, when a joint-stock company chooses to operate according to this model, it is required to have a Supervisory Board depending on the circumstances. Only in the case where the joint-stock company has fewer than 11 shareholders and the organizational shareholders own less than 50% of the total shares of the company, the Supervisory Board is not required. In cases where these two conditions are not fully met, a Supervisory Board is mandatory.

Thus, it can be determined that a joint-stock company with organizational shareholders owning 50% or more of the total shares of the company is required to have a Supervisory Board.

Respectfully!