“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.
★ Latest News about Haworth & Lexon
• Haworth & Lexon provided legal service for asset acquisition by foreign investor in Shandong Province
★Improvement in Enterprise Registration System
★Latest Laws and Regulations:
• New Regulations on Sales and Operation of Securities Investment Funds
• Systematic Regulations on Publication Market
• Notice on Non-trading Sales and Payment of Foreign Exchange of MNCs by SAFE
• Reply by the Supreme People's Court of the Jurisdiction in Civil Case of Bankruptcy Liquidation Group
• Cancellation by CSRC of the third Administrative Approval Projects
• Notice by the Supreme People's Court on Trial Supervision
Haworth & Lexon Law Firm provides legal service for asset acquisition by foreign investor in Shandong Province
Department of Foreign Trade and Economic Cooperation of Shandong Province has approved the asset acquisition of Shandong Dezhou Xingtai Special Paper Co., Ltd by Netherlands Conitex Sonoco Holding B.V., whose the Headquarters is located at Miami , U.S. , on July 9, 2004.
Papertech (Dezhou) Co., Ltd., Which was set up by the foreign party and the Chinese party, Shandong Zhaodongfang Paper Group Co, Ltd., has formally established on July 1, 2004.
We represented the foreign party in the whole project, including earlier stage negotiation, due diligence, designing the scheme and drafting the Contract for Asset acquisition, Joint Venture Contract and Article of Association and reviewing and revising finally. The total investment of the project amounts to 29.9 million dollars and the registered capital reaches 19.19 million dollars.
Improvement in Enterprise Registration System
—— New Regulations on Registration of Enterprises and Institutions
Since June 10, 2004, the State Council, State Administration for Industry and Commerce and Ministry of Commerce promulgated several new regulations on registration of enterprises and institutions, including Interim Regulation on Administration of Registration of Institutions , Regulation on the Procedures of Enterprise Registration , Regulation on Administration of Registration of Registered Capital of Enterprises , and Measure on the Registration of Foreign Trade Operators for Record , which will come into force in June 27 and July 1 respectively.
According to Regulation on the Procedures of Enterprise Registration , the enterprise registration authority shall make the decision for approval extempore if the applier goes to the place for registration, while the authority shall make the decision within 15 days since they receive the application if it is made by the applier through mail, since July 1, 2004. In case that the materials need to be checked, the decision for approval of registration or not shall be made within 15 days since the application is received.
There are special provisions that the interested person can apply to withdraw the registration in case of the following situations: 1. making the decision of approval in case of abuse of power and neglect of duty; 2. making the decision of approval in case of overstepping the authority; 3. making the decision of approval to those unqualified appliers; 4. other situations in which the registration can be withdrawn; 5. the applier get the registration by fraudulence or bribery.
Regulation on Administration of Registration of Registered Capital of Enterprises , according to Company Law , stipulates the payment, assessment and modification of the registered capital. The Regulation also makes it clear that if the registration authority doubts the real registered capital of the enterprise after its establishment, the authority can require the enterprise to assess its capital in designated assessment institution and submit the certification of assessment in a prescribed period; and stresses that the registration authority can punish the assessment institutions if they provide false certifications.
The State Council modified Interim Regulation on Administration of Registration of Institutions set out in Oct. 25,1998, which makes it clear that the administrative institution of institution registration affiliated to institution system administration authority of the government at or above the county level is the authority which administrates and supervises the registration of institutions.
The foreign trade operators who deal with the products or technology import and export business, Measure on the Registration of Foreign Trade Operators for Record stipulates that, shall make registration for record to Ministry of Commerce or its authorized agencies. The Custom shall not settle the formalities of customs application of import and export and inspection for those who do not make the registration for record.
New Regulations on Sales and Operation of Securities Investment Funds
China Securities Regulatory Commission promulgated Administrative Measures on Sales of Securities Investment Funds and Administrative Measures on Operation of Securities Investment Funds respectively in June 25 and June 29, 2004, which will come into force in July 1, 2004.
According to Administrative Measures on Sales of Securities Investment Funds , commercial banks, securities companies, securities investment advisory institutions, special institutions for sales of funds, and other institutions authorized by CSRC may apply to CSRC for the qualification of sales of funds.
Administrative Measures on Sales of Securities Investment Funds also stipulates in details the requirements for agents of sales of funds, the licensed conditions and procedures of funds advertisement materials, funds sales cost, funds subscription, funds application for purchase, the upper limit for funds ransom rate, and the standards for funds disclosure. The Measure s also states that the industry commission can stipulate the basic standard for funds subscription, application for purchase and ransom.
Compared to the former relevant regulations, Administrative Measures on Operation of Securities Investment Funds stipulates the conditions of approval for funds collection, the conditions and record procedure of success in funds collection. As for the basic activities during the process of purchase application and redemption, the Measures prohibit the purchase application and redemption in non-trading days and trading time so as to protect the fair treatment of all kind of investors. The classification of funds and the relevant investment ratio requirements, funds investments limitation are also stipulated in the Measures . As for open funds, the funds contract shall include the annual maximum allocation times and minimum allocation rate. Furthermore, provisions on funds shareholders meeting can be found in the Measures .
These Measures , according to Funds Law , detail the matters and procedures for holding the funds shareholders meeting. Funds supervisor is the first caller for the funds shareholders meeting. In case that neither the funds supervisor nor the funds trustee wants or can hold the funds shareholders meeting, the funds holders who hold 10% of the total amount of funds can hold the funds shareholders meeting.
Systematic Regulations on Publication Market
In June 27, 2004, the General Administration of Press and Publication set out Administrative Regulation on Publication of Audio and Video Products and modified Administrative Regulation on Publication Market, which will be enforced since Aug. 1, 2004.
Publication license system is adopted as to the newspapers, magazines, books, E-journal and other audio and video products. The publication institution for newspapers, magazines, books, E-journal shall have the registered capital no less than RMB 20 million, while the publication institution for audio and video products shall have the registered capital no less than RMB 300,000. The establishment of publication institutions for newspapers, magazines, books, E-journal and other audio and video products shall be approved by GAPP.
Notice on Non-trading Sales and Payment of Foreign Exchange of MNCs by SAFE
The State Administration of Foreign Exchange issued Notice on Relevant Issues of Administration of Non-trading Sales and Payment of Foreign Exchange of Multinational Corporations in June 29, 2004.
According to the Notice , the MNC and its affiliated companies shall apply to the designated bank with approval documents and other relevant certifications by SAFE when doing the formalities of non-trading sales and payment of foreign exchange. The loan or share of cost among Chinese MNC and its overseas affiliated companies shall be only paid by the local head office of Chinese MNC to overseas affiliated companies. No other local affiliated companies can do that. The Notice also stipulates the payment method and procedure of the salary of workers who are from foreign countries, Hong Kong , Taiwan and Macau , research fees, purchase fees, sales fees and other management fees which have been prepaid by the overseas affiliated companies by MNC or its local affiliated companies.
Reply by the Supreme People's Court of the Jurisdiction in Civil Case of Bankruptcy Liquidation Group
The Supreme People's Court issued Reply of the Jurisdiction in Civil Cases of Breach of Contract or Infringement of the Bankruptcy Liquidation Group recently, which will be enforced since June 28, 2004. The Reply states that the court which accepts the bankruptcy case has the jurisdiction over the civil litigation of breach of contract or infringement of the bankruptcy liquidation group occurring after the announcement of the company's bankruptcy but before the end of bankruptcy procedure, which shall be dealt with in the bankruptcy procedure.
Cancellation by CSRC of the Third Administrative Approval Projects
China Securities Regulatory Commission issued Notice on Cancellation of the Third Administrative Approval Projects in June 22, 2004, canceling 42 administrative approval projects.
The cancelled administrative approval projects include issuing method of stock, establishment of overseas securities situations by local securities situations, approval for the securities situations' qualification of sales business, record for the qualification of sole director of listing company, approval for the redemption of overseas stock by overseas listing company, approval for funds supervisor's application for purchase or redemption because of no stipulations in the funds contract or collection description of the open funds.
Notice by the Supreme People's Court on Trial Supervision
The Supreme People's Court issued N otice on Several Issues of Trial Supervision in May 18, 2004, which stresses the time limit for the case inspection, case reading and retrial case of the SPC. Moreover, the Notice states that the high people's courts in all the provinces shall assist the trial supervision activities of the SPC.