What are the most authentic means to verify a China company? Any of these two methods should be made: a. Look at the company address; b. Visit local authority that is responsible for company registration. The appropriate authority is the local Administration of Industry and Commerce (AIC). You can get the following company information at local AIC: date of incorporation, address, legal representative, registered capital, contact information, business scope, business type, business term, annual inspection performance, etc. Most AIC websites have a company search function for a small charge.
Basic Required Documents when acquiring stock in a Chinese company: Company documents: articles of association, business license, WFOE approval, checklist and record of appointment of directors and officers, etc.; Annual audit and taxation assessments and all speaking with and notices through the tax authorities, both national and local; Real estate documentation: ownership, lease, mortgages, etc.; Employee list, and replications of employee contracts and records for tax and social welfare payments; Insurance documents; Significant existing contracts with vendors and customers; Current financial statements; Report of distributions to shareholders; Listing of lawsuits and other claims, if any; Index of hard belongings and automobiles; Intellectual property: trademarks, patents, copyrights, technology licenses; Listing of loans payable and guarantees payable and contingent, if any; Environmental approvals/licenses and annual environmental inspection reports.
The most important distinctions we end up finding between a Chinese company acquisition along with a domestic company acquisition are any of these: Many, if not completely of the documents of the Chinese company are, logically enough, in Chinese. China requires way more government sign-offs and registrations compared to United States Of America. But generally, the goals and the ways are not all that different. In both cases, the thing is to find out as much as you can in regards to the company to be acquired and to structure the deal in such a way as to maximize the returns for your client moving forward.
Legal due diligence prior to checking out a joint venture in China is therefore a necessity not only to find if there can be any skeletons lurking, but in addition to determine where the current managerial operations are in the existing company and what really should be changed to bring it into compliance both with an increased amount of attention through the Chinese authorities but also with the international requirements the foreign trader must conform too. Accordingly, legal due diligence both offers reassurance within the actual circumstance, can raise any areas of concern, and also provides a blueprint for which must be done to upgrade the possible businesses future integrity.
Business Licensing: Is the Chinese companies' current range of business compatible with the intentions for the joint venture? Are all the mandatory operational licenses set? Are they transferable to the joint venture? These are all conditions that need to be solved, and the method for these licensing rights executed to transmit them where necessary to the JV. It can also be helpful for the trader to note expiry dates on these, and make certain that renewals are performed soon enough. This is also true of the Chinese company. Business licenses in China have to be renewed. If his license to function expires in 12 months and you are carrying out upfront finance for a 20-year joint venture, you have to assess the risk factor of his own licensing renewal situation. It can also be wise to check that the name of the legally responsible person on the Chinese business license is the same as the individual you are dealing with, and if not, find out why.
Basic Required Documents when acquiring stock in a Chinese company: Company documents: articles of association, business license, WFOE approval, checklist and record of appointment of directors and officers, etc.; Annual audit and taxation assessments and all speaking with and notices through the tax authorities, both national and local; Real estate documentation: ownership, lease, mortgages, etc.; Employee list, and replications of employee contracts and records for tax and social welfare payments; Insurance documents; Significant existing contracts with vendors and customers; Current financial statements; Report of distributions to shareholders; Listing of lawsuits and other claims, if any; Index of hard belongings and automobiles; Intellectual property: trademarks, patents, copyrights, technology licenses; Listing of loans payable and guarantees payable and contingent, if any; Environmental approvals/licenses and annual environmental inspection reports.
The most important distinctions we end up finding between a Chinese company acquisition along with a domestic company acquisition are any of these: Many, if not completely of the documents of the Chinese company are, logically enough, in Chinese. China requires way more government sign-offs and registrations compared to United States Of America. But generally, the goals and the ways are not all that different. In both cases, the thing is to find out as much as you can in regards to the company to be acquired and to structure the deal in such a way as to maximize the returns for your client moving forward.
Legal due diligence prior to checking out a joint venture in China is therefore a necessity not only to find if there can be any skeletons lurking, but in addition to determine where the current managerial operations are in the existing company and what really should be changed to bring it into compliance both with an increased amount of attention through the Chinese authorities but also with the international requirements the foreign trader must conform too. Accordingly, legal due diligence both offers reassurance within the actual circumstance, can raise any areas of concern, and also provides a blueprint for which must be done to upgrade the possible businesses future integrity.
Business Licensing: Is the Chinese companies' current range of business compatible with the intentions for the joint venture? Are all the mandatory operational licenses set? Are they transferable to the joint venture? These are all conditions that need to be solved, and the method for these licensing rights executed to transmit them where necessary to the JV. It can also be helpful for the trader to note expiry dates on these, and make certain that renewals are performed soon enough. This is also true of the Chinese company. Business licenses in China have to be renewed. If his license to function expires in 12 months and you are carrying out upfront finance for a 20-year joint venture, you have to assess the risk factor of his own licensing renewal situation. It can also be wise to check that the name of the legally responsible person on the Chinese business license is the same as the individual you are dealing with, and if not, find out why.
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Important note: make sure you store the due diligence data as it can be employed in the longer term. For more resources and definitive guides to help you make a decision to obtain a small business, take into consideration reading our due diligence guide on our website.
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