LISTED mainland companies will hav to start answering to shareholders if the new company law is implemented as planned tomorrow. ''Now the law clarifies shareholders' rights as they have the ultimate decision-making power. Before, enterprises were answerable only to the state,'' said Linklaters and Pains solicitor and head of China department Judith Crosbie. Shareholders' power in financial matters are defined to include such basic rights as to examine the minutes of shareholders' meetings as well as financial and accounting reports. Stake-owners will also have final say in approving budgets, accounts, profit distribution plans and plans for recovery of losses. They are to decide on issues such as merger, division, dissolution and liquidation of the company. The issuing of bonds and any increases or reductions in the company's registered capital is subject to shareholder approval. But the law is still vague in many ways. While the content of financial reports is set out, no detailed financial disclosure is required. Terms such as ''serious illegal act'', regarding suspension, are open to interpretation. Audits are a must, but the credentials of auditors are not specified. Because the new law sets more stringent level of accountability than the previous Opinion on the Standardisation of Limited Liability Companies and the Opinion on the Standardisation of Joint Stock Companies, it is uncertain whether the nine listed mainland companies will have to re-register. ''They may have to carry on a further process to complete corporation. At some point they'll be notified that they are not legal companies,'' Ms Crosbie said. Lawyers and academics felt the law would have only a nominal effect on foreign investors. Mainland companies will have higher standards to meet, according to Susanna Chiu, manager of certified public accountants Grant Thorton. Speaking at an Asia Law Journal conference yesterday, Ms Chiu said foreign companies had the option of using either the company or Sino joint venture law, but when in conflict they stuck to the latter. ''In practice, there won't be much conflict between the new law and Sino joint venture law,'' Ms Chiu said. She said foreign companies had more flexibility to act under the existing law but the minimum capital requirement under new legislation would be effective in making mainland partners pay up.