We have already written a few articles regarding inheritance by foreigners of corporate shares (a stock company limited by share) or equity interests (a general limited liability company) in a China company, where typically the deceased is a Chinese citizen being a shareholder in a China domestic company and the heirs (often spouse and children) have already…
Limited liability has been recognized as one of the fundamental features of companies and corporations throughout world, which was heralded as great an invention as the steam engine.
Under Chinese laws and in Chinese judicial practice, it has proven that it is difficult to get the court to pierce the corporate veil, a metaphor referring to the limited liability…
In the past a couple of days, four cities in China, Shanghai, Xi’an, Changsha and Hangzhou, has announced that they will restrict corporate entities in purchasing local properties, a new round of efforts in reining in local property market.
For a decade, China (mainly the central government) has been wrestling with property markets. On one hand, the…
[For a PDF version of this post, please click here.]
Sparked by court cases in private equity investment world recent years, share repurchase by the company (whose shares are being repurchased) has been a hot topic in the legal arena. Foreign investors in China may well be involved in such a share repurchase arrangements, and it is of interest to foreign investors…
Facts: a limited liability company (“LLC”) incorporated in 2013 in China has two shareholders with the majority shareholder having 60% of equity interests (there is no share in a China LLC, and equity is expressed in percentages), and the minority shareholder having 40%. The Company has a three-member board of directors with the majority shareholder…
Being a minority shareholder in a China limited liability company can be a nightmare for investors, foreign or domestic. You get stuck there with no hope and find yourself no easy exit. I have witnessed many such sad stories happening to foreign clients who participated in Sino-foreign equity joint ventures.
So it will be meaningful for investors to know what…
It is not rare to see a Sino-foreign joint venture company (indeed any type of company) to run into a stalemate where the operation comes to halt or the minority shareholder(s) is marginalized with no rescue. For the victims in such deadlock, there should be a way out of it. After all, justice should be upheld.
I. The Law and Judicial Interpretation
As a remedy to…
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
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…
[You can also download the PDF version for review here Derivative Action_140516]
Derivative actions are regarded worldwide as an effective enhancement of corporate governance in terms of protecting shareholders from the misbehaving management of their invested company, and protecting small shareholder from being repressed by controlling shareholders.…
You may frequently encounter the phrase “legal person” when perusing legal articles about Chinese laws, in particular, corporate and business laws. However, you may inadvertently take the “legal person” in China as the same in your home country when it is actually not. which may lead to unmindful loss.
What is a legal person under…
It is a landmark court decision in China corporate law practice in the judicial system, having far-reaching impact for anyone that holds equity interests in China limited liability companies.
The decision was made not long ago by a Shanghai People’s First Intermediary Court in the high profile dispute between Fosun and Soho in regard of the equity interest…
Most foreign investors have come to choose to go alone when investing in China. As a result, more and more WFOE companies (limited liability companies) have appeared in market. Among those WFOEs, there is a considerable portion being single or one member companies that, namely, have only one shareholder, either a natural person or a legal person.
Recently,…
Just came across an article on the Internet, entitled “Protection for the Rights & Interests of Dormant Shareholders” discussing the protection of legal interests of dormant shareholders. While this article cast some lights on the issue, but some of its points do not apply to foreign investors being a “dormant shareholder”.…