All posts by legal

Guarantee is one of the important means to ensure the recovery of creditor’s rights. When a third party provides a guarantee for a debtor, the creditor shall carefully assess whether the guarantee is valid and enforceable. So, as a creditor, what are cautions related to guarantees provided by third parties? Firstly, from the perspective of the guarantee subject, when a third party provides a surety guarantee, it is necessary to confirm its capacity to provide the guarantee. This issue involves two aspects:(1) Is the subject prohibited from acting as a guarantor? and (2) Are there any legal preconditions for this…

In practice, many affiliated enterprises engage in mixed employment. Typical scenarios of mixed employment include two situations: 1. Workers provide labor for two or more affiliated enterprises simultaneously. For example, A serves as the legal counsel for a group company and, due to the lack of legal staff in a subsidiary, A also undertakes legal work for the subsidiary. 2. Workers provide labor alternately for two or more affiliated enterprises. For example, A, an engineer, was assigned to work on a project for a Beijing-based affiliate, and after completing the project, is reassigned to a Guangzhou-based affiliate for another project.…

Due to the economic downturn, some companies have to dissolve and liquidate. However, there are many risks during the dissolution and liquidation if the company failed to handle the procedure properly. In particular, the Company Law revised in 2023 (hereinafter referred to as the “New Company Law”) has amended or added provisions regarding liquidation, which deserves attention. This article sorts out the relevant risks with the main focus on the subject of liability assumption during the liquidation of a limited liability company. Legal Risks Related to Liquidation Obligors The original Company Law did not specify the definition or scope of…

Company A did not take out the work-related injury insurance for its employees, but instead it took out a group accident insurance. Sun got injured at work. After Sun received the claim payment from the insurance company, he sued the company, demanding for the work-related injury insurance benefits. Company A defended that Sun had already received the claim payment from the insurance company, he should not be entitled to double compensation. However, both the court of first-instance and the court of second-instance supported Sun’s claim. Company B did not take out the work-related injury insurance for its employees, but instead…