fully paid within the time period stipulated by the company's by-laws (articles of association), or within a maximum of one year from the company's registration in the Commercial Register. Shares may be issued in either registered or bearer form. Registered shares may be issued in documentary form with a share certificate or book-entered (dematerialised) form, whereas bearer shares can only be issued in book-entered (dematerialised) form. Both types are generally transferable. The articles of association may restrict (but not exclude) the transferability of shares. The joint-stock company may issue ordinary shares (including collective shares that substitute more shares of the same class having the same nominal value), voting and non-voting preference shares. The option to issue employee shares as a specific share type is no longer allowed. The nominal value of preference shares issued by a company cannot exceed 50% of its registered capital. Joint-stock companies must create a reserve fund at the time of incorporation with a minimum amount of 10% of the registered capital. This reserve fund has to be replenished each year with an amount specified in the articles of association, but subject to a minimum of 10% of the net reported profits, until such time as it reaches the amount specified in the articles of association (which must be at least 20% of the company's registered capital). The reserve fund may only be used to cover the company's losses and is not readily distributable to shareholders. The supreme body of a joint-stock company is the General Meeting of its shareholders. Each shareholder is entitled to attend general meetings, vote, ask for information and explanations concerning the dealings of the company and to make proposals. The exclusive powers of the general meeting include amendments to the articles of association, increase or reduction of the registered capital, appointment and removal of members of the Board of Directors and the Supervisory Board, approval of financial statements and profit distribution, decisions concerning the winding-up of the company and the changing of its corporate form. The Board of Directors is the statutory body of the company that manages the company's operations and acts on its behalf. The Board of Directors decides on all matters of the company, except for those reserved to the authority of the General Meeting or Supervisory Board by law or the articles of association and is responsible for ensuring proper accounting and reporting procedures. Members of the Board of Directors who breach their duties have joint and several liability to compensate damage caused to the company. Joint-stock companies must also have a Supervisory Board with at least three members, to supervise the exercise of powers by the Board of Directors and the conduct of business by the company. The annual financial statements must be audited by an authorised auditor and must be published.
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