Registering on GISA and Counseling Procedures

Following is the procedures about GISA registering and counseling:

(1)Companies or preparatory offices applying for GISA registering

Companies have to meet the following requirements to apply for GISA registering:

  1. Companies should be incorporated, limited, or preparatory offices for incorporated company and established according to Taiwan, Republic of China’s Company Act.
  2. Companies’ or preparatory offices’ planned paid-in capital should be less than NT$50 million, but by obtaining recommendation letter or innovation and creativity opinion letter from city and county government (or higher level), the regulatory authority in charge of a relevant industry, or other organizations approved by TPEx, the applicant can waive the paid-in capital criteria.
  3. Companies should possess original ideas and potential.
  4. There are no requirements about establishment date and profitability.
  5. Companies are willing to accept TPEx’s integrative counseling

(2)TPEx and outside professional’s innovation examination (First-stage examination)

After receiving the application, TPEx will contact outside professionals of relevant fields to issue innovation opinions on the company’s or preparatory office’s technology, products, and business model. If more than half of these professionals agree, and after TPEx’s comprehensive consideration as appropriate, the company then will be able to receive integrative counseling.

For companies or preparatory offices obtaining Technology, Product, or Business Model Innovation Opinion from city and county government (or higher level), the regulatory authority in charge of a relevant industry, or other organizations approved by TPEx, such as Industrial Technology Research Institute of Taiwan, R.O.C, Institute for Information Industry, or Commerce Development Research Institute, the applicant can waive the examination. However, only after TPEx’s comprehensive consideration as appropriate, the company can then receive integrative counseling.

(3)TPEx’s public integrative counseling mechanism

After company pass the examination or obtain Technology, Product, or Business Model Innovation Opinion, TPEx’s public integrative counseling mechanism will provide integrative counseling services, with resources from relevant associations to provide accounting, internal control, marketing, and regulatory integrative counseling services. In this way, innovative non-public small-sized companies are able to set up internal control, accounting, and corporate governance systems.

Basically above-mentioned counseling period should not exceed two years, but for reasons deemed as appropriate by GTSM, the counseling period can be extended.

(4) Examination prior to GISA registering (Second-Stage Examination)

After the company or preparatory office receives TPEx’s public integrative counseling for some time and TPEx consider the company as appropriate to be registered on GISA, and the company’s registering plan is on schedule, TPEx will proceed to examination prior to registering on GISA. The examination focuses on applying company’s management teams, role of board of directors, effective accounting and internal control systems, and reasonableness and feasibility of capital raising plan prior to GISA registering. If the company passes the examination, TPEx will notify the company to raise capital prior to GISA registering.

(5) Capital raising prior to GISA registering

For the company or preparatory office raising capital prior to GISA registering, the company should post capital raising information on GISA’s webpage, and then investors can purchase through TPEx GISA capital raising system. The company is now allowed to choose the type and list of investors. If the capital raising process cannot be completed, the company cannot be registered on GISA.

(6) Registering on GISA

After companies or preparatory offices complete capital raising process, amendment of certificate of incorporation, or establishment registration, it can choose the registering date to be registered on GISA. TPEx will give a four-digit stock code, and the code also applies even when the company applies for public offering, emerging board, main board of TPEx or TWSE afterwards.

(7) Counseling and supervision after GISA registering

Continuous counseling

After the company being registered on GISA, TPEx will continue to provide counseling about business transparency and internal control effectiveness. Registered companies should send employees for relevant training sessions. However, due to the scarcity of resources, GISA registering period can be extended after three years, without the following circumstances:

  1. The company’s internal control and accounting systems are not soundly established or effectively operated.
  2. The company or any director, supervisor, general manager, or actual responsible person has committed any act in violation of the principle of good faith.
  3. The company does not disclose the information specified in Article 22 and 23 of Regulations Governing the Go Incubation Board for Startup and Acceleration Firms.
  4. The company’s working capital is seriously sufficient.
  5. The company does not have designated accounting personnel or financial reports audited by a CPA.
  6. Other reasons deemed as inappropriate by TPEx. The company approved to extend registering period should be responsible for fees in regards of financial auditing by accounting firms and shareholder services provided by securities firms.
    GISA registered companies are expected to enlarge their operating scale and proceed to public offering and TPEx main board listing.

Supervision- information disclosures are required

  1. Basic information: main products, management teams, and financial and sales information
  2. Annual filings: information about shareholders' meeting and financial statements
  3. Quarterly filings: raised capital utilization reports
  4. Occasional filings: material information such as return of check, loss of credit, lawsuit, or serious reduction of output.

Suspension clauses- suspend GISA capital raising functions

  1. Failing to file annual financial statements
  2. Failing to hold shareholder’s meeting
  3. Failing to file material information, and fail to improve after being requested
  4. Failing to comply with provided statement or commitments
  5. Material avoidance of CPA or professional counseling or inspection requested by TPEx
  6. Material violation of Company Act or GISA rules
  7. Other reasons deemed as necessary by TPEx to suspend GISA capital raising functions

Termination mechanism

  1. Applying to competent authorities for retroactive handling of public offering procedures, and the application becoming effective
  2. Registered on GISA for more than three years (but for reasons deemed as appropriate by TPEx, the registering period can be extended)
  3. Being suspended for GISA capital raising functions for more than three months according to article C (The reasons for suspension are not limited to one clause)
  4. Being revoked of its company registration or dissolved by competent authorities
  5. Applying to court for bankruptcy or restructuring
  6. Applying documents, information provided, or explanations containing material omission or misstatements
  7. Material violation of Company Act, GISA rules, or GISA agreement
  8. Other reasons deemed as necessary by TPEx