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Fair Trade Act
1. Gift and Award Rules
On February 9, 2015, the Fair Trade Commission announced the draft Gift and Award Rules according to Article 23(2) of the Fair Trade Act. Excluding the following conditions, the content of the draft is similar to the "Principles of Fair Trade Commission Governing Gift and Award" (hereafter referred to as “Principles"):
(1) Definitions of gift and award: "Gift" refers to any item an enterprise provides without consideration for transaction opportunities. "Award" means any money, goods or services provide by enterprises by way of a raffle, sweepstakes or similar means.
(2) The following are not treated as gifts or awards: (1) free trial products or promotional activities with no condition of transaction, (2) price discounts on the same types of goods, (3) volume discounts on the same types of products, or (4) discounts provided on bundles of different goods or combinations thereof.
Other key restrictions in the draft, including but not limited to the maximum value restrictions on gifts, the annual award ceiling and the maximum value of the first prizes in award campaigns, are the same as those in Principles.
Reported by:Stacy Lo / Mark Chen
Limited partnership
2. Limited Partnership Bill
At the Cabinet meeting on February 12, the Executive Yuan (EY) passed the draft Limited Partnership Act prepared by the Ministry of Economic Affairs. It will then forward this bill to the Legislative Yuan for readings. According to the EY's press release, key features of this bill are:
(1) A limited partnership is a juridical person after due registration and must be a profit-seeking entity. There are two types of partners. One is general partners who are jointly and severally liable for the limited partnership's debts; the other is limited partners, who are liable for the partnership's debts to the extent of their capital contribution. General partners manage the partnership's business and are the responsible persons of limited partnership. Managers and liquidators in terms of their duties are also responsible persons.
(2) A company may be a partner in a limited partnership provided that the shareholders give their consent or approval.
(3) The general partners' capital contribution may be in cash or another form. To ascertain the capital amount of a limited partnership, an audit by a CPA is required when the limited partnership is first registered. An audit may also be required if the limited partnership's capital amount exceeds the amount or the number of partners exceeds that set by the central government.
(4) Partners cannot retrieve their capital contribution. However, they can do so in accordance with the partnership agreement when they pay the debts of the limited partnership or legally deposit such amounts in favor of creditors. In addition, partners can transfer their capital contribution in whole or in part to a third party based on the partnership agreement or consent of all other partners.
(5) Unless the partnership agreement states otherwise, the general partner selected and appointed by all general partners can act for and on behalf of the limited partnership. In terms of business decisions, a simple majority by general partners is required.
(6) A limited partner cannot participate in the business operations of or represent the limited partnership.
(7) Anyone who joins a limited partnership as a general partner is subject to consent of all partners. Anyone who joins a limited partnership as a limited partner is subject to consent of all general partners. General partners leave limited partnership because of death, compulsory enforcement of their capital contribution by courts, or removal from the partnership. However, they are still liable for the debts of the limited partnership that were incurred prior to their departure.
(8) Liquidation starts when a limited partnership dissolves or its registration is revoked or cancelled. All general partners are liquidators unless the partnership agreement provides otherwise. The liquidation process for an unlimited company applies mutatis mutandis to liquidation of a limited partnership.
Reported by:Kang-Shen Liu
Food and Drug Administration
3. Proposed Amendment to the Enforcement Rules of Health Food Control Act
The Executive Yuan submitted on February 12, 2015, a draft amendment to the Pharmaceutical Affairs Act to the Legislative Yuan for further review. According to the draft amendment, in response to urgent public health needs, the central competent authority may exceptionally allow the manufacture or import of a medicament not yet normally approved upon application. The central competent authority is also authorized to stipulate regulations governing examination and approval of such application.
Reported by:Jolene Wang / Crick Liang
Public Companies
4. Proposed amendment to the "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies"
The Financial Supervisory Commission (FSC) issued a press release on February 4, 2015, proposing to amend the "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies." We summarize the key points below:
(1) When a financial holding company consigns a trust enterprise or stock affairs agent to act as solicitor, its subsidiaries shall not make any further solicitation or handle proxy solicitation matters for that particular shareholders meeting.
(2) A solicitor or a company consigned to handle solicitation matters shall file a personnel report, and the same shall apply when there is any change of personnel thereafter.
(3) Each proxy shall be affixed with the chop of the solicitation office, and the personnel of the aforementioned office shall sign or affix their chops thereon.
Reported by:Kang-Shen Liu / Angela Lin
Financial Institutions
5. Amendment to ''Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises''
On January 30, 2015, the FSC has formally announced the amendments to Article 5, Article 21, Article 22 and Article 22-1 of ''Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises''. We reported the major points of the draft amendments in section seven of Issue No. 216 of the Lexgroup Newsletter.
Reported by:Jeffrey Liu / Caitlyn Kao
Securities Firms
6. Amendments to "Regulations Governing Securities Firms"
On February 4, 2015, the FSC formally amended relevant articles of ''Regulations Governing Securities Firms'' (by issuing the ruling of Ref. No. Jin-Guan-Zheng-Quan-Zi-1040001299). We reported the major points of the draft amendments in section eight of Issue No. 215 of the Lexgroup Newsletter.
Reported by:Jeffrey Liu / Judy Tai
Public Companies
7. Amendments to the "Guidelines for the Codes of Ethical Conduct for TWSE/GTSM Listed Companies", the "Template for XXX Co., Ltd. Rules of Procedure for Shareholders Meetings", the "Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors" and the "Template for XXX Co., Ltd. Procedures for Ethical Management and Guidelines for Conduct"
The Taiwan Stock Exchange (TWSE) and the GreTai Securities Market (GTSM) announced amendments to the following Guidelines and Templates on January 28 and February 4, 2015. The key points are:
(1) "Guidelines for the Codes of Ethical Conduct for TWSE/GTSM Listed Companies": Companies shall provide a specific whistle-blowing system; the Personal Information Protection Act shall be followed when disclosing the personal information of the personnel violating the ethical rules; and the ethical rules shall be disclosed on companies' websites.
(2) "Template for XXX Co., Ltd. Procedures for Ethical Management and Guidelines for Conduct": Companies shall establish a dedicated unit under the board of directors to handle ethical related matters; directors, supervisors and shareholders of a company shall explain the major content of the conflict of interest related matter in the board meeting; companies shall establish a dedicated unit to prevent any infringement of intellectual property rights; companies are prohibited from conducting any unfair competition; companies shall consider whether their business counterparts are involved in any unethical conduct; companies shall establish an internal/external whistle-blowing system; and senior officers shall establish an ethical atmosphere.
(3) "Template for XXX Co., Ltd. Rules of Procedure for Shareholders Meetings": For the shareholders' meeting convened by the board, the chairman of the company shall preside over the shareholders' meeting in person. In addition, the majority directors, at least one supervisor, and at least one member of each functional commission shall attend the meeting. Companies shall not arbitrarily require shareholders to provide evidencing documents for their attendance of shareholders' meeting. The results for each agenda of the shareholders' meeting (including the numbers of votes for and against and the number of abstentions) shall be published on the same day.
(4) "Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors": companies shall adopt the cumulative voting mechanism when electing directors and supervisors; directors shall be diversified; companies shall not arbitrarily add requirements for documentation of qualifications when reviewing those of the director and supervisor candidates; and all the votes of the director and supervisor elections shall be kept by the company for at least one year.
Reported by:Stacy Lo / Angela Lin
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2015-02-17
