DOC

JOINT VENTURE - ARTICLES OF ASSOCIATION - SERVICES

By Thelma Campbell,2014-09-08 10:11
7 views 0
JOINT VENTURE - ARTICLES OF ASSOCIATION - SERVICES

    ANNEX 1

    ARTICLES OF ASSOCIATION

    OF

    ;[NAME OF JOINT VENTURE COMPANY]

    ;_______________, 20__

    ;__________________ MUNICIPALITY, PEOPLE'S REPUBLIC OF CHINA

    TABLE OF CONTENTS

     Page No.

    1. GENERAL PROVISIONS.............................................................................................................. 1 2. PURPOSES, SCOPE OF BUSINESS AND SCALE OF PRODUCTION OF

    THE COMPANY ............................................................................................................................ 3

     3. TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL .................................. 4 4. BOARD OF DIRECTORS ............................................................................................................. 7 5. MANAGEMENT ORGANIZATION .......................................................................................... 12 6. LABOUR MANAGEMENT ........................................................................................................ 16 7. TAXATION, THREE FUNDS AND PROFIT DISTRIBUTION ............................................... 17 8. FINANCIAL AFFAIRS AND ACCOUNTING .......................................................................... 18 9. BANK ACCOUNTS AND FOREIGN EXCHANGE ................................................................. 20 10. DURATION AND EARLY TERMINATION ............................................................................. 21 11. LIQUIDATION AND DISSOLUTION ....................................................................................... 21 12. POLICIES AND PROCEDURES ................................................................................................ 23 13. MISCELLANEOUS ...................................................................................................................... 24

    ARTICLES OF ASSOCIATION

THESE ARTICLES OF ASSOCIATION are formulated in accordance with the Law of the People's

    Republic of China on Chinese-Foreign Equity Joint Ventures and the Regulations for the Implementation of the Law of the People's Republic of China on Chinese-Foreign Equity Joint Venture (hereinafter collectively referred to as the "Joint Venture Law") and other relevant and officially promulgated Chinese

    laws and regulations and in accordance with the Joint Venture Contract dated ; [Date] for the

    establishment of ; [Name of the Joint Venture Company] between:

     ; [NAME OF PARTY A], a ; [type of enterprise] registered with the ; ___________ Municipal

    Administration of Industry and Commerce (Business License No. ______________) and with its legal address at ; [Address] (hereinafter referred to as "Party A");

AND

; [NAME OF PARTY B] a [type of enterprise] organized and existing under the laws of [Jurisdiction]

    with its [principal place of business][registered office] at [Address] (hereinafter referred to as "Party B").

Party A and Party B may hereinafter be referred to individually as a "Party" or collectively as the "Parties".

     Unless otherwise defined herein, capitalized terms used in these Articles of Association shall have the meanings ascribed to them in the Joint Venture Contract.

    The Parties hereby agree as follows:

    1. GENERAL PROVISIONS

    1.1 Name and Address of the Company

    (a) The name of the Company shall be ; "[NAME]" in English and ; "[NAME]" in Chinese.

    (b) The legal address of the Company shall be ; [Address].

    1.2 Use of Name

    The name of the Company shall not be changed except with the prior written consent of the Parties

     or as a result of termination of a relevant corporate name license contract.

    1.3 Limited Liability Company

    The Company shall be a limited liability company. The liability of each of the Parties for the

    obligations, liabilities, debts and losses of the Company shall be limited to that Party's obligation

    to make its respective contribution to the registered capital of the Company within the period

    required by Chinese law. Unless it has agreed otherwise in a separate agreement with a third party,

    a Party shall not be liable for any obligations or liabilities of the Company. Creditors of the

    Company shall have recourse only to the assets of the Company and shall not have any claim

    against the Parties for the obligations of the Company, and in case any creditor of the Company

    brings any action or claim against any Party for any act of omission of the Company, the Company

    shall defend, at its cost, such Party and hold harmless such Party against such claims or actions or

    any loss or expenses incurred thereby. A Party shall not be required to provide any further funds

    to or on behalf of the Company beyond the amount contributed by the Party under the Joint

    Venture Contract.

    1.4 Legal Status

    Upon the issuance of its Business License, the Company shall be a legal person in the PRC. The

    Company shall be governed by, and shall be entitled the protection of, the laws, decrees and

    pertinent rules and regulations of the PRC. The Company shall enjoy all rights, benefits and

    preferential treatments as a foreign investment enterprise.

    1.5 Profits and Losses

    The profits of the Company shall be shared by the Parties in proportion to and, in the event of

    losses, to the extent of their respective contributions to the registered capital of the Company.

    1.6 No Agency Relationship

    Neither Party is the agent of the other Party nor does either Party have any power to bind the other

    Party or to assume or to create any obligation of responsibility, express or implied, on behalf of the

    other Party in the other Party's name. Neither the Joint Venture Contract nor any of the other

    contracts contemplated therein shall be construed as constituting Party A and Party B as partners

    or as creating any other form of legal association which would impose liability upon one Party for

    the act or failure to act of the other.

    1.7 Branches and Subsidiaries

    The Company may establish branch offices and/or subsidiaries in the PRC upon the approval of

    the Board of Directors and, if necessary, the Examination and Approval Authority and the relevant

    local government departments where such branch offices and/or subsidiaries shall be located. 2. PURPOSES, SCOPE OF BUSINESS AND SCALE OF OPERATIONS OF THE

    COMPANY

    2.1 Purposes and Scope of the Company

    The purpose and scope of business of the Company shall be as follows:

    (a) Acting as a non-exclusive marketing and sales agent for the sale and distribution of Party B

    Products to customers in the Territory pursuant to the Agency Contract;

    (b) Installation, maintenance and repair of Party B Products for end-users in the Territory; (c) Providing technical consulting services to existing and potential end-users in the Territory; (d) Providing technical support to end-users in the Territory; and

    (e) Technical training to end-users in the Territory regarding the use of Party B Products.

2.2 Powers of the Company

    In order to achieve its principal purposes, the Company shall be empowered, within the scope of

    the promulgated laws, decrees and regulations of the PRC, to undertake the following: (a) employ, remunerate and dismiss managers, staff and retain, compensate and dismiss outside

    agents, advisors, consultants and contractors;

    (b) purchase, lease or otherwise establish, acquire, maintain and operate offices, facilities, branches,

    subsidiaries and sites in China;

    (c) lease, purchase or otherwise acquire premises and other property of all kinds; (d) enter into and perform relevant contracts with any individual, company, enterprise, economic

    organization or entity within or outside China;

    (e) purchase or otherwise acquire and undertake all or any part of, the business, assets and liabilities

     of any other company, enterprise, economic organization or entity within or outside China; (f) sell, lease and otherwise dispose of the assets of the Company during the course of its operations

    and during the liquidation and dissolution of the Company;

    (g) acquire and deal with patents, copyrights, trademarks and other intellectual property rights; (h) maintain banking relationships of all types with financial institutions within or outside the PRC

    and to draw and deal with cheques, bills of exchange, promissory notes and other negotiable

    instruments;

    (i) obtain loans, lines of credit or other appropriate financing, obtain or provide guarantees,

    indemnities and power of attorney, and mortgage, pledge, create security interests in, or otherwise

    encumber, any of its assets as security for loans;

    (j) issue bonds, securities and other financial instruments;

    (k) obtain insurance as may be necessary in the course of the Company’s operations;

    (l) deal with disputes and participate in legal proceedings of all types including mediation,

    administrative proceedings or arbitration;

    (m) invest the income of the Company and distribute the profits of the Company;

    (n) do generally all other lawful things as may be necessary or desirable to accomplish the purposes

    of the Company.

    3. TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL

    3.1 Total Amount of Investment

    The total amount of investment of the Company shall be ; [RMB______________

    (_________________Renminbi)][US$__________________(______________United States

    Dollars)].

    3.2 Registered Capital

    The registered capital of the Company shall be ; [RMB_________ (_________________

    Renminbi)][US$__________________(______________United States Dollars)] and shall be

    contributed by the Parties in the following proportions:

    (a) Party A's aggregate contribution to the registered capital of the Company shall be fifty percent

    (50%) of the total registered capital of the Company, and shall be the equivalent of ;

    [RMB_____________________ (____________________ Renminbi)]

    [US$__________________(____________________United States Dollars)] in the form of ;

     [Description] as set forth on Schedule 1 to the Joint Venture Contract.

    (b) Party B's aggregate contribution to the registered capital of the Company shall be fifty percent

    (50%) of the total registered capital of the Company, and shall be the United States Dollar

    equivalent of ; [RMB_____________

    (________________Renminbi)][US$________________(___________United States Dollars)]

    in the form of ; [Description] as set forth on Schedule 1 to the Joint Venture Contract.

    3.3 Additional Financing

    The Company may obtain additional funds through loans from domestic or foreign financial

    institutions on terms and conditions approved by the Board of Directors and the Parties. The

    Company may also obtain loans or guarantees from the Parties or their Affiliates on terms and

    conditions to be determined by the relevant parties.

    3.4 Timing of Capital Contributions

     Contributions to the registered capital of the Company shall be made by the Parties in accordance

    with Schedule 1 to the Joint Venture Contract; provided, however, that Schedule 1 may be adjusted

    by the unanimous vote of the Board in light of actual conditions consistent with the requirements

    of relevant regulations and, provided, further, that the obligation of any Party to make its initial

    contribution shall be subject to the fulfilment or waiver of each of the following conditions: (a) the Agency Contract, Premises Lease Contract, Secondment Contract, Supply Contract,

    Technology License Contract, Trademark License Contract, Training Contract, and any other

    contracts referred to herein have been executed by the parties thereto, and have each received the

    approval of the relevant Chinese authorities, if required;

(b) the Business License of the Company is in full force and effect;

    (c) the form and substance of the approvals received in connection with or in accordance with the Joint

     Venture Contract and the documents referred to in Article 3.4(a) are acceptable to each Party; and (d) each of the Parties is satisfied with the tax preferences, holidays and concessions obtained or to be

    obtained by the Company.

    3.5 Investment Certificates

    Within ; ________ (___) days after the Parties have made their initial capital contributions, the

    Company shall engage an accountant registered in China to verify such contributions. Upon the

    issuance of a verification report by such accountant, the Company shall issue to each contributing

    Party an interim investment certificate signed by the Chairman evidencing that the contribution

    was made. The Company may issue such interim investment certificates from time to time as each

    Party makes further capital contributions and the same have been verified by the accountant within

    ; ________ (___) days after each contribution. Within ; _________ (___) days after the entire

    registered capital of the Company has been contributed by the Parties, the Company shall request

    that an accountant registered in China verify each Party's total contributions and issue a final

    certificate of verification. Upon receipt of the final certificate of verification from the accountant,

    the Company shall promptly issue a final investment certificate to each Party setting forth the

    aggregate amount of such Party's contribution(s). Concurrently with the issuance of such final

    investment certificate, such Party shall surrender to the Company for cancellation all of the interim

     investment certificates previously issued to such Party. Such final investment certificate shall be

    signed by the Chairman and the Vice-Chairman.

    3.6 Increase or Reduction of Registered Capital

    Any increase or reduction in the registered capital of the Company shall be approved by the Board

    of Directors and submitted to the appropriate examination and approval authorities for approval.

    Upon receipt of such approval, the Company shall register the increase or reduction in the

    registered capital with the appropriate administration for industry and commerce. 3.7 Non-Encumbrance

    Neither Party may encumber its share of the registered capital or its Interest without the prior

    written consent of the other Party, not to be unreasonably withheld.

    3.8 Transfer of Interest

    Neither Party shall be entitled to sell or otherwise transfer its Interest before the Minimum

    Commitment Period and, thereafter, neither Party may assign, sell or otherwise dispose of all or

    part of its Interest in the Company to any third party except as provided in Articles 7.4 and 7.5 of

    the Joint Venture Contract.

    4. BOARD OF DIRECTORS

    4.1 Establishment

    The Board of Directors of the Company shall be established by the Parties and shall hold its first

    meeting within ; __________ ( ) days of the Establishment Date.

    4.2 Composition and Term

    The Board of Directors shall be composed of ; _______ (___) Directors, of whom ; _______

    (___) shall be appointed by Party A and ; _______ (___) by Party B. Unless the Parties

    otherwise agree in writing, the Chairman shall be appointed by Party A and the Vice Chairman by

    Party B. Each individual serving in the capacity of Director, Chairman or Vice Chairman shall

    hold office for a term of four (4) years, and each shall be eligible for consecutive terms of office

    upon reappointment by the original appointing Party. Any vacancy created in the Board of

    Directors shall be filled by the Party which originally appointed the absent Director causing the

    vacancy. Any Party may at any time remove for any reason any or all of the individuals appointed

    by such Party as a Director and appoint in lieu thereof another individual or individuals to serve

    the remainder of the relevant term(s).

    4.3 Legal Representative

    The Chairman of the Board shall be the legal representative of the Company and shall act only in

    accordance with the specific decisions, resolutions and instructions of the Board. Whenever the

    Chairman is unable to discharge his duties, he shall authorize the Vice Chairman or another

    Director to represent the Company. Each Director, in his capacity as a Director, shall serve in a

    non-executive role.

    4.4 Authority

    The Board of Directors shall be the highest authority of the Company and shall make decisions on

    all major and important matters of the Company.

    4.5 Personal Liability of Directors

    A Director, including the Chairman and Vice Chairman shall not have personal liability for action

    he undertakes on behalf of the Company within the scope of authority of the Joint Venture

    Contract, the Articles of Association or the Board resolutions unless his or her action: (a) is outside the scope of the approval or authorization given to him by these Articles of Association

    or the Board of Directors’ resolution ; or

    (b) is in breach of Articles 59 to 63 of the Company Law of PRC; or

    (c) is in breach of the laws and regulations of the PRC at the time.

    Any Director, including the Chairman and Vice Chairman, acting in violation of these Articles of

    Association or Board of Director’s resolutions shall indemnify and hold harmless the Company

    against all losses caused to or liabilities and expenses incurred by the Company. The Company

    shall, to the extent permitted by law, indemnify any Director for damages or losses incurred in

    good faith by such Director in the performance of his or her obligations.

    4.6 Unanimous Approval

    Resolutions of the Board of Directors involving the following matters shall be adopted only upon

    the unanimous affirmative vote of all ; __________ (__) Directors (whether present in person or

    by proxy) at a duly convened meeting:

    (a) Amendment of these Articles of Association;

    (b) Increase, reduction or assignment of registered capital and the adjustment of each Party's share of

    interest in the registered capital of the Company;

    (c) Merger or consolidation of the Company with any other economic organization or reorganization

    of the Company; and

    (d) Extension, termination, liquidation or dissolution of the Company.

    4.7 Other Important Decisions of the Board

    Except for those matters set forth in Article 4.6, resolutions of the Board of Directors shall be

    adopted by the affirmative vote of not less than ; _______ (___) Directors for all important

    matters of the Company including, without limitation:

    (a) Approval of any change in the scope of business of the Company;

Report this document

For any questions or suggestions please email
cust-service@docsford.com