The course consists of two parts, namely, company Law and bankruptcy Law, which cover the whole life of a company registered in Mainland China.
I. The Company Law
The passage of the Company Law of the People's Republic of China ("Company Law") by the National People's Congress of China in 1993 was applauded by both the legal and business worlds as a milestone in the legal and economic history of China. The Company Law's historical significance and its legal influence on China's transformation into a market-oriented economy may not be underestimated. The goals of the Company Law are to regulate and standardize the organization and conduct of companies, to protect the legitimate interests of companies' shareholders and creditors, and to stimulate the development of a socialist market economy. Or, as commonly understood, the Company Law is meant to help shape China's planned economic system into a market-oriented system by shifting the control of common business organizations from government to private citizens.
The Company Law is the first national legislation in China that expressly recognizes the legality of limited liability forms of business organizations wholly established by Chinese nationals, and also the legality of both state ownership and private Chinese citizens' ownership of such organizations. Furthermore, it is also the first national legislation in China that implicitly recognizes foreign investors' ability to participate in a Chinese Joint Stock Company, and the first national legislation that recognizes their rights to establish representative offices in China.
As mentioned above, the historical significance of the Company Law should not be questioned. However, in the 11 years since the enactment of the Company Law, it has become evident that ambiguities and imperfections in the law threaten to impede its successful operation. Serious structural problems exist, and these problems, if they could not be solved in time, would substantially undermine the ultimate goal that the Company Law purports to accomplish.Thus on October 27, 2005, the Standing Committee of the Tenth National People's Congress approved the revisions to the Company Law in its Eighteenth Session, which made drastic modifications to address issues such as the too high incorporation requirements, loopholes in corporate governance, insufficiency of the protection of legitimate interests and rights of shareholders (especially those of small and medium shareholding), and vagueness in definition of obligations of controlling shareholders, chairmen, supervisors and top executives of companies. The new Law has come into effect since January 1, 2006.
“After the reform is before the reform”. In less than a decade, the Company Law has seen another reform which concentrated in the liberalization of the registered capital mechanism. The reformed Company Law will enter into force on March 1, 2014.
Based on the background and evolution of China’s company law, the first part of the course will examine formation and organization of Limited Liability Companies (LLCs) and Joint Stock Limited Companies (JSLCs) / Companies Limited by Shares (CLSs); financing the corporation; purposes and powers (ultra vires doctrine); transfer of shares (and restriction of transfers in LLCs); distribution of powers among shareholders, directors, managers and supervisors; derivative lawsuit; preemptive rights; voting rights; dividends and distributions; organic changes; merger and division; public offering in regard to establishment of JSLCs; some important aspects relevant of the Securities Law of 1999 (revised in 2005 as well); and dissolutions and liquidations of companies.
II. The Bankruptcy Law
to be updated.
Course Objectives:
This course is designed for the students who intend to understand the framework and the important institutions and even key provisions of Company and Bankruptcy law in China.
*Course Organization and Requirements:
Reading materials, including statutes, regulations, judiciary interpretations, academic articles and commentaries will be handed out before class, students are expected to familiarize themselves with the materials as suggested and prepare for the class. The participation to class discussions is both encouraged and required.
I. The Company Law
The passage of the Company Law of the People's Republic of China ("Company Law") by the National People's Congress of China in 1993 was applauded by both the legal and business worlds as a milestone in the legal and economic history of China. The Company Law's historical significance and its legal influence on China's transformation into a market-oriented economy may not be underestimated. The goals of the Company Law are to regulate and standardize the organization and conduct of companies, to protect the legitimate interests of companies' shareholders and creditors, and to stimulate the development of a socialist market economy. Or, as commonly understood, the Company Law is meant to help shape China's planned economic system into a market-oriented system by shifting the control of common business organizations from government to private citizens.
The Company Law is the first national legislation in China that expressly recognizes the legality of limited liability forms of business organizations wholly established by Chinese nationals, and also the legality of both state ownership and private Chinese citizens' ownership of such organizations. Furthermore, it is also the first national legislation in China that implicitly recognizes foreign investors' ability to participate in a Chinese Joint Stock Company, and the first national legislation that recognizes their rights to establish representative offices in China.
As mentioned above, the historical significance of the Company Law should not be questioned. However, in the 11 years since the enactment of the Company Law, it has become evident that ambiguities and imperfections in the law threaten to impede its successful operation. Serious structural problems exist, and these problems, if they could not be solved in time, would substantially undermine the ultimate goal that the Company Law purports to accomplish.Thus on October 27, 2005, the Standing Committee of the Tenth National People's Congress approved the revisions to the Company Law in its Eighteenth Session, which made drastic modifications to address issues such as the too high incorporation requirements, loopholes in corporate governance, insufficiency of the protection of legitimate interests and rights of shareholders (especially those of small and medium shareholding), and vagueness in definition of obligations of controlling shareholders, chairmen, supervisors and top executives of companies. The new Law has come into effect since January 1, 2006.
“After the reform is before the reform”. In less than a decade, the Company Law has seen another reform which concentrated in the liberalization of the registered capital mechanism. The reformed Company Law will enter into force on March 1, 2014.
Based on the background and evolution of China’s company law, the first part of the course will examine formation and organization of Limited Liability Companies (LLCs) and Joint Stock Limited Companies (JSLCs) / Companies Limited by Shares (CLSs); financing the corporation; purposes and powers (ultra vires doctrine); transfer of shares (and restriction of transfers in LLCs); distribution of powers among shareholders, directors, managers and supervisors; derivative lawsuit; preemptive rights; voting rights; dividends and distributions; organic changes; merger and division; public offering in regard to establishment of JSLCs; some important aspects relevant of the Securities Law of 1999 (revised in 2005 as well); and dissolutions and liquidations of companies.
II. The Bankruptcy Law
to be updated.
Course Objectives:
This course is designed for the students who intend to understand the framework and the important institutions and even key provisions of Company and Bankruptcy law in China.
*Course Organization and Requirements:
Reading materials, including statutes, regulations, judiciary interpretations, academic articles and commentaries will be handed out before class, students are expected to familiarize themselves with the materials as suggested and prepare for the class. The participation to class discussions is both encouraged and required.