Agency between Shareholders and Companies

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This is more an academic thought than a practical tip.

I am reading the book “Agency, Partnership and the LLC” (2nd ed, West Nutshell Series)  by J. Dennis Hynes in particular to find support for my personal understanding of the agency relationship between shareholders/members and the companies/corporations they invest.

In China, law scholars seldom shed…

Answer to a question posed by a blog reader regarding legal representative of China company

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Here is the question:

Dear Jason,

Today I was doing some research on the legal representative of WFOE’s. During my research I came across the following article:

In your article you mention the following:

When this legal representative resigned by submitting his resignation letter to board of

Trademark issue in OEM production arrangement in China

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OEM production is an important way of China collaborating with foreign businesses where a Chinese factory is requested to produce certain parts or end products under an OEM contract under which such parts or products will all be shipped to foreign markets. In this post, OEM production we discuss refers particularly to an OEM arrangement where the China OEM …

Chinese FDI in Africa

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Overview of overseas business of Chinese companies

China’s role in the global economy has rapidly changed. As Chinese FDI outflows are rapidly closing the gap with inflows, the country is expected to be the most important net investor in the world in the coming two years (Unctad, 2014).

The increasing importance of state-owned enterprises (国有企业,国营企业) in …

Never forget to add a clear liquidated damage clause in your business contracts with China

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The world is now sourcing various products in and from China. You may be one of them.

Wherever you do business with China (I mean, Chinese businessmen), you need to sign a contract with your Chinese counterparts.

Unfortunately, as a new market economy where most businesses esp the small ones don’t really know much about market, Chinese businesses don’t…

Previous CIETAC Shanghai now assured of its jurisdiction over arbitration cases after changing name

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Many may be aware of the row between CIETAC Shanghai (now Shanghai International Arbitration Center) and CIETAC headquarter in Beijing.

For long, CIETAC Shanghai is operating as a branch office, and under the instructions of CIETAC headquartered in Beijing. But disputes erupted in 2012 when CIETAC revised its arbitration rules with CIETAC Shanghai claiming…

Dispute resolution where international lawyers may be weak in China

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International law firms and lawyers are thriving in China for long. Foreign investors generally come into China hand in hand with a foreign law firm.

International law firms are appealing to foreign investors in China for various reasons: feeling more bonded with each other due to language skills and culture, having global connections and resources to serve…

Pitfall for buyers of Chinese trademarks

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Here is the story:

A foreign investor wishes to buy a Chinese local brand in respect of certain products falling within Class A, and at the time of executing the trademark transfer agreement, the seller doesn’t disclose that he has a very similar trademark in Class B products which are similar products with those in Class A. After partial payment of the …

When does a share buyer become shareholder in a Chinese company when buying its shares?

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To many, it may seem a simple and even stupid question. But it is not.

I   In the Case of Domestic Company

In a country with the tradition of statute laws, when a statute law fails to offer a clear answer to a certain legal issue, it can be a problem in practice.

With respect to the captioned question, China Company Law does not provide clearly for when a buyer of the equity…

China’s inflation slides to 5-year low

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Low Inflation Rate

According to the National Bureau of Statistics, China’s inflation rate slides to 5-year lowest in September.

Meanwhile, the producer price index, a measure of inflation at the factory gate, fell 1.8 percent last month, after slipping 1.2 percent in August. In this month, the consumer price index increased only 1.6% year-on-year, which…

What if your real property in China is sold by an unauthorized person?

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It happens not only in China. There seem to be property scam all over the world, click here and here.

A recent case intrigues me a lot.

Facts: an old Shanghai lady who become an American citizen back in 1990s left her apartment in down town area of Shanghai to her niece for use and care. Recently when she came back to Shanghai, she found that her apartment was now owned…

broadcasting right for sport events in China

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I have been serving as external legal counsel for SlamBall China for a couple of years. With its rapid growth and expansion, it has attracted more and more media attention. In this November, it will hold a SlamBall tournament in Wuhan and Beijing, a big event for SlamBall China and for the sport itself.

Here comes an internet company with interest to broadcast …

Allocated land use right issue in purchasing properties in French Concession Area in Shanghai

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This is actually a summary written to one of my clients who is selling his house in the French Concession Area in Shanghai. One of his prospective buyers raised a good question regarding the land use right after reviewing the title deed of the house. Unlike other new apartments, my client’s title deed of his house does not specify a 70 year period of land use…

Can the landlord enforce a lease contract under Chinese laws?

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Leasing is a commonplace type of real estate deals in the market. There are many kinds of leases, apartment lease, factory lease and office lease etc.  Serviced offices are regarded as a type of lease with special features.

Landlords always have the same headaches of tenants terminating the lease prematurely. For serviced office providers, this headache…

Obtain a security interest (guarantee) from a Chinese company

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In business world, security is critical. For creditors like traditional banking lenders or industrial companies that are occasionally involved in lending, borrowing or other obligations, a security interest in the form of collateral, guarantee, standby letter of credit is always craved if ever available.

A security interest in this post refers to any  …

Is it a good time to buy property in Shanghai China?

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You may say it is crazy to buy Chinese properties esp those first-tiered cities like Shanghai, Beijing, where the expectation of price drop just seems to take hold.  Probably people should wait for some time before the market gets clear where it will be going.

Not everybody has that patience.

According to a Wall Street Journal article “China buzzards

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