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Article 1
These Regulations are enacted pursuant to Paragraph 3 of Article 7 of the Company Act.
Article 2
When applying for registration of incorporation or registration of corporate changes for a merger,
split-up, acquisition, share conversion, share exchange, or increase or reduction of the paid-in
capital, a company shall bind together and submit to a certified public accountant ("CPA") for
auditing a statement of change of paid-in capital and the following documents, depending on the
nature of the case:
1. Statement of shareholders' capital contributions in cash;
2. Statement of capital contributions by claims;
3. Statement of capital contributions by properties;
4. Statement of capital contributions by service.
5. Statement of allotment of shares through capitalization of dividends and bonuses and statement
of appropriation of earnings;
6. Statement of allotment of shares through capitalization of legal reserve;
7. Statement of allotment of shares through capitalization of capital reserve and statement of
sources of capital reserve;
8. Statement of allotment of shares after merger (if any shares are cancelled due to a merger, a
statement of cancellation of shares after the merger shall also be included);
9. Statement of allotment of shares after a split-up, and the types and amounts of assets and
liabilities of the demerged portion of the demerged company as of the date immediately before the
recordation date;
10. Statement of allotment of shares after acquisition;
11. Statement of allotment of shares after share exchange;
12. Statement of allotment of shares after share conversion;
13. Statement of conversion of shares from convertible corporate bonds or share subscription
warrants; and
14. Statement of capital reduction. (In the event of capital reduction as a result of a split-up, the
types and amounts of the assets and liabilities of the demerged portion of the demerged company
as of the date immediately before the recordation date shall also be included. This is not required
in the case of buying-back of shares for capital reduction.)
In the case of a company, the statements specified in Subparagraphs 1, and5 to 14 of Paragraph 1
of this Article shall apply only to its directors, supervisors or shareholders that hold more than 10
percent of the total shares. For those shareholders holding less than 10 percent of the total shares,
statements with consolidated information are acceptable.
In the case of a publicly traded company, if all the equity capital is contributed by issued shares
according to special laws, the statements specified in Subparagraph 3, Paragraph 1 of this Article
shall only apply to its directors, supervisors or shareholders that hold more than 10 percent of the
total shares. For those shareholders holding less than 10 percent of the total shares, statements with
consolidated information are acceptable.
The company’s seal and the responsible person seal or signature of the responsible person shall be
affixed to the statement of change of paid-in capital amount and the other documents under the
first Paragraph. The seal of the company and the seal or signature of the responsible person
representing the company shall be affixed to the statement of change of paid-in capital and
documents to be submitted.
In the case of buying-back of shares for capital reduction in accordance with Article 28-2 of the
Securities and Transaction Act, the audit by a CPA is not required.
Article 3
With regard to the documents listed under Paragraph 1 of the previous Article, the company shall
prepare and attach relevant documents in accordance with the following:
1. Statement of shareholders' capital contributions in cash: The statement shall indicate the names
of the shareholders, the dates and amounts of share contributions, and the dates and bank account
information where the contributions are deposited. The photocopies of deposit slips, or in the
absence of such deposit slips, photocopies of bankbooks, statements of accounts or inquiry sheets
shall also be attached. If the company opened a special bank account to collect all the contributions,
it may replace the photocopies of the deposit slips, the bankbooks, the statement of accounts or the
inquiry sheets with the special account deposit contract (or the contract entrusted for the collection
of contributions) and the certificate of collection of all the contributions issued by the bank (or
photocopies of bankbooks). In the event of any inconsistency between the bank deposits and the
accounting books, a reconciliation statement shall be prepared. Where any contributions have been
utilized, a statement of capital utilization affixed with the corporate seal of the company and the
seal of the responsible person or signature of the responsible person of the company indicating the
purpose shall be additionally submitted. If necessary, the competent government authorities may
require the company to submit photocopies of certificates of primary utilizations. If any
contributions are transferred into term deposits, any pledge, termination of contract or assignment,
if any, shall be specified.
2. Statement of capital contributions by claims: The statement shall indicate the names of the
shareholders, reasons for and dates of incurrence of the claims, the amounts of the incurred claims,
and the amount of contributions by claims, bearing the signatures or seals of the creditors with
their consent and attached with the primary documents to prove the incurrence of the claims.
Where any contributions have been utilized, a statement of capital utilization affixed with the
corporate seal of the company and the seal of the responsible person or signature of the responsible
person of the company indicating the purpose shall also be submitted. If necessary, the competent
government authorities may require the company to submit photocopies of certificates of primary
utilizations. If any contributions are transferred into term deposits, any pledge, termination of
contract or assignment, if any, shall be specified.
3. Statement of capital contributions by properties: The statement shall indicate the names of
shareholders, the types, quantities, prices or criteria for appraising the prices of the properties, and
the shares or certificates allotted by the company. If any technology, stock or other property is
contributed, the relevant property shall be specified as having been registered in the name of the
company in accordance with the law before the date of incorporation or the capital increase
recordation date. However, if there is no registration requirement in accordance with the law, such
property shall be specified as having been delivered to the company before incorporation or the
capital increase recordation date. If any stock is contributed, the criteria for appraising the price
shall be specified.
4. Statement of allotment of shares through capitalization of dividends and bonuses, legal reserve,
capital reserve, merger, split-up, acquisition, or share exchange, share conversion, statement of
capital reduction, or statement of conversion of shares from convertible corporate bonds or shares
subscription warrants: The statement shall indicate the names of the shareholders, the amounts and
the dates.
5. Statement of capital contributions by service: The statement shall indicate the names of
shareholders, the amount of such capital contribution prescribed in the Articles of Incorporation,
and the shares or certificates allotted by the company.
For any equity capital of a close company to be contributed with technologies or service, a written
consensus of the shareholders shall also be submitted.
Article 4
When a CPA is engaged to audit the capital for a company’s incorporation registration or
amendment registration of merger, acquisition, share exchange, share conversion or increase or
decrease of paid-in capital, the CPA shall verify whether the paid-in capital amount in the
statement of change of capital and the attached documents prepared by the company in accordance
with Article 2 are correct.
The CPA shall submit the audit report after auditing the documents set forth in the preceding
paragraph.
Article 5
When applying for registration of branch office incorporation in the Republic of China,
registration of increase or reduction of its working capital in the Republic of China, a foreign
company shall prepare a statement of change of working capital, affixed with the corporate seal of
the branch office and the seal of the responsible person in the Republic of China ,or signature of
the responsible person in the Republic of China and submit to the CPA to audit.
The CPA shall submit the audit report after auditing the documents set forth in the preceding
paragraph.
Article 6
When applying for registration of incorporation, increase or reduction of working capital in the
Republic of China, a profit seeking enterprise of Mainland Area shall prepare a statement of
change of working capital affixed with the corporate seal of the branch office and the seal of the
litigious and non-litigious agent in the Republic of China to audit.
The CPA shall attach the audited statement of change of working capital in accordance with the
previous paragraph to the audit report. If the application is for branch registration or an increase of
its working capital in the Republic of China, photocopies of bank passbooks, bank statements, or
inquiry sheets shall also be attached.
Article 7
The audit report issued by the CPA engaged to audit and certify a company’s incorporation
registration or change registration of merger, split-up, acquisition, share exchange, share
conversion or increase of paid-in capital shall indicate the source of the contributions (cash,
monetary claims, technologies, service, stock certificates, other types of property, dividends and
bonuses, legal reserve, capital reserve, merger, split-up, acquisition, share exchange, share
conversion, restricted employee entitlement to new shares), the issuing prices, the number of
shares being issued, and the capital amount. In the case of shares issued at a premium or discount,
the issued amount per share and the accounting treatment shall be specified. The total number of
shares issued and the capital amount before and after the capital increase shall also be specified.
The CPA engaged to audit and certify the registration of capital amount under the previous
Paragraph shall audit the following matters:
1. In the event of capital contributions in cash: The status of contributions shall be examined;
where the payments have been deposited in a bank, the deposit certificates shall be verified; where
the payments are made by bills, whether these bills have been honored shall be verified; where the
payments are made by monetary claims against the company, whether the reasons for incurrence of
such claims is truthful shall be verified; where any contributions have been utilized, a statement
shall be prepared explaining the purpose of utilization and the relevant certificates shall be verified;
and where the contributions have been deposited as time deposits, whether there is any pledge,
cancellation of contract, or assignment shall be verified.
2. Where contributions are made through technologies, stock certificates or other types of property:
The names of the shareholders, the types, quantities, prices or criteria for appraising the prices of
the property, and the shares or certificates allotted by the company shall be verified.
3. Where contributions are made through technologies and other properties: Except for companies
invested in by foreigners or overseas compatriots, the CPA shall obtain opinions of relevant
institutions, organizations or experts on the appraised prices and evaluate whether their opinions
should be adopted and verify whether the relevant property has already been registered under the
name of the company according to the law prior to incorporation or the recordation date of
increase of its capital; however, for those properties not legally required to be registered, whether
the relevant property has already been delivered to the company before the incorporation or the
recordation date of increase of its capital should be verified.
4. Where contributions are made through share certificates of another company: The CPA shall
verify whether the appraisal is carried out in accordance with the following:
(1) Shares issued by a company that is not listed on the Taiwan Stock Exchange, not traded on the
Gre Tai Securities Market, or not Emerging Stocks, may be appraised based on the net worth of the
company on the date of evaluation.
(2) Emerging Stocks may be appraised based on the average trading price of such stocks on the
date of evaluation; however, if there is no trading price of such stocks on such a date, the appraisal
shall be based on the average trading price of the last day preceding the date of evaluation; in the
event of severe fluctuation of the price, the price shall be appraised based on the average trading
price for the 30-day period before the date of evaluation.
(3) Shares issued by a listed company or a company traded on the Gre Tai Securities Market may
be appraised based on the closing price of such shares on the date of evaluation. Where there is no
transaction price of Emerging Stocks on the date of evaluation, the price shall be appraised based
on the closing price on the last transaction day before the date of evaluation; in the event of severe
fluctuation of the price of such Emerging Stocks, the price shall be appraised based on the average
trading price for the 30-day period before the date of evaluation. Where there is no transaction
price of shares issued by a listed company or a company traded on the Gre Tai Securities Market
on the date of evaluation, the price shall be appraised based on the closing price on the last
transaction day before the date of evaluation; in the event of severe fluctuation of the price of such
shares, the price shall be appraised based on the average of the closing prices for the 30-day before
the date of evaluation.
(4) The date of evaluation under the previous three Subparagraphs shall fall within the two months
prior to the recordation date.
5. In the event of capitalization of dividends and bonuses: Whether the appropriation of earnings
meets the applicable provisions under the Company Law in accordance with the Articles of
Incorporation, the financial statements and the proposal for appropriation of earnings ratified by
the shareholders' meeting (or by consensus of the shareholders) shall be verified.
6. In the event of capitalization of legal reserve: Whether the amount of capitalization and the
calculation of the appropriated amounts meets the applicable provisions under the Company Law
in accordance with the minutes of the shareholders' meeting (or the consensus of the shareholders)
shall be verified.
7. In the event of capitalization of capital reserve: Whether the type, source and contents thereof
comply with the applicable provisions of the Company Law and whether the converted amount is
consistent with the minutes of the shareholders' meeting (or the consensus of the shareholders)
shall be verified.
8. In case of a merger: The CPA shall verify the names of shareholders, the respective number of
shares to be issued and related matters according to the Company Law, the Business Mergers and
Acquisitions Act and other applicable legislations, the minutes of shareholders’ meetings and board
meetings (or the consensus of directors or the shareholders) and the merger contract. The
accounting treatment adopted shall also be stated.
9. In case that new shares are to be issued in a split-up: The CPA shall verify the names of
shareholders, the respective number of shares to be issued and related matters according to the
Company Law, the Business Mergers and Acquisitions Act and other applicable legislations, the
resolutions of the shareholders' meetings and board meetings (or the consensus of directors) and
the split-up plan. The accounting treatment adopted shall also be stated.
10. In the case that new shares are to be issued in acquisition: The CPA shall verify the names of
shareholders, the respective number of shares to be issued and related matters according to the
Company Law, the Business Mergers and Acquisitions Act and other applicable legislations, the
resolutions of the shareholders' meetings and board meetings (or the consensus of directors) and
the acquisition contract. The accounting treatment adopted shall also be stated.
11. In the case that new shares are to be issued in share exchange: The CPA shall verify the names
of shareholders, the respective number of shares to be issued and related matters according to the
Company Law, the Business Mergers and Acquisitions Act and other applicable legislations, the
resolutions of the shareholders' meetings and board meetings (or the consensus of directors) and
the share exchange contract. The accounting treatment adopted shall also be stated.
12. In the case that new shares are to be issued in share conversion: The CPA shall verify the
names of shareholders, the respective number of shares to be issued and related matters according
to the Company Law and other applicable legislations, the resolutions of the shareholders'
meetings and board meetings (or the consensus of directors) and the share conversion contract. The
accounting treatment adopted shall also be stated.
The CPA shall verify the number of shareholders when being requested to certify the capital
amount of a close company in accordance with the preceding paragraph. In case of capital
contributions with technologies or service, written consensus of the all shareholders, the type and
amount of such capital contribution prescribed in the Articles of Incorporation, and the shares
allotted by the company shall be verified submission of value appraisal report is not required. In
regard to capital contributions by service, the names of shareholders and whether such contribution
falls into the percentage announced by the competent authority shall also be verified.
Article 8
When a CPA is engaged to audit for a company’s paid-in capital reduction registration, the audit
report issued by the CPA shall state the reasons for the capital reduction (such as redemption or
buying-back of shares for capital reduction, return of paid-in capital in cash for capital reduction,
return of paid-in capital in kind for capital reduction, making-up losses by capital reduction, and
capital reduction by split-up), the number of cancelled shares, and the amount of capital reduced,
as well as the total number of shares issued and the total amount of capital before and after the
capital reduction.
The CPA engaged to audit and certify the registration of capital amount under the previous
Paragraph shall audit the following matters:
1. The names of shareholders and the number of cancelled shares set forth in the resolution of the
shareholders' meeting or the board of directors meeting (or the consensus of directors or the
shareholders).
2. In the event of a capital reduction by a split-up, the names of shareholders, the number of
cancelled shares and other relevant matters in accordance with the Company Law, the Business
Mergers and Acquisitions Act, the resolution of the shareholders' meeting and the split-up plan.
Article 9
Unless otherwise provided in these Regulations, a CPA's audit report shall contain the following
particulars:
1. The name of the audited statement of change of capital (working capital) and attached
documents and the date thereof.
2. The name of the company audited and its company uniform number; in the case of application
for incorporation of a company, the company uniform number is not required.
3. The CPA's audit scope and his/her professional opinion..
4. Signature and seal of the CPA.
5. The date of auditing and certification.
6. The name, location and telephone number of the accounting firm.
The audit report issued by the CPA pursuant to the audit work performed in accordance with these
Regulations shall include at least four sections. The first section shall be the Introduction, stating
the name of the statement of change of capital (working capital) and the attached documents
audited and the date thereof and the responsibilities of the company and the CPA. The second
section is the Scope, stating the scope and basis of the audit work. The third section is the Opinion,
stating the results of the CPA’s audit and the audit opinions issued. The fourth section is the
Restricted Purpose, stating the purpose for the issuance of the report and the restrictions on its use.
The CPA engaged for the audit of a statement of change of paid-in capital shall prepare to record
the audit work that was planned and performed in accordance with the regulations, which the
competent government authorities may request for review at any time.
The audit documentation shall serve as proof as to whether the CPA has fulfilled his/her
professional responsibilities, as well as the basis for the opinions that formed the audit report. The
opinions, facts and figures included in the audit report shall be supported by substantial evidence
provided in the audit documentation.
The date of auditing and certification as referred to in above Subparagraph 5, Paragraph 1 shall
mean the date on which the audit is completed; provided that certification shall commence from
after the financial instruction's business hours on the date of incorporation or the date of
recordation for capital increase, capital reduction, merger or acquisition.
Article 10
These Regulations shall be enforced starting November 1, 2018.
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