Mortgage of Cooperative Joint Venture Assets Without Board Approval
March 31, 2001 | BY
clpstaff &clp articles The IssueArticle 28 of the PRC Sino-foreign Co-operative Joint Venture Law Implementing Rules (IR) requires a two-third quorum for a duly convened…
The Issue
Article 28 of the PRC Sino-foreign Co-operative Joint Venture Law Implementing Rules (IR) requires a two-third quorum for a duly convened board meeting. In addition, Article 29 requires the unanimous approval of all board members present at a duly convened board meeting to mortgage the company's property. Is a mortgage agreement valid if the legal representative of the company enters into the agreement to mortgage the company's assets in the absence of a proper board resolution, the creditor is not aware that the board has failed to authorize the mortgage, and the mortgage is properly registered with the relevant authority?
An Illustrative Case
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