All posts by legal

Company A was punished by the administration authority for stating, “The first store for brand “XX” in XX city”, “The Only Seller for Free Shipping”, on its company website. A foreign-invested Company C entrusted Company D to design its company website, in which “Taiwan” and “Hongkong” were listed beside “China” in the introduction of the company. Later then, Company C and Company D were punished by the administration authority. The basis of the above 2 punishments is the “Advertising Law”. Those companies could not understand such punishment. They insist that these are only the description of the company on its…

Lee signed a labor dispatch contract with Shanghai Company A, and was dispatched to Company B as an operator. One year later, because of a dispute, Lee insisted that the position was not complementary, so the dispatch contract was invalid, Company B was the de factor employer and should pay double the wages for unsigned a labor contract. In the end, the Shanghai No.2 Intermediate People’s Court determined that the position was not complementary, but since this article is a regulatory requirement, the dispatch contract should be deemed as valid. Coincidentally, in a similar case in Nanjing, a labor dispute…

It seems that the foreign exchange payment for importing technologies is only a foreign exchange management issue. However, there are laws and regulations on the management of the technology import and taxation in China, so enterprises shall also pay attention to those requirements. Overall, enterprises shall pay attention to 3 aspects related to the foreign exchange payment for importing technologies: the management of importing technologies, foreign exchange, and taxation. When importing technologies, the importer shall check the category of the imported technology. According to the relevant laws and regulations, China set 3 categories on the management of the imported technologies,…

According to “Measures for the Use of Encryption Products by Overseas Organizations and Individuals within China” (2007), if a foreign would like to use commercial cryptographic equipment (“CCE”) imported from overseas within the territory of mainland China, he shall obtain the Permit for Use of Cryptographic Products Manufactured Overseas; if he would like to buy any CCE produced within the territory of mainland China, he shall obtain the Permit for Use of Cryptographic Products by a Foreign Organization or Individual. In practice, a few foreigners have been warned by the public security authorities for using CCE without permits, and the…

Zhu borrowed 2 million from Wang, and transferred 20% of Company A’s shares to Wang for guarantee. Zhu also promised if he failed to repay the loan on time, the loan should be converted into shares, which means Wang could have the ownership of shares. As Zhu failed to repay, Wang informed Zhu that the loan should be converted into shares. However, Zhu argued that the agreement on the guarantee is a fluidity clause, which was invalid. In practice, if a debtor uses shares as the guarantee for the loan, normally, the debtor would enter into a written hypothecation contract…

During the annual performance review, Company A found Chen had brought a huge loss to the company due to his serious fault. The company warned Chen in written and penalized two months’ salaries to compensate the company’s loss, in accordance with the “Employee Handbook”. Chen brought a labor arbitration, and claimed that the punishment was improper and the company shall return the two months’ salaries. In practice, many employers have stipulated a cumulative punishment system. For example, a total of 3 written warnings could be deemed as a serious violation of rules and regulations, and the company has the right…