Limited company by shares in Taiwan holds an annual regular meeting of shareholders every year. If there are significant matters to be discussed, an extraordinary general meeting of shareholders may also be convened. Generally, both regular meeting and special meeting are convened by the board of directors. However, if the board of directors is unable to convene a meeting, there are two alternative methods to convene a special meeting of shareholders:
If the board of directors is unable to convene the meeting, the supervisors may convene a special meeting of shareholders if it is necessary for the benefit of the company.
Shareholders who have held 3% or more of the total issued shares for over one year may, with the approval of Taiwan Ministry of Economic Affairs, convene a shareholders’ meeting. Alternatively, shareholders who have held 50% or more of the total issued shares for over three months may convene the meeting without any permission.
For unlisted companies, the stock transfer suspension period is within 15 days before the meeting. For listed companies, the stock transfer suspension period is within 30 days before the meeting. Shareholders who need to attend or convene a special meeting of shareholders, must purchase or hold the company’s stock before the stock transfer suspension period to be eligible to attend the shareholders’ meeting.
According to Taiwan Company Act, the board of directors is the executive of the company. Whoever hold most seats on the board controls the management of the company. If some companies, different factions of shareholders or directors may use the special meeting to vie for management control. Once the special meeting is convened to re-elect directors and supervisors, the existing management team can be entirely dismissed, resulting in a complete change in control. Therefore, current management should be aware of this potential risk.
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A Taiwan limited company by shares is required to appoint at least one supervisor to oversee and conduct audits of the company’s operations. The primary purpose of supervisor role is to serve as a check against the board of directors, ensuring that the rights of general shareholders are not infringed upon and that directors do not abuse their powers for personal gain.
No matter foreigners or Taiwanese to be the responsible person of Taiwan company, the tax regulations will be varied as different as the country of tax residents.Residency and holding the household registration in Taiwan within 1 to 31 days (with Taiwan labour insurance, health insurance, national pension, or spouse and children in Taiwan).
To comply with the Anti-money laundering policies, Taiwan companies shall declare the shareholding information which shareholders holding the shares more than 10% on the shareholder declaration platform affiliated with TDCC (Taiwan Depository & Clearing Corporation) on March 1st to 31st annually.
Taiwan companies don’t have to pay taxes if the company have a great deficit within the first few years. Upon making profits, the losses incurred from the past few years are not possible to recover the offset, which is different than other countries. For tax return by the due date, from the position of Taiwan Taxation Bureau, the due date is included the tax return and payment.
