Taiwan Company Law has long been perceived as a mandatory statute instead of an enabling one in practice. However, the increasing global competition coupled with rapidly changing technology call for more flexibility in corporate law. But where the boundary is not an easy question to answer. This paper aims to propose a framework for evalu-ating the validity of articles of incorporations. Among others, authors suggest principles of corporate law, the corporate control market, the protection of minority shareholders, and the compatibility between dif-ferent national policies and laws be considered.
The paper further analyzes two articles of incorporation: one is the limit of the directorship of a shareholder, and the other is a variable-range for the size of the board of directors. While the competent author-ity has accepted their validity, authors suggest differently. By using the framework of evaluation set forth in this paper, authors argue that these two articles not only violate the well-established principles of the Tai-wan Corporate Law (i.e., the free transferability of shares and the man-datory cumulative voting system), but also destroy the market for corpo-rate control.