Business-starting Investment Enterprises
BIZCHINA / Company laws
Provisions Concerning the Administration of Foreign-funded
Business-starting Investment Enterprises
Updated: 2006-04-17 10:37
Chapter III Capital Contributions and Relevant Modifications
Article13 The capital contributions made by the investors of a
business-starting enterprise without qualifications of legal entity and
the relevant modifications shall be in conformity with the following:
(1) The investors may pay their subscribed capital by installments
according to the proceedings of the business-starting investment, but the
longest term shall be no more than 5 years. The amount of capital to be
invested at each stage shall be decided by the FBIE itself according to
the contract of the enterprise and the agreement concluded by it and its
invested enterprise. In the contract, the investors shall stipulate
liabilities of the investors who do not pay the subscribed capital
contributions and relevant measures.
(2) During the period of the continuous existence of the FBIE, the
investors generally shall not reduce their subscribed amount of capital.
Upon approval of the examination and approval organ, an investor may
reduce its subscribed amount of capital if the said amount exceeds 50 %
of the total provided that it has obtained the consent of the
indispensable investors and the business-starting FBIE isn't in violation
of the requirement of minimum registered capital of US$1,000,000 (The
present provision shall not be applicable to a case where an investor
reduces its invested amount of capital in accordance with item (5) of
this Article or the FBIE reduces the untapped capital when its term of
investment expires). In this case, the investors shall stipulate the
conditions, procedure and methods for reducing the subscribed amount of
capital in the contract of the FBIE;
(3) Indispensable investors shall not withdraw from the FBIE during the
period of its continuous existence. A necessary withdrawal under a
special circumstance shall be upon the consent of the investor whose
investment amount exceeds 50% of the total amount, and the relevant
rights and interests shall be assigned to the new investor who satisfies
the conditions as provided in
Article7. The contract and the articles of association of this enterprise
shall be modified and shall be reported to the check and approving
authority for approval.
The transference of the other investors' subscribed amount of capital or
invested amount of capital shall be done in compliance with the contract
of the FBIE and the assignee shall meet the requirements as provided in
Article6. All investors shall make relevant modifications in the contract
and the articles of association of the FBIE and report to the examination
and approval organ for archival purposes.
(4) After an FBIE has been established, the investment application of new
investors shall be in conformity with the present Provisions and the
stipulations in the contract, and shall be consented by the indispensable
investors. Relevant modifications shall be made in the contract and the
articles of association of the FBIE and shall be reported to the
examination and approval organ for archival purposes.
(5) Among the incomes of an FBIE arising from selling or disposing of the
interests of its invested enterprise by other means, the part equivalent
to its original amount of investment may be directly allocated to all the
investors. Such allocation constitutes a reduction of the invested amount
of the investors. An FBIE shall stipulate concrete methods of allocation
in its contract, and at least 30 days before it makes such allocation, it
shall submit an archival statement on the request of reducing the
relevant invested amount of the investors. In the said statement, it
shall prove that the amount of the investments to be made by the
investors and the other capital it has at that time is at least in
conformity with the investment obligations that the FBIE shall undertake
at that time. However, such allocation shall not be a plea to the
litigation resulted from its violation of any of the investment
obligations.
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