General introduction to trust margin trading
Venture capitalists will invest in lots of portfolio companies to look for the next Apple or Google. In many such investments, venture capital investors will only hold a minority share, which do not give them control over the portfolio companies' daily operation. In such cases, most investors believe that to lose the amount of invested capital will be the worst case if such investments turn out to be a failure given the "limited liability" rule under PRC Company Law.
Norwest Holdings Pte Ltd (in Liquidation) v Newport Mining Ltd [2011] SGCA 42
- Background
Company A is a foreign enterprise whose business is the production of certain specialist machinery. In China, only approved entities which are on a list compiled by the department in charge are permitted to manufacture such machinery. Company B, a Chinese enterprise, is one such entity. To enter the Chinese market, company A signed a joint venture agreement with company B in 2007. Each company agreed to contribute capital to establish a joint venture to manufacture such machinery.
Throughout the global economic meltdown, the number of bankruptcy cases in China has risen considerably. To shed light on bankruptcy proceedings and stabilize the domestic economy, the Supreme People’s Court of the PRC issued Opinions on Several Issues Regarding the Proper Adjudication of Enterprise Bankruptcy Cases to Provide a Judicial Safeguard for Maintaining Order in the Market Economy on June 12, 2009. The Opinions direct courts at all levels to properly apply the Enterprise Bankruptcy Law (EBL) to assist insolvent enterprises, maintain market order, and stabilize the economy.
The Bankruptcy Law, applicable to FIEs and most other companies in China, will come into effect on 1 June 2007.
The Bankruptcy Law sets out a dual test of insolvency: inability to pay debts as they fall due ("cash flow insolvency") and insufficient assets to pay off all debts ("balance sheet insolvency"). Either a debtor or a creditor may apply to the court for reorganization or liquidation of the debtor. Court assistance may also be sought to conciliate.
Introduction This briefing complements our other publications on corporate restructuring and the sale or purchase of distressed assets.
What are the options for companies in financial difficulty in the PRC?
Many multinational corporations ("MNCs") are either restructuring or actively considering restructuring their China operations, given the current economic conditions and forecasts. Restructuring efforts often include consolidating legal entities, business units, and operations; closing down operations and factories; and workforce reductions. Implementing such restructuring efforts often raises complicated legal issues, many of which require careful analysis in light of recent legislation and policy considerations.
Consolidating Operations
In Colombia, as in many other countries, closing down or dissolving a business is often more complicated than setting up a new one. Although there is a lot of information related to setting up a company in this country, there is not much guidance on the process of shutting one down. Because things do not always go as planned, it is important for investors to obtain information on corporate dissolution in Colombia.
Dissolution and Winding Up
Introduction