The capital of a company limited by shares shall be divided into shares, and a company shall choose either par value or no par value shares when issuing shares.

For a company issuing par value shares, each share shall have the same par value; for a company issuing no par value shares, the payment for such no par value shares shall be fully set aside as equity capital.

A portion of the shares may be designated as special shares, with the kind of such special shares to be specified in the Articles of Incorporation.

The total number of shares as specified in the Articles of Incorporation may be issued in installments; for shares to be issued at the same time and under the same conditions of issuance, the issuance price thereof shall be the same. The method to determine the issuance price for a public company may be prescribed by the competent authority in charge of securities affairs.

Equity capital to be contributed other than cash by shareholders may be in the form of monetary credit extended to the company, or the property or technical know-how required by the company, provided, however, that the amount of such substitutive capital contribution shall require a prior approval of the board of directors.

A company may convert all of the issued par value shares into no par value shares 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; the capital reserve set aside based on Item One, Paragraph One of Article 241 before such convert shall become equity capital in whole.

Where there is any higher percentage of the total number of shares represented by the shareholders present and/or the total number of the voting rights required in the Articles of Incorporation for the preceding paragraph, such higher percentage shall prevail.

When a company issuing share certificates converts all of its par value shares into no par value shares in accordance with Paragraph One, the share price of issued par value shares shall be considered to be not written from the record date of such convert.

Under the circumstance of preceding paragraph, the company shall give notice to each shareholder to exchange his/her shares within 6 months from the record date of such convert.

The preceding four paragraphs shall not apply to public companies.

A company choosing to issue no par value shares shall not convert its shares into par value shares.

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A company may, in pursuance of the resolution adopted by its board of directors, apply to the competent authority in charge of securities affairs for an approval of public issuance of its shares. A company may apply for an approval of ceasing its status as a public 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. "In the event the total number of shares represented by the shareholders present at a shareholders’ meeting of a company whose shares have been issued in public 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. "Where there is any higher percentage of the total number of shares represented by the shareholders present and/or the total number of the voting rights required in the Articles of Incorporation for the preceding two paragraphs, such higher percentage shall prevail. "A public company has resolved, moved to an unknown place, or failed to perform the duties as a public company under the Securities and Exchange Act for causes not attributable to the company, the competent authority in charge of securities affairs may cease its status as a public company. "In the case of a government owned company, the public issuance of its shares and the cease of its status as a public company shall require a special prior approval of the competent authority in charge of such enterprise.

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After its incorporation, the company may, pursuant to a resolution adopted by a majority vote of a meeting of the board of directors attended by two-thirds or more of all the directors, issue new shares as the consideration payable by the company for its acquisition of the shares of another company, without being subject to the restrictions set out respectively in Paragraphs One through Three, Article 267 of this Act.

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After its incorporation, for improving its financial structure or resuming its normal operation, the company participating in the special approval of the governmental bailout program may issue and transfer new shares to the government as the consideration for receiving governmental financial help. Such issuing procedure shall not be subject to the restrictions regarding issuance of new shares set forth in this Act and the regulations thereof shall be prescribed by the central competent authority. "In the case that the bailout program under the preceding paragraph reaches NTD 1 billion, the competent authority of the special approval and the company receiving such bailout shall report its self-help plan to the Legislative Yuan.

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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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When a company publicly issues new shares, the payment on such shares shall be in cash; where such shares are not issued to the public; however, but rather subscribed to by shareholders or by particular persons by agreement, any property necessary to the business of the company may be in lieu thereof.

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