Legislation roundup: Company Law, outbound investment, and financing security
September 01, 2017 | BY
Susan Mok &The SPC has clarified that shareholders can be held liable for divulging trade secrets, and the State Council has restricted outbound deals in real estate and hotel industries and substantially raised the threshold for establishing financing security companies
Company Law
Supreme People's Court, Provisions on Several Issues Concerning the Application of the <PRC Company Law> (4)
If a shareholder, after exercising its right to information, divulges a trade secret of the company, causing harm to the lawful interests of the company, and the company requests that the shareholder compensate for the relevant loss, the people's court shall uphold such request.
Further reading
Outbound
General Office of the State Council, Circular on Transmitting the National Development and Reform Commission, Ministry of Commerce, People's Bank of China and Ministry of Foreign Affairs, Guiding Opinions on Further Guiding and Regulating the Orientation of Outbound Investment
Strong domestic enterprises are encouraged to engage in outbound investment that is conducive to the Belt and Road Initiative, export of superior production capacity, upgrading the R&D in China and complementing the energy and resource shortages in China.
On the other hand, domestic enterprises are restricted in engaging in outbound investment in real estate, hotels, multiplexes, the leisure industry and sports clubs.
Further reading
Financing
State Council, Regulations for the Oversight of Financing Security Companies
The establishment of financing security companies is required to have at least Rmb20 million (a large increase from the previous Rmb5 million requirement) of paid-in registered monetary capital, and the establishment of a (sub-)branch in another province, autonomous region or municipality directly under the central government is required to have minimum registered capital of Rmb1 billion.
Further reading
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