✒️Draft SHA

Rule No.0 - Governance Rule

Rules No. 1 ~ 255 - Voting Rules

Rules No. 256 ~ 511 - Position Allocate Rules

Rules No.512~767 - First Refusal Rules

Rules No. 768 ~ 1023 - Group Update Orders

(1) Right holders directly exercise rights

Right holders may, by means of digital signature technology, have their identities verified so that may directly send instructions of exercising rights to specific API of smart contracts, thereafter, the relevant function or method will be triggered, and will update the states of the Register of Members, Meeting Minutes, or other Book-Entry records in accordance with the predefined rules and terms, thereby achieves the desired legal consequences accordingly. Throughout this process, there is no need for any third party, such as secretary, agent or authority, to engage in as legal representative or proxy. ComBoox can ensure that the actions for right exercising are not intervened or controlled by any third party.

(2) Obligors have no chance to default

The reason why defaults occurred usually because the realization of contractual rights requires obligors to make cooperation behaviors actively. If using smart contracts to define and control the book-entry system, then, many “claim rights” will be transformed into "disposal rights" that can be unilaterally exercised by right holders. In this way, the possibility of defaults will be completely eliminated.

As for the organizational documents like the Articles of Association or the Shareholders Agreement, many defaults are actually Ultra Vires behaviors (either substantive or procedural) of the controlling shareholder or executive officers. Smart contracts have rigid and strict programming logic, and can precisely control the timing, permissions, procedures, and other conditions of business operations, which may fundamentally eliminates such challenges with respect to corporate governance.

(3) Real-time information disclosure

Corporate governance behaviors can generally be categorized into several sepecific types, signing documents, voting, paying consideration, nominating candidates, accepting appointment, and resignation etc. The existing technology has already been able to implement on blockchain of all these legal behaviors that are emphasizing on "Expressing Intent" or "Updating Book-Entry Interests", i.e. using blockchain to record the digital tracks of the behaviors, and using smart contracts to automatically verify identity of the actor, determine the conditions precedent, and control the timeline and process accordingly.

Blockchain is a distributed system that enables real-time information sharing. In case of a legal behavior is accepted to conduct on blockchain, at the same time when it updates the book-entry records and enforces the legal effects, the corresponding information will be disclosed simultaneously. Legal actions and information disclosure are no more separate activities, which will be transformed into an integrated action with no time lag or contents difference. Consequently, disclosure issues like untimely delay, misrepresentation, or misleading statements should become impossible to occur.