09
2022-10
Recently, the 2022 Jinan municipal political and legal system outstanding "three micro" works selection activities after preliminary evaluation, re-evaluation and final evaluation, selected 60 winning works. Zhongcheng Qingtai Jinan's video "Striving forward bravely and striving to promote the rule of law" won the second prize in the selection activity. The video works focus on the work style of Zhongcheng Qingtai Lawyers, guided by Xi Jinping's thought of socialism with Chinese characteristics in the new era, adhering to the original intention of the rule of law, remembering the purpose of service, serving the government, serving the people, and serving the overall situation of economic and social development, and showing the spirit of legal workers in the new era. Welcome to the 20th National Congress and start a new journey. Zhongcheng Qingtai Law firm will take this event as an opportunity to make persistent efforts to fulfill its original mission and the spirit of loyal to the party and serving the people. Zhongcheng Qingtai lawyer will strengthen his confidence, work hard, be a good lawyer to the satisfaction of the party and the people, and contribute to the construction of safe Shandong. Welcome to the 20th National Congress and start a new journey. Zhongcheng Qingtai Law firm will take this event as an opportunity to make persistent efforts to fulfill its original mission and the spirit of loyal to the party and serving the people. Zhongcheng Qingtai lawyer will strengthen his confidence, work hard, be a good lawyer to the satisfaction of the party and the people, and contribute to the construction of safe Shandong.
2022-10-09
08
2022-10
In the construction project has not yet begun, the contractor in order to obtain construction opportunities, may sign a construction contract with the contractor in addition to the winning contract, by reducing the price of the project, change the payment method, shorten the duration and other acts to ensure their competitive advantage. This leads to the fact that in practice, there are often one or more contracts between the contractor and the contractor for the construction project in addition to the winning contract, I .e., "black and white contracts". Under the premise of the validity of the winning contract, under what circumstances will the content of the non-winning contract and the different part of the winning contract be deemed as substantive change and invalid? Although there are relevant laws and regulations in practice, there are still many disputes to be clarified. 1. legal provisions on the substantive content of contracts Article 57, paragraph 1, of the Regulations for the Implementation of the Law on Tendering and Bidding stipulates: "The tenderer and the winning bidder shall sign a written contract in accordance with the provisions of the Law on Tendering and Bidding and these Regulations, and the main terms of the contract, such as the subject matter, price, quality and time limit for performance, shall be consistent with the contents of the tender documents and the winning bidder's tender documents. The tenderer and the winning bidder shall not enter into any other agreement shall not enter into any other agreement." From the contents of the legal provisions stipulated in Article 57, paragraph 1, of the Regulations on the Implementation of the Bidding Law, it can be seen that the substantive content shall refer to the main provisions of the contract, such as the subject matter, price, quality and time limit for performance. Paragraph 1 of Article 2 of the Interpretation (I) of the Supreme People's Court on the Application of Law in the Trial of Disputes over Construction Contracts (hereinafter referred to as the (I) of Judicial Interpretation of Construction Projects) stipulates that the substantive contents of the construction contract separately signed by the tenderer and the winning bidder, such as the scope of the project, construction period, project quality and project price, are inconsistent with the winning contract, and one party requests to determine its rights and obligations in accordance with the winning contract, the people's court should support it. Paragraph 2 stipulates that in addition to the winning contract, the tenderee and the winning bidder shall sign a separate contract for the purchase of the contracted property at a price significantly higher than the market price, the construction of housing supporting facilities free of charge, the transfer of profits, and the donation of property to the construction unit, so as to reduce the project price in a disguised form. If one party requests that the contract deviates from the substantive content of the winning contract, the people's court shall support. As can be seen from paragraph 1 of the provision, the substantive content includes the scope of the project, the construction period, the quality of the project, the price of the project, etc. Paragraph 2 provides for more detailed provisions on changes in the price of the project to prevent disguised reductions in the price of the project through other means. 2. typical cases The current laws and regulations and judicial interpretation of the substantive change has been more clearly defined, but in practice, due to the "black and white contract" of the phenomenon of widespread, the contract content of the change is also a wide variety of ways. Therefore, how to determine whether it is a substantive change must not only stand on the basis of legal provisions, but also combine relevant precedents in practice. 1.(2019) Lu 01 Min Zhong No. 3547 In this case, the court of first instance held that "the project payment and payment schedule and standards have changed with the filing contract. The total price of the filing contract is 3.4 million yuan, while the total price of the contract project is more than 4.17 million yuan after the contract change signed separately by both parties is increased, and the progress of the payment project is quite different from that of the filing contract. At the same time, due to the signing of the supplementary agreement, the quantity and duration of the project involved have also changed. According to Article 46 of the Bidding Law, the tenderer and the winning bidder shall enter into a written contract in accordance with the bidding documents and the bid documents of the winning bidder, and shall not enter into any other agreement that deviates from the substantive content of the contract. Accordingly, the" Construction Project Construction Contract "and" Supplementary Agreement "signed by the plaintiff and the defendant violated the mandatory provisions of laws and regulations and were invalid." The court of second instance held that "the construction project construction contract and supplementary agreement signed by the research institute of traditional Chinese medicine and Haidong lantao company involved in the case have undergone substantial changes to the above-mentioned government procurement contract due to the agreed project price, payment schedule and standard, and the construction project construction contract and supplementary agreement have not reorganized the bidding procedures, on this basis, the court of first instance found that the" construction contract "and" supplementary agreement "signed by both parties were invalid because they violated the mandatory provisions of laws and administrative regulations, which were based on the law, and the court confirmed this." In this case, the contract price was changed from 3.4 million yuan to 4.17 million yuan, and the payment schedule and standard were significantly changed. Finally, the court found that the change was the substantive content of the contract, resulting in the invalidity of the contract. 2.(2019) Supreme Law Minzong No. 1093 In the first instance, none of the parties raised any objection to the validity of the "General Contract Supplementary Agreement" involved in the case. Therefore, the first instance did not regard this as the focus of the dispute. In the second instance, Nantong Second Construction claimed that the "General Package Supplementary Agreement" was invalid, and the real estate company should pay the project advance payment and progress payment to it in accordance with the agreement of the winning "Construction Contract. In this regard, the Court believes that the "General Package Supplementary Agreement" and the winning "Construction Contract" compared to the project payment method from the advance payment plus progress payment to the contractor full advance construction. The payment method is an important part of the project price, therefore, it should be determined that the "General Package Supplementary Agreement" constitutes a substantial change to the winning contract, according to the provisions of Article 46 of the the People's Republic of China Law on Tendering and Bidding, the agreement is invalid and not legally binding on both parties. Similar cases include (2018) Supreme Law Minzong No. 69. In this case, the court of first instance found the following facts: after the company and Jinsha County Education Bureau signed the "Investment and Construction Contract" according to the bidding documents and the winning bidder's bidding documents, they signed the "Supplementary Agreement" on December 25, 2012, changing the "payment method for project repurchase payment" from BT mode to "payment according to Party B's construction progress". The court of first instance held that the BT model is the process of general contracting through the project company, transferring financing and construction to the owner, and the owner paying the total project investment plus a reasonable return to the investor. One of the core elements of the BT model is that the contractor has a financing obligation. The "Supplementary Agreement" has modified the core content of the BT Agreement, which belongs to the situation of "other agreements concluded by the tenderer and the winning bidder that deviate from the substantive content of the contract" stipulated in the "the People's Republic of China Tendering and Bidding Law. The court of second instance confirmed this. From the above cases, it can be seen that a material change in the method of payment for the works would also be deemed to constitute a material change to the winning contract. 3.(2018) Supreme Fa Min Shen No. 1235 In this case, according to the bidding documents, the two parties signed the "Construction Project Construction Contract" for the 5# and 6# buildings on August 24, 2009 and filed it with the construction authority, and signed two more "Construction Project Construction Contract Supplementary Agreements" for the 5# and 6# buildings respectively. The project price pricing standard, contract duration, liability for breach of contract and other contents agreed in the two supplementary agreements are inconsistent with the provisions of the construction project construction contract for filing, which is a change to the substantive content of the bid-winning contract for filing, in violation of the aforementioned mandatory provisions. the second-instance judgment found that the changes in the substantive terms of the two supplementary agreements were invalid and the applicable law was correct. Article 30 of the the People's Republic of China Contract Law provides that changes in the subject matter of the contract, quantity, quality, price or remuneration, time limit for performance, place and manner of performance, liability for breach of contract and method of dispute resolution are material changes to the content of the offer. Yuhua claims that the breach clause is not a statutory substantive clause, even if it is inconsistent with the tender documents, it is valid and lacks legal basis. In this case, the Supreme Court also identified the liability for breach of contract and the method of resolving disputes as a material change. 4.(2022) Supreme Fa Min Shen No. 262 In this case, the employer and the contractor have signed a series of supplementary agreements and supplementary contracts according to the changes in the construction situation of the project involved in the case. For example, the "Supplementary Agreement" on June 30, 2014 is an agreement between the two parties on losses such as suspension of work and subsequent construction matters, supplementary Contract 2 to Supplementary Contract 8 and Project Settlement Agreement of Xinghai Harmony World Area 1 and Area 2 are further supplementary agreements made by both parties on specific matters such as newly added house type renovation project, completed project content and settlement price, determination method of project cost of unconstructed part, construction period, project payment, liability for breach of contract, completion, project settlement, etc, the above agreements are the true intentions of both parties in the course of the performance of the construction contract due to changes in objective circumstances, and do not affect whether other bidders can win the bid or the conditions under which they will win the bid. The signing of the above-mentioned agreement does not violate the bidding system, resulting in an imbalance of rights and obligations between the contractor and the contractor, and does not constitute a substantive change to the Construction Contract. The second-instance judgment found that the above-mentioned supplementary agreement and supplementary contract were made due to changes in the construction of the project and actual needs, and were the constituent documents of the construction contract involved in the case, and there was nothing improper. Huiyuan Company advocates that the supplementary contract changes the substantive content of the "Construction Contract", and the "Construction Contract" is a "black and white contract" relationship, can not be established, the hospital will not support. In this case, although the subsequent supplementary agreement changed the duration, payment method, and liability for breach of contract, the court did not find it to be a substantive change. 3. comprehensive analysis What was found to be a material change in the above-mentioned cases was not directly provided for in the legal provisions, and the grounds for the court's determination of a material change in the first three cases included the progress of payment, the standard of payment, the method of payment, the liability for breach of contract, and the method of dispute resolution. In the fourth case, there are also changes to the above contents, but they are not considered as substantive changes. Thus, not all changes in the content of the contract should be considered as material changes. In fact, from the perspective of legal provisions, some contents are not clearly reflected, but their essence also belongs to the category of substantive changes, or although they are stipulated in the legal provisions to belong to the category of substantive changes, their reasonable changes will not be recognized as substantive changes by the court. In judicial practice, the judge's discretion is also extremely important when determining the scope and extent of deviation from the substantive content of the contract. From the perspective of project quality, if the employer requires to improve the project quality standard or safe construction requirements after the contract is signed, the project price will be increased accordingly. Similarly, the employer requires to reduce the project quality standard and the project price will be reduced accordingly. At this time, the supplementary contract signed by changing the contract price shall be a valid contract. However, if the contractor requires the contractor to significantly reduce the project price when the project quality standards are not adjusted or fine-tuned, the supplementary contract signed by both parties to change the contract price is likely to be considered as a material change and the contract will be invalid. Similarly, the same is true for the adjustment of the speed of the construction period, the change of the payment method of the project, and the change of the terms of liability for breach of contract. Therefore, for the determination of substantive changes, first, to see whether the content of the change belongs to the scope of substantive changes stipulated by law, including the subject matter of the contract, price, quality, performance period, scope of the project, construction period, payment method, payment term. Second, when the content of the change belongs to the substantive change stipulated by law, the scope of the change should also be considered, whether it is a normal change or a substantive change, while the consideration and determination of the scope of the change belongs to the scope of the judge's discretion. When the content of the change is not clearly stipulated in the law, it is also necessary to consider whether the content of the change will lead to a significant change in the rights and obligations of both parties, resulting in unequal rights and obligations, such as the terms of payment, payment methods, liability for breach of contract and other provisions above. In judicial practice, as in the above-mentioned cases, under the premise of the validity of the winning contract, the judge's discretion is generally to measure the size of the change in the relationship between the rights and obligations of both parties, if the change in the content of the contract leads to a serious imbalance of interests between the two parties will generally be identified as a substantive change.
2022-10-08
30
2022-09
On September 29, 2022, the establishment ceremony and the first phase of the Jinan Financial "Quanrun" Policy and Regulations Propaganda Group was held in Long'o Building. Huang Dongqing, a lawyer from Jinan Institute of Zhongcheng Qingtai, was invited to give the first legal lecture to the city's financial departments. Lawyer Huang Dongqing carried out a lecture on "the study and interpretation of the Constitution" around the theme of the Constitution, which was interpreted in detail from five parts: the concept, nature, status, structure, content and related cases of the Constitution, which was widely praised by the participants. The establishment of a policy and regulation propaganda group and the promotion of a series of policies and regulations is an important measure for the financial department to thoroughly implement the Jinping rule of law and enhance the construction of a government under the rule of law. Through this lecture, the constitutional awareness of the majority of financial cadres has been greatly enhanced. Zhongcheng Qingtai Law firm will actively give full play to the advantages of government legal services and make concerted efforts and contributions to the rule of law and the construction of a government ruled by law!
2022-09-30
30
2022-09
On September 28, the Shenyang Ecological and Environmental Protection Comprehensive Administrative Law Enforcement Team organized the fourth stage of law enforcement training. Lawyer Luo Xianghu, a partner of Zhongcheng Qingtai (Jinan) Law Firm, was invited to give a special lecture on "Three Systems and On-site Inspection Process Standards. Lawyer Luo Xianghu started from the background, concept and system essence of the "three systems", combined with the characteristics of environmental administrative law enforcement at the present stage, and focused on the interpretation of the administrative law enforcement publicity system, the whole process of law enforcement record system, and the legal review system for major law enforcement decisions for administrative law enforcement personnel. At the same time, combined with the new requirements for environmental administrative law enforcement after the revision of the "Administrative Punishment Law", the environmental protection on-site supervision and inspection process standards are explained in detail. This special training is profound and simple, interprets the law by case, and the content is close to the reality of environmental administrative law enforcement, which has enhanced the understanding and understanding of the "three systems" of administrative law enforcement personnel. This training is of great significance for promoting strict, fair and civilized law enforcement, ensuring and supervising the effective performance of administrative agencies, further strengthening the construction of comprehensive administrative law enforcement teams for ecological environmental protection, continuously improving the efficiency and level of ecological environmental law enforcement, and safeguarding the legitimate rights and interests of the people.
2022-09-30
30
2022-09
The 20th National Congress of the Communist Party of China is a very important congress held at an important moment when our party has entered the new journey of building a modern socialist country in an all-round way and the second centenary goal. In order to fully escort the victory of the 20th National Congress of the Communist Party of China and give full play to the important role of Zhongcheng Qingtai (Jinan) Law Firm in maintaining social harmony and stability, Zhongcheng Qingtai Public Welfare Legal Service Group Zhou Jiakui, Zhao Kaiyong, Zhao Bing, Wu Xiaozhu and other members At the end of September, he went to the People's Government of Zhenglu Town, Shanghe County, and held a symposium on "One Village, One Legal Adviser" One Legal Adviser "in Zhenglu Town. Song Jialan, member of the party group of the Shanghe County Judicial Bureau, Pang Dianpeng, deputy secretary of the party committee of Zhenglu Town, and Wang Maohua, director of the Judicial Office of Zhenglu Town, attended the forum. At the symposium, Secretary Pang Dianpeng first expressed his gratitude to the members of the Zhongcheng Qingtai Public Welfare Legal Service Group for their arrival, and recognized the service group's legal support for the grassroots petition work in Zhenglu Town over the years. Subsequently, the participants conducted specific communication and exchanges on various problems encountered in the petition work. Everyone agreed that lawyers, as a third party, participate in the petition work, and can analyze the encounters for petitioners from an objective perspective. Legal issues, guide petitioners to legally and rationally resolve relevant demands through legal channels. On the occasion of the 20th National Congress of the Communist Party of China, the lawyers of Zhongcheng Qingtai Law Firm used their solid professional legal knowledge to closely connect with the letter and visit staff to ensure the correct and efficient operation of the letter and visit work, and create a law in the whole society., A good environment for solving problems and using and resolving contradictions by law.
2022-09-30
29
2022-09
1. Foreword In the process of equity investment, in order to reduce the investment risk, the investor will often require the underlying company as the financier or its actual controller or shareholders to buy back the shares of the underlying company held by the investor when the agreed conditions are triggered. The more common repurchase subject is the actual controller, shareholders or their related parties of the target company, and on the premise that the relevant subject does not violate other regulatory provisions, the use of this method can effectively reduce the investment risk and ultimately promote the cooperation between the investment and financing parties. This article does not discuss this method too much. However, in practice, we will also encounter the request of the relevant parties to directly repurchase the investor's equity by the target company, and this paper focuses on the effectiveness, operability, and possible risks of such repurchase behavior of the target company. 2. legal analysis (I) the relevant provisions of the Company Law 1. Relevant regulations of limited liability company Article 74 of the Company Law stipulates that under any of the following circumstances, a shareholder who votes against the resolution of the shareholders' meeting may request the company to purchase its equity at a reasonable price:(1) the company has not distributed profits to shareholders for five consecutive years, and the company has made profits for the five consecutive years and meets the conditions for profit distribution stipulated in this Law;(2) the company merges, divides or transfers its main property;(3) When the term of business as stipulated in the articles of association expires or other reasons for dissolution as stipulated in the articles of association arise, the shareholders' meeting passes a resolution to amend the articles of association so that the company survives. Within 60 days from the date of adoption of the resolution of the shareholders' meeting, if the shareholders and the company cannot reach an equity purchase agreement, the shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the shareholders' meeting. The above-mentioned rights are often referred to as the "right of dissenting shareholders to request share repurchase" of a limited liability company, which is clearly defined in the company's corporate law. At the same time, other chapters of the company law do not prohibit limited liability companies from directly buying back shares held by shareholders. 2, the relevant provisions of the company limited by shares. Article 142 of the Company Law stipulates that a company may not purchase shares of the Company. However, except in one of the following circumstances:(1) reduction of the company's registered capital;(2) merger with other companies holding shares in the Company;(3) use of shares for employee stock ownership plans or equity incentives...... The above provisions provide for specific circumstances in which a joint stock company buys back shares held by shareholders. From the above provisions alone, there is no prohibition on the repurchase of shares by the subject company in the Company Law, and there seems to be no obstacle to the repurchase of shares by the company, but in practice it is prone to investment risks, disputes and disputes, as detailed in the analysis below. Relevant Provisions of (II) Nine Minute Minutes According to the "Minutes of the National Court Civil and Commercial Trial Work Conference" issued by the Supreme People's Court: "Where an investor requests a target company to repurchase its shares, the people's court shall conduct a review in accordance with the mandatory provisions of Article 35 of the Company Law on" shareholders shall not withdraw their capital contributions "or Article 142 on share repurchase. After review, if the target company has not completed the capital reduction procedure, the people's court shall reject its claim." In the process of the subject company repurchasing the investor's equity, it is necessary to use the subject company's own funds to pay the repurchase price, the substantive result of which is: the investor recovers the equity investment. If no procedure is taken in the repurchase process, shareholders may be suspected of evading capital contributions, while the underlying company's assets due to the repurchase resulting in a reduction in solvency, is also not conducive to the protection of the rights and interests of the company's creditors. Therefore, the nine people's minutes clearly state that the court should reject the request for repurchase without capital reduction. That is, the completion of the capital reduction procedure is a prerequisite for the repurchase. Conditions to be met and procedures to be performed to (III) the capital reduction of the subject company As mentioned earlier, the completion of the capital reduction procedure is a prerequisite for the repurchase, and the completion of the capital reduction procedure has a significant impact on the execution of the repurchase, and the relevant provisions on the conditions and procedures to be met for the capital reduction are as follows: 1. Internal procedures of the company Article 37 of the Company Law, the shareholders' meeting shall exercise the following functions and powers:(7) to make a resolution on the increase or decrease of the registered capital of the company; 2. External procedures of the company Article 177 of the Company Law, when a company needs to reduce its registered capital, it must prepare a balance sheet and a list of property. The company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make a public announcement in the newspaper within 30 days. The creditor shall have the right to require the company to pay off its debts or provide corresponding guarantee within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if the notice is not received. Possible risks of (IV) the underlying company's repurchase 1. According to Article 37 of the Company Law, the company shall perform internal decision-making procedures in accordance with the provisions of the Company Law and the Articles of Association before capital reduction. If other shareholders object, the capital reduction and repurchase procedures may not be carried out. 2, the subject company triggered the repurchase conditions, many cases are due to the company's operating conditions in general, or even face more debt. Article 177 of the Company Law provides for the protection of creditors as a result of the change in the company's solvency as a result of the capital reduction, which results in the loss of shareholders and the loss of creditors' interests. However, in practice, it is very difficult for a company to pay off all its debts in order to reduce its capital or to provide security that meets the requirements of creditors, thus failing to meet the requirements of the company law for the protection of creditors. At the same time, in view of the fact that the company's capital reduction should be registered by the industrial and commercial administration department in accordance with the law, and after telephone consultation with the industrial and commercial administration departments in many places, the staff all said that if the relevant documents indicate that the creditors have objections to the relevant debt settlement arrangements or debt guarantees for the capital reduction, the industrial and commercial registration authority will not handle the relevant change registration. In particular, if the company has an economic dispute and enters into judicial or arbitration proceedings, it is difficult to go through the capital reduction procedures. 3. Supervision of state-owned assets If the subject enterprise is a state-controlled enterprise, the capital reduction procedure and whether the capital reduction price is in line with the state-owned regulatory provisions should also be considered when reducing capital, and if the difference between the capital reduction price and the then equity assessment price is too large, it may also lead to violation of the relevant state-owned regulatory provisions. 4. Consequences of flawed capital reduction and repurchase procedures Even if the company does not meet the conditions for capital reduction through improper means to reduce the procedures and pay the repurchase price, the company or shareholders are still exposed to legal risks. After searching, in judicial practice, some courts hold that if the company does not obtain the consent of the creditors when reducing its capital, it should bear supplementary liability for the creditor's debt within the scope of the capital reduction. For example,(2011) Shanghai No.1 Zhongmin No.1 (Min) Zhongzi No. 1458 Civil Judgment: The appellant shall bear supplementary compensation liability to the appellee for the debts of XC Company within the scope of capital reduction. According to the judgment of the case, if the creditors of the target company do not agree, even if the investor recovers the investment through capital reduction, there is still the possibility of recovery. 5, the target company repurchase default, the investor rights more difficult. (1) According to the clear provisions of the above-mentioned nine people's minutes, the court shall reject the request for repurchase without capital reduction. Under the premise that the company is unable to fulfill the capital reduction procedures in any of the above, it is difficult for the investor to require the underlying company to assume the repurchase liability through litigation. (2) Even if the investor's claim is changed to require the company to reduce its capital, there is a dispute as to whether the court should intervene in the acceptance of such claims, and there is a greater risk of losing the case if the capital reduction is not resolved by the shareholders' meeting and the creditors raise objections. 3. Conclusion In summary, for matters related to the repurchase of shares held by the investor of the winning company in the equity investment: (I), in the case of a limited liability company, there is no prohibition in the company law on the direct repurchase of shares by the company; in the case of a limited liability company, the company may repurchase shares only under certain conditions. Although the effectiveness of repurchase agreements is not directly affected, both limited liability companies and joint stock companies are more difficult to implement in the practice of direct acquisition of shares by companies, prone to disputes, and more difficult for investors to defend their rights after disputes. (II), in the structure of investment transactions where there is a real need for gambling repurchase, it is proposed that the actual controller, shareholders or their related parties of the company should assume the equity gambling and repurchase obligations, and if the subject company is required to provide credit enhancement, the subject company may consider providing joint and several liability guarantee for the payment of the above-mentioned gambling repurchase price. (III) relevant investment entities should also pay attention to complying with the relevant regulations of relevant regulatory authorities or industry organizations (such as the State-owned Assets Supervision and Administration Commission, the China Securities Regulatory Commission, and the China Foundation Association), and their applicable entities should also comply with relevant requirements. Introduction to Zhongcheng Qingtai Jinan Institute Fund Business Center In order to do excellent, refined, specialized fund business and better provide legal services, Zhongcheng Qingtai Jinan Institute integrates the resources of the whole institute and establishes a fund business center, which brings together excellent lawyers of relevant specialties in the institute. Currently, it is composed of more than 30 senior lawyers who are proficient in and familiar with the field of fund legal business. The team lawyers all graduated from well-known law colleges in China, more than 80% of lawyers have a master's degree or above, a diploma with a double degree, and a collection of multi-compound lawyers in criminal, corporate, securities, real estate and other fields. At present, it provides fund legal services for more than 30 provincial and municipal state-owned enterprise fund companies and high-quality private fund companies, including Shandong guidance Fund, Shandong Finance Group, Shandong Development Investment Group, Lushang Group, Shandong Expressway Group, Shandong Ocean Group, Jinan guidance Fund, Weihai guidance Fund, Jinan first Investment Company, etc. And has been committed to the professional development of fund business, to provide customers with the whole process of fund legal services, to provide accurate program design, to minimize legal risks for customers.
2022-09-29
29
2022-09
Summary: China first introduced the legal concept of "denial of legal personality" in 2005, also known as "unveiling the veil of corporate legal person". It is mainly reflected in Articles 20 and 63 of the the People's Republic of China Company Law (hereinafter referred to as the "Company Law"), through which the "denial of legal personality system" is formally determined. However, the nature of this provision is a principled provision and the applicable standards are vague in judicial practice. This principled provision is not balanced and does not match the increasing demand for the denial of legal personality in judicial practice, leading to an endless stream of new problems in judicial practice. Therefore, clarifying the applicable conditions and criteria of personality mixing is still a hot topic in the academic circles, and it is also an important purpose of this study. In the process of participating in the restructuring and reorganization project of major state-owned enterprises in 2022, the author comprehensively inspected the company's shareholders, controllers, main managers and financial personnel, the resolution and decision-making of major matters, the company's main business and the purpose of transactions between the company and other companies by combing the enterprise's "one enterprise, one policy" plan and on-site due diligence, it is found that the parent company and most of its subsidiaries have the risk of personality mixing, and the enterprise has been involved in litigation due to the mixing of legal personality. After examination by the court, it is believed that the shareholders of one-person limited liability company do not constitute property mixing, and complete company accounts, articles of association, audit reports, accounting firm reports and bank statements need to be provided, there are also written resolutions and corresponding financial documents for the company's investment, operation, budget and final accounts, loss recovery, dividends and other links, and the above-mentioned evidence provided by the enterprise is not sufficient to prove that the company's property is independent of the holding company's property, so it bears joint and several liability. This paper mainly takes the management control relationship between the parent company and the subsidiary company in practice, the guiding cases of the Supreme People's Court and the public cases of the Supreme People's Court as the starting point, interprets the relevant guidelines of the Minutes of the National Court Civil and Commercial Work Conference, and then sorts out the identification standards of the personality mix between the parent company and the subsidiary company, and further puts forward practical suggestions on the prevention and control of such risks. Keywords: Legal Personality Denial Identification Standard Property Mix Personality Mix. 1. legal person personality denial system Presentation of (I) issues In 2005, China first introduced the concept of corporate personality denial system in the "Company Law". The revised "Company Law" published in 2013 clarified the legal personality denial system in Article 20. The law stipulates: "Company shareholders shall abide by laws, administrative regulations and articles of association, exercise shareholder rights in accordance with the law, and shall not abuse shareholder rights to harm the interests of the company or other shareholders; the independent status of the company as a legal person and the limited liability of shareholders shall not be abused to harm the interests of the company's creditors. If a shareholder of a company abuses his rights as a shareholder and causes losses to the company or other shareholders, he shall be liable for compensation in accordance with the law. If the shareholders of a company abuse the independent status of the company as a legal person and the limited liability of shareholders to evade debts and seriously harm the interests of the company's creditors, they shall be jointly and severally liable for the debts of the company." However, the 20 provisions do not specify the specific applicable standards for the denial of legal personality. Only in Article 63 of the Company Law, "If the shareholders of a one-person limited liability company cannot prove that the company's property is independent of the shareholders' own property, they shall bear joint and several liability for the company's debts" stipulates the principle that the shareholders self-certify the independence of property when the legal personality of a one-person company is mixed. However, the above provisions are only provisions in principle, which give judges a certain degree of discretion, leading to the phenomenon of different judgments in the same case when dealing with similar cases. On January 31, 2013, the No. 15 Guiding Case issued by the Supreme People's Court made discussions and guiding opinions on issues related to the denial of legal personality of affiliated companies. However, there are no clear guidelines on the criteria for determining the confusion of legal personality and the applicable subjects, the identification of affiliated companies, and how to determine the confusion of related companies' personalities in judicial practice, the application of section 20 of the Companies Act requires a combination of factors. Therefore, to clarify the applicable conditions, applicable subjects and identification standards of the mixing of corporate personality is still a hot topic in the academic circles, and it is also the significance of this paper. (II) related concepts 1, the legal personality denial system. The legal person personality denial system is based on the protection of the legitimate rights and interests of third parties, in certain circumstances, because the company's legal personality and the company's shareholders, actual controllers, related related companies have the same personality, shareholders abuse the company's legal personality, at this time should not recognize the independent personality of the company's legal person system. At present, according to the provisions of the Company Law, the third party, I .e. the creditor, can only investigate the shareholder's responsibility when claiming the protection of rights. However, with the continuous development of market economy in reality, more and more companies have related behaviors and related transactions. The personality of related companies is mixed, but it is difficult to investigate the responsibility of shareholders. It is a supplement to the limited liability system of shareholders to deny the personality of related companies, it can effectively correct the imbalance of the shareholder limited liability system in the protection of third parties, I .e. creditors, under certain circumstances. 2. Related companies The definition of related relationship refers to the relationship between the controlling shareholders, actual controllers, directors, supervisors and senior managers of the company and the enterprises directly or indirectly controlled by them, as well as other relationships that may lead to the transfer of the interests of the company, but the enterprises controlled by the state are not only related because they are controlled by the state. Combined with the "the People's Republic of China Tax Collection and Management Law" (hereinafter referred to as the "Tax Collection and Management Law"), the "Detailed Rules for the Implementation of the the People's Republic of China Tax Collection and Management Measures" (hereinafter referred to as the "Detailed Rules for the Implementation of the Tax Collection and Management Measures") and the "Accounting Standards for Business Enterprises No. 36-Related Party Disclosure (2006)", the current legislation in our country mainly uses the standard of actual control relationship to determine related companies. Mr. Zhu Ciyun pointed out in the article "China's company law should establish the rules of lifting the corporate veil", the mixing of related companies refers to: "the external performance of the relevant companies as their own independent legal entities, but in fact in the production and operation of the same, this phenomenon most often occurs in the parent subsidiary, sister companies and other companies in the collection." [1] 3. Parent companies and subsidiaries This paper mainly studies how to identify the personality mix between the parent company and the subsidiary company in the affiliated company. A parent company and a subsidiary are corresponding legal concepts, and a parent company is a company that owns more than a certain percentage of shares in another company or is able to enjoy actual control over another company by agreement, and has legal personality. A subsidiary is a company in which more than a certain percentage of the company's shares are held by another company or are under the actual control of another company by agreement. Since the shares are controlled by the parent company, the subsidiary is often dominated and controlled by the parent company in its actual operations. 2. Criteria for the Mix of Personality between Parent Company and Subsidiary Company This paper mainly through the interpretation of the "National Court Civil and Commercial Work Conference Minutes" relevant guidelines, the Supreme People's Court guiding cases and the Supreme People's Court open cases of the decision gist, the identification of mixed personality standards to make a comb. Interpretation of the Minutes of the National Court Civil and Commercial Work Conference in (I) 1, independent meaning and independent property. The determination of whether a parent company and a subsidiary constitute a mix of personality depends on three main aspects: personnel, business and property, of which the mix of property is the key to determining whether a company constitutes a mix of personality. According to Article 10 of the Minutes of the National Court's Civil and Commercial Work Conference (hereinafter referred to as the "Nine People's Minutes"), the most fundamental criterion for determining whether the personality of the company and the personality of the shareholders are mixed is whether the company has independent meaning and independent property, and the most important manifestation is whether the property of the company and the property of the shareholders are mixed and indistinguishable. In determining whether it constitutes a personality mix, the following factors should be taken into account: (1) Shareholders use the company's funds or property free of charge without financial records; (2) The shareholder uses the company's funds to repay the shareholder's debts, or the company's funds are used by the affiliated company free of charge without financial records; (3) The books of the company are indistinguishable from the books of the shareholders, making the property of the company indistinguishable from the property of the shareholders; (4) The shareholders' own earnings and the company's earnings do not distinguish, resulting in unclear interests of both parties; (5) The property of the company is recorded in the name of the shareholder and is occupied and used by the shareholder; (6) other circumstances of mixed personality. In the case of personality mixing, the following mixing often occurs at the same time: the company's business and the shareholder's business; the company's employees are mixed with the shareholder's employees, especially the financial personnel; and the company's domicile is mixed with the shareholder's domicile. When the people's court is hearing a case, the key is to examine whether it constitutes a mix of personalities, without requiring the mix of other aspects at the same time, which is only a reinforcement of the mix of personalities. According to the No. 15 guiding case "Xugong Group Construction Machinery Co., Ltd. v. Chengdu Chuanjiao Industry and Trade Co., Ltd. and other sales contract disputes" [2] issued by the Supreme People's Court guiding case No. 4, it can be seen that there are three criteria for judging the mixing of legal personality: personnel mixing, business mixing and financial mixing. Among them, personnel mixing refers to the mixing of personnel in the company, business mixing refers to the company is engaged in similar or identical business, the main judgment criteria for business scope overlap, internal management control and meaning expression confusion three aspects. As for financial mixing, it is reflected in the use of common accounts and the indistinguishability of their respective assets. The reason for the judgment of the second instance of the case for business mixing has such a statement: "the actual operation of the three companies are involved in construction machinery-related business, the distribution process there is a common sales manual, distribution agreement" (2) Excessive control There is a relationship of controlling and being controlled between the parent company and the subsidiary company. Therefore, in practice, the parent company often brings the subsidiary company into the management system and system of the parent company to manage together, which easily makes the subsidiary company lose its independent property rights and produces the situation that the parent company controls the subsidiary company excessively. However, excessive control does not necessarily lead to the mixing of the legal personality of the parent company and the subsidiary company. Excessive control usually refers to the transfer of benefits between parent and subsidiary companies, where the parent company uses its control over the subsidiary to transfer benefits between parent and subsidiary companies or between subsidiaries and affiliates. This abuse of control, if the company's property boundaries are unclear, property is mixed, personality is difficult to distinguish or can not be distinguished, it constitutes the company's personality mix. However, if the abuse of the control right does not result in unclear property boundaries, mixed property, and difficult or indistinguishable personality of each company, it does not constitute mixed personality of the company, and the system of denial of corporate personality is not applicable. Creditors can protect their rights by exercising the right of revocation or claiming that the act is invalid according to law, and the second paragraph of Article 13 of the judicial interpretation (III) of the Company Law applies mutatis, to the extent that the benefits are obtained, the Company shall be liable for supplementary compensation for the portion of the Company's debts that cannot be paid off. According to Article 11 of the "Minutes of the National Court Civil and Commercial Work Conference" (hereinafter referred to as the "Nine People's Minutes"), the company's controlling shareholders over-dominate and control the company, manipulate the company's decision-making process, and make the company completely lose its independence and become The tools or bodies of controlling shareholders seriously damage the interests of the company's creditors, and the company's personality should be denied, and the shareholders who abuse control shall bear joint and joint liability for the company's debts. Common situations in practice include: (1) Transfer of benefits between parent and subsidiary companies or between subsidiaries; (2) Transactions between parent and subsidiary companies or subsidiaries, the proceeds go to one party, but the losses are borne by the other party; (3) first withdraw funds from the original company, and then set up a company with the same or similar business purpose, to avoid the debts of the original company; (4) Dissolve the company first, and then set up another company with the original company's premises, equipment, personnel and the same or similar business purposes to avoid the debts of the original company; (5) Other situations of excessive domination and control. (II) Guidance Case No. 163: Substantive Merger and Bankruptcy Reorganization Case of Jiangsu Textile Industry (Group) Import and Export Co., Ltd. and Its Five Subsidiaries [3] According to the guidance case No. 163, Jiangsu Textile Industry (Group) Import and Export Co., Ltd. (hereinafter referred to as "Provincial Textile Import and Export Company") and its five subsidiaries substantially merged bankruptcy reorganization case, the brief introduction of the case is as follows: The registered capital of Jiangsu Textile Import and Export Company is 55 million billion yuan, of which Jiangsu Textile (Group) Corporation (hereinafter referred to as the Provincial Textile Group) accounts for 60.71 percent and the company's trade union accounts for 39.29 percent. The registered capital of provincial light textile company, provincial knitting company, provincial mechanical and electrical company, Wuxi new Su textile company and provincial clothing company (hereinafter referred to as the five subsidiaries) are 10 million yuan, 5 million yuan, 6.37 million yuan, 10 million yuan and 10 million yuan respectively. The provincial textile import and export company accounts for 51% of the investment in the five subsidiaries, and the remaining shares of the five subsidiaries are held by employees. The case involves the operation and management of six companies. (1) Except for Wuxi New Su Textile Company, the other companies involved in the case are all registered at the same address, and the legal representatives of the five subsidiaries are all senior executives of the provincial textile import and export company. Financial personnel and administrative personnel are also shared. Among them, five subsidiaries share financial personnel with the provincial textile import and export company for accounting, the final approval personnel for payment and reimbursement are the same. (2) There is a situation of business cross-mixing between the provincial textile import and export company and the five subsidiaries, the business of the five subsidiaries is specifically arranged by the provincial textile import and export company, and there are a large number of related debts and guarantees between the provincial textile import and export company and the five subsidiaries. In this case, the court found out after examination that there was a high degree of personality mixing among the six companies involved in the case, which was mainly manifested in: the high degree of overlapping personnel and the failure to form a complete and independent organizational structure; Sharing financial and examination and approval personnel and lacking an independent financial accounting system; The business is highly cross-mixed, forming a highly mixed business entity, which objectively makes it difficult to properly distinguish the income of the six companies; there are a large number of related debts and guarantees between the six companies, resulting in the assets of each company can not be completely independent of each other, debt and debt liquidation is extremely difficult. In this case, the court held that the merger and reorganization of the related enterprises with highly mixed personality and the substantive merger of the related enterprises in a timely manner are in line with the principle requirements of the bankruptcy law on the fair liquidation of creditor's rights and debts and the fair protection of the legitimate rights and interests of creditors and debtors. From the above-mentioned guiding cases, it can be learned that when the people's court hears a case, the key is to examine whether it constitutes a mix of personality, without requiring other aspects of the mix at the same time, which is only a reinforcement of the mix of personality. When the people's court determines whether a company constitutes a mixed personality, it should make a judgment based on a variety of factors, such as the place where the company is established, the situation of the company's shareholders, controllers and key financial personnel, the company's main business and the purpose of transactions between the company and other companies, the company's tax situation, and the background and performance of specific creditors when signing contracts with the company, should be included in the scope of investigation. Public Case of (III) Supreme People's Court: Jiangsu Higher People's Court (2019) Su Min Zhong No. 1285 Civil Judgment
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Light and Stars | Youth Training Camp Cadets Training Perception (III)
✦ Light and stars law leaves into shade ✦ The first "Guanghe Xingchen" youth training camp was successfully concluded. The two-day course was compact and professional. Many senior lawyers shared their insights and experiences since practicing selflessly with us through simple language and rich practical cases. The simple and sincere language contains the encouragement and expectation for our young lawyers, which has benefited us a lot, also let us young lawyers have a lot of thinking, summed up as follows: Director Gong Lixin's teaching has given us a new understanding and judgment of the lawyer's career, which has benefited us a lot. Young lawyers should have politics, strategy, clients, innovation, professionalism, systems, bottom line, sharing, and professional thinking, conform to the national development strategy, grasp the general trend of the development of emerging business fields, and follow the trend in order to succeed. Director Hu Youbin's lecture gave us a comprehensive and profound understanding of due diligence legal affairs. Due diligence should be based on due diligence and prudence, follow the principles of objectivity, independence, and comprehensive rationality, and follow a series of working methods. Provide customers with the most accurate and comprehensive decision-making basis. Director Gao Chang's lecture has answered a large number of difficult questions in the due diligence practice of non-performing assets, such as the validity of the guarantee contract, the guarantee, the determination of the amount of guarantee, the potential risks on the collateral, the effective service of court documents, etc., which is enlightened. Director Qiao Aijun's equity investment due diligence practice comprehensively and exhaustively reminds us of various potential risks in the equity investment process, which is penetrating and meticulous, and provides us with accurate guidance for issuing excellent due diligence reports. Director Zhao Kaiyong told us in detail the whole process of due diligence practice of urban construction real estate. There are many laws and regulations in the field of urban construction real estate, and the legal relationship is complex. Director Zhao shines the cocoon for us and illuminates the road of exploration. Director Geng Guoyu told us about the culture and party building of Zhongcheng Qingtai Law Firm. The culture of Zhongcheng Qingtai can be summarized as virtue, gathering, wide, harmonious and diligent. For many years, Zhongcheng Qingtai Law Firm has been insisting on party building to promote the construction of the firm, planning the development of the firm from the perspective of party building, planning how to play the role of party building from the perspective of law firm development, and taking the promotion of the development of the firm and the improvement of the ability to serve economic and social development as the starting point and destination of party building work, which has achieved good results and kept the firm in the forefront of the industry. Thank you, directors and colleagues, for accompanying us through the wonderful weekend, thank the senior lawyers for their generous teaching, and thank the class committee for their selfless efforts. This time I have the honor to participate in the youth training camp, listen to the senior lawyers to share their practice experience and experience, and get to know many colleagues, which will be of great benefit to my future practice career. May we live up to our youth and pursue our dreams bravely. May the light and stars, the leaves of the law, the sea of stars, and the future. ✦ The light and the stars are within reach ✦ After three days and two nights of youth training, the partners sat around and said goodbye. By the Yellow River, Longquan was in rain. I sincerely thank the organizing committee of the "Guanghe Xingchen" youth training camp for its meticulous planning, building an interactive platform for young lawyers from all over the world, and planting the seeds of inheritance in the heart of every young lawyer for their selfless dedication. I sincerely thank all the directors and teachers for their selfless sharing. Decades of business experience and industry insights are condensed into one lesson. Party building leads and iterative thinking. Although our young lawyers are at the foot of the mountain at the beginning, they stand behind their predecessors and follow your footsteps and guidance to catch a glimpse of the bitterness and joy of the mountain and the scenery on the top of the mountain. They will strive to climb and move forward bravely. The theme of this training camp is "due diligence", which is a non-litigation regular business. The foundation is not necessarily simple. It must be based on legal knowledge, oriented by business thinking, framed by industry cognition, and guaranteed by risk awareness. Each link must be treading on thin ice, diligent and prudent. Young lawyers must have a deeper understanding of due diligence business. Sincerely thank all the small partners of "groups of 5" (groups of 5) for their complementary understanding and mutual support. Your unique brilliance makes us feel confident and full of motivation in our respective days and nights after our separation. For three days and two nights, starting from the first sight of each other, the goodbye of each event is still heartache; the goodbye at this time is a real farewell; but the farewell is for a better goodbye, friends of the four seas, Looking forward to the next stop, goodbye!
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On September 28, 2022, Cheng Shoufa, a senior partner of Zhongcheng Qingtai (Jinan) Law Firm, was invited to participate in the "Xi Jinping Rule of Law Thought Special Training" of the Jinan Radio and Television Party Committee Theoretical Learning Center Group, and made "Learning Xi Jinping Rule of Law Thought and Improving Management" Special report on the concept of the rule of law. Through the report, lawyer Cheng Shoufu expounded the historical logic of Xi Jinping's thought of socialism with Chinese characteristics in the new era, and the CPC Central Committee attached importance to the practice of comprehensively governing the country according to law to establish Xi Jinping's thought of the rule of law. this paper analyzes the eight distinctive characteristics and 11 core essentials of Xi Jinping's thought of the rule of law. The report clearly stated that the party's leadership over the comprehensive rule of law must be adhered to, the people must be the center, and the socialist rule of law with Chinese characteristics must be adhered to. The report also combines Xi Jinping's rule of law thoughts, specific legal regulations and the characteristics of radio and television stations. Interpretation. Participants expressed that through learning, they have strengthened their understanding of the political determination of the party's leadership to comprehensively govern the country according to law, and established a people-centered fundamental position and a firm belief in strengthening the country by law. It also expresses the need to further study and deeply understand the scientific connotation and core essence of Xi Jinping's thought of the rule of law, further improve the political position in the work, strengthen the responsibility, and effectively implement Xi Jinping's thought of the rule of law in combination with the implementation of specific laws, regulations and rules and regulations. Go to work. This activity is one of the activities of Zhongcheng Qingtai lawyers to actively spread Xi Jinping's thoughts on the rule of law. Zhongcheng Qingtai Law Firm integrates party building work into various activities of law firms and lawyers, promoting construction with party building, promoting development with party building, promoting business with party building, promoting brand with party building, realizing the overall leadership of party building work, adhering to the belief of being a good lawyer satisfied with the party and the people, and spreading Xi Jinping's thoughts on the rule of law, welcome the party's 20 big victory held.
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The 20th National Congress of the Communist Party of China is a very important congress held at an important moment when our party has entered the new journey of building a modern socialist country in an all-round way and the second centenary goal. In order to fully escort the Party's 20th victory and give full play to the important role of Zhongcheng Qingtai (Jinan) Law Firm in maintaining social harmony and stability, on the eve of National Day, members of Zhongcheng Qingtai Public Welfare Legal Service Group Zhou Jiakui, Zhao Kaiyong, Zhao Bing, Zhang Yafei, Wu Xiaozhu and other party members and lawyers rushed to Zhenglu Middle School in Shanghe County to hold a lecture on the rule of law. Song Jialan, member of the party group of Shanghe County Justice Bureau, Wang Maohua, director of Zhenglu Town Justice Office, Yang Chunxiao, principal of Zhenglu Middle School, Zhang Hualiang, vice principal, and teachers and students of the school participated in the lecture. In order to ensure that this lecture can achieve good results, lawyer Zhou Jiakui, deputy director and senior partner of Zhongcheng Qingtai Jinan Institute, carefully prepared the content of the speech with the theme of "campus bullying" that exists in the current campus. It mainly includes the harm and consequences of campus bullying, the solution to campus bullying and the specific methods to prevent campus bullying. In the course of the lecture, lawyer Zhou Jiakui entertained and adopted the way of random questions and answers on the spot, which improved the students' enthusiasm for interaction. This lecture won the high recognition of the teachers and students on the spot, and the applause from the audience continued. At the same time, it also enhanced the awareness of the rule of law of the teachers and students. At the beginning of the new semester, this lecture has played an important role in preventing campus bullying and building a harmonious campus. In order to better serve the campus, enhance the awareness of the rule of law of teachers and students on campus, and help build a harmonious campus, the lawyers of Zhongcheng Qingtai Law Firm will continue to study relevant laws, regulations and policies, make full use of their professional advantages, and combine the objective problems existing in the campus, And adopt the publicity methods that the majority of teachers and students love to hear to help the construction of a harmonious campus. Zhongcheng Qingtai Law Firm is committed to providing high-quality, all-round and professional legal services. At the same time, it does not forget its original intention and actively assumes social responsibility. Lawyers of Zhongcheng Qingtai always maintain the political nature of being of one heart and one mind with the party, always stand firm on the fundamental position of the people's lawyer for the people, always adhere to the position of socialist rule of law workers with Chinese characteristics, be a good lawyer to the satisfaction of the party and the people, and use the law to escort the masses a better life!
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Zhongcheng Qingtai Jinan Region
Address: Floor 55-57, Jinan China Resources Center, 11111 Jingshi Road, Lixia District, Jinan City, Shandong Province
