Publications

The revised Company Law (2023) came into force on July 1, 2024. It imposes restrictions on the capital contribution period, triggering a wave of corporate capital reductions. Meanwhile, due to the backdrop of the economic environment in recent years, numerous enterprises have opted for capital reduction for various reasons. Although the Company Law prescribes relevant procedural requirements for capital reduction, specific rules vary across practical scenarios. We have compiled key matters concerning capital reduction for limited liability companies for reference. Firstly, the procedures for capital reduction differ depending on the reasons for such action. Reasons Legal Basis & Key Procedural…

In American TV dramas, a typical scene is that a protagonist carried a cardboard box and walked out of office after being fired. In China, however, this protagonist may carry the box and walk back to the office. According to Article 48 of the Labor Contract Law, if an employer unlawfully rescinds or terminates an employment contract, the employee has the right to request reinstating the contract. The employer may only settle the matter by paying compensation equivalent to twice the statutory severance pay (2N) if the contract is no longer capable of being performed. But no employer would be…

National standards, industry standards, local standards, enterprise standards and association standards serve as the yardsticks for product quality. National mandatory standards must be strictly followed. Local standards are often categorized into the scope of quasi-mandatory standards based on local regulatory provisions. In cases where enterprise standards are unclear, industry standards may also become an important adjudication basis once quality disputes arise between enterprises over customized product transactions. Therefore, enterprises shall keep track of applicable standards. Once an update is released, they need to verify relevant matters and formulate response measures, which mainly include the following aspects: Does the new standard…

A collective employment contract is a written agreement concluded by an employer and employees through collective negotiation on labor-related matters in accordance with the law. Since a collective employment contract does not require individual consent from each employee but applies to all employees, its conclusion and entry into force are subject to certain restrictions. According to relevant provisions, the procedures for the conclusion and entry into force of a collective employment contract are as follows: (1) Drafting Stage: Representatives of the employer and the employees reach a consensus through negotiation to formulate the draft. (2) Voting Stage: The draft shall…

Before discussing export controls targeting Japan, it is necessary to note the background, that is, since 2024, from the perspective of national security, China has accelerated legislation and continuously strengthened overall export controls on rare earths and dual-use items. Major regulations are listed below: Date Name of Regulation 2024/06/22 Regulations on the Administration of Rare Earths 2024/09/30 Regulations on the Administration of Export of Dual-Use Items 2024/11/15 Export Control List of Dual-Use Items 2025/04/04 Announcement No. 18 of 2025 of the Ministry of Commerce and the General Administration of Customs: Decision on Implementing Export Controls on Certain Medium and Heavy…

Article 8 of the “Labor Contract Law” stipulates: “When recruiting a worker, an employer shall truthfully inform the worker of the job content, working conditions, workplace, occupational hazards, production safety status, labor remuneration, and other information that the worker requests to know; …” Because of this provision, many employers inform workers of matters relating to occupational hazards when recruiting them for positions exposed to such hazards. In addition, Paragraph 1 of Article 33 of the “Law on the Prevention and Control of Occupational Diseases” provides: “When concluding a labor contract with a worker, an employer shall truthfully inform the worker…

Company A and Company B have long-term business relations. To secure debt recovery and simplify procedures, Company A requires the guarantor to issue a general guarantee undertaking, covering all debts between the two companies. Although this practice is similar to the “maximum amount guarantee” stipulated in the “Civil Code”, the differences are obvious: the latter requires a definite term and generally sets a maximum limit on the creditor’s claim. Then whether Company A’s requirement is valid? In judicial practice, the key to determining the validity lies in whether there is an identifiable main contract or fundamental principal claim. Firstly, if…

Article 40, Item 3 of the “Labor Contract Law” stipulates: “If the objective circumstances on which the labor contract was concluded have undergone material changes, rendering the labor contract unperformable, and the employer and the employee fail to reach an agreement on amending the labor contract through negotiation, the employer may rescind the labor contract by notifying the employee in writing 30 days in advance or by paying the employee an additional month’s salary.” However, how to define the “material changes in objective circumstances” has long been a difficult issue in practice, and employers are often anxious about rescinding labor…

In commercial activities, parties often record their phased opinions in the form of meeting minutes or memorandums before entering into a formal agreement. To avoid being deemed to have concluded a contract, some parties may add a clause to the memorandum stating that it “shall not be binding on either party”. However, in most cases, the memorandum is without such clause. In such circumstances, is a memorandum legally binding? From the perspective of judicial practice rules, a memorandum is generally deemed legally binding if it has the following characteristics: Firstly, it contains the essential terms of a contract. Some parties…

In practice, some companies may provide additional benefits to employees, such as additional annual leave, enterprise annuities, and so on. Many people believe that such additional benefits are not statutory obligations of companies, so companies could grant, adjust or revoke those benefits at their own discretion without any legal risks. This perception is incorrect. If handling additional benefits improperly, companies may encounter troubles and burdens. Then how to handle additional benefits properly? Firstly, it is recommended to formulate clear rules for additional benefits. These rules should cover the eligible recipients or eligibility criteria, specific content, payment methods and timelines of…