Newsletter
NON-VOTING SHARES
In an interpretation dated 31 October 2002, the MOEA stated that if a company limited by shares that has a single corporate shareholder issues special shares without voting rights, and such non-voting shares are subsequently held by a shareholder other than the single corporate shareholder, then the company ceases to be a single-shareholder company, and the provisions of Article 128-1 of the Company Law concern-ing single-shareholder companies no longer ap-ply.
Further, the old Paragraph 5 of Article 172 of the Company Law, which provided that "Paragraphs 1 to 3 regarding notice of shareholders' meetings shall not apply to shareholders without voting rights," was repealed in the amendment of 12 November 2001. The legislative intent of the amendment is that a non-voting shareholder merely lacks the right to vote, and should not be deprived of the right to attend shareholders' meetings. The right to attend shareholders' meetings, participate in debate, and ask questions shall be the shareholder's basic "right to know." Therefore under the amended Company Law, when the board of directors convenes a share-holders' meeting, it must also give notice of the meeting to non-voting shareholders in accor-dance with Article 172 of the Law.