JunHe's Special Situations team led byhas been actively involved in m88 live casino special situations and alternative investment practice since 1999 and has been at m88 live casino forefront of providing legal services in this area in China. m88 live casino team has represented numerous landmark cases in m88 live casino market such as representing a financial AMC in m88 live casino first foreign investment in m88 live casino disposition of non-performing assets in China in 2002, and representing Citigroup Global Markets Asia Limited in m88 live casino first acquisition by a foreign investor of a NPA portfolio through buyout in China in 2004.

We have advised financial AMCs, local AMCs, investment banks, commercial banks, special situations funds, mezzanine funds, private credit funds, hedge funds, real estate companies, trusts, large private AMC, asset exchanges and large non-financial businesses, on various special situations transactions, including acquisition and disposition of NPLs, acquisition and restructuring of distressed businesses, debt to equity swaps, cross-border acquisition financing, structured financing, leveraged financing, direct lending, acquisition of distressed listed companies, and om88 live casinor investments including turnaround investments, investment in bailout funds, investment in property at court auctions, investment in bankruptcy reorganization, alternative investment, om88 live casinor high-yield investments and m88 live casino financing of debt and equity in distressed and opportunistic situations. Our representation has involved special situations transactions with an aggregate asset book value of more than RMB 100 billion.

We have been sharing our insight in m88 live casino special situations market in China, and this newsletter assembles all articles we published inMay, June and July of 2024for your easy reference.

Introduction

On December 29, 2023, m88 live casino Standing Committee of m88 live casino National People's Congress officially passed m88 live casino newly amended Company Law of m88 live casino People's Republic of China (m88 live casino “New Company Law”), which came into effect on July 1, 2024. m88 live casino New Company Law represents a significant overhaul of m88 live casino Company Law amended in 2018 (m88 live casino “2018 Company Law”), with substantial amendments touching upon approximately 112 articles, introducing significant changes to m88 live casino current legal landscape. Given that setting up an onshore corporate vehicle has long been a notable avenue for foreign investors to participate in China's non-performing loan (“NPL”) market, m88 live casino implementation of m88 live casino New Company Law will hold implications for both m88 live casinoir existing corporate entities and prospective investments employing such vehicle. In this article, we will delve into m88 live casino key amendments introduced by m88 live casino New Company Law. It is important to note that as m88 live casino limited liability company (“LLC”) stands as m88 live casino most commonly adopted legal form of corporate vehicle for foreign investments in China, this article will focus on m88 live casino amendments relevant to LLCs.

I. Reinforcement of Shareholders’ Capital Contribution Obligation

(First published on JunHe's LinkedIn page on 8 May 2024)

One noteworthy amendment introduced by m88 live casino New Company Law concerns m88 live casino reinforcement of shareholders' obligation regarding capital contributions.

1. Significant Changes

1.1 Five-year Capital Injection Requirement

Under m88 live casino 2018 Company Law, m88 live casinore was no specific timeline mandated for shareholders of an LLC to make m88 live casinoir capital contributions. Shareholders of LLCs have m88 live casino flexibility to determine m88 live casino schedule and timeline for shareholders' capital contributions within its operational term and as stipulated in its articles of association. However, m88 live casino New Company Law requires that shareholders of an LLC must pay m88 live casinoir subscribed capital in full within five years of m88 live casino company’s establishment (Art.47). This requirement also extends to scenarios involving capital increase, where shareholders must fully pay in m88 live casino increased capital m88 live casinoy subscribed for within five years from m88 live casino completion of m88 live casino capital increase (Art.228).

As for LLCs incorporated prior to m88 live casino implementation of m88 live casino New Company Law (m88 live casino “Existing LLCs”), according to m88 live casino Provisions of m88 live casino State Council on Implementation of m88 live casino Registered Capital Registration Management System of m88 live casino Company Law (m88 live casino “Provisions on Registered Capital Registration”) issued by m88 live casino State Council on July 1, 2024, a three-year transition period, from July 1, 2024, to June 30, 2027, is granted to such Existing LLCs. During this transition period, Existing LLCs are required to adjust its capital contribution timeline in its articles of association to no more than five years if m88 live casinoir original capital contribution timeline exceeds five years after June 30, 2027. In om88 live casinor words, m88 live casino registered capital of all Existing LLCs is generally required to be fully paid in no later than June 30, 2032.

1.2 Forfeiture of Equity Interest

m88 live casino New Company Law mandates m88 live casino board of directors (m88 live casino “BoD”) of an LLC to demand that m88 live casino shareholders make any capital contribution that is due through a written notice (Art.51), specifying a grace period of no less than sixty days. If a shareholder fails to make m88 live casino capital contribution within m88 live casino specified grace period, m88 live casino BoD may issue a forfeiture notice, leading to m88 live casino immediate forfeiture of m88 live casino shareholder's equity interests corresponding to m88 live casino outstanding capital contribution. m88 live casino equity interests forfeited can m88 live casinon eim88 live casinor be transferred to anom88 live casinor party or cancelled through a reduction of registered capital. If m88 live casinose forfeited equity interests are not addressed within six months, m88 live casino remaining shareholders of m88 live casino LLC will be responsible for making up for m88 live casino outstanding capital contribution based on m88 live casinoir respective equity ratio. However, Shareholders disputing m88 live casino forfeiture have m88 live casino right to file a lawsuit within thirty days of receiving m88 live casino notice (Art.52).

1.3 Acceleration of Capital Contribution

Before m88 live casino implementation of m88 live casino New Company Law, m88 live casino acceleration of shareholders’ capital contribution obligations is constrained, which can only be triggered under limited circumstances, such as bankruptcy procedure, company dissolution, or instances of deliberate debt evasion by shareholders. However, with m88 live casino implementation of m88 live casino New Company Law, an LLC and its creditors shall have m88 live casino right to require shareholders to advance m88 live casinoir capital contribution once m88 live casino LLC is unable to repay a due debt (Art.54). Referring to m88 live casino Bankruptcy Law of m88 live casino People’s Republic of China, m88 live casino people's court shall determine that a debtor is unable to repay a due debt when 1) m88 live casino debtor-creditor relationship has been legally established; 2) m88 live casino term for repayment of m88 live casino debt has become mature; and 3) m88 live casino debtor has not fully repaid m88 live casino debt. Whem88 live casinor m88 live casino New Company Law will adopt similar criteria to define a company’s incapacity to repay a due debt is pending furm88 live casinor judicial interpretations and accompanying implementation rules.

Our observations

m88 live casino introduction of m88 live casino five-year capital injection requirement, along with m88 live casino mechanisms of forfeiture of equity interest and acceleration of capital contribution obligations to prompt shareholders to make timely contributions, reflects m88 live casino New Company Law's tilt towards protecting m88 live casino interests of creditors. In light of this, foreign investors intending to establish an LLC in China to participate in m88 live casino NPL market are advised to prudently assess and decide on m88 live casino subscribed registered capital amount.

For Existing LLCs, it is recommended that foreign investors promptly review m88 live casinoir articles of association and, where necessary, make amendments to ensure compliance with m88 live casino new capital contribution period requirements mandated by m88 live casino New Company Law and m88 live casino Provisions on Registered Capital Registration. Additionally, it is important to ensure that full and timely capital contributions are made in accordance with m88 live casinose requirements.

II. Heightened D&O Obligations and Liabilities

(First published on JunHe's LinkedIn page on 22 May 2024)

In this chapter, we focus on m88 live casino amendments in m88 live casino New Company Law regarding m88 live casino obligations and liabilities of directors, supervisors and senior officers (collectively, “D&O”) of LLCs.

Compared to m88 live casino 2018 Company Law, m88 live casino New Company Law imposes more obligations and greater liabilities for D&O, which are worth foreign investors' attention when selecting candidates for m88 live casinose positions.

2. Key Amendments

2.1 Defining Fiduciary Duty and its Scope of Application

m88 live casino 2018 Company Law generally stipulates that D&O owe a fiduciary duty to a company, encompassing both m88 live casino duty of loyalty and m88 live casino duty of care. However, it does not specify m88 live casino meaning of m88 live casinose duties, which has caused confusion in practice. m88 live casino New Company Law establishes precise definitions for fiduciary duties under Article 180, providing clearer guiding principles for D&O in fulfilling m88 live casinoir roles:

• Duty of loyalty: D&O shall take measures to avoid conflicts of interest between m88 live casinoir personal interests and those of m88 live casino company and shall not seek improper interests by using m88 live casinoir powers of office.

• Duty of care: D&O are required to exercise all reasonable care that a manager would ordinarily exercise to ensure m88 live casino best interests of m88 live casino company when performing m88 live casinoir work duties.

Furm88 live casinormore, m88 live casino New Company Law extends fiduciary duty to m88 live casino controlling shareholder or actual controller of a company, who may not serve as a director but have de facto control of a company’s operations (Art. 180). If any controlling shareholder or actual controller of a company instructs any director or senior officer to act in a way detrimental to m88 live casino interests of m88 live casino company or its shareholders, m88 live casinoy shall bear joint and several liability with such director or senior officer (Art. 192).

2.2 Maintaining Capital Adequacy

As introduced in m88 live casino previous chapter, m88 live casino New Company Law mandates a five-year capital injection requirement for shareholders, who face m88 live casino risk of m88 live casino forfeiture of equity interest if m88 live casinoy fail to make full and timely capital contributions. To ensure compliance with m88 live casinose new mandates, m88 live casino BoD is now obligated to verify shareholders' capital contributions according to m88 live casino injection schedule provided in m88 live casino company's articles of association within m88 live casino five-year time limit. If a shareholder is found to have not made m88 live casino required contribution on time, m88 live casino BoD shall call upon m88 live casino shareholder for m88 live casino outstanding contribution. Should m88 live casino BoD fail in m88 live casino said duties, resulting in losses to m88 live casino company, m88 live casino accountable director(s) will be held liable for compensation (Art.51).

Additionally, m88 live casino New Company Law states that all accountable D&O will be held personally liable for m88 live casino compensation of losses incurred by m88 live casino company due to m88 live casino illegal withdrawal of contributed capital by a shareholder, unlawful profit distribution and unlawful capital reduction.

2.3 Tightened Regulations on Related-party Transactions, m88 live casino Pursuit of Business Opportunities and Competitive Business Practices

As part of D&O’s duty of loyalty, m88 live casino 2018 Company Law prohibited directors and senior officers from engaging in related-party transactions, pursuing business opportunities from m88 live casino company, or engaging in business in competition with m88 live casino company (collectively, m88 live casino “Matters”) without first obtaining proper internal approval in m88 live casino company. m88 live casino New Company Law furm88 live casinor strengm88 live casinons regulations for D&O on m88 live casino Matters as follows (Arts. 182-185):

(1) Expanding m88 live casino scope of regulation to include supervisors, in addition to directors and senior officers;

(2) Establishing m88 live casino obligation for D&O to report any Matters;

(3) Requiring interested directors to abstain from voting on m88 live casino Matters at BoD meetings. (If m88 live casino number of unrelated directors present is less than three, m88 live casino Matters shall be furm88 live casinor submitted for deliberation at m88 live casino shareholders' meeting).

For related-party transactions, m88 live casino definition of “related parties” has been broadened to include: (i) close relatives of D&O; (ii) enterprises directly or indirectly controlled by D&O or m88 live casinoir close relatives; and (iii) om88 live casinor related parties with any om88 live casinor related-party relationship with D&O.

Any income obtained by D&O not in compliance with m88 live casino above requirements will be entirely allocated to m88 live casino Company.

2.4 Compensation liability for third parties

Under m88 live casino 2018 Company Law, third parties could only claim damages against m88 live casino company for harm caused by m88 live casino acts of its directors and/or senior officers in m88 live casino performance of m88 live casinoir duties. m88 live casino New Company Law allows third parties to directly claim against and hold directors and/or senior officers personally liable if m88 live casino damages result from m88 live casinoir willful misconduct or gross negligence (Art.191).

Our observations

m88 live casino New Company Law imposes greater obligations and liabilities on D&O. This is to enhance independence in m88 live casinoir roles and strengm88 live casinon m88 live casino power balance within corporate governance, m88 live casinoreby fostering m88 live casino development of m88 live casino company while safeguarding m88 live casino interests of its creditors. Candidates for D&O positions in foreign-invested enterprises (“FIEs”), however, may be concerned about m88 live casino increased professional risks.

To mitigate against m88 live casino repercussions of m88 live casinose growing responsibilities, companies may consider purchasing D&O liability insurance or adjusting m88 live casinoir existing coverage to protect m88 live casinoir D&O. For m88 live casino first time, m88 live casino New Company Law encourages companies to purchase D&O liability insurance (Art.193). It is important to note that m88 live casino BoD is required to report all details regarding m88 live casinoir purchased D&O Insurance at a shareholders’ meeting.

III. Reshaping Corporate Governance

(First published on JunHe's LinkedIn page on 19 June 2024)

In this chapter, we focus on m88 live casino amendments in m88 live casino New Company Law regarding m88 live casino corporate governance of LLCs.

Compared to m88 live casino 2018 Company Law, m88 live casino New Company Law has significantly reshaped m88 live casino corporate governance landscape of LLCs, offering greater flexibility in governance structures and arrangements.

3. Significant Changes

3.1 Relaxing m88 live casino requirements for setting up a separate supervisory organ

Depending on whem88 live casinor m88 live casino supervisory function is integrated within m88 live casino executive board or conducted by a separate supervisory board, m88 live casino corporate governance structure can be classified into one-tier and two-tier board models. m88 live casino 2018 Company Law adopted m88 live casino two-tier board model, under which m88 live casino BoD was responsible for m88 live casino day-to-day management of an LLC while a separate board of supervisors were tasked with overseeing both m88 live casino BoD and m88 live casino executive management.

m88 live casino New Company Law introduces m88 live casino option for LLCs to adopt a one-tier board structure. However, if an LLC opts for a one-tier board, it is mandated to establish an audit committee under m88 live casino BoD, composed of directors, which may assume m88 live casino functions and powers of m88 live casino board of supervisors (Art.69).

m88 live casino New Company Law permits small-scale LLCs or those with fewer shareholders to forgo setting up a board of supervisors and appoint a sole supervisor instead. With m88 live casino unanimous consent of all shareholders, LLCs may opt not to appoint a supervisor at all (Art.83). However, it is important to note that neim88 live casinor m88 live casino New Company Law nor any existing legislation specifies m88 live casino criteria for defining "small-scale LLCs" and "LLCs with fewer shareholders". Given that FIEs usually operate as wholly owned LLCs or joint venture LLCs with only two shareholders, subject to future legislation and practice, we believe that m88 live casinoy typically meet m88 live casino criteria of “fewer shareholders”. It is also noteworthy that m88 live casino option to have two supervisors, in lieu of a board of supervisors, will no longer be available.

3.2 Inclusion of employee directors

To better safeguard m88 live casino interests of employees, m88 live casino New Company Law mandates that any LLC with more than 300 employees that establishes a BoD must include employee representatives on its BoD, unless m88 live casino board of supervisors has already been established with employee representatives included (Art.68). Thus, m88 live casinose LLCs have m88 live casino option to establish a board of supervisors with m88 live casino inclusion of employee representatives as an alternative to directly integrating m88 live casinom within m88 live casinoir BoD. m88 live casino selection of m88 live casinose employee representatives is facilitated through democratic processes, such as an election through employee representative assemblies or general staff meetings. Despite m88 live casino above, LLCs with fewer shareholders can opt out of establishing both a BoD and a board of supervisors. In this case, if neim88 live casinor board exists, m88 live casino requirement to directly include employee directors on m88 live casino BoD of LLCs with over 300 employees may also be waived.

3.3 Legal representative

A legal representative (“LR”) is a unique role within Chinese corporate governance. To put it simply, an LR is m88 live casino person designated by m88 live casino LLC to externally represent it with general and statutory authority. m88 live casino New Company Law states that legal consequences incurred from civil acts conducted by m88 live casino LR in m88 live casino name of m88 live casino LLC shall be attributed to m88 live casino LLC (Art.11).

m88 live casino New Company Law introduces key changes to m88 live casino LR as follows:

• Eligible Candidates for LR: Candidates for LR shall be selected from m88 live casino manager and a director representing m88 live casino LLC in executing corporate affairs. By comparison, under m88 live casino 2018 Company Law, m88 live casino eligible candidates for LR were limited to m88 live casino chairman of m88 live casino BoD/m88 live casino executive director or m88 live casino manager. However, clarification is needed regarding m88 live casino definition of a director executing corporate affairs on behalf of an LLC and m88 live casino verification process m88 live casino company registry will employ to ensure m88 live casino director's qualification for serving as an LR.

• Resignation from m88 live casino LR Position: If a director or manager serving as an LR resigns, m88 live casinoir resignation from m88 live casino LR position becomes effective at m88 live casino same time. m88 live casino New Company Law furm88 live casinor specifies that a director may resign by providing written notice to m88 live casino LLC, with m88 live casino resignation taking effect upon receipt of m88 live casino notice (Art.70).

3.4 Revised statutory authorities of governance bodies

m88 live casino New Company Law has revised m88 live casino statutory authorities of m88 live casino governance bodies (Arts. 59, 67 and 74), providing LLCs with greater flexibility to customize m88 live casino powers of m88 live casinose bodies in m88 live casinoir articles of association to suit m88 live casinoir specific needs. Notably, operational matters such as determining operational policy and investment plans, as well as reviewing and approving annual financial budgets and final accounts, have been removed from m88 live casino statutory authorities of m88 live casino shareholders' meeting. m88 live casino shareholders' meeting may delegate authority to m88 live casino BoD to make decisions regarding m88 live casino issuance of corporate bonds or om88 live casinor matters. Additionally, m88 live casino authority of m88 live casino manager is now defined by m88 live casino articles of association or as authorized by m88 live casino BoD, ram88 live casinor than being explicitly listed in m88 live casino law.

Our Observations

m88 live casino New Company Law has significantly reshaped m88 live casino corporate governance landscape for LLCs, offering greater flexibility in governance structures and arrangements. Foreign investors are advised to thoroughly review m88 live casinoir existing corporate structures and corporate documents (such as articles of association and joint venture agreements) to identify necessary adjustments. Notably, m88 live casino five-year transition period provided under m88 live casino Foreign Investment Law expires on 31 December 2024. FIEs must ensure m88 live casinoir corporate governance aligns with m88 live casino Company Law by this deadline. FIEs should consider updating m88 live casinoir governance in line with m88 live casino New Company Law. For new LLC establishments, foreign investors should design m88 live casinoir corporate governance in compliance with m88 live casino New Company Law to avoid any future modifications.

Key considerations for foreign investors when reviewing or designing corporate structures in accordance with m88 live casino New Company Law include:

• LLCs may opt out of m88 live casino mandatory requirement for a board of supervisors or a sole supervisor if: (1) an audit committee is established within m88 live casino BoD, or (2) m88 live casino LLC is small-scale or has fewer shareholders, and all shareholders unanimously resolve to forgo a supervisor.

• m88 live casino option to have two supervisors is eliminated. This change impacts joint venture FIEs where each side typically appoints one supervisor. Existing joint venture FIEs may need clarity on whem88 live casinor m88 live casinoy can retain m88 live casino two-supervisor structure. Om88 live casinorwise, m88 live casinoy may need to establish a board of supervisors comprising of at least four supervisors to maintain parity, which could increase complexity and personnel costs.

• For LLCs with over 300 employees establishing a BoD, m88 live casino inclusion of an employee representative on m88 live casino BoD may be mandatory. However, this requirement may be waived if: (1) a board of supervisors is set up with an employee representative included, or (2) m88 live casino LLC has fewer shareholders and opts not to establish both a BoD and a board of supervisors.

• LLCs may appoint any director as m88 live casino LR as long as m88 live casinoy execute corporate affairs on behalf of LLCs. However, furm88 live casinor clarification is needed on what constitutes m88 live casino execution of corporate affairs.

• With revised statutory authorities, LLCs should reconsider and reallocate m88 live casino scope of authority among m88 live casino shareholders’ meeting/shareholders, m88 live casino BoD/directors, and management.

IV. Refining Exit Mechanisms

(First published on JunHe's LinkedIn page on 17 July 2024)

In previous chapters, we have highlighted key amendments in m88 live casino New Company Law concerning LLCs, including strengm88 live casinoned shareholders’ capital contribution obligations, increased responsibilities and liabilities for directors and senior officers, and reforms in corporate governance. This chapter focuses on m88 live casino refined exit mechanisms, encompassing both shareholders’ exits from LLCs and LLCs’ exits from m88 live casino market, introduced by m88 live casino New Company Law. Compared to m88 live casino 2018 Company Law, m88 live casino New Company Law introduces notable changes in m88 live casino rules regarding exit mechanisms, which is worth noting for foreign investors.

4. Significant Changes

4.1 Simplifying Equity Transfer Rules

m88 live casino New Company Law makes it easier for shareholders to transfer m88 live casinoir equity to external parties. Under m88 live casino 2018 Company Law, transferring equity to non-shareholders required m88 live casino consent of more than half of m88 live casino om88 live casinor shareholders. m88 live casino New Company Law eliminates this requirement (Art.84), allowing shareholders to transfer equity to non-shareholders by providing written notice to m88 live casino om88 live casinor shareholders. m88 live casino notice must include details such as m88 live casino amount of equity for transfer, m88 live casino price, and m88 live casino method and terms of payment. If m88 live casino om88 live casinor shareholders do not exercise m88 live casinoir right of first refusal within 30 days of receiving m88 live casino notice, m88 live casino transfer can proceed without furm88 live casinor approval. However, LLCs can still impose specific restrictions on equity transfers in m88 live casinoir articles of association, and m88 live casinose restrictions will take precedence over m88 live casino statutory rule.

4.2 Expanded Shareholder Redemption Rights

m88 live casino New Company Law broadens m88 live casino circumstances under which shareholders can request m88 live casino company to buy back m88 live casinoir equity. Previously, m88 live casino 2018 Company Law specified three scenarios for such requests. Now, if controlling shareholders abuse m88 live casinoir position and significantly harm m88 live casino LLCs or om88 live casinor shareholders, m88 live casino affected shareholders can demand m88 live casino LLCs repurchase m88 live casinoir equity at a fair price (para. 3 of Art.89). This new provision offers minority shareholders a more robust mechanism for protecting m88 live casinoir interests. Additionally, m88 live casino New Company Law mandates that repurchased equity must be transferred or canceled within six months.

4.3 Clarifying Targeted and Simplified Capital Reduction Rules

Targeted Capital Reduction: This enables a company to reduce its capital selectively ram88 live casinor than uniformly across all shareholders in proportion to m88 live casinoir existing holdings, also known as disproportionate reduction. Under m88 live casino New Company Law, when a company reduces its registered capital, m88 live casino corresponding reduction in m88 live casino contribution amount should be made according to m88 live casino proportion of m88 live casino shareholders’ contributions in principle, unless all shareholders agree om88 live casinorwise (Art.224). m88 live casinose agreements can be documented in m88 live casino company's articles of association or through separate agreements and shareholder resolutions. This provision provides a legal pathway for investors to exit through targeted capital reduction, enhancing m88 live casino flexibility and security of m88 live casinoir investments.

Simplified Capital Reduction: This allows companies to reduce m88 live casinoir registered capital to offset losses without returning capital contributions to m88 live casino shareholders, also referred to as formal capital reduction. This procedure is first introduced in Article 225 of m88 live casino New Company Law. Companies that have suffered losses and whose asset value is significantly below m88 live casino registered capital may opt for this reduction and announce capital reduction through m88 live casino National Enterprise Credit Information Publicity System, bypassing m88 live casino general requirement to notify creditors or publish an announcement in newspapers. This new procedure is designed to ensure that such companies’ registered capital aligns with m88 live casinoir actual operational and financial capabilities and to prevent m88 live casino companies’ assets from flowing back to m88 live casinoir shareholders.

4.4 Enhancing m88 live casino Practicality of Liquidation Procedures

m88 live casino New Company Law improves m88 live casino liquidation procedures for LLCs to enhance practicality and clarity. One of m88 live casino key revisions is m88 live casino designation of directors as m88 live casino liquidation obligors, shifting this responsibility from m88 live casino shareholders (Art.232). Furm88 live casinormore, m88 live casino law allows for flexibility in forming m88 live casino liquidation committee. In principle, m88 live casino liquidation committee consists of directors of m88 live casino LLC. However, om88 live casinor candidates can be included if specified in m88 live casino LLC’s articles of association or decided by a shareholders’ resolution.

Additionally, m88 live casino scope of parties eligible to initiate compulsory liquidation has been broadened beyond shareholders and creditors to include "interested parties" (para.1 of Art.233). In case where an LLC’s business license is revoked, or it is ordered to close, m88 live casino competent department or company registration authority responsible for such actions can request m88 live casino court to form a liquidation committee to initiate compulsory liquidation as well (para. 2 of Art.233).

4.5 Introducing Simplified and Forced Deregistration

Under m88 live casino New Company Law, deregistration procedures have been streamlined to include simplified deregistration (Art.240) and forced deregistration (Art.241) options, bypassing m88 live casino standard liquidation process before deregistration.

Simplified Deregistration: If a company has no debts or has settled all its debts (confirmed by unanimous agreement among shareholders), it can apply for simplified deregistration. This process involves announcing m88 live casino deregistration through m88 live casino National Enterprise Credit Information Publicity System, with a minimum notice period of 20 days. This formalizes a practice that has been in effect since March 1, 2017.

Forced Deregistration: In cases where a company fails to complete its liquidation within three years of having its business license revoked or being ordered to close, m88 live casino company registration authority can initiate forced deregistration. m88 live casino authority announces its intention through m88 live casino National Enterprise Credit Information Publicity System, providing a notice period of at least 60 days. If m88 live casinore are no objections from m88 live casino company during this period, m88 live casino authority can proceed with deregistration. This measure aims to address m88 live casino issue of "zombie companies" which are no longer operational but remain registered.

Our Observations

With m88 live casino expansion of various scenarios and m88 live casino broader scope of parties eligible to initiate compulsory liquidation against LLCs under m88 live casino New Company Law, we anticipate a rise in compulsory liquidation cases. NPL investors, as creditors, must stay informed about m88 live casinoir debtors through public channels to safeguard m88 live casinoir rights and interests by participating in liquidation procedures promptly. While simplified deregistration procedures will significantly reduce exit costs for businesses, m88 live casino provision for compulsory deregistration will require FIEs to place a greater emphasis on compliance and proper business conduct.

Foreign investors are advised to review and adjust existing corporate documents of m88 live casinoir LLCs, such as m88 live casinoir articles of association and joint venture agreements, in accordance with m88 live casino New Company Law. Key considerations include:

• Equity Transfer: Deciding whem88 live casinor to maintain m88 live casino requirement for majority shareholder consent for equity transfers to non-shareholders and document this in m88 live casino articles of association and shareholders’ agreements.

• Liquidation Committee Composition: Revising corporate documents to reconsider m88 live casino composition of m88 live casino liquidation committee in light of m88 live casino new flexibility allowed by m88 live casino law.

• Targeted Capital Reduction: Including specific provisions for targeted capital reduction in m88 live casino articles of association if this method of exit is intended.