What is the legal framework for mergers and acquisitions of businesses in China?

The legal framework for mergers and acquisitions of businesses in China is governed by the Company Law of the People’s Republic of China (“Company Law”). Under Article 19 of the Company Law, there are two main procedures for a merger or acquisition of a business in China: a simple merger or acquisition and a joint venture. A simple merger or acquisition involves only two entities, one of which is the acquiring entity and the other being the target entity. The acquiring entity must file an application with the relevant Chinese company registration authority in the place where the target entity is located and the authority must approve the merger or acquisition. In a joint venture, two or more entities come together to form a new entity that is jointly owned and operated by the participating parties. The joint venture agreement will specify the purpose, business scope and profits distribution of the joint venture. In addition, the parties to the joint venture must register the joint venture with the relevant Chinese company registration authority in the place where the joint venture is located. Overall, the legal framework for a merger or acquisition and a joint venture in China are complex and require experienced professionals who are knowledgeable with the Company Law and the regulations of the relevant Chinese authorities. Those interested in mergers and acquisitions of businesses in China should seek the advice of a licensed attorney or an experienced legal consultant.

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What is the legal framework for mergers and acquisitions of businesses in China?

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