In China, the supervisory organization composed of supervisors is called the board of supervisors, which is the necessary statutory supervisory organization of the company. Supervisors are usually composed of shareholder representatives and employee representatives, and may not concurrently serve as directors or managers.
Because the shareholders of the company are scattered and their professional knowledge and ability vary greatly, in order to prevent the board of directors and managers from abusing their powers and harming the interests of the company and shareholders, it is necessary to select this special supervision institution at the shareholders' meeting to exercise the supervision function on behalf of the shareholders' meeting.
Legal basis: People's Republic of China (PRC) Company Law.
Article 52 A limited liability company shall set up a board of supervisors with no less than three members. A limited liability company with fewer shareholders or smaller scale may have one or two supervisors instead of a board of supervisors.
The board of supervisors shall include an appropriate proportion of shareholders' representatives and employees' representatives, of which the proportion of employees' representatives shall not be less than one third, and the specific proportion shall be stipulated in the articles of association. The employee representatives in the board of supervisors are elected by the employees of the company through employee congresses, employee congresses or other forms of democratic elections.
The board of supervisors shall have a chairman, who shall be elected by more than half of all supervisors. The chairman of the board of supervisors shall convene and preside over the meeting of the board of supervisors; If the chairman of the board of supervisors is unable to perform his duties or fails to perform his duties, more than half of the supervisors shall jointly nominate a supervisor to convene and preside over the meeting of the board of supervisors.
Directors and senior managers shall not concurrently serve as supervisors.
Article 53 The term of office of a supervisor is three years. Upon expiration of the term of office, a supervisor may be re-elected.
Where the supervisor fails to be re-elected in time upon the expiration of his term of office, or the members of the board of supervisors are less than quorum due to the resignation of the supervisor during his term of office, the original supervisor shall still perform his duties in accordance with laws, administrative regulations and the Articles of Association before the re-elected supervisor takes office.
Article 54 The board of supervisors and the supervisors of a company without a board of supervisors shall exercise the following functions and powers:
(a) to check the company's finances;
(2) To supervise the acts of directors and senior managers in performing the duties of the Company, and put forward suggestions for the removal of directors and senior managers who violate laws, administrative regulations, articles of association or resolutions of the shareholders' meeting;
(3) To require directors and senior managers to correct their actions when they harm the interests of the company;
(4) Proposing to convene an extraordinary shareholders' meeting, and convening and presiding over the shareholders' meeting when the board of directors fails to perform its duties as stipulated in this Law;
(five) to submit a proposal to the shareholders' meeting;
(6) To institute legal proceedings against directors and senior managers in accordance with the provisions of Article 152 of this Law.
(seven) other functions and powers stipulated in the articles of association.
Article 55 Supervisors may attend board meetings as nonvoting delegates and raise questions or suggestions on matters resolved by the board.
The board of supervisors and the supervisors of the company without a board of supervisors may investigate the company's abnormal operation; If necessary, an accounting firm can be hired to assist in the work, and the expenses shall be borne by the company.
Article 56 The board of supervisors shall meet at least once a year, and the supervisor may propose to convene an interim meeting of the board of supervisors.
The discussion methods and voting procedures of the board of supervisors shall be stipulated in the company's articles of association unless otherwise stipulated in this Law.
The resolution of the board of supervisors shall be adopted by more than half of the supervisors.
The board of supervisors shall make minutes of the decisions on the matters discussed, and the supervisors present at the meeting shall sign the minutes.
Article 57 The expenses necessary for the board of supervisors and the supervisors of a company without a board of supervisors to exercise their functions and powers shall be borne by the company.
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