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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