The issuance of new shares of a close company shall be adopted by a majority of directors at a meeting attended by two-thirds or more of the total number of directors, unless otherwise provided for in its Articles of Incorporation.

Paragraphs 2 through 4 of Article 356-3 shall apply mutatis mutandis to the contribution of equity capital for subscribing new shares. In addition, such contribution can also be made in the form of monetary credit extended to the close company.

Article 267 shall not apply to the issuance of new shares referred to in Paragraph 1 of this Article.

The provisions pertaining to ordinary liquidation shall apply mutatis mutandis to matters in special liquidation if not provided for in this sub-section.

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A close company is a non public offering company whose shares shall be held by not more than 50 persons, and whose Articles of Incorporation shall impose restrictions on transfer of shares of a company. "The central competent authority shall as necessary in view of the socio- economic situation and the actual needs increase the number of shareholders referred to in the preceding Paragraph; the method of calculation and scope of qualification of the shareholders shall be prescribed by the central competent authority.

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A private placement of corporate bonds by a close company shall be adopted by a majority of directors at a meeting attended by two-thirds or more of the total number of directors.

A private placement of convertible corporate bonds or corporate bonds with warrants by a close company shall be adopted by both the resolution of a meeting of board of directors set forth in the preceding Paragraph and the resolution of a shareholders’ meeting, provided, however, if the provisions of its Articles of Incorporation require no resolution of a shareholders’ meeting, such provisions shall govern.

The restrictions on number of shareholders and transfer of shares imposed by the Articles of Incorporation set forth in Article 356-1shall still apply after the holders of corporate bonds exercising their conversion rights or warrants.

The provisions of Article 246, Article 247, Paragraph 1 and Paragraphs 4 through 7 of Article 248, Article 248-1, Articles 251 through 255, Article 257-2, Article 259, and Paragraph 1 of Article 257 regarding certification of corporate bonds shall not apply to the issuance of corporate bonds provided in Paragraph 1 and Paragraph 2 of this Article.

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A close company may voluntarily change its status into a non close company by a resolution adopted, at a shareholders’ meeting, by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares.

Where stricter criteria for the total number of attending shareholders and for the number of votes required to adopt a resolution at a shareholders’ meeting referred to in the preceding Paragraph are specified in the Articles of Incorporation of a close company, such stricter criteria shall govern.

In any event that a close company fails to meet the requirements set forth in Article 356-1, the company shall change its status into a non close company and shall apply for a necessary alteration registration in respect of such change accordingly.

If a close company fails to apply for an alteration registration in accordance with the preceding Paragraph, the competent authority may order it to rectify such violation within a given time limit and impose successively in each case a fine based on Paragraph Five of Article 387; where the violation is of a severe nature, the competent authority may, ex officio, order the dissolution of a company.

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A non public offering company may change its status into a close company by the unanimous consent of its shareholders.

After the unanimous consent of its shareholders provided in the preceding Paragraph, the company shall immediately notify each of its creditors and make a public announcement.

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A close company shall explicitly describe its nature of 'closeness' in its Articles of Incorporation and the central competent authority shall make such a nature public on its information website.

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A close company shall be formed by the agreement of all promoters and the promoters shall fully subscribe in the first issue of the total number of shares.

Equity capital to be contributed other than cash by the promoters may be in the form of assets required in the business of a close company , technical know-how, or service, provided, however, that equity capital to be contributed by service shall not exceed a certain percentage of the total shares issued by a close company .

The certain percentage set forth in the preceding Paragraph shall be prescribed by the central competent authority.

Equity capital to be contributed by technical know-how or service shall be agreed by all shareholders, and the kinds, amount of such capital contribution and the number of shares allotted to the subscriber by a close company shall be explicitly described in its Articles of Incorporation; the competent authority shall register such particulars in accordance with the Articles of Incorporation and shall make such particulars public on its information website.

The provisions of Article 198 shall apply mutatis mutandis to the election of directors and supervisors by the promoters in a close company , unless otherwise provided for in the Articles of Incorporation.

Articles of 132 through 149 and Articles 151 through 153 shall not apply to the formation of a close company .

The provision of Article 198 shall apply to the election of directors and supervisors in the shareholders' meeting of a close company, unless otherwise provided for in the Articles of Incorporation.

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A close company shall make no public offering of any of its securities, provided, however, that this provision shall not apply to the crowd-funding portal operated by securities businesses approved by the competent authority in charge of securities affairs.

The proviso to the preceding Paragraph shall still be subject to the restrictions on the number of shareholders and transfer of shares imposed by the Articles of Incorporation set forth in Article 356-1.

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The restrictions on transfer of shares shall be explicitly described in the Articles of Incorporation of a close company. "The restrictions on transfer of shares set forth in the preceding Paragraph shall be conspicuously annotated on a close company ’s printed share certificates; if a company does not issue shares, an assignor shall state such restrictions on the relevant written documentation delivered to the assignee. "The assignee referred to in the preceding Paragraph may request the company to deliver a copy of its Articles of Incorporation.

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Where a close company is to issue special shares, it shall include in its Articles of Incorporation provisions concerning:

1. Order, fixed amount or fixed ratio of allocation of dividends and bonus on special shares;
2. Order, fixed amount or fixed ratio of allocation of surplus assets of the company;
3. Order of or restriction on, no voting right, multiple voting right, or veto power over specific matters on the exercise of voting power by special shareholders;
4. Any prohibition or restriction regarding special shareholders’ rights of being elected as directors and/or supervisors or rights of electing a certain amount of seats of directors and supervisors;
5. Number, method or formula for special shares to be converted into common shares;
6. Restrictions on transfer of special shares; and
7. Other matters concerning rights and obligations incidental to special shares.

Paragraph Two of Article 157 shall not apply to multiple voting rights of special shareholders as set forth in Item Three of the preceding paragraph.

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A close company may explicitly provide in its Articles of Incorporation that its shareholders' meeting can be held by means of visual communication network or other methods promulgated by the central competent authority. "In case a shareholders' meeting is proceeded via visual communication network, then the shareholders taking part in such a visual communication meeting shall be deemed to have attended the meeting in person. "A close company may explicitly provide in its Articles of Incorporation that if it is agreed by all its shareholders, any action to be taken at a shareholders' meeting may be taken, without a meeting, by written consents to exercise their voting power. "A shareholders' meeting held in accordance with the preceding Paragraph shall be deemed to have been convened; the shareholders who exercise their voting power by written consents shall be deemed to have attend the meeting in person.

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Shareholders of a close company may reach a voting agreement in writing to jointly exercise their voting rights or may form a voting trust where the voting trustee will exercise the voting power based upon the terms and conditions stated in such a written voting trust agreement. "The trustee referred to in the preceding Paragraph shall be a shareholder unless otherwise provided for in its Articles of Incorporation. "A voting trust cannot be set up as a defense against the close company unless the written voting trust agreement referred to in the first Paragraph, the name or title, office, residence or domicile of each shareholder, and the total number, kind and amount of shares transferred to the voting trust have been delivered to the company for registration 30 days prior to a regular shareholders’ meeting or 15 days prior to a special shareholders' meeting.

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Unless otherwise approved specifically by the central authority in charge of the object enterprise, when a company issues new shares, there shall be ten to fifteen per cent of such new shares reserved for subscription by employees of the company.

When a government operated enterprise issues new shares, it may, after obtaining the special approval from the competent authority in charge of the said enterprise, reserve no more than ten per cent of such new shares for subscription by its employees.

In issuing new shares, a company shall make public announcement and advise, by notice, its original shareholders to subscribe for, with preemptive right, the new shares, except those reserved under either of the preceding two paragraphs, in proportion respectively to their original shareholding and shall state in the notice that if any shareholder fails to subscribe for new shares, his right shall be forfeited. Where a fractional percentage of the original shares being held by a shareholder is insufficient to subscribe for one new share, the fractional percentages of the original shares being held by several shareholders may be combined for joint subscription of one or more integral new shares or for subscription of new shares in the name of a single shareholder. New shares left unsubscribed by original shareholders may be open for public issuance or for subscription by specific person or persons through negotiation.

The right to subscription of new shares as provided for in the preceding three paragraphs, except those reserved for subscription by employees, may be separated from the rights in original shares and transferable independently.

The provisions provided in Paragraphs One and Two under this Article for reserving the right of subscribing new shares by employees shall not apply to the case where the new shares are distributed to original shareholders as dividend shares capitalized with the reserve fund or the value increments of assets.

A company may restrain the shares subscribed by its employees under Paragraph One or Paragraph Two of the article from being transferred or assigned to others within a specific period of time which shall in no case be longer than two years.

Qualification requirements of employees, including the employees of parent s or subsidiaries of the company meeting certain specific requirements, entitled to receive shares in accordance with the provision of Paragraph One, may be specified in the Articles of Incorporation.

The provisions set out in this Article shall not apply to the company which is merged by or with another company, or is split up, or is under reorganization, or is issuing new shares in accordance with the provisions set out in Article 167-2, Article 235-1, Article 262, or Paragraph I, Article 268-1 of this Act.

A company issuing restricted stock for employees shall not apply Paragraphs One to Six of this Article and shall adopt such resolution, at a shareholders’ meeting, by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares.

In the event the total number of shares represented by the shareholders present at a shareholders’ meeting of a public company is less than the percentage of the total shareholdings required in the preceding Paragraph, the resolution may be adopted by two-third of the voting rights exercised by the shareholders present at the shareholders’ meeting who represent a majority of the outstanding shares of the company.

Qualification requirements of employees, including the employees of parents or subsidiaries of the company meeting certain specific requirements, entitled to receive restricted stock for employees in accordance with the provision of Paragraph Nine, may be specified in the Articles of Incorporation.

The competent authority in charge of securities shall prescribe rules governing the issuance amount, issuance price, issuance conditions and other matters for compliance for a company offering its shares to the public and issuing new shares in accordance with the preceding three Paragraphs.

The responsible person of a company violating the provisions of Paragraph I under this Article shall be subject to a fine of not less than NT$ 20,000 but not more than NT$ 100,000.

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A close company shall be formed by the agreement of all promoters and the promoters shall fully subscribe in the first issue of the total number of shares.

Equity capital to be contributed other than cash by the promoters may be in the form of assets required in the business of a close company , technical know-how, or service, provided, however, that equity capital to be contributed by service shall not exceed a certain percentage of the total shares issued by a close company .

The certain percentage set forth in the preceding Paragraph shall be prescribed by the central competent authority.

Equity capital to be contributed by technical know-how or service shall be agreed by all shareholders, and the kinds, amount of such capital contribution and the number of shares allotted to the subscriber by a close company shall be explicitly described in its Articles of Incorporation; the competent authority shall register such particulars in accordance with the Articles of Incorporation and shall make such particulars public on its information website.

The provisions of Article 198 shall apply mutatis mutandis to the election of directors and supervisors by the promoters in a close company , unless otherwise provided for in the Articles of Incorporation.

Articles of 132 through 149 and Articles 151 through 153 shall not apply to the formation of a close company .

The provision of Article 198 shall apply to the election of directors and supervisors in the shareholders' meeting of a close company, unless otherwise provided for in the Articles of Incorporation.

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