Foreign investors
BIZCHINA / Company laws
Interim Provisions on Mergers and Acquisitions of Domestic Enterprises
by Foreign investors
Updated: 2006-04-17 10:20
Article 13 The equity interest purchase agreement or the agreement to
increase the capital of the Domestic Company as set forth in Article 12
of these Provisions shall be governed by the Chinese law and shall
contain the following main contents:
(1) information regarding each of the parties to the agreement, including
its full name, address, 4/8 and the name, position and citizenship of its
legal representative, etc.;
(2) proportions and the price of the equity interest to be acquired or
the increased capital to be subscribed;
(3) term and methods of performance of the agreement;
(4) rights and obligations of the parties to the agreement;
(5) liabilities for breach of the agreement and settlement of dispute; and
(6) the date and the place of the execution of the agreement.
Article 14 In the case of an Asset Merger and Acquisition by foreign
investors, the total amount of investment of the foreign investment
enterprise established upon the Merger and Acquisition shall be
determined on the basis of the transaction price of such assets and the
actual scale of production and operation. The proportion between the
registered capital and the total amount of investment of the foreign
investment enterprise to be established shall be consistent with the
relevant regulations.
Article 15 In the case of an Asset Merger and Acquisition by foreign
investors, the investors shall submit the following documents to the
examination and approval authority with the corresponding jurisdiction of
approval, based on the total amount of investment, enterprise type, and
industry of the foreign investment enterprise to be established and in
accordance with the laws, administrative regulations and departmental
rules governing the establishment of foreign investment enterprises:
(1) the resolution by the property rights holders or the agency of
authority of the domestic enterprise approving the sale of such assets;
(2) the application for the establishment of the foreign investment
enterprise;
(3) the contract and the articles of association of the foreign
investment enterprise to be established;
(4) the asset purchase agreement executed between the foreign investment
enterprise to be established and the domestic enterprise or the asset
purchase agreement executed between the foreign investors and the
domestic enterprise;
(5) the articles of association and the business license
(duplicates) of the domestic enterprise subject to the Merger and
Acquisition;
(6) certification proving that the domestic enterprise subject to the
Merger and Acquisition has given notice and the public announcement to
its creditors;
(7) identification documents or incorporation certification and
creditworthiness certification of the foreign investors;
(8) the plan for the re-settlement of employees of the domestic
enterprise subject to the Merger and Acquisition; and
(9) documents required to be submitted under Articles 7 and 19 of the
Provisions. Where any permission given by any other government authority
is required in connection with the purchase and operation of the assets
of the domestic enterprise as specified in the above paragraph, the
relevant documents of such permission shall be submitted simultaneously.
If foreign investors purchase any assets by agreement with the domestic
enterprise and invest such assets to set up a foreign investment
enterprise, such assets shall not be used for operation purposes until
and unless the foreign investment enterprise has been duly established.
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