Part One ( Question Answer )
1. Give the definition of both equity joint venture and contractual joint venture as foreign investment in China , and make comparison of these two kinds of joint venture, i.e. pointing out the difference between the two kinds .
2. Describe respectively (1) legal forms of trade in service ; (2) the relationship between trade in service and international investment.
3. Give the definition of both registered capital and total amount of investment of joint ventures under Chinese law, and describe the relation between these two terms.
4. Describe two forms of foreign investment other than equity joint venture, contractual joint venture and wholly foreign investment enterprise, and point out their legal basis respectively.
5. Make the description of legal forms of trade in service, then point out the relation between trade in service and international investment.
6. Describe the difference between registered capital and total amount of investment of joint ventures, and the relation between these two terms.
Part Two ( Case Analysis )
.1. A multinational company X (Company X) established a wholly foreign-owned enterprise Y (Company Y) in 1992 to produce a kind of electronic products and export. In May 1996, Company Y announced its bankruptcy due to its serious financial crisis and its failure to pay the mature debts. Because the property of Company Y was too limited to pay the debts, the debtees of Company Y filed a suit against Company X, requiring it to assume debts for its subsidiary-Company Y. They provided the following evidences to support their claims:
A. The claim right of Company X was amount to 40%of the debts of Company Y.
B. 85% of the products of Company Y was sold to Company X and the selling price was much lower than the normal price to the other buyers.
C. Company Y basically operated under the directions of Company X and all of its important decisions were made by its parent company-Company X.
Questions for Case:
(1)Whether or not what Company X has done was detrimental to its independent legal status from Company Y?
(2)Should Company X assume debts for Company Y to pay the debtees? Why?
2. A Hong Kong company and company A, company B in Xiamen City established a joint venture of plastics company in 1989. Hong Kong company accounts for 30% of total amount of registered capital; company A and company B account for the other 70%. After the two years of the joint venture establishment the plastics company suffered a great loss because of its bad management, which was in debt of 1.8 million Yuan RMB. Company A and Companies B suggested termination of the joint venture contract in advance, but the Hong Kong company rejected the proposal on the meeting of the board of directors. The conflict between the partners resulted in the further loss. The joint venture’s amount of loss was increased up to more than 7 million Yuan RMB. The Xia Men two companies brought suit against the Hong Kong company, claiming for the termination of the joint venture contract and dissolution of the enterprise.
Questions for Case:
(1) Whether termination of a joint venture contract must be agreed unanimously by board of directors under Chinese law?
(2) Should the foreign investment enterprise be dissolved in case the enterprise was in the condition of serious loss and lack of capacity to operate continuously under Chinese laws? If should, who will launch such a procedure of dissolution? And which department or organ is responsible for the examination and approval of dissolution?
(3) Can the dispute of the enterprise dissolution be submitted to the court for decision if no unanimous agreement were reached by all parties to the joint venture? If can, how to go through the liquidation procedure for the enterprise?