China’s Latest Laws and Regulations as of October 2012, II

V. The Supreme People’s Court Published its Third Group of Guiding Cases.

The Supreme People’s Court published the third group of guiding cases on September 28, 2012. Four cases were published, including two civil cases and two criminal cases. The two civil cases mainly concern the concrete application of the Company Law and further clarify the scope of judicial review for litigation to cancel company’s resolutions and shareholder liability for liquidation. The two criminal cases concern new methods of embezzlement and corruption and limited stay of execution with reprieve.


Guiding Case by China Supreme Court: JV’s Minority Shareholders May Undertake All Company’s Debt

By You Yunting

By judicial practices in China, in case the Sino-foreign invested company, which however is operated under the management of Chinese shareholder, is trapped in the insolvency, the foreign investors could be judged to take all the debt of the company, not subject to the total amount of its investment, when Chinese partner chooses to disappear or refuse to clear the debt. And in recent, as per the latest 3rd guiding cases by China Supreme People’s Court, by a decision indicated in it, the non controlling shareholder shall be liable to the joint liability to the non-settled debt of the company, that obviously aggravates the burden of the company shareholder. Then, what is the fair way to avoid such risks? We put forward our answer to it in today’s post.