Representatives of business groups, lawyers, accountants and bookkeepers’ unions yesterday opposed the Ministry of Economic Affair’s proposed amendment to the Company Act (公司法) at a public hearing in Taipei, citing concerns over increased operating costs and inconvenience to small and medium-sized enterprises (SME).
The Chinese National Federation of Industries (CNFI, 全國工業總會) and the Chinese National Association of Industry and Commerce, Taiwan (CNAIC, 工商協進會) said they are worried about the proposed amendment, as it demands that non-publicly listed companies upload sensitive information, such as a full list of shareholders and financial statements, to an online platform.
“If an SME is not listed on the Taiwan Stock Exchange or the Taipei Exchange, it is not obliged to disclose that information. This simply adds an unnecessary burden to SMEs,” CNFI representative Wang hui-ling (王慧玲) told the hearing, which was convened by the ministry.
The Taipei Bar Association (台北市律師公會) said it does not think disclosing shareholder lists would protect shareholders’ interests.
On the contrary, it would jeopardize personal information security, it said.
The ministry unveiled the draft amendment on Thursday last week and held the first public hearing yesterday to get feedback from the public. The ministry is to hold two more hearings before finalizing the details of the amendment and sending it to the Executive Yuan before next month.
The draft proposes that non-listed companies with a paid-in capital of more than NT$30 million (US$997,606) should disclose their shareholders’ lists, audited financial statements and employment scale to an online system set up by the ministry in an effort to protect shareholders’ interests by improving the transparency of company management. Non-listed companies with paid-in capital of less than NT$30 million, but with revenue and employment scales similar to companies above the paid-in capital threshold would have to follow the same procedure.
Whoever uploads the information would bear responsibility for its authenticity, the amendment says.
“The proposed regulations can protect investors’ interests, prevent zombie companies and money laundering,” Department of Commerce Director-General Lee May (李鎂) told the hearing.
Lee said the ministry estimated that more than 670,000 non-listed companies would be affected by the proposed regulations.
National Chengchi University College of Law professor Faung Kai-lin (方嘉麟) said the proposal might affect a large number of domestic companies, but it could help improve the transparency of the management of corporate bodies.
“We do not think it would add operational costs to companies,” Fuang said. “We think it would help to identify companies that do not have good operations.”
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