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Outline of Curriculum Company Law

 

Part I

Investment Vehicles

Introduction I

Investment Vehicles under the New Company Law (2005)

 

Chapter 2

Common Vehicles of Foreign Investment

2.1
Introduction and Latest Developments 

2.2
Features Shared by the Common Vehicles

2.2.1 MOFCOM Approval 

2.2.2 Legal Personality

2.2.3 Chinese Individual Shareholders

2.2.4 Profit-Sharing not in Proportion

2.3
Features Peculiar to Each of the Common Vehicles

2.3.1 Features Peculiar of the WFOE

2.3.1.1 Not All Open Industries Available to a WFOE

2.3.1.2 Single-Person WFOE

2.3.2 Features Peculiar to the EJV

2.3.2.1 Profit-Sharing Rigidly in Proportion

2.3.2.2 Negotiated Pricing of the Non-monetary Assets Contribution

2.3.3 Features Peculiar to the CJV 

2.3.3.1 Provision of‘Cooperative Conditions’

2.3.3.2 Advance Recovery of Investment

2.4
Company Name 

2.5
Registered Capital

2.5.1 Capital Requirement

2.5.2 Contribution Assets

2.5.3 Capital Injection Schedule

2.5.3.1 Injection in One Lump Sum

2.5.3.2 Injection by Instalments

2.5.3.3 Legal Consequences of Default in Capital Injection

2.5.4 FIFs with Less than Twenty-Five Per Cent Foreign Capital

2.5.5 Capital Increase

2.5.5.1 Capital Increase in General

2.5.5.2 Capital Increase with Surplus Reserve or Undistributed Profits

2.5.6 Capital Reduction

2.6
Total Investment Amount

2.7

Term of Operation

2.8
Corporate Governance Structure of an FIE

2.8.1 Board of Directors as the Power Organ for an EJV or CJV

2.8.2 Shareholders’ Meeting /Sole Shareholder as the Power Organ for a WFOE

2.8.3 Board of Supervisors or a Single Supervisor Required for All FIEs

2.9
Establishment Procedures of an FIE 

2.10
Liquidation of an FIE

2.11
Key Provisions at Issue 

 

Chapter 3

Foreign Invested Holding Company (FIHC)

3.1
Introduction and Latest Developments

3.2
Establishment of an FIHC

3.2.1 Qualifications of the Investor

3.2.2 Registered Capital

3.2.2.1 Capital Injection

3.2.2.2 Contribution by Converting Paid-in Capital in Existing FIEs

3.2.3 Total Investment Amount

3.2.4 Approval of the National MOFCOM

3.3
Business Scope of the FIHC

3.3.1 Overview

3.3.2 Investment in Investee FIEs

3.3.2.1 Investment Ways 

3.3.2.2 The Minimum USD Million Investment Commitment

3.3.2.3 Renminbi Contribution in the Investment

3.3.3 Provision of Services to Qualified Investee FIEs

3.3.3.1 Qualification of the Investee FIE

3.3.3.2 Services Provided under Specific Appointment

3.3.3.3 Services Provided in General

3.3.4 Business with Connected Parties 

3.3.5 Business with Third parties

3.3.5.1 Foreign Trade

3.3.5.2 Distribution 

3.3.5.3 Other Business with Third Parties

3.4
Qualifying as a Regional Headquarter

3.4.1 The Qualifications 

3.4.2 The Qualifying Procedures 

3.4.3 Business Scope of a Headquarter FIHC

3.5
Taxation

3.5.1 Tax Incentives

3.5.2 Taxation over the Investment Business

3.5.3 Taxation over the Provision of Services to the Investee FIEs

3.5.4 Export Tax Rebates

3.6
Key Provisions at Issue

Chapter 4

Foreign Invested Company Limited by Shares (FICLS)

4.1

Introduction and Latest Developments

4.2

General Matters of the FICLS

4.2.1 The Promoters

4.2.2 Establishment Ways

4.2.3 The Twenty-Five Per Cent Foreign Capital Requirement

4.2.4 Eligibility to FIE Preferential Treatments

4.3

Registered Capital

4.4

Corporate Governance Structure of an FICLS

4.5

Establishment Procedures of an FICLS

4.6

Restructuring an Existing Company into an FICLS Overview

4.6.1Restructuring an Existing FIE into the FICLS

4.6.2Restructuring a State-Owned Enterprise (SOE) into the FICLS

4.6.3Restructuring a Domestic CLS into the FICLS

4.7

Transfer of Non-floated Shares in an H Shares Compan

4.8

Key Provisions at Issue

 

Chapter 5

Foreign Invested Limited Liability Partnership (FILLP)

5.1

Introduction and Latest Developments

5.2

General Matters

5.2.1 The Door Opened to a Limited Liability Partnership (LLP)

5.2.2 Application of the FIPE Rules

5.2.3 Industrial Controls

5.3

Partners

5.3.1 The Partners in an FIPE

5.3.2 Limited Liability Legal Person as a General Partner

5.3.3 Partners in a Special General Partnership

5.3.4 Limited Partners in an LLP

5.3.4.1 Liability Limited to the Extent of Contribution to the LLP

5.3.4.2 ‘Safe Harbour’ Rule for the Limited Partners

5.3.4.3 Special Treatments for a Limited Partner 90

5.3.5 Transformation from a General Partner to Limited Partner or Vice Versa

5.4

Capital Contribution

5.4.1 Contribution Assets

5.4.2 Valuation of Non-Monetary Contribution

5.4.3 Time Limits for the Capital Injection

5.5

Partnership Agreement

5.6

Features Particular for an FIPE

5.6.1 MOFCOM Approval Requirement

5.6.2 Capital Contribution Amount

5.6.3 Total Investment Amount

5.6.4 Term of Operation

5.7

Establishment Procedures of an FIPE

5.8

Approval/Record-Filing of Post-Establishment Matters

5.9

Withdrawal from the Partnership

5.10

Key Provisions at Issue

Part II  Merger and Acquisition: Non-Listed Companies

Introduction II

M&As under the New M&A Rules (2006)

 

Chapter 6

Acquisition of Domestic Enterprises in General

6.1

Introduction and Latest Developments

6.2

Structuring the Acquisition: Equity vs. Assets Deal

6.3

Pricing Based on Valuation

6.4

Procedures of the Acquisition

6.4.1 The Procedures of Equity Acquisition

6.4.2 The Procedures of Assets Purchase

6.4.2.1 Available Approaches of the Assets Purchase

6.4.2.2 Particular Points as Compared with the Procedures of Equity Acquisition

6.5

Merger Controls Industrial Controls Report to the National MOFCOM in Particular Acquisitions

Anti-monopoly Review Based on Competition Law

6.6

Taxation in an Acquisition Deal

Tax Levied in an Acquisition Deal Tax Implications

6.7

Key Provisions at Issue

 

Chapter 7

Acquisition of Particular Structure:Acquisition via SPV, Share Swap

7.1

Introduction and Latest Developments

7.2

Establishment of an Offshore SPV by Domestic Residents

7.3

Stringent Controls over the Acquisition via an SPV

7.3.1 Approval by the National MOFCOM

7.3.2 Limited Availability to the FIE Preferential Treatments

7.4

Cross-border Share Swap in General

7.4.1 Conditions for the Share Swap

7.4.2 The Approval and Registration Procedures of a Share Swap in General

7.4.3 The M&A Consultant in a Share Swap Deal

7.5

Share Swap Involving an SPV

7.5.1 The Particular Structure of a Share Swap Involving SPV

7.5.2 Particular Conditions for a Share Swap Involving SPV

7.5.3 Particular Procedures of a Share Swap Involving SPV

7.5.4 Repatriation of the Overseas Proceeds and Distributions

7.6 Key Provisions at Issue

 

Chapter 8

Acquisition of State-Owned Enterprises (SOEs)

8.1

Introduction and Latest Development

8.2

Transfer of SOEs IN GENERAL

8.2.1 Transfer Ways

8.2.2 Transfer Approval by Competent Authorities

8.2.3 Pricing of the Transfer

8.2.4 Payment

8.3

Private Transfer by Agreement (Transfer by Agreement)

8.3.1 Strict Controls over the Transfer by Agreement

8.3.2 The Procedures of Transfer by Agreement

8.4

Public Transfer on the Equity Exchange (Floor-Based Trading)

8.5

Supervisions over the Controlling of State Capital

8.5.1 Sectors Requiring Absolute or Strong Controlling by State Capital

8.5.2 Strict Requirements for the Transfer of State Controlling Rights

8.6

Assets Valuation and Approval/Record-filing Thereof

8.6.1 The Valuation Requirement and Exceptions

8.6.2 Approval/Record-Filing of the Valuation Result

8.6.3 Procedures of the Approval/Record-Filing of the Valuation Result

8.7

Key Regulations at Issue

Chapter 9

Equity Transfer and Pledge in Existing FIEs

9.1

Introduction and Latest Development

9.2

Offshore Acquisition of an Existing FIE

9.3

Onshore Acquisition of an Existing FIE

9.3.1 By-reference Application of the M&A Rules

9.3.2 Pricing of the Acquisition

9.3.3 Procedures of Equity Acquisition of an Existing FIE

9.4

Equity Pledge in an Existing FIE

9.4.1 Conditions and Restrictions on the Pledge

9.4.2 Procedures of the Equity Pledge in an FIE

9.4.2.1 Procedures of the Pledge not Constituting Outbound Security

9.4.2.2 Additional Procedures for the Pledge Constituting Outbound Security

9.5 Key Provisions at Issue

 

Chapter 10

Acquisition (Domestic Re-investment) by Existing FIEs

10.1

Introduction and Latest Developments

10.2

Application of the Industrial Controls on Foreign Investment

10.3

Abolishment of the Investment Qualification Review by the SAIC 18

10.4

Procedures of Domestic Re-investment by FIEs

10.4.1 The Procedures Varying Dependent on the Proposed Business Scope

10.4.2 Domestic Re-investment in ‘Encouraged’ orPermitted’Sectors

10.4.3 Domestic Re-investment in ‘Restricted’ Sectors

10.4.4 Record-Filing of the Domestic Re-investment

10.5

FIE Status of the FIE’s Investee-Company

10.5.1 Qualifications for the Investee-Company to Enjoy an FIE Status

10.5.2 Separate Application for the Grant of the FIE Status 191

10.5.3 Incentives Available to an Investee-Company with the FIE Status

10.6

Key Provisions at Issue

Chapter 11

Merger between FIEs or with an FIE

11.1

Introduction and Latest Developments

11.2

General Matters of the Merger

11.2.1 Conditions Precedent to a Merger

11.2.2 MOFCOM Approval Requirement

11.2.3 Nature of the Post-merger Company

11.2.4 Industrial Controls

11.3

Essentials of the Post-merger FIE

11.3.1 Registered Capital

11.3.2 Total Investment Amount

11.3.3 Shareholding Structure

11.3.4 Establishment Date

11.4

Procedures of the Merger

11.5

Availability of the Original Incentives to the Post-merger FIE

11.6

Taxation in a Merger Deal

11.7

Key Provisions at Issue

 

Chapter 12

Merger Controls under Competition Law

12.1

Introduction and Latest Developments

12.2

Authorities of the Anti-monopoly Review

12.3

Merger Review in the Sense of Concentration

12.3.1 The Definition of ‘Concentration’

12.3.2 Threshold-Triggering Merger Review

12.3.3 Substantive Assessment Factors in the Review

12.3.4 Exemption of the Filing and Review Requirement

12.4

Procedures of the Merger Review and Filing

12.5

Investigation in the Lack of Active Filing

12.6

Liabilities of Non-compliance

12.7

Key Provisions at Issue

Part III

Merger and Acquisition: Listed Companies

Introduction III

Takeover under the New Takeover Code (2006)

Chapter 13

Takeover of Listed Companies in General

13.1

Introduction and Latest Developments

13.2

Takeover Methods

13.3

Takeover by Offer

13.3.1 General Matters of the Offer

13.3.1.1 Voluntary Offer vs. Mandatory Offer

13.3.1.2 General Offer vs. Partial Offer

13.3.1.3 Offer Period

13.3.1.4 Offer Price

13.3.1.5 Payment Means and Performance Bond

13.3.2 Procedures of the Takeover by Offer

13.3.3 Defence Measures against the Takeover Offer

13.4

Takeover through Shares Purchase Agreement (SPA)

13.4.1 The Takeover through SPA in General

13.4.2 The Procedures for an SPA Targeting Thirty Per Cent Shares or Less

13.4.3 The Procedures for an SPA Targeting over Thirty Per Cent shares Transitional Period

13.5

Indirect Takeover Ways of Indirect Takeover

Cooperation Obligations of the de Facto Controlling Person

13.6

Role of the Independent Financial Advisor (IFA)

IFA of the Purchaser

IFA of the Target Company

13.7

Key Provisions at Issue

 

Chapter 14

Strategic Investment in Listed Companies

14.1

Introduction and Latest Development

14.2

General Matters of the Strategic Investment

14.2.1 Ways to Investment

14.2.2 Entry Standards

14.2.3 Investment Restrictions

14.3

Strategic Investment through Shares Purchase Agreement (SPA)

14.4

Strategic Investment through Private Placement

14.5

FIE Treatments for the Listed Company with Strategic Investment

14.6

Repatriation Restrictions

14.7

Key Provisions at Issue

 

Chapter 15

Investment via Qualified Foreign Institutional Investors (QFIIs)

15.1

Introduction and Latest Developments

15.2

Entry Standards of the QFII

15.3

Strategic Investment vs. QFII: Pros and Cons

15.4

Licences Necessary for QFII Investment

15.4.1 Grant of the QFII Permit by CSRC

15.4.2 Grant of the QFII Quota Certificate by SAFE

15.5

Controls over the Investment

15.5.1 Investment within the QFII Quota

15.5.2 Shareholding Caps

15.6

Agencies in the Investment

15.6.1 Trading Broker: A Domestic Securities Company

15.6.2 Custodian: A Domestic Commercial Bank

15.7

Accounts Management

15.7.1 Capital Accounts

15.7.2 Securities Accounts

15.8

Key Provisions at Issue

 

Chapter 16

Transfer of State-Owned Shares in a Listed Company

16.1

Introduction and Latest Developments

16.2

Centralization of the Approval Authority

16.3

Trading on the Stock Exchange

16.3.1 The Approval or Record-Filing Requirement

16.3.2 The SASAC Approval on the Trading of SS Shares

16.4

Transfer through Shares Purchase Agreement (SPA)

16.4.1 The Approval Requirement

16.4.2 Pricing under the SPA

16.4.3 The Procedures of SS Shares Transfer through SPA

16.5

Indirect Transfer

16.5.1 Indirect Transfer of SS Shares

16.5.2 Particular Features of the Indirect Transfer of SS Shares

16.5.3 Procedures of the Indirect Transfer of SS Shares

16.6

Role of the Independent Financial Advisor (IFA)

16.7

Key Provisions at Issue

 

Chapter 17

Disclosure in the Takeover

17.1

Introduction and Latest Developments

17.2

Disclosure Reports in General

17.3

Disclosure Reports in Specific

17.3.1 Change of Interests Report

17.3.2 Takeover by Offer Report

17.3.3 Listed Company Takeover Report

17.4

Disclosure Procedures

17.4.1 Disclosure in the Trading on the Stock Exchange

17.4.2 Disclosure in the Takeover by Offer

17.4.3 Disclosure in the Takeover Through SPA

17.4.4 Disclosure in the Indirect Takeover

17.5

Concepts Critical to the Disclosure

17.5.1 Acting in Concert

17.5.2 Controlling Rights

17.6

Key Provisions at Issue

 

Chapter 18

Substantial Assets Restructuring (SAR) of a Listed Company

18.1

Introduction and Latest Developments

18.2

Identification of the SAR

18.2.1 The Definition of SAR

18.2.2 Quantitative Standards of the SAR

18.2.3 SAR through Private Placement

18.2.4 SAR through Means other than Purchase or Sales

18.2.5 Very Substantial Assets Restructuring (VSAR)

18.3

Special Reports and Professional Opinions Involved in an SAR

18.4

Procedures of and Disclosure in the SAR

18.5

Key Provisions at Issue