The Ministry of Economic Affairs rendered the Jing-Shang-10302136340 Circular of November 18, 2014 (hereinafter, the "Circular") to communicate that when the chairmanship of a company is vacant due to the retirement of the chairman during his tenure as a director, Article 208, Paragraph 3 of the Company Law may apply by analogy where the vice chairman may act on behalf of the chairman.

Article 203, Paragraph 1 provides: "Meetings of the board of directors shall be convened by the chairman of the board of directors, except for the first meeting of each term of the board of directors which shall be convened by the director who received a ballot representing the largest number of votes at the election of directors." Paragraph 4 of the same article provides: "Where the number of directors attending the first meeting of the newly elected board of directors is less than the minimum quorum of the meeting of the board of directors convened for election of the chairman and the managing directors of the board of directors, then the original convener shall resume the meeting within 15 days to conduct the election, and may apply the resolution adopting method set forth in Article 206 of this Law."

According to the Circular, the purpose of Article 203, Paragraph 4 of the Company Law is that since the first board meeting of each term mostly deals with the appointment of the company's chairman and is therefore very important, if the number of directors attending the meeting does not reach the quorum for the election of the chairman, the original convener should continue to convene the meeting within 15 days and to elect the chairman by way of a general resolution adopting method under Article 206 of the Company Law so that the company may appoint the chairman as soon as possible to guide the company's operation to the right track.

It was further indicated in the Circular that in case of the vacancy of chairmanship due to the retirement of the chairman when he reaches the retirement age, this is not the circumstance where directors are elected during the first board meeting of each term under Article 203, Paragraph 4 of the Company Law. To wit, Article 206 of the same law shall not be applied to elect the chairman by a general resolution adopting method, and Article 208, Paragraph 3 of the Company Law may apply by analogy where the vice chairman may act on behalf of the chairman; or in the absence of a vice chairman, the managing directors or directors may appoint one director among themselves to act on behalf of the chairman and call a board meeting to elect the chairman.