Whether or not the Several Provisions on the Change of Equity of Investors in Foreign Invested Enter

The Ministry of Foreign Economic Cooperation and the State Administration for Industry and Commerce promulgated Foreign Economic and Trade Law No. 267 in 1997.

Article 1. These Provisions are formulated in accordance with the Company Law of the People's Republic of China, the Law of the People's Republic of China on Sino-Foreign Joint Ventures, the Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures, the Law of the People's Republic of China on Foreign-Funded Enterprises, and other relevant laws and regulations, so as to promote the healthy development of foreign-invested enterprises, protect the legitimate rights and interests of all parties to the investment, and maintain social and economic order.

Article 2: The term "change in the equity of investors in foreign-invested enterprises" as used in these Provisions refers to changes in the investors of Sino-foreign joint ventures, Sino-foreign cooperative joint ventures, or foreign-funded enterprises (hereinafter collectively referred to as enterprises) established within the territory of China in accordance with Chinese law, or their share of capital contribution (including the provision of cooperation conditions) in the enterprises (hereinafter referred to as "equity"). Including but not limited to the following main reasons for the change of equity of investors in foreign-invested enterprises:

1) Transfer of equity by agreement between enterprise investors;

2) the transfer of equity by the enterprise investor to its affiliates or other transferees with the consent of the investors of other parties;

3) The adjustment of the registered capital of the enterprise by the enterprise investor agreement leads to a change in the equity of the investors of all parties;

4) The enterprise investor pledges its equity to the creditor with the consent of the investors of other parties, and the pledgee or beneficiary acquires the equity of the investor in accordance with the provisions of the law and the contract;

5) The enterprise investor is bankrupt, dissolved, revoked, revoked or dies, and its heirs, creditors or other beneficiaries acquire the equity of the investor in accordance with law;

6) Where an enterprise investor merges or divides, its successor after the merger or division inherits the equity of the original investor in accordance with law;

7) If the enterprise investor fails to perform the capital contribution obligations stipulated in the enterprise contract and the articles of association, the investor shall be replaced or the equity shall be changed with the approval of the original examination and approval authority.

Article 3. The change of equity of enterprise investors shall comply with the relevant laws and regulations of the People's Republic of China, and shall be approved by the examination and approval authorities and the registration authority for change registration in accordance with these provisions. Equity change without approval by the examination and approval authority is invalid.

Article 4. The change of equity of enterprise investors must comply with the provisions of Chinese laws and regulations on investor qualifications and industrial policy requirements.

According to the Catalogue for the Guidance of Foreign Investment Industries, a change in equity of an industry that is not allowed to be wholly foreign-owned shall not result in a foreign investor holding all the equity of the enterprise; If an enterprise becomes a foreign-funded enterprise due to a change of equity, it must also meet the conditions for the establishment of a foreign-funded enterprise as stipulated in the Detailed Rules for the Implementation of the Law of the People's Republic of China on Foreign-Funded Enterprises (hereinafter referred to as the "Detailed Rules on Foreign Investment").

You can go to the Ministry of Commerce's ** Laws and Regulations Database to check the current effective regulations.

Legal Analysis: In order to standardize the procedures for changing the equity of investors in foreign-invested enterprises and protect the legitimate rights and interests of all parties to the investment, the "Several Provisions on the Change of Equity of Investors in Foreign-invested Enterprises" are formulated.

Legal basis: Several Provisions on the Change of Equity of Investors in Foreign-invested Enterprises》 Article 1 These Provisions are formulated in accordance with the Company Law of the People's Republic of China, the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures, the Law of the People's Republic of China on Foreign-Funded Enterprises, and other relevant laws and regulations, so as to promote the healthy development of foreign-invested enterprises, protect the lawful rights and interests of all parties to the investment, and maintain social and economic order.

Legal Analysis: In order to standardize the procedures for the change of equity of investors in foreign-invested enterprises and protect the legitimate rights and interests of all parties to the investment, the "Several Provisions on the Change of Equity of Investors in Foreign-invested Enterprises" are formulated.

Legal basis: "Several Provisions on the Change of Equity of Investors in Foreign-invested Enterprises" Article 1 These Provisions are formulated in accordance with the Company Law of the People's Republic of China, the Law of the People's Republic of China on Sino-Foreign Joint Ventures, the Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures, the Law of the People's Republic of China on Foreign-funded Enterprises, and other relevant laws and regulations in order to promote the healthy development of foreign-invested enterprises, protect the legitimate rights and interests of all parties to the investment, and maintain social and economic order.

Foreign-invested enterprises should pay attention to the legal issues in handling equity changes

First of all, the change of equity of an enterprise investor must be approved by the original examination and approval authority and the corresponding change registration must be completed to be effective.

Secondly, the change of equity shall comply with the provisions of the Catalogue for the Guidance of Foreign Investment Industries, and shall not cause the company's operations to exceed the scope specified in the Catalogue through the change of equity.

Third, unless the foreign investor transfers all the equity to the Chinese investor, the change of equity shall not result in the foreign investor's investment ratio being less than 25% of the vertical capital of the enterprise's registered capital file.

1. Is it necessary to go through the industrial and commercial change registration after the equity transfer?

In the equity transfer transaction, the equity transfer of the shares does not need to go through the industrial and commercial registration, and the limited liability company needs to go through the corresponding industrial and commercial registration.

Under normal circumstances, if a shareholder transfers equity, it shall go through the registration of equity change, but the transfer of equity between shareholders within a limited liability company that does not cause a change in the name of the shareholder does not need to go through the industrial and commercial change registration.

2. How to confirm the qualifications of shareholders.

Confirmation of shareholder qualifications is carried out in the following ways:

1. Confirm the basic principles of shareholder qualifications, and the principle of priority application of formal evidence and exception application of substantive evidence;

2. Substantive evidence, evidence obtained by the investor through capital contribution, such as the articles of association, industrial and commercial registration, register of shareholders, certificate of capital contribution, proof of actual capital contribution, etc.

The precautions for becoming a shareholder of a company include the following:

1. Go through the procedures for equity change;

2. A limited liability company pays attention to the limitation of shareholders' liability, that is, it bears responsibility within the share of capital contribution.

Article 3 of the Several Provisions on the Change of Equity of Investors in Foreign-invested Enterprises stipulates that the change of equity of enterprise investors shall comply with the relevant laws and regulations of the People's Republic of China, and shall be approved by the examination and approval authorities and the registration authority shall be changed in accordance with these Regulations. Equity change without approval by the examination and approval authority is invalid.

Legal analysis: If the laws, regulations and rules of the State Administration for Industry and Commerce stipulate that the establishment of a branch office shall be subject to examination and approval, the approval document of the original examination and approval authority shall be submitted for the foreign-invested enterprise to change its domicile, and the certificate of use of the domicile shall also be submitted; If the increase in registered capital involves the change of the original contract, a supplementary agreement shall also be submitted to amend the articles of association of the company; In the case of a change of legal representative, the appointing certificate of the appointing party and the identity certificate of the appointed person shall also be submitted; For the transfer of equity, the transfer contract should also be submitted.

Supplementary agreement, as well as the transferee's legal business certificate and credit certificate. Where there is a change in the members of the board of directors of a foreign-invested enterprise, it shall be filed with the original competent registration authority.

Legal basis: Detailed Rules for the Implementation of the Regulations on the Administration of Registration of Enterprise Legal Persons Article 41 When a foreign-invested enterprise changes its registration matters, it shall submit the following documents and certificates: (1) an application for change of registration signed by the chairman of the board of directors (2) a resolution of the board of directors; (3) When changing the shareholder, registered capital, business scope and business period, the approval documents of the original examination and approval authority shall be submitted.