Haworth & Lexon Law Newsletter
No.9, 2005 (Total:No.37)
“Haworth & Lexon Law Newsletter” is issued every month, mainly introducing the legal change in the fields of Corporate, Securities, Foreign investment, Intellectual property rights, International trade etc. with necessary comment. All the comments do not mean the legal opinion of our firm and the firm does not have any legal liability for such comment. Should you have any interest in any topics or any questions please feel free to contact the firm. You will be expected to have satisfactory response from the professional attorney of our firm.
★The draft of enterprise law has entered second discussion with twelve alternations
★ Latest Laws and Regulations
l Notice on the question of security investment and fund investment in Right Card in the reform of stock right division.
l State administration of taxation issued “The management method of deductions and exemptions of taxes (trying out)” the other day
l Notice on Trade Management of Free Trade Zones and Free Trade Zones of Logistics by Ministry of Commerce, General Administrations of Custom
l State Administration of Foreign Exchange adjusted the management of inner banks` financing guarantee for the enterprises beyond the border
The draft of enterprise law has entered second discussion with twelve alternations
The 17th session of the tenth Standing Committee of the National People's Congress began to revise and carry on the second review to the draft of the Enterprise Law on August 23. Compared with the first view of the draft text, amended draft had significant revision in many aspects.
The shareholder may request the court to dismisses the company
Supreme People's Court、some regions and the enterprise put forward that at present it is seriously difficult for some companies to manage, although not achieving the bankrupt boundary, but continuously maintain the situation will bring great loss to the shareholder; The company will be at the deadlock condition because the difference between the shareholder is serious and the shareholder meeting and directorate either can not make decision to dismiss the company and liquidate. Enterprise Law should stipulate that shareholder may apply court to dismiss the company and liquidate aiming at this kind of situation
The intermediary organization will bear compensation responsibility to provide falsely for company's assets.
The revised draft of Enterprise Law stipulates the administrative penalty measure to punish those intermediary organizations providing such materials as the false capital inspection certificate, assessment report, etc. for the company.
The limited liability enterprise is possibly sued if it does not distribute the profit to the shareholder for a long time on purpose.
Enterprise Law revision draft added the stipulation: The shareholder of limited company can demand to consult company's account book. If the company has rational foundations to think the shareholder consults the account book has improper purposes, which may be harmful to interests of company, the company can refuse to offer it. If the company refuses to offer it, the shareholder can apply the court to require the company to offer it. If The company has made profits for five years in succession, and has the distribution profit condition according with the regulations of this law, but the company do not distribute profit to shareholder ,the shareholder who vote 'No' to the resolution of shareholders' meeting can require company purchase his stock right at a reasonable price. If the shareholder and company can't reach the agreement on the stock right purchase, the shareholder can bring a suit to the court.
The shareholder of one-shareholder Company might bear joint liability for corporation debt.
After discussing with the State Council legal system office and the Supreme People's Court the Law Committee of the National People's Congress proposed increasing a stipulate: The shareholder of one-shareholder limited company should bear joint liability to the corporation debt if he can't prove the company's property is independent to property of the shareholder.
The minimum limit of the Limited Company registered capital falls to 5 million Yuan
After managing the research with State Council legal system, the law committee of National People's Congress proposed to reduce the registration capital lowest quota to 5 million Yuan.
The legal representative person of the corporate can be produced from three kinds of person
After managing the research with State Council legal system, the law committee of National People’s Congress proposes changing relevant clauses into: Company's legal representative person is should be the President, executive director or manager in accordance with corporation constitution.
The company must not undertake Joint liability while investing other enterprises
After managing the research with State Council legal system, the law committee of National People’s Congress proposes changing relevant clauses into: Company can make the investment to other enterprise, but it mustn't undertake joint liability of the debt of the enterprise that it invests to.
Set limits to the guarantee the company Provides for the others
After managing the research with State Council legal system and the Supreme People's Court, the law committee of National People’s Congress proposes adding a stipulate: "The company` guarantee for others should be decided by the board of directors or shareholders' meeting according to the regulation of the corporation constitution; if there is a limit stipulate on total guarantee amount or individual amount of guarantee by-law, the guarantee mustn't exceed the fixed limit." "Company providing guarantee for its own shareholder or actual controller， the decision must be passed by the shareholders' meeting.""Aforementioned shareholder or shareholder gripped by the actual controller can't participate in the vote of the aforementioned item; the vote should be passed by more than half of vote rights of the shareholders who attend meeting."
Abusing right to escape debt, the shareholder will bear joint liability for company debt.
In order to maintain the interests of the creditor of the company and normal economic orders , there is a new stipulate : if the company shareholder abuses independent status of corporate legal person and shareholder's limited responsibility to escape debts , and does harm to the interests of company creditor seriously, he should bear joint liability to the corporation debt .
Smaller limited company needn't set up the board of supervisors
Law Committee of the National People's Congress studied with the legal system office of the State Council, and the suggestion is to revise as: Limited company sets up the board of supervisors, its member can't be less than three people; if the shareholder is fewer in number or there is less scale, it can have one or two supervisors, and do not need to set up the board of supervisors.
Reserve the exploration space for the independent director system of listed
Considering that this law already explicitly stipulated all limited company had to set up board of supervisors, as to the question that listed company carries out the independent director system, it is better to only order principle stipulates on listed company’s setting up the independent director, and reserve the space for further exploring in practice. According to the above, stipulates after the revision is: Listed Company can set up the independent director, but the concrete means should be ordered by the securities supervision and administration organization of the State Council.
That whether the limited company retains the way of establishment by the mean of collection waits for further studies.
According to the present Enterprise Law, the establishment of limited company may adopt two ways: One is initiator establishment; the other is collection establishment. The revision draft didn’t do any modification.
Notice on the question of security investment and fund investment in Right Card in the reform of stock right division.
The fund investment pattern is more flexible.
That right card enter fund investment in vision may make great change to the future fund investment. As finance derivate product with obvious lever effect, right card, bond, stock, etc. investing variety have obviously different characteristics. Fund can take full advantage of its characteristic to avoid assets dangerous and pursue high income on the basis of keeping original capital, to process a series of different management tactics different from the past. With appearance of the right card, there is going to be brand-new varieties of fund in the future. The permission of the voluntarily buying in the Notice make the fund have full subjective motivator of management of investment. That fund can invest in right card freely make assets administration of fund flexible.
Strict control of risk and property safety
How does the fund control its investment risk while the right card is one kind of high lever action financial tool? “Notice” retained the prudential principle, and added many stipulations on that. The wariness reflects on the investment scope, the process of investment and the enactment of the investment ratio of the right card. In the investment scope, “notice” stipulates: the fund can only invest in the right card issued in the reform of stock right division. At investment process, before fund invests in the right card, the investment project must be presented to
Provides the experimental opportunity for the fund investment innovation
“Notice” explicitly points out: The right card has its own operation characteristic. On the question of security investment and fund investment in the right card, it should be launched progressively on the basis accumulating certain experience, and then make further regulation according to the market situation. This fully proves, “notice” made transitional arrangement under the condition that the fund generally lack investment experience of new financial instruments at present. Except the right card that derived in the reform of stock right, our country also might appear various kinds of innovative financial products in the future. The fund could lay a foundation for making the investment in innovation only during the process of trying to find out and practicing constantly in the future. The issue of and “notice” is the first step of test.
There will be significant influence on the right card market pattern in the future
"Notice" makes the fund investment in the right card have autonomies , that is to say , the fund can follow own judgment of price and value of the right card, and buy in or sell in good time . Because the fund amount of the fund is extremely huge, even calculating with upper limit 3% of the investment, it is enough for the two right cards to form strong influence.
State administration of taxation issued “The management method of deductions and exemptions of taxes (trying out)” the other day
State administration of taxation issued “The management method of deductions and exemptions of taxes (trying out)” (hereinafter called “method”) the other day, and “method” will take into effect on
Notice on Trade Management of Free Trade Zones and Free Trade Zones of Logistics by Ministry of Commerce, General Administrations of Customs
Notice on Trade Management of Free Trade Zones and Free Trade Zones of Logistics by Ministry of Commerce, General Administrations of Customs has been issued and implemented by Ministry of Commerce and General Administrations of Customs. In order to implement the promises that
1. Enterprises and individual in Free Trade Zones and Free Trade Zones of Logistics can obtain the right of trade and the right of distribution in accordance with the Law of the People’s Republic of China on Foreign Trade, Foreign Trade Operator Record Registration Method and Foreign Investment In Commercial Domain Regulation Method and other correlations stipulates. Enterprises and individual obtaining the rights upon can trade with the Enterprises and individual including those Enterprises and individual that haven’t obtained the rights inside the frontier and out side the zone legally. The foreign invested enterprises gaining the right of distribution can be engaged in distribution legally.
2. The foreign trade operators in free trade zones and free trade zones of logistic selling the products or buy products to others inside the frontier and outside the zone should follow the national stipulates about import and export, foreign exchange and tax revenue management.
(1) The goods transported between the zones and others inside the frontier outside the zones should transact the export procedure according to the regulations by the Customs. Enterprises inside the zone distributing the products to the outside as the statue of foreign trade operator can handle applying procedures to customs and foreign exchange canceling procedures after verification as enterprises in the inside the zone. That the enterprises and individual outside the zone buy product from those inside can handle according to the present stipulation.
(2) The goods traded between the enterprises inside and outside the zone don’t need to implement the import and export permission management except that there are international law that the People's Republic of
(3) The customs does not audit the permit of the textile belonging to "textile exportation temporary management inventory" and transported from the outside into the inside of the zone. The customs will handle the procedure of permission of checking out according to related stipulation when the above cargo actually leaves the country and be exported to the country or area that must implement textile temporary exportation management.
3. The establishment of the enterprises inside the free trade zone and free trade zone of logistic should conform to the national industry policy. The enterprises must not be engaged in the production and management in the national prohibition investment domain.
4. To the every enterprise inside the zone, the tax revenue, customs supervising and managing, the exchange control item should be handled according to correlation stipulations by Ministry of Commerce, General Administrations of Customs and State Administration of Foreign exchange
State Administration of Foreign Exchange adjusted the management of inner banks` financing guarantee for the enterprises beyond the border.
State Administration of Foreign exchange issued “Notice on adjustment of the way of management of the financing guarantee that inner banks provide for the enterprises beyond the border” on