The government is drafting new rules to help start-ups safeguard their ownership after receiving capital injections from outside the companies, the government’s latest effort to encourage start-ups, Premier Mao Chi-kuo (毛治國) said yesterday.
Last year, the Financial Supervisory Commission set up a special trading platform for start-ups to raise funds, Mao said, adding that the government also launched a program to utilize the state-run National Development Fund to support young Taiwanese entrepreneurs.
Mao said that many founders of start-ups have expressed concern about not being able to decide the direction in which their companies operate after receiving funds from outside investors. In light of this concern, Mao requested that the Ministry of Economic Affairs set new rules in the Company Act (公司法) to relax current regulations.
The ministry’s Department of Commerce said it is drafting a new chapter regarding “closed corporations” in the act, and is scheduled to send the draft to the Executive Yuan for review in April.
Department official Chang Ju-chen (張儒臣) said the ministry plans to relax the regulations on the face value of stocks and preferred shares to allow start-up owners to have more freedom in managing stock rights.
“The relaxed regulations would allow start-up founders who have received less capital injections to hold more ownership of their company, ensuring that they can have a say in how the company operates,” Chang said.
For example, investors could agree to allow a start-up’s founder to increase personal shares from 30 percent to 60 percent without requiring a further injection of funds into the company, he said.
However, if a start-up becomes publicly traded after an initial public offering, the firm would subsequently be required to abide by the Company Act as a regular company instead of as a closed corporation, Chang said.
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