Viewpoint... Commercial real estate leasing legal risks and recommendations.

1. Foreword In recent years, with the cooling of the leasing market and the rise of e-commerce platforms, the number of disputes over commercial real estate leasing has increased. Compared with residential leasing, the commercial background and commercial interests involved in commercial real estate leasing are more special and complex, so such disputes are relatively more complex. Based on the author's own experience in handling relevant cases and retrieving the judgment cases of local courts in recent years, the author briefly combs and analyzes the legal risks encountered by the lessor in the process of commercial real estate leasing, and puts forward corresponding suggestions. Legal Risks of 2. Commercial Real Estate Leasing 1, the lessee will be no real estate certificate housing rental risk. If the leased house is an illegal building, according to Article 2 and Article 3 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of Laws in the Trial of Disputes over Urban House Lease Contracts, if the construction project planning permit is not obtained or is not constructed in accordance with the provisions of the construction project planning permit; or if the leased house is a temporary building that is not approved or constructed in accordance with the approved content, the house lease contract is invalid, the lessor may be found to be primarily at fault or equally at fault and therefore liable for damages. Reference Case 1, Guangdong Provincial High Court 2020 Yue Min Zhong No. 2217 The Court held that "... from the lease contract and supplementary agreement, the leased property is a house, because the house involved in the case did not obtain the construction project planning permission, so the lease contract is invalid contract". Whether the rental housing has been processed real estate certificate, is not the only criterion to judge whether the housing lease contract is valid. Under the "presale + mortgage" purchase mode, if the lessor has obtained the occupation and use right when renting the house, the house lease contract can be considered valid. Reference Case 2, (2020) Xiang 01 Min Zhong No. 10100 On the issue of the validity of the contract, the court held that according to the provisions of Article 2 of the interpretation of the Supreme People's Court on Several Issues concerning the specific application of law in the trial of urban housing lease contract disputes, the lease contract concluded between the lessor and the lessee for the house built without obtaining the construction project planning permit or in accordance with the provisions of the construction project planning permit is invalid. However, if a construction project planning permit is obtained before the end of the debate in the court of first instance or the construction is approved by the competent department, the people's court shall determine it as valid. The factory buildings, warehouses and office buildings involved in the case have not obtained the construction project planning license, and the "lease contract" signed by both parties is an invalid agreement because it violates the mandatory provisions of the law. The court of first instance, in accordance with the principle of fairness, has not wrongly upheld the degree of fault of both parties in accordance with their respective proportions of 50%. Regarding the steel structure expansion loss of 68400 yuan claimed by the appellant, the court held that both parties were at fault because the contract involved in the case was invalid. The first instance determined that the steel structure expansion loss of 34200 yuan was not improper according to the degree of fault of both parties and the proportion of 50%, and the court maintained it. Reference Case 3, Supreme People's Court (2022) Supreme Famin Shen No. 302 After hearing the case, the Supreme People's court held that: "under the circumstances that the relevant facts have been confirmed in the effective judgment of another case, the original judgment comprehensively considers the current" presale + mortgage "mode in China's real estate field. It takes a long time for the buyer to become the owner of the house in the legal sense through the registration procedures of house transfer, If the buyer is not allowed to lease the house during this period, it is not conducive to the use of social resources, but also contrary to the basic principles of the market economy that encourages transactions. It is finally determined that the" House Lease Contract "belongs to the true meaning of Liu Xiaobing and Wang Yuanjie, and it does not violate the mandatory provisions of laws and regulations, and is legal and effective. The contract is not improper"; "Combining the original intention and fairness principle of'buying and selling without breaking the lease, it is confirmed that Hengshun Company has transferred the possession and use right of the house involved in the case to Liu Xiaobing, and Liu Xiaobing's lease behavior is essentially to transfer the possession and use right of the house obtained from Hengshun Company to Wang Yuanjie. The lease relationship occurred during the period when Liu Xiaobing legally owned the use right of the house involved in the case, and the lease relationship does not violate laws and regulations, it is not improper that a legally established lease right should not be denied or affected by facts such as subsequent changes in property rights or termination of contracts." Suggestion: The lessee will rent the house after obtaining the construction project planning permit; if the corresponding procedures cannot be completed before the lease, it is recommended to clearly stipulate in the lease contract or lease announcement that the lessee has already known that the leased house has not obtained the real estate certificate and has not obtained the construction planning permit. The lessee shall not claim that the contract is invalid or terminate the contract on the grounds that the leased house has not obtained the real estate certificate or the construction planning permit. The lessee may not claim damages from the lessor on the grounds that the lease contract for the house has not obtained planning permission is invalid and there is a loss of performance. Temporary buildings approved by government departments and constructed in accordance with the approved content are legal buildings within the approved period, and the lessor may lease them according to law. The part that exceeds the approved use period of the temporary building is generally deemed invalid. If the building leased by the lessor exceeds the approved period, it is recommended that the lessor go through the formalities to extend the use period to the competent government department as soon as possible to avoid the lessee's claim dispute that the contract is partially invalid. 2, the risk of rental housing in violation of the planned use. Article 3 of the "Urban and Rural Planning Law" "Construction activities in urban and town planning areas shall meet the planning requirements." Article 7 "Urban and rural planning approved in accordance with the law shall not be modified without legal procedures." Leased items leased by the lessor for illegal planning purposes may involve the risk of termination of the contract and the lessee's claim. Reference Case 4, (2022) Wan 03 Min Zhong No. 2324 The Court believes that ...... both parties to the contract are at fault for the termination of the performance of the contract, whether they should bear the corresponding legal responsibility. Article 3 of the "the People's Republic of China Urban and Rural Planning Law" stipulates: "Cities and towns shall formulate urban plans and town plans in accordance with this Law. Construction activities within the planned areas of cities and towns shall meet the planning requirements." Article 7 stipulates: "Urban and rural planning approved in accordance with the law is the basis for urban and rural construction and planning management, and may not be modified without legal procedures." According to the above-mentioned legal provisions, the operation of the swimming fitness center involved in the case cannot violate the planned use. The use of the site agreed in the contract, whether it is a small parking lot or a warehouse, as a swimming and fitness center, violates the planned use, and the parties have not proved that the planning has been approved. Therefore, the purpose of the contract cannot be achieved due to the change of the planned use of the site involved in the case, and the parties may request the termination of the contract on this ground. According to Article 5 of the Cooperation Contract, the main obligation to handle fire inspection and acceptance is at Pufa Hotel. Due to the violation of the planned use of the site renovation involved in the case, it will inevitably lead to the failure of fire control and the inability of the swimming fitness center to operate. Pufa Hotel should bear the main responsibility. As an actual investor in the swimming and fitness center, Yang Zihan should fully understand the planned use of the small parking lot and warehouse involved in the case before investing in the construction. He should know that he cannot change the planned use of the building at will. He has not fulfilled the duty of prudence and has subjective fault. According to the degree of fault of both parties, the hospital decided that Pufa Hotel should bear 60% of the responsibility and Yang Zihan should bear 40% of the responsibility. According to the degree of fault between Yang Zihan and Pufa Hotel, the court of first instance decided that Yang Zihan should bear 70% of the responsibility and Pufa Hotel should bear 30% of the responsibility. The court corrected it. Suggestion: The lessor should rent out the house in strict accordance with the planned use of the house. If it is necessary to change the original planned use for lease, it is suggested that the lessee should be responsible for handling the relevant planning approval and construction procedures in the lease contract, and the lessee should not claim compensation from the lessor for handling obstacles in the planning approval procedures. 3, the lease contract opening rate terms of the legal risk. Based on the special properties of commercial properties, the leasing parties often have a corresponding agreement on the opening rate and opening time of the mall. If the lessee fails to meet the opening rate requirements or fails to realize the brand entry agreed upon by both parties, the court may find that the lessor is in breach of contract and shall bear the liability for breach of contract in proportion. Reference Case 5, (2021) Yu 05 Min Zhong 69 The Court believes that the focus of the dispute in this case is whether Pengheng Company has breached the contract in the process of performing the contract, and whether it should bear the corresponding liability for breach of contract. First of all, the supplementary agreement on the house lease contract signed by Pengheng Company and Mengya Company is the true intention of both parties, and both parties should perform according to the contract. The supplementary agreement clearly stipulates that when the mall opens, Pengheng Company shall ensure that the main merchants in the mall (Goodfield Fitness, Cross-border Cinema, Wanda Baby King, NIKE, Adidas Collection Store or other merchants of the same level) enter and open at the same time. The house leased by Pengheng Company is an integral part of Renyue Tiandi Shopping Center. The level and scale of merchants introduced by the shopping center will inevitably affect the level positioning and passenger flow of the entire shopping center. Therefore, the introduction and opening of merchants agreed in the supplementary agreement by both parties belong to the guarantee clause of the rental market environment and belong to Pengheng Company's main contractual obligations. As of April 29, 2019, when Renyue Tiandi Shopping Center opened, Pengheng Company did not guarantee Goodfili Fitness, Wanda Baby King, NIKE,Adidas Collection Store or other businesses of the same level to enter and open at the same time according to the contract. Although Pengheng Company provided evidence to prove that it introduced Mengshi Fitness, Adventure Sunshine Park, rookie and Tebu kids stores, however, both Goodfili Fitness and Wanda Baby Wang agreed in the contract belong to chain organizations that enjoy a certain popularity nationwide. rookie and Tebu kids also do not belong to the same level as NIKE and ADIDAS in brand popularity and brand positioning. Pengheng Company claims that it has signed a contract with Goodfili Fitness and Wanda Baby King. Goodfili Fitness and Wanda Baby King have nothing to do with it, the supplementary agreement between Pengheng Company and Mengya Company stipulates that Pengheng Company shall ensure the introduction of the above-mentioned merchants and start business at the same time. Even if Pengheng Company signs a contract with the above-mentioned merchants, it does not conform to the contract agreement between the two parties if it does not start business at the same time. Therefore, the evidence shown by Pengheng Company is not sufficient to prove that it has fulfilled its investment invitation obligations according to the contract agreement, because Pengheng Company did not fulfill its contractual obligations, constitutes a breach of contract. Although the housing lease contract and supplementary agreement involved in the case did not stipulate the legal consequences of Pengheng Company's violation of the above agreement, as a guarantee clause of the rental market environment, Pengheng Company's failure to fulfill the corresponding contractual obligations can be regarded as Pengheng Company's delivery of the leased site to Mengya Company does not conform to the purpose agreed in the contract. The evidence of Pengheng Company's use of the site involved in the case does not serve as a contractual obligation for Mengya Company to agree to waive Pengheng's market environment guarantee clause. Because the site delivered by Pengheng Company to Mengya Company does not conform to the purpose agreed in the contract, Mengya Company has the right to exercise the right of simultaneous performance of the defense to suspend the payment of the corresponding rent to Pengheng Company. After receiving the rectification notification letter from Mengya Company, Pengheng Company not only failed to perform the corresponding obligations according to the contract, but also sent a notification letter to Mengya Company to terminate the contract. As a result, Pengheng Company shall bear the responsibility for the cancellation of the lease contract. According to this, the first instance supports the reasonable loss arising from the termination of the contract by Mengya Company. Pengheng Company believes that it does not constitute a breach of contract and should not be liable for compensation. The court does not support the appeal reason. Suggestion: It is recommended that the opening rate be agreed as the overall opening rate of the rental project, not limited to a certain floor or area, and try not to specify the entry of a certain brand in the contract, and the lessor can increase the number of types of brands. 4, lease defects do not disclose the risk of notification. The lessor's lease to the lessee of a house that has not passed the fire acceptance or completion acceptance does not necessarily result in the invalidity of the lease contract. Article 13 of the "Fire Protection Law" stipulates that "construction projects that must implement the fire protection acceptance system shall not be put into use without acceptance." Article 61 of the "Construction Law" A construction project may be delivered for use only after it has been completed and passed the acceptance check; if it has not been accepted or fails to pass the acceptance check, it is prohibited to put it into use. The above-mentioned provisions are mandatory provisions on the conditions of use of the leased property, if the lessor does not disclose the status quo of the leased property has not passed the fire acceptance and completion acceptance, the lessee may request the termination of the contract and require the lessor to compensate for the loss of decoration on the grounds that the leased property is not eligible and the purpose of the lease contract cannot be realized. Legal basis: Article 724 of the the People's Republic of China Civil Code stipulates that "if the leased property violates the mandatory provisions of laws and administrative regulations on the applicable conditions, and the leased property cannot be used, the lessee may terminate the contract." Reference Case 6, Supreme People's Court (2018) Supreme Law Minshen No. 871 Ruling This court believes that according to the third provision of Article 8 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of Laws in the Trial of Urban Housing Lease Contract Disputes, it can be seen that the leased house violates the mandatory provisions of laws and administrative regulations on the conditions for the use of the house. If the leased house cannot be used, the lessee may request to terminate the contract. The judicial interpretation establishes the basic principle of determining the validity of urban housing lease contracts and limits the scope of invalid contracts. The fire acceptance stipulated in the the People's Republic of China Fire Protection Law belongs to the provisions of the conditions for the use of the house. Therefore, even if there is a company's alleged case involving the second workshop without fire acceptance, it does not necessarily lead to the invalidity of the lease contract. Judging from the actual situation of this case, after the signing of the "Plant Lease Contract" involved in the case, China Railway Company delivered the subject matter of the contract to a company in accordance with the contract, and a company also actually used the plant and other facilities of China Railway Company, and both parties are in accordance with the contract. perform. The "Plant Lease Contract" is the true intention of both parties, the content does not violate the mandatory provisions of laws and administrative regulations, and there is no invalidity of the contract as stipulated in Article 52 of the the People's Republic of China Contract Law. A company that the original judgment did not adopt its defense of the validity of the lease contract in the case can not be established. Reference Case 7, Supreme People's Court (2021) Supreme Law Minshen No. 4912 The Court considers that… according to the provisions of Article 61 of the Construction Law and Article 13 of the Fire Protection Law, construction projects that have not completed the completion acceptance and fire protection acceptance cannot be delivered for use, which does not affect the conclusion of the lease contract for the relevant construction projects by the parties concerned and the validity of the contract. According to the facts that have been ascertained, a house lease contract relationship has been established between the Land Reclamation Company and Wang Zitian, and the content of the contract to be performed shall be subject to the "Lease Contract" signed by Ai Hong and the Land Reclamation Company and the supplementary agreement. Paragraph 2 of Article 3 of the contract stipulates: "The land reclamation company will deliver the leased property to Party B for use as it is..." It shall be deemed that the parties to the contract have known and recognized the state of the leased property at that time, including the physical condition and the examination and approval and acceptance. Wang Zitian, as the lessee, has a duty of prudent care in this regard. Therefore, Wang Zitian advocates that the delay in completion acceptance and fire acceptance of the leased property affects its normal use of the leased property and does not have a contractual basis. Recommendation: The author believes that when leasing the construction in progress without a real estate certificate, the lessor should clearly agree in the lease contract that the delivery method of the lease is the status quo delivery, and make it clear that the lessee has known that the lease has not handled the real estate certificate.

2023-07-13

Viewpoint | New Law Express-The State Council officially issued the Regulations on the Supervision and Administration of Private Investment Funds

In order to improve the supervision system of private equity funds, the business activities of private investment funds will be further included in the rule of law and standardized track for supervision. On July 9, 2023, the State Council officially issued the Regulations on the Supervision and Administration of Private Investment Funds (hereinafter referred to as the "Regulations"), which will come into force on September 1, 2023. These regulations have a total of seven chapters and 62 articles, which are divided into general provisions, private equity fund managers and private equity fund custodians, fund raising and investment operations, special provisions on venture capital funds, supervision and management, legal responsibilities and supplementary provisions. The following is a review of the contents of the new and revised provisions of these Regulations, the specific contents of which are interpreted as follows: 1. specify the scope of application Article 2 of the "Regulations on the Supervision and Administration of Private Investment Funds" clearly stipulates the scope of application, that is, "within the territory of the People's Republic of China, raising funds in a non-public manner, establishing investment funds or establishing companies or partnerships in accordance with the law for the purpose of conducting investment activities, private fund managers or general partners manage and conduct investment activities for the benefit of investors, these Regulations shall apply". The above provisions also specify the basic definition of private equity funds. 2. to clarify the problem of superior law The interim regulations on the Administration of Private Investment funds (draft for soliciting opinions) (hereinafter referred to as the draft for soliciting opinions, except that the securities regulatory authorities and their dispatched offices exercise some of their administrative rights in accordance with the Securities Investment Fund Law in Article 4, it does not take the Securities Investment Fund Law as the legislative basis for its superior law. Compared with the draft, this regulation clarifies its upper legal basis. In addition, with regard to the regulatory authority of private equity funds, these regulations are formally placed in the documents of the effectiveness level of administrative regulations in terms of legality, and implement the supervision and management rights of the China Securities Regulatory Commission and its dispatched agencies on the business activities of private equity funds. 3. strengthen the requirements of fund managers and their shareholders. (I), compared with the draft for soliciting opinions, these regulations delete some principled requirements for private equity fund managers (e. g., business premises, employees, risk control compliance and other systems). In view of the previous "Measures for the Registration and Filing of Private Investment Funds", the requirements of private equity fund managers in terms of paid-in capital, business premises, employees, internal control system, etc. have been quantified and refined, and more clear landing standards have been provided. Not retained. (II) Article 7 of these Regulations clearly stipulates that the manager of a private equity fund shall be a company or partnership established in accordance with the law. If the assets of a private equity fund established in the form of a partnership are managed by a general partner, the general partner shall apply the provisions of these Regulations on private equity fund managers. This provision is intended to prevent backdoors by fund managers in practice. (III), the negative list of controlling shareholders and actual controllers of private equity fund managers is compared with the draft for soliciting opinions, which states that the subjects required by the negative list in the draft for soliciting opinions include major shareholders or partners, and the regulations on Private Equity funds have been adjusted to make it clear that they are controlling shareholders, actual controllers or general partners. These adjustments solve the problem of unclear judgment criteria for "major shareholders. 4. to increase the negative list of senior executives. On the basis of the draft for soliciting opinions, these regulations further expand the negative list, adding "administrative penalties imposed by the financial management department for major violations of laws and regulations in the past three years" and "acting as the legal representative, executive partner or appointed representative of the private equity fund manager whose registration has been canceled due to the circumstances listed in item 3 of the first paragraph of Article 14 of these regulations." or senior managers responsible, since the private equity fund manager was deregistered for less than 3 years ", the main content is basically consistent with the" Private Investment Fund Registration and Filing Measures. 5. clarify the registration requirements of fund managers. Article 10 of these regulations clearly stipulates that "private equity fund managers shall perform registration procedures with institutions entrusted by the securities regulatory authority under the State Council in accordance with the law." This time, the registration requirements are uniformly clarified from the level of administrative regulations. In addition, compared with the draft for soliciting opinions, these regulations delete the requirement that the fund industry association complete the registration formalities within 20 working days from the date of accepting the registration application. 6. clarify the performance of private equity fund managers and the prohibited behavior of related subjects. (I) Regarding the responsibilities of private equity fund managers, these regulations have added the provisions of "separate management and separate bookkeeping of different private equity fund properties under management"; added the provisions of "establishing an effective risk control system"; at the same time, from operability From a perspective, the relevant provisions of "calculating and reporting investor account information to investors in accordance with the agreement of the fund contract" have been deleted. Moreover, the following clause is separately stipulated: "Where an investment fund is established by raising funds in a non-public manner, the private equity fund manager shall also exercise litigation rights or perform other legal acts in its own name for the property interests of the private equity fund". (II) This Regulation increases the prohibited sexual acts of shareholders, actual controllers and partners of private equity fund managers, such as false capital contributions and evasion of capital contributions; unauthorized interference in the business activities of private equity fund managers; and the use of private equity fund property for their own or other people's interests. The main purpose is to prevent the shareholders and actual controllers of private equity fund managers from dominating the property of private equity funds in practice, making profits for themselves or related stakeholders, and harming the interests of investors. 7. increases ongoing compliance requirements These regulations increase the continuous compliance requirements of private equity fund managers, mainly reflected in: The (I) is in good financial condition and has working capital commensurate with the type of business and the size of assets under management; The legal representative of the (II), the executive partner or the appointed representative, or the senior manager in charge of investment management shall, in accordance with the provisions of the securities regulatory authority under the State Council, hold a certain proportion of the equity or property shares of the private equity fund manager, except as otherwise provided by the State; The Measures for the Registration and Filing of Private Investment Funds require senior executives to directly or indirectly hold a certain percentage of the equity or property shares of the private equity fund manager, and the total paid-in capital shall not be less than 20% of the paid-in capital of the private equity fund manager, or Not less than 20% of the minimum paid-in capital of the private equity fund manager stipulated in the "Registration and Filing Measures. 8. clarify the circumstances in which the registration of the fund manager is canceled These regulations mainly modify and adjust the situation of cancellation of registration from "the first private equity fund has not been filed within 6 months after registration" to "the first private equity fund has not been filed within 12 months from the date of registration". At the same time, the situation in item (VI) of Article 13 of the draft for soliciting opinions that "does not comply with the provisions of paragraph 2 of Article 6 of these regulations, and shall not be corrected within the prescribed time limit, and the circumstances are serious" has been deleted. In addition, these regulations provide for the handling of private equity fund assets before the cancellation of private equity fund managers, that is, "the private equity fund manager shall be notified to liquidate the private equity fund assets or transfer the private equity fund management responsibilities to other registered private equity fund managers in accordance with the law". 9. Clarify Prohibitive Provisions on Solicitation Behavior Articles 17 and 18 of these Regulations clearly stipulate the relevant acts of fund raising. Article 17 Private equity fund managers shall raise funds by themselves and shall not entrust others to raise funds, except as otherwise provided by the securities regulatory authority under the State Council. Article 18 A private equity fund shall be raised or transferred from qualified investors, and the cumulative number of investors in a single private equity fund shall not exceed the number prescribed by law. Private equity fund managers shall not take the establishment of multiple private equity funds for a single financing project, etc., to break the legal limit on the number of people, and shall not take the private equity fund shares or income rights to split and transfer, etc., to lower the standard of qualified investors. The term "qualified investor" as mentioned in the preceding paragraph refers to the units and individuals who have reached the prescribed asset scale or income level, and have the corresponding risk identification ability and risk bearing ability, and the subscription amount is not less than the prescribed limit. 10. clarify the fund's investment scope and negative list (I) on the investment scope of private equity funds. The provisions of these regulations are basically consistent with the "Measures for the Registration and Filing of Private Investment Funds", but the "Measures for the Registration and Filing of Private Investment Funds" further refines the provisions, which clearly include "stocks of non-listed public companies, stocks issued by listed companies to specific targets, The shares of listed companies traded in bulk transactions, negotiated transfers, etc., and the shares of equity investment funds", etc. In addition, the scope of fund investment stipulated in these regulations does not include "debt investment". In practice, for some funds that invest in special opportunity areas, they may make debt investment to participate in non-performing asset business. The feasibility of such investment needs to be further clarified by the regulatory authorities. (II) negative list on investment scope Money lending and credit business are already regulated in the "Certain Provisions on Strengthening the Supervision of Private Investment Funds", which are further clarified here. However, the "Provisions on Strengthening the Supervision of Private Investment Funds" clearly in accordance with the contract to provide loans within one year for the invested enterprises, except for guarantees, there is no such exception in these regulations, whether the above provisions apply or which provisions are based on, to be further clarified by the regulatory authorities. (III) about government investment projects These regulations add the prohibited behavior of "not to increase the government's hidden debt in disguise by requiring the local people's government to promise to buy back the principal. XI. Implementation of differentiated management and new investment level management regulations Article 25 of these regulations stipulates that the investment level of private equity funds shall comply with the provisions of the financial management department of the State Council. However, private equity funds that meet the conditions prescribed by the securities regulatory authority under the State Council and invest the main fund property in other private equity funds are not included in the investment hierarchy. The investment levels of venture capital funds and private equity funds as stipulated in the second paragraph of Article 5 of these Regulations (I. e. government funds) shall be prescribed by the relevant departments of the State Council. Therefore, private equity funds with reasonable development needs, such as venture capital funds and government funds, are exempted from a layer of nesting restrictions on the basis of existing rules. XII. Restrictive requirements for delegation of investment management authority Article 27 of these regulations stipulates that the manager of a private equity fund shall not entrust the investment management duties to others. Where a private equity fund manager entrusts other institutions to provide securities investment advice services for private equity funds, the entrusted institution shall be the fund investment advisory institution stipulated in the Securities Investment Fund Law. From this, it can be seen that the above provisions may have some impact on the dual GP model of funds that exist in practice, in which the GP who does not act as a fund manager assumes a portion of the responsibilities related to investment management there is a compliance risk of violating the above provisions. However, the investment adviser of private equity investment funds is not specifically stipulated in these regulations, and only the qualification of investment adviser of private equity investment funds is clarified. However, private equity investment funds do need external third-party institutions to provide investment advisory services, to be further clarified by the regulatory authorities. XIII. Clear requirements for the establishment of a system of connected transactions Article 28 of these regulations stipulates that private equity fund managers shall establish and improve the management system of related party transactions, and shall not conduct improper transactions or transfer of interests between private equity fund property and related parties, and shall not conceal them through multi-layer nesting or other means. The above provisions add provisions on the related transaction system and decision-making procedures. XIV. Clarify the prohibited sexual acts of fund managers and other entities at the investment stage Article 30 of these regulations clearly stipulates that some prohibited acts of private equity fund managers, private equity fund custodians and their practitioners: The (I) confuses its inherent property or the property of others with the property of the private equity fund; (II) use the property or position of private equity funds to seek benefits for people other than investors; (III) embezzlement and misappropriation of private fund property; (IV) divulging undisclosed information obtained for the convenience of his position, and using the information to engage in or express or imply that others are engaged in relevant securities and futures trading activities; Other acts prohibited by (V) laws, administrative regulations and the provisions of the securities regulatory authority under the State Council. Fifteen, increase the private equity fund managers can not normally perform their duties and other circumstances of the disposal measures. Article 34 of these regulations stipulates that due to the inability of private equity fund managers to perform their duties normally or the occurrence of major risks, private equity funds cannot be

2023-07-12

Point of View-Under the capital contribution system, is it necessary to bear joint and several liability for the company's subsequent debts after the transfer of equity by shareholders who have not actually contributed?

1. brief In May 2016, Cui and Guo jointly established an ornamental fish company with a subscribed capital of 10 million yuan, of which Cui was 8 million yuan and Guo was 2 million yuan, with a subscription period of 30 years. In July 2017, Cui transferred his shares to Li. In August 2018, the ornamental fish company confirmed that it owed 1 million yuan to Wanhu Company for the decoration project, which has not been paid. In April 2019, Li and Guo canceled the company. In March 2020, Wanhu sued Li, Guo and Cui to the court, demanding that Li and Guo be liable for repayment, and Cui be jointly and severally liable for the above debts within the range of 8 million yuan. 2. Judgment Result As to whether Cui should bear the responsibility, the court of second instance made a judgment contrary to the court of first instance. The court of first instance held that Article 22 of the "Interpretation II of the Company Law" stipulates that when the company is dissolved, the outstanding capital contributions of shareholders should be regarded as liquidation property. The outstanding contributions of shareholders, including the outstanding contributions due and payable, as well as the contributions that have not yet expired in instalments in accordance with the provisions of Articles 26 and 80 of the Company Law. When the company's property is not sufficient to pay off the debts, the people's court shall support the creditor's claim that the shareholders who have not paid the capital contribution and other shareholders or promoters at the time of the establishment of the company shall bear joint and several liability for the company's debts within the scope of the unpaid capital contribution. Article 18 of Interpretation III of the Company Law stipulates that the shareholders of a limited liability company transfer their equity if they fail to perform or fully perform their capital contribution obligations. The transferee knows or should know that if the company requests the shareholder to perform the capital contribution obligations and the transferee bears joint and several liability for this, the people's court shall support it. Where the creditor of the company brings a lawsuit against the shareholder in accordance with the second paragraph of Article 13 of these regulations, and requests the transferee to bear joint and, the people's court should support it. Cui, the promoter and original shareholder of the ornamental fish company, transferred the equity without fulfilling the obligation of capital contribution. Therefore, Cui should be jointly and severally liable for the company's debts within the scope of his unpaid capital contribution. The author as Cui a commissioned litigation agent in the subsequent appeal. In my opinion, under the registration subscription system, the transfer of shares by shareholders before the expiration of the subscription period is a legal and effective act, so the rights and obligations of shareholders have been broadly transferred. However, in the interpretation of the Company Law, "failure to fulfill or fully fulfill the obligation of capital contribution" should be defined as that after the expiration of the subscription period, Cui does not belong to this situation, and in addition, before the transfer of Cui's equity arises from the debts of the ornamental fish company and the reasons for the dissolution of the company, the provisions of Articles 18 and 22 of Interpretation II of the Company Law shall not apply. Cui should not be jointly and severally liable. Subsequently, the court of second instance adopted the author's point of view and revoked the judgment of the court of first instance. 3. legal analysis Summing up the case in the abstract, the question can be raised: after the shareholders transfer their shares before the expiration of the capital contribution period, are they liable for the company's subsequent debts? 1. The issue of the effectiveness of equity transfer. The validity of the equity transfer should be judged before discussing whether the shareholders of the transferred equity should bear the debt. It is generally believed that under the paid-up capital system, the shareholders of the company shall enjoy the benefits of the period of the paid-up capital during the life of the company, and the shareholders of the company shall enjoy the rights and obligations of the shareholders after paying a certain amount of capital, so that the exercise of the rights of the shareholders to transfer their own equity is valid as long as it conforms to the relevant laws on the transfer of equity. In China, the transfer of equity in accordance with the Civil Code of legal acts effective elements and the relevant provisions of the Company Law can be. The Company Law and its relevant judicial interpretations are not prohibitive. And from the essence of the equity transfer, the equity transfer is not a physical contribution, but a qualification. Anyone who has acquired the status of a shareholder in accordance with the law has the right to transfer, even if the transfer of shares is valid before the expiration of the subscription period. 2. The circumstances in which the liability for the debt is required. The transfer of shares is legal and valid, and then we will discuss the circumstances under which the original shareholders should bear the relevant responsibility for the debts of the subsequent company. Article 18 of Interpretation III of the Company Law stipulates that if a shareholder of a limited liability company fails to perform or fully perform its capital contribution obligations, the transferee knows or should know that the company requests the shareholder to perform its capital contribution obligations and the transferee knows or should know that the company requests the shareholder to perform its capital contribution obligations and the transferee bears joint and several liability for this, the people's court shall support it; where the creditors of the company file a lawsuit against the shareholder in accordance with the second paragraph of Article 13 of these provisions, and at the same time request the aforementioned transferee to bear joint and several liability for this, the people's court shall support it. According to the above provisions, the original shareholders to bear joint and several liability to meet the requirements of:(1) the transfer of equity without full performance of capital contribution obligations;(2) the transferee knew or should have known of this. The more controversial item is item (1), so only this requirement is discussed, how should the failure to fully fulfill the capital contribution obligation be defined, especially under the registered capital system, is the failure of shareholders to fulfill the capital contribution before the expiration of the period of time belong to the above situation? According to the relevant decision rules of the Supreme Court (see Part IV), it is concluded that shareholders enjoy the benefits of the term before the expiration of the subscription period, so that the failure of shareholders to pay or not fully pay the capital contribution within the subscription period is not an unfulfilled or incomplete performance of the capital contribution obligation. Shareholders who transfer their shares before the expiration of the subscription period are not required to be jointly and severally liable for the company's unliquidated debts within the scope of the unfunded principal and interest. And the Nine People's Minutes also make relevant provisions, shareholders in accordance with the law to enjoy the benefits of the term. Therefore, "failure to fully fulfill the obligation to contribute capital" should be understood in a narrow sense, and it should be interpreted as an equity transfer that has not paid the capital contribution (the capital contribution has been expired) beyond the payment period, I .e. a defective capital contribution. In summary, we can conclude that shareholders who have not actually made capital contributions are not liable for the transfer of equity under the following conditions: 1. The period of capital contribution before the transfer of equity has not expired; 2. The debt occurs after the transfer of equity; 3. There is no accelerated maturity under the Company Law. Summary of 4. referee rules On May 28, 1.2013, Anhui Holdings and China Energy Holdings signed the Equity Transfer Agreement, transferring 99% of its equity in An Investment to China Energy Holdings, and transferring the rights and obligations of shareholders together. Therefore, the transfer of equity by Anhui Holdings in the case of capital contribution obligations have not yet expired, does not belong to the expiration of the capital contribution period and does not fulfill the capital contribution obligations, Anhui Holdings should no longer bear the responsibility of capital contribution to the company. (2016) Supreme Famin Re -301 2. According to the first paragraph of Article 28 of the "the People's Republic of China Company Law", "Shareholders shall pay in full and on time the amount of capital contributions they have subscribed for as stipulated in the company's articles of association", before the expiration of the subscription period, shareholders enjoy the benefits of the period, Therefore, the failure of shareholders to pay or fully pay their capital contributions within the subscription period does not belong to the failure or failure to fully perform their capital contribution obligations. A shareholder who transfers his equity before the expiration of the subscription period is not required to be jointly and severally liable for the company's unpayable debts within the scope of the unfunded principal and interest, unless the shareholder has the bad faith of transferring the equity to evade the obligation of capital contribution, or there are exceptional circumstances such as zero paid-in capital and setting an ultra-long subscription period in the case of a low registered capital. (2021) Supreme Famin Shen No. 6421 3. In this case, Feng Liang and Feng Dakun, the former shareholders of Gansu Huahuineng Company, have a capital contribution period up to December 31, 2025. Article 28 of the the People's Republic of China Company Law stipulates that shareholders shall pay in full and on time the amount of capital contributions they have paid as stipulated in the articles of association of the company. Shareholders enjoy the "term interest" of capital contribution, and the creditors of the company have the opportunity to examine whether to conduct a transaction with the company on the basis of reviewing the credit information such as the time of capital contribution of the shareholders of the company, and the creditors' decision on the transaction shall be subject to the time of capital contribution of the shareholders. The Supreme People's Court on the application<中华人民共和国公司法>The "failure to perform or fully perform the obligation of capital contribution" stipulated in Article 13, paragraph 2, of the (III) on Certain Issues shall be understood as "failure to pay or fully pay the capital contribution", and shareholders whose capital contribution period has not expired and have not fully paid their share of capital contribution shall not be deemed as "failure to perform or fully perform the obligation of capital contribution". In this case, when Feng Liang and Feng Dakun transferred all the equity, the capital contribution period of the subscribed equity has not expired, which does not constitute Article 13, paragraph 2, of the "(III) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Company Law" The situation of "transferring equity without fulfilling or fully fulfilling the obligation of capital contribution" as stipulated in Article 18. (2019) Supreme Law No. 230 Comprehensive case 1. 2. three decision rules can be considered that the shareholders who transfer the equity before the expiration of the capital contribution period should not be considered as "not fulfilling or not fully fulfilling the obligation of capital contribution". 4. Yazer Company filed for bankruptcy liquidation in a timely manner when it had the reasons for bankruptcy. As the sole shareholder of Yazer Company at that time, Microneet Company did not actively promote Yazer Company to file for bankruptcy liquidation, nor did it actively pay capital to supplement the company's capital to pay off its debts. In this case, in order to safeguard the interests of the creditors of Yaze Company, it shall, in accordance with the provisions of Article 35 of the Enterprise Bankruptcy Law, determine that the capital contribution of the shareholders who have not reached the period of capital contribution shall be accelerated due to the bankruptcy of the company, and determine that the capital contribution obligation of the micro-network company shall be accelerated due before the transfer of equity. (2020) Shanghai 03 Minchu No. 5 Combined with the case 4 decision rules, it can be held that the period of capital contribution has not expired but there is an accelerated maturity situation under the company law. 5. In this case, Bian Xiangping's secured creditor's rights to Beijing Zhengrun Energy Company occurred after Gao Yang's transfer of capital contribution, that is, the company's creditor's rights did not exist at the time of equity transfer; Gao Yang and Guoxin Zhixi Center signed the "Capital Contribution Transfer Agreement" which stipulates that the transferee Guoxin Zhixi Center shall take over the rights and obligations of the funder, beijing Zhengrun Energy Company registered the relevant "Shareholders' Meeting Resolution" and "Investment Transfer Agreement" with the industrial and commercial department and registered the industrial and commercial change. Bian Xiangping should know that Gao Yang is no longer a shareholder when accepting the guarantee provided by Beijing Zhengrun Energy Company. The legal guarantee relationship between Beijing Zhengrun Energy Company and Beijing Zhengrun Energy Company has nothing to do with Gao Yang, and there is no expectation interest or trust interest in Gao Yang. Therefore, the judgment of the second instance found that Gao Yang's transfer of equity before the expiration of the period of capital contribution, its capital contribution obligations are transferred together, does not belong to the failure to fulfill or fully fulfill the capital contribution obligations, and there is nothing improper. Bian Xiangping applied for a retrial and held that Gao Yang's transfer of capital contribution was an expected breach of the company's capital contribution liability and had no legal basis. (2020) Supreme Law Minshen No. 5769 In conjunction with the rules of judgment in Case V, it can be held that there is no liability for claims and debts arising after the transfer of equity before the expiration of the period of contribution. Reference article: 1. Liu Min. On the liability of capital contribution after the transfer of unpaid-up equity, Law and Business Research, 2019,36(06). 2. The shareholders who have not reached the period of capital contribution shall still have the obligation to contribute after the transfer of equity, WeChat public number Shanghai High Court Research Office. https://mp.weixin.qq.com/s?__biz=MzI2ODUzMDA3MA==&amp;mid=2247499886&amp;idx=1&amp;sn=69268d6e27169ac9e21e1120d1ab481a&amp;chksm=eaecb897dd9b31811ddff7860e876a9cb4d107f947d654c527aaefbe5914c24916c2c7999f3c&amp;scene=27</中华人民共和国公司法>

2023-07-10

Viewpoint... A brief analysis of the legal risk of the ship's failure to register a mortgage.

2023-06-27

Viewpoint | Punitive damages may be claimed for resale of infringing products after assuming civil liability

2023-06-27

Viewpoint... The issue of mortgage determination when the creditor is inconsistent with the nominal mortgagee.

2023-06-25

Viewpoint | If criminals are temporarily placed outside prison due to pregnancy or lactation, please understand

1. Legal basis and legislative spirit The second item of the first paragraph of Article 265 of the Criminal Procedure Law: Women who are pregnant or are breastfeeding their own babies; criminals sentenced to fixed-term imprisonment or criminal detention may be temporarily executed outside prison. The system of temporary execution outside prison is a special system of penalty execution in our country. The application of temporary execution outside prison to women who are pregnant or breastfeeding their babies is the maintenance of the health rights of women and babies, and is an important manifestation of the spirit of humanitarian justice. 2. Who can make a decision on the temporary execution of a pregnant offender? If the offender is found to be pregnant or nursing a baby before the sentence takes effect, the decision of the people's court (court of first instance) that handed over the execution shall be made; if the offender is found to be pregnant or nursing a baby after the sentence takes effect, the prison or detention center shall submit a written opinion to the prison administrative organ at or above the provincial level or the public security organ at or above the municipal level divided into districts for approval. Therefore, if the criminal is in a state of bail before the judgment takes effect, he can apply to the court for temporary execution outside prison when the judgment takes effect. For the application, the court will organize a review and seek the opinions of the procuratorate, and then make a decision on whether to agree to the temporary execution outside prison. 3. Is the sentence offset during the period of temporary execution outside prison? Temporary execution outside prison can be used to offset the sentence. The period of temporary execution outside prison shall be calculated from the date of service of the decision on temporary execution outside prison. Generally speaking, the decision to suspend execution outside prison will be made later than the effective time of the court decision. For example, (2022) Ji 0128 Xing Geng No. 2. On January 25, 2022, the People's Court of Shenze County issued a criminal judgment (2022) Ji 0128 Xingchu No. 1, and sentenced the criminal Song to six months in prison for obstructing credit card management. After the judgment came into effect, the current criminal Song Mou applied for temporary execution outside prison on the grounds of "pregnancy. The Shenze County People's Court solicited the opinions of the Shenze County People's Procuratorate and the Shenze County Judicial Bureau in writing, and both believed that the criminal Song Ce met the conditions for temporary execution outside prison. On May 5, 2022, the criminal Song Mou was temporarily sentenced to execution outside prison. 4. How long is the temporary execution time outside prison? China's criminal law has no explicit provisions on lactation during temporary execution outside prison. However, according to Article 63 of the labor law, Article 9 of the special provisions on labor protection of female employees and Article 9 of the interpretation of the Supreme People's Court on several issues concerning the specific application of law in the trial of crimes of trafficking in women and children, the definition of "infant" is consistent, that is, children under one year old. Based on this, in judicial practice, "lactation" is generally understood as "the period of breastfeeding one's baby under one year of age". That is, this period should be up to 1 year, from the date of birth to the following year's birthday. Because this is natural time, there is no situation that can prolong lactation. Thus, if the offender has not given birth at the time of the court's decision to suspend the execution outside prison, the period of suspension outside prison extends from the date of service of the decision to one year after the birth of the child. 5. Can I continue to apply for execution outside prison if I become pregnant again during the temporary execution outside prison? The Criminal Procedure Law and the Regulations on Temporary Execution Outside Prison jointly issued by the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, the Ministry of Justice, and the National Health and Family Planning Commission only stipulate the circumstances under which temporary execution outside prison can be temporarily executed. The number of times is specified. Therefore, if a woman who is breastfeeding her baby becomes pregnant again during the period of temporary execution outside prison, she can continue to apply for temporary execution outside prison. For example, case number:(2016) Ji 0426 Xing Zhi Zi No. 178-1, the criminal Ren Mouxiang is a woman who is breastfeeding her baby. The Shexian County People's Court made a decision on June 15, 2017 to temporarily execute her outside prison. When the temporary execution outside prison expired, the criminal Ren Mouxiang applied for temporary execution outside prison with another pregnancy and provided relevant supporting materials. On August 13, 2018, the Shexian County Court once again made a decision on its temporary execution outside prison. 6. Abortion during temporary execution outside prison. How to calculate the period of temporary execution outside prison? Once a pregnant woman has a miscarriage, she does not meet the conditions for temporary execution outside prison. For those whose sentences have not expired, continuing to reform in the community cannot achieve the purpose of punishment, and they need to be admitted to prison in time. Therefore, during the period of temporary execution outside prison, if the community correction staff find that the offender has miscarried, they will generally submit a recommendation for admission to the court that made the execution outside prison. After review, the court will make a decision on the execution of imprisonment in accordance with Article 268 of the the People's Republic of China Criminal Procedure Law. In judicial practice, the period during which the offender is admitted to correction after miscarriage is not allowed to offset the sentence. For example, (2021) Ji 0128 Punishment No. 4, after the judgment came into effect, the criminal Gu Moumei applied to the court for temporary execution outside prison in 2020 and 2021 on the grounds that she was in the "breastfeeding period" and "pregnant". After review, the court decided to temporarily execute him outside prison. In the process of execution, the staff of the Bureau of Justice found that Gu Moumei had miscarried, and suggested that the criminal Gu Moumei should be put in prison for execution on the grounds that the situation of temporary execution outside prison disappeared but the sentence was not expired. After investigation, the court found that the criminal Gu Moumei miscarried on October 1, 2021, and the situation of temporary execution outside prison has disappeared, and the sentence has not expired, and should be sent to prison for execution, and the criminal Gu Moumei was temporarily executed outside prison. Until October 1, 2021. 7. Is the offender a woman who is pregnant or breastfeeding her own baby necessarily subject to temporary execution outside prison? The Criminal Procedure Law stipulates that for criminals who are pregnant or breastfeeding, "can" apply to execution outside prison rather than "should", that is to say, it is not inevitable to apply execution outside prison to such criminals. In judicial practice, specific judgments should be made according to the criminals' performance in reform and attitude of confession and repentance. Of course, after admission, women who are pregnant or breast-feeding their babies will be given humane care, and temporary places like "homes" will be set up in the supervision places to try not to cause harm to innocent babies. When their breastfeeding period expires, they will be immediately handed over to their relatives. If there are no relatives or relatives who are unwilling to raise them, they can be raised by civil affairs agencies and social welfare agencies.

2023-06-12

Viewpoint | A brief analysis of the consensus termination of the labor contract.

Article 36 of the "Labor Contract Law" stipulates that the employer and the employee may terminate the labor contract by consensus. Because of its flexibility and low risk, consensus cancellation is also one of the most used ways of cancellation by employers. Referee's point of view 1. Unless the laborer proposes to terminate the labor contract in accordance with Article 38 of the Labor Contract Law, the laborer proposes to terminate the labor contract, and both parties agree to terminate the labor contract, the employer may not pay economic compensation for the termination of the labor contract. 2. If the employer proposes to terminate the labor contract and both parties agree to terminate the labor contract, the employer shall pay the employee economic compensation for the termination of the labor contract. 3. If the labor contract is terminated by consensus, it shall not be subject to the restriction of 30 days' written notice as stipulated in Articles 37 and 40 of the Labor Contract Law. 4. Except for the reasons provided by law, if the parties agree on the reasons for the termination or termination of the labor contract, the agreement shall be null and void, except where the agreement of the parties is specific to the statutory reasons. 5. The agreement reached between the worker and the employer on the cancellation or termination of the labor contract, the payment of wages, overtime pay, economic compensation or compensation, etc., does not violate the mandatory provisions of laws and administrative regulations, and there is no fraud, Coercion or take advantage of the danger of others shall be deemed valid. If the agreement is significantly misunderstood or is obviously unfair, and the parties request to cancel it, the people's court shall support it. 1. Dissolution of Labor Contract and Economic Compensation by Consensus According to Item 2 of Article 46 of the Labor Contract Law, if the employer proposes to terminate the labor contract to the laborer in accordance with Article 36 of the Labor Contract Law and terminates the labor contract through consultation with the laborer, the employer shall pay the laborer Economic compensation. If the laborer proposes to terminate the labor contract and negotiates with the employer to terminate the labor contract, the law does not require the employer to pay economic compensation to the laborer. However, if the employer and the employee reach an agreement to pay economic compensation to the employee, the agreement shall be valid. Dissolution of the labor contract and the right to rescind the contract by consensus of the 2. Article 36 of the Labor Contract Law clearly stipulates that the employer and the employee may terminate the labor contract by consensus. However, this does not mean that both parties to the labor relationship can agree on the cause of termination of the labor contract other than the legal cause in the labor contract, that is, there is no agreed right of termination in the field of labor contract. According to the provisions of the Labor Contract Law, the employer can only unilaterally terminate the labor contract in accordance with the fault dismissal system stipulated in Article 39 of the Law, the no-fault dismissal system stipulated in Article 40, and the economic layoff system stipulated in Article 41, except for the termination of the labor contract by consensus between the two parties in the labor relationship. The right of workers to terminate the labor contract is almost unlimited. Under normal circumstances, they only need to notify the employer 30 days in advance or 3 days in advance during the probation period. Therefore, the legislative purpose of the "Labor Contract Law" is to restrict the employer's right to terminate the labor contract in order to maintain stable labor relations. If the parties are allowed to agree on the reasons for the exercise of the right of discharge, it is bound to overrun the legislative purpose of the Labor Contract Law. In summary, both parties to the labor relationship can terminate the labor contract by consensus, but they cannot break through the legal cause of termination in the labor contract in advance and agree on the right to terminate the contract. Except for the reasons stipulated by law, if the parties agree on the reasons for the termination or termination of the labor contract, the agreement is invalid, except that the parties' agreement is specific to the statutory reasons. The meaning of the 3. to terminate the labor contract by consensus is the limit. In practice, when the two parties to the labor relationship negotiate the termination of the labor contract, they often negotiate whether to give economic compensation and how much economic compensation to give. When the economic compensation and other matters are not agreed, they will not sign an agreement to terminate the labor contract. However, there are also labor relations between the two parties in the economic compensation is not negotiated when the first signed the termination of the labor contract agreement, and then on the economic compensation matters dispute, one party on this ground to deny the validity of the termination of the labor contract agreement. The key to dealing with this issue is to clarify the meaning of the termination of the labor contract by consensus. The consensual termination of the labor contract is a consensual termination arrangement for the labor contract relationship between the two parties, and the meaning of the consensual termination is independent in the absence of evidence to prove that there are other conditional factors. After the two parties have reached an agreement to terminate the labor contract, if one party goes back on its word, it shall not be supported. On the other hand, if there is evidence that the termination of the labor contract is subject to certain conditions, the effect of the termination of the labor contract does not occur when the conditions are not fulfilled. 4. Consequences of Dissolution of Labor Contract by Consensus If both parties to the labor relationship terminate the labor contract by consensus, the following legal consequences will occur according to law: 1. If the laborer proposes to terminate the labor contract and both parties to the labor relationship agree to terminate the labor contract, the employer does not need to pay economic compensation; if the employer proposes to terminate the labor contract and both parties to the labor relationship agree to terminate the labor contract, the employer needs to pay economic compensation in accordance with the law. 2. If the two parties to the labor relationship agree that the employer is not required to pay economic compensation, if the agreement does not violate the true intention of the parties, the agreement shall be followed in practice. 3. The employer shall, within 15 days after the termination of the labor contract by both parties, complete the formalities for the transfer of archives and social security relations for the workers in accordance with the law. If the delay or refusal to do so causes losses to the worker, the worker may request compensation from the employer. Key points of practice 1. Pay attention to the examination of whether the party proposing the termination of the labor contract is the worker or the employer. 2. Pay attention to the examination of whether the termination of the labor contract agreement has been revoked or legally invalid. 3. Pay attention to the scope of the meaning of consensus, whether it only includes the termination of the labor contract itself, or also includes other matters such as economic compensation. 4. Pay attention to review whether the termination of the labor contract by consensus is premised on certain conditions and whether the prerequisite conditions have been fulfilled. If not, the reasons should be examined. Practical Operation Guidance It is recommended that the employer or employee retain the evidence of the whole process of negotiating the termination of the labor contract.

2023-06-09

Viewpoint................................................................................................

In recent years, the number of corporate bankruptcy cases has increased year by year. From accepting bankruptcy applications to declaring corporate bankruptcy, to corporate tax registration cancellation, a series of tax issues will be involved, which is easy to cause tax-related disputes. This paper discusses whether the tax late fees involved in the bankruptcy business of enterprises can exceed the principal amount of tax. According to Article 32 of the the People's Republic of China Tax Collection and Administration Law, if a taxpayer fails to pay the tax within the prescribed time limit, and if the withholding agent fails to pay the tax within the prescribed time limit, the tax authority shall, in addition to ordering the payment within a time limit, from the date of payment of the tax, a late fee of five ten thousandths of the overdue tax shall be charged on a daily basis. The provision does not limit the upper limit of late payment fees, which will be calculated as long as the taxpayer owes tax until the tax is paid. According to the Announcement of the State Administration of Taxation on Certain Matters Concerning Tax Administration (State Administration of Taxation Announcement No. 48 of 2019), taxes owed by enterprises, late fees, fines, and interest arising from special tax adjustments shall be calculated and determined on the date on which the people's court decides to accept the bankruptcy application. The "the People's Republic of China Administrative Compulsory Law" stipulates that if an administrative agency makes an administrative decision on the obligation to pay money in accordance with the law, if the party fails to perform within the time limit, the administrative agency may impose a fine or late fee in accordance with the law. The standards for imposing additional fines or late fees shall be notified to the parties concerned. The amount of the additional fine or late fee shall not exceed the amount of the obligation to pay money. On August 22, 2012, the Tax Service Department of the State Administration of Taxation replied to the taxpayer's question on whether the tax late fee can exceed the principal: "The tax late fee increase shall be implemented in accordance with the collection and management law, and the administrative enforcement law shall not apply, and there is no question of whether the tax principal can be exceeded. If the late fee increase data exceeds the principal, it shall be increased in accordance with the provisions of the collection and management law." In judicial proceedings, some courts held that tax late fees could not exceed the principal amount. For example, in the case of the dispute over the confirmation of bankruptcy claims between the Huaiyin District Taxation Bureau of the State Administration of Taxation and Shandong Building Materials Corporation [case No.:(2019) Lu 01 Min Zhong No. 4926], the judgment of the Jinan Intermediate people's Court is that the additional late fee is a punishment measure for taxpayers not paying taxes within the time limit prescribed by law, and a way of administrative enforcement. The second paragraph of Article 45 of the "the People's Republic of China Administrative Enforcement Law" stipulates that "the amount of a fine or late fee shall not exceed the amount of the obligation to pay money". The amount of late fees determined by the manager of the building materials company is in accordance with the law. The Huaiyin District Taxation Bureau requires the manager of the building materials company to confirm the late payment of the tax exceeding the principal, which does not comply with the law and should not be supported. In addition, in the case of Pingshan County Jingye Smelting Co., Ltd. and Nandian Taxation Branch of Pingshan County Taxation Bureau of the State Administration of Taxation and the Tax Administration (Taxation) of Pingshan County Taxation Bureau of the State Administration of Taxation [Case No.:(2020) Ji 0131 Xingchu No. 7], the judgment of the People's Court of Pingshan County of Hebei Province is that the overdue fine for this case far exceeds the tax, with reference to Article 45 of the the People's Republic of China Administrative Enforcement Law: "If the administrative organ makes an administrative decision on the obligation to pay money according to law, and the party concerned fails to perform it within the time limit, the administrative organ may impose a fine or late fee according to law. The standards for imposing additional fines or late fees shall be notified to the parties concerned. The amount of the additional fine or late fee shall not exceed the amount of the obligation to pay money." In this case, the Nandian Taxation Branch of Pingshan County Taxation Bureau of the State Administration of Taxation and the Pingshan County Taxation Bureau of the State Administration of Taxation actually charged Pingshan County Jingye Smelting Co., Ltd. a late fee of 14397072.96 yuan from November 1, 1997 to November 30, 1997. The late fee is obviously improperly calculated and should be corrected. The amount of late fee should not exceed the amount of late tax, 2439975.08 yuan, except for the tax payable of 2439975.08 yuan and late fee of 2439975.08 yuan, the State Administration of Taxation Pingshan County Taxation Bureau Nandian Taxation Branch and the State Administration of Taxation Pingshan County Taxation Bureau collected more than 11957097.88 yuan in late fees from Pingshan County Jingye Smelting Co., Ltd. and should be refunded. As a tax late fee, which law is applicable? It is argued that the the People's Republic of China Tax Collection and Management Law is a special law, the the People's Republic of China Administrative Enforcement Law is a common law, and according to the provisions of the the People's Republic of China Legislation Law, the special law is superior to the common law, and the the People's Republic of China Tax Collection and Management Law should be applied when calculating the tax late fee. There is also a view that the tax authority is also an administrative agency, and its enforcement measures against taxpayers are also subject to the "the People's Republic of China Administrative Enforcement Law". Therefore, the tax principal cannot be exceeded when calculating the tax late fee. In short, in the current tax environment, the legal environment, tax late fees can exceed the amount of tax principal is still a controversial topic. In the bankruptcy business, it is recommended that the administrator should actively communicate and coordinate with the competent tax authorities on whether the tax late fees involved in the bankruptcy business can exceed the principal amount of the tax, so as to avoid tax-related disputes or other liability disputes as far as possible. Deal with tax issues in bankruptcy proceedings in compliance with the law, effectively avoid the risk of practice, and promote the smooth progress of bankruptcy business.

2023-06-01

Viewpoint | Analysis of late fees in corporate bankruptcy business

In recent years, the number of corporate bankruptcy cases has increased year by year. From accepting bankruptcy applications to declaring corporate bankruptcy, to corporate tax registration cancellation, a series of tax issues will be involved, which is easy to cause tax-related disputes. This paper discusses the problem of late fees involved in the business of enterprise bankruptcy. The nature of tax late fees formed before the acceptance of 1. bankruptcy cases. The Reply of the Supreme People's Court on the Issue of Whether the Claim for Confirmation of Claims by Tax Authorities on Late Fees Arising from Tax Arrears of Bankrupt Enterprises should be Accepted (Fa Shi [2012] No. 9) stipulates that the people's court shall accept the claim for confirmation of claims filed by tax authorities on late fees arising from tax arrears of bankrupt enterprises in accordance with the law. In accordance with the relevant provisions of the Enterprise Bankruptcy Law and the Tax Collection and Administration Law, the late fees incurred by the bankrupt enterprise due to the payment of taxes before the bankruptcy case is accepted are ordinary bankruptcy claims. Whether the social security late fees incurred before the acceptance of the 2. bankruptcy petition are bankruptcy claims. Article 3 of the (III) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Enterprise Bankruptcy Law (hereinafter referred to as the (III) for Judicial Interpretation of the Enterprise Bankruptcy Law) stipulates that after the bankruptcy application is accepted, the overdue fine arising from the debtor's outstanding payment, including the overdue interest and labor insurance premium that should be doubled if the debtor fails to perform the effective legal document, The people's court will not confirm it. Article 61 of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Enterprise Bankruptcy Cases (Fa Shi [2002] No. 23) stipulates that the following creditor's rights are not bankruptcy creditor's rights: (2) After the people's court accepts the bankruptcy case, the debtor fails to pay the overdue fine for the amount due, including the overdue interest and labor insurance premium that the debtor should double if he fails to implement the effective legal documents. This provision is consistent with the spirit of Article 3 of the above-mentioned (III) on Judicial Interpretation of Enterprise Bankruptcy Law. Notice of the Second Civil Trial Division of the Higher People's Court of Jiangsu Province on Printing and Distributing the Guidelines for the Trial of Bankruptcy Cases (Revised Edition) (Su Gao Fa Dian [2017] No. 794) holds that: "7. bankruptcy claims and the order of repayment ...... The following claims do not belong to bankruptcy claims: First, the administrative and judicial organs impose fines, fines and other related costs on the debtor. Second, the debtor's failure to implement the effective legal instrument should double the delay interest and the late payment of labor insurance premiums. Article 54 of the Notice of Shenzhen Intermediate People's Court on Issuing the Guidelines for the Examination and Determination of Creditor's Rights in Bankruptcy Cases (No. 5 [2017] of Shenzhen Intermediate People's Court) also holds that:" The following claims declared by creditors shall not be determined: (1) fines, fines and other related expenses imposed on the debtor by administrative and judicial organs; (II) late fees for delay interest and labor insurance premiums that should be doubled if the debtor fails to perform the effective legal documents; ...... "Both documents provide that" delayed interest and late fees are not bankruptcy claims ". In the case of the dispute over the confirmation of ordinary bankruptcy creditor's rights between the yi county tax bureau of the state administration of taxation and Huangshan zhiheng investment co., ltd. [case number:(2019) wan 1023 minchu no 363], the tax authorities believed that according to article 3 of the (III) on judicial interpretation of enterprise bankruptcy law, "after the bankruptcy application is accepted, the overdue fine arising from the debtor's arrears includes the overdue interest and labor insurance premium that the debtor should be doubled if the debtor fails to fulfill the effective legal documents, if a creditor declares as a bankruptcy claim, the people's court shall not confirm it", and the bankruptcy claim shall be confirmed at the point in time of bankruptcy acceptance. That is, the late payment of social insurance premiums prior to bankruptcy acceptance is a bankruptcy claim. However, the People's Court of Yixian County, Anhui Province held that the provisions of the law did not reverse the late fees and double the deferred interest paid before the bankruptcy application was accepted, which could be recognized as bankruptcy claims. The late payment of social insurance premiums is punitive and has a specific object of implementation. If it is determined to be a bankruptcy claim, it is all creditors who are actually punished, which is contrary to the original intention of the measure and the spirit of the bankruptcy law to protect all creditors fairly. In the end, the court dismissed the tax authorities' claims. There has been controversy over whether the social security late payment fee arising before the acceptance of the bankruptcy application is a bankruptcy claim, with some judicial precedents determining it as a bankruptcy claim and some judicial precedents not confirming it as a bankruptcy claim. China is not a case law country, and the details of each case vary widely, the above-mentioned case of the judgment point of view provides a new way of thinking, that is, "social insurance premium late fees with a punitive, with a specific object of implementation. If determined as a bankruptcy claim, the actual punishment is all creditors, contrary to the spirit of the bankruptcy law fair protection of all creditors." In the bankruptcy business, it is recommended that the administrator should attach great importance to the tax late fees involved in the bankruptcy business, actively communicate and coordinate with the competent tax authorities, and avoid tax-related disputes or other liability disputes as far as possible. Deal with tax issues in bankruptcy proceedings in compliance with the law, effectively avoid the risk of practice, and promote the smooth progress of bankruptcy business.

2023-05-30