Sino-foreign joint venture contract (7)

Joint venture contract

First general rule

1.1. ABC Co., Ltd. is established in accordance with the laws of the People's Republic of China and is legally permitted to engage in economic activities. Its head office is located in the People's Republic of China __ Province ___;

DEF Co., Ltd. was established in compliance with the laws of __, and its head office is located at ____.

1.2. Party A and Party B agree to jointly establish a joint venture company in accordance with the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures and the Regulations on the Implementation of the Law of the People's Republic of China on Sino-Foreign Joint Ventures and Relevant Laws. Both parties agree to abide by this contract with sincerity.

Article 2 Name and address of the joint venture

2.1. Chinese full name of the joint venture company:
__________________________________

2.2. The full name of the joint venture company in English:
__________________________________

The head office and registered location are located at _________________
_____________________.

Article 3 The company's purpose and business scope

3.1. The company operates on the basis of fair and lawful business principles of equality and mutual benefit, and is based on the sales of its products and services to obtain the company's satisfactory profits.

3.2. The company should improve its management level, strive to achieve economic benefits, and in accordance with international commercial trade practices, the company should be competitive in terms of efficiency, output, price, and delivery time.

3.3. The company produces _____ products and provides services for the domestic market and designated international markets and related companies and companies to sell and fulfill the relevant business determined by the company.

3.4. Establish a service company to operate a number of life service businesses required by the company.

Article 4 Registered Capital and Funds

4.1. The company is a limited liability company. The liability of both parties to the company is limited to the amount of investment confirmed by both parties. The registered capital of the company is _____, and Party A and Party B each contribute 50% of the _____. The two parties will share the profits according to the above investment ratio and share the losses and risks.

4.2. The above funds shall be invested in cash, in kind and technically agreed by both parties. All investments were completed within ____ years of the establishment of the company. The first investment is completed within one month after the establishment of the joint venture company, and the rest of the investment time is determined by the board of directors according to actual needs.

4.3. The company does not issue shares. After each party has paid its investment amount, both parties shall be verified by an accountant registered in China, and a certificate of verification shall be issued. The company shall issue an investment certificate signed by the chairman and the vice chairman accordingly. The certificate shall state the following matters: Name; year, month and day when the company is established; the name and investment amount of the joint venture parties, the year, month and day of the capital investment, the year, month and day of the investment certificate. The investment certificate is evidence of non-liquidity. The total registered capital recognized by both parties shall not be reduced during the contract period.

4.4. funds. In addition to the registered capital, if the company needs to replenish funds, the board of directors may, according to the decision of the board of directors of the People's Republic of China, raise funds in China in an appropriate manner according to the joint venture of the People's Republic of China, or directly apply for loans from other foreign banks.

4.5. The details of the investment in the company's registered capital by both parties are determined by the company's board of directors.

Article 5 Board of Directors and Organization

5.1. The board of directors is the highest authority of the company and determines all major issues of the company. The board of directors consists of six members, with Party A and Party B each occupying three. The candidates for directors shall be appointed or exchanged by Party A and Party B respectively. The chairman of the board of directors shall be appointed by one of the directors appointed by Party A, and the vice chairman shall be appointed by one of the directors appointed by Party B. The directors are appointed for a term of four years and may be re-elected upon continued appointment by the parties.

5.2. All decisions of the board of directors must be approved by four-fourths of the directors. A director who fails to attend the board of directors may issue a formal letter of appointment to vote with the directors present. When dealing with matters concerning the interests of both parties, the board of directors shall decide on the basis of equality, mutual benefit and consensus.

5.3. The board of directors meets twice a year and is convened and presided over by the chairman.

The chairman of the board must give notice 20 days before the meeting. When necessary, at the request of all the directors of one party, the chairman and the vice chairman may hold a special meeting after consultation. The meeting minutes are written in Chinese and English, and the records are archived and saved. When the chairman is absent, the vice chairman will act on his behalf. Meetings should generally be held in China. In the absence of a board meeting, the resolution signed by all directors has the same effect as the resolution of the board meeting.

5.4. Matters that need to be unanimously approved by the board of directors include:

Amendments to the articles of association;

Increase and transfer of registered capital of the company;
Extension, termination, dissolution of the company's term and its liquidation and closing work;
Company's development rules and loan plans;
The company's work plan, production and operation plan;
The company's annual financial budget, final accounts and annual accounting statements;
Reserve funds, employee incentives and welfare funds, company development fund extraction plans and annual profit distribution plans;
The appointment and dismissal of the general manager and deputy general manager of the company and the appointment and dismissal of the heads of the departments nominated by the general manager and deputy general manager;
The rules and regulations of the company's operation and management;
Implementation methods of the company's organization, staffing, employee wages, incentives, benefits, etc.;
Company's personnel training program;
Other major issues concerning the rights and interests of both parties.

The general manager and deputy general manager shall preside over the day-to-day operation and management of the company in accordance with this contract and the resolutions of the board of directors. If the general manager is absent, the deputy general manager will act on his behalf. The establishment, organization, responsibilities and personnel arrangements of each department shall be formulated by the general manager and deputy general manager in accordance with the principles determined by the board of directors and approved by the board of directors.

The general manager and deputy general manager shall not concurrently serve as the general manager or deputy general manager of other economic organizations, and shall not participate in the commercial competition of other economic organizations and the company. If the Zheng, deputy general manager or other senior management personnel are corrupt or seriously dereliction of duty, the board of directors has the right to dismiss at any time.

Article 6: Responsibilities and obligations of both parties

6.1. Party A and Party B shall endeavor to achieve the company's business objectives and objectives in the most effective and economical way, and within the existing laws and permitted business scope, both parties shall select qualified and experienced management personnel and technicians to work diligently in the company. Open.

6.2. Party A has the responsibility and obligation to assist the company in handling the following matters:

Assist the company to apply for approval, registration, and business license to relevant Chinese authorities;
In accordance with relevant Chinese laws, assist companies to apply for tax breaks within a possible range;
Assist the company in collecting information on China's market demand, product competitiveness and sales trends;
Assisting foreign staff in applying for entry visas to the People’s Republic of China and providing official travel within China;
Assist the company in arranging staff's office, accommodation, meals, transportation, medical care, etc.;
Assist the company to hire Chinese staff, engineers, technicians, workers and translators;
Assist the company to open a foreign currency and RMB account with the bank agreed by the Bank of China and the State Administration of Foreign Exchange;
Assist the company to contact the procedures of material transportation, import and export declarations in China;
Party A shall assist other things that should be done at the request of the company when possible.

6.3. Party B has the responsibility and obligation to assist the company in handling the following matters:

Guide and assist the company to solve technical, operational and management problems, provide advanced and applicable technology and management experience, in order to obtain maximum operational benefits, to strive for the quality of its products and assume its technical responsibility;

Develop and provide working rules and regulations for the company on manufacturing processes, equipment maintenance, safety, material storage, etc.

After consultation with Party A, assist the company to formulate training plans, train Chinese personnel at the factories owned by Party B and at locations acceptable to both parties, so that Chinese personnel can master relevant technical processes and specialized skills within the time specified in the training plan. ;

Assist the company in collecting applicable technology, process, economic information and legal materials related to the company's business.

Article 7 Preparation for Construction

7.1. The board of directors shall appoint a preparatory team within 60 days from the date of establishment of the company. The work plan for the preparatory group is determined by the board of directors. The preparatory group consists of four members, who are composed of two members, including a team leader and a deputy leader. The board of directors shall appoint team members nominated by both parties and select the team leader and deputy team leader from the nomination team members, but the board of directors has the right to dismiss any team members at any time. When a member nominated by either party is dismissed, the party shall nominate a successor who will be approved by the board of directors for the successor to participate in the preparatory establishment.

7.2. The construction of the new plant, the preparation team is in accordance with 6.2. The provisions are responsible for contacting the approval of the building design, supervising the procurement of equipment and materials, setting the construction project schedule, providing technical management, ensuring the progress of the construction project, and keeping its reports, drawings, files and other materials in a safe place. The preparatory team actively cooperates in daily work and meets at least once a week during the construction of the new plant to discuss the progress and quality of the construction project. This meeting should be recorded and signed by the team leader and deputy leader.

7.3. When at least three team members make recommendations, the general manager can sign the construction contract and other related contracts on behalf of the company and the contractor. The works stipulated in each construction contract shall be allowed to be built within the scope of the project by the relevant Chinese authorities. All work should be carried out in accordance with the timetable set out in the contract. All construction and related costs shall not exceed the amount stated in the contract.

Article 8 Profit Distribution and Taxation

8.1. After the end of each fiscal year, the company's net profit should be distributed to all parties in proportion to the amount of investment in the company's registered capital by Party A and Party B as soon as possible. In order to achieve this paragraph 8.1. For the purpose, “pure profit” means the amount remaining after deducting the following fees from the gross profit:

The amount after deducting the income tax from the gross profit of the company in accordance with the relevant laws and regulations of China and the provisions of this contract;
The amount of the reserve fund established by the relevant laws and regulations of China and set up by the board of directors;
According to the amount of funds required by the board of directors to develop and expand the company's reinvestment;
The amount of special funds for employee rewards and welfare funds established in accordance with relevant Chinese laws and regulations or established by the board of directors.

8.2. According to the spirit of the preferential treatment of the 14th section of Chapter 3 of the Guangdong Special Economic Zone Regulations, the maximum income tax rate payable by the company is 15%. For enterprises with advanced technology and large scale, tax reductions of 20% to 50% or tax exemptions for one to three years are granted. With the assistance of Party A, the company applies for tax reduction and exemption in accordance with Chinese laws and regulations.

8.3. The company's China, overseas Chinese, Hong Kong, Macao and foreign nationals shall pay personal income tax in accordance with Chinese tax laws and regulations.

Article 9: Company's Rights and Labor Wages

9.1. According to the "Regulations of the People's Republic of China on Guangdong Special Economic Zones"

Can operate their own businesses independently, and can hire foreign personnel for technical and management work;
Employing Chinese employees, the enterprises themselves recruit, and the employment is evaluated according to the principle of merit, and the employer and the employee sign the contract. The employed staff may be tried for 3 months to 6 months; the redundant employees of the enterprise due to changes in production and technical regulations may be dismissed if they are unable to adapt to the requirements and cannot adjust to other types of work within the enterprise. For those employees who violate the company's rules and regulations and cause adverse consequences, they may give warnings, demerits, pay cuts, and dismissals according to the seriousness of the circumstances;

9.2. Depending on the needs of the company's operations, it is determined by itself whether to use piece counting or timing, day counting, and monthly salary system;

9.3. The wages and other legitimate income of foreign employees, overseas Chinese workers, and Hong Kong and Macao employees employed after paying personal income tax may be remitted through the Bank of China or other banks in accordance with the provisions of the foreign exchange management measures; the legal profits of the company after paying the company income tax may be Remitted through Bank of China or other banks in accordance with foreign exchange management regulations;

9.4. If the company suspends business for the reason, it will report the reasons to the relevant departments and go through the procedures for clearing the debts. The assets can be transferred and the funds can be remitted.

Article 10 Accounting and Auditing

10.1. The company shall establish an accounting system in accordance with the unified regulations of the People's Republic of China on the accounting of Chinese and foreign joint ventures.

10.2. The company shall prepare quarterly financial statements within ten days of the end of the financial year and distribute copies of the financial statements to Party A, Party B and each director. The financial statements should include the balance sheet and profit and loss statement at the end of the accounting period and are prepared in both Chinese and English. Signing by the company’s financial staff is true and correct.

10.3. The company shall prepare annual financial statements within 30 days after the end of the financial year and distribute copies of the financial statements to Party A, Party B and each director. The annual financial statements include the balance sheet and profit and loss statements as of the end of the financial year. The financial statements shall be audited and certified by an accounting firm entrusted by the Chinese government and certified by the Board of Directors to be true and correct.

10.4. Party A and Party B have the right to audit the company's operating accounts and records at their own expense within one month after the end of each financial year of the company.

Article 11 Effectiveness of the Agreement and the Term of the Joint Venture

11.1. After the contract has been approved by the competent department of the People's Republic of China, the company shall go through the registration formalities with the Administration for Industry and Commerce within one month after receiving the approval letter, and obtain a business license. The date of approval by the competent approval authority is the date on which the contract is effective. All letters of intent and other files signed by both parties before the effective date of this contract will automatically lapse on the effective date of this contract.

11.2. The term of this contract is valid from the date of entry into force of this contract until the expiration date. The company's joint venture period is ten years. If the company's business develops and the registered capital needs to increase, the joint venture period can be extended. The extension of the time limit will be agreed upon separately.

11.3. Six months before the expiration of the time limit, the two parties agreed to terminate the contract. According to the Regulations on the Implementation of the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the time limit for the approval of the joint venture company by the relevant government departments may continue for each period of five years.

11.4. If the contract is terminated for any reason or by any party, it must be approved by the institution approved by the original contract.

Article 12 Transfer

12.1. No party to the company may transfer, mortgage, sell or otherwise dispose of all or part of its shares to a third party without the unanimous approval of the board of directors and the approval of the competent approval department of China. If a party wants to transfer shares, the following rules must be observed:

When a company's party wishes to transfer all or part of its shares in the company, the company has the right of first refusal;

In order to give priority to the transferee, the respondent shall reply within 30 days after the transferor submits the written transfer request, otherwise the transferor has the right to transfer to the third party;

When the company transfers all or part of its investment to a third party, the qualification and credit of the third party must be approved in writing by the other party. The conditions for the transfer must not be more favorable than the conditions for transfer to the other party. The transferor should transfer the transferee. Two copies of the written agreement on the corresponding partial rights and obligations of the transfer, submitted to the other party;

The company shall not be allowed to interfere with the work of the company or be affected by the organization; after the approval of the transfer, the company shall go through the registration formalities with the Administration for Industry and Commerce within 30 days.

Article 13 Termination and liquidation

13.1. Either party may issue a notice of termination of contract at least sixty days before the termination of the contract when:

Voluntary or involuntary declaration of bankruptcy, liquidation or dissolution;
In the event that one party fails to perform its obligations under this contract or violates any of the provisions of this contract, the notice of termination of contract shall state the breach of contract and the breach of contract that the defaulting party can correct during the notice without correction;
After the two parties strictly abide by the provisions, they still violate the current laws, decrees or regulations of the government, which prevents the company from continuing to operate.

13.2. After the contract is terminated or terminated early, the company liquidates its assets, claims and debts. In the liquidation, it should be implemented in accordance with the provisions of the contract in accordance with the principle of fairness and reasonableness.

13.3. When the company expires or the contract is terminated, the board of directors shall formulate procedures and principles for liquidation and determine the members of the liquidation committee. The liquidation committee may hire accountants and lawyers registered in China to make recommendations to the board of directors.

13.4. According to the relevant laws of China and approved by the relevant authorities, the liquidation committee may sell and sign the sales agreement with the “company in operation”. Party A has the right of first refusal.

13.5. If no buyer is willing to purchase a "business in operation", the company's business will be terminated and the liquidation committee can sell the company's assets in a sub-item. In this case, Party A has the right of first refusal, and Party B takes the second place.

13.6. The party breaching the contract must be responsible for the financial loss suffered by the party that applied for the business due to its breach of contract.

Article 14 Land use

14.1. In accordance with the application for the application of "Land Use", Party A shall, on behalf of the company, submit an application for land use for the new plant to the relevant government department, obtain approval from the planning department, and obtain the "Land Use Certificate".

14.2. According to the Interim Provisions on Land Administration in Special Economic Zones, the company can apply for exemption from land use fees as a technology-intensive and advanced project. The company should also apply for preferential treatment in respect of land use fees.

Article 15 Insurance

15. During the contract period, the general manager of the company and the first deputy general manager intend to jointly propose the projects insured by the company according to different stages of different businesses. Under the same conditions of price and service, priority should be given to Chinese insurance companies.

Article 16 Applicable Law

16.1 The establishment, operation, management, taxation, import and export materials, labor management, land use, personnel entry and exit and other activities of the company shall comply with the relevant laws, regulations and regulations promulgated in the Guangdong Special Economic Zone.

In the absence of such provisions in the laws, regulations and regulations, the joint venture company shall abide by the laws, decrees, rules and regulations of the People's Republic of China promulgated. The company shall also abide by the terms set out in this contract.

16.2. The company's property, rights and Party B's investment and profit sharing shall be subject to the laws, decrees, rules and regulations of the People's Republic of China and the Guangdong Special Economic Zone issued in accordance with the provisions of this contract and the legal rights and interests of Party B. protection of.

Article 17 Settlement and Arbitration of Disputes

17.1. All disputes arising out of or in connection with the execution of this contract shall first be settled by friendly negotiation between the parties.

17.2. Since this contract causes any dispute between Party A and Party B, it should first be resolved by the board of directors in a spirit of mutual trust. If it is not resolved within 30 days, Party A and Party B may choose a third party to mediate.

17.3. If the mediation cannot be settled within 30 days, the dispute shall be finalized by arbitration. The arbitration panel consists of three arbitrators. Party A assigns one, Party B assigns one, and the third arbitrator is jointly agreed by two arbitrators appointed by Party A and Party B. If the two arbitrators appointed differ in their opinions, the third arbitrator shall be appointed by the Arbitration Institute of the Stockholm Chamber of Commerce in Sweden and shall be the chairman of the arbitration panel at the place of arbitration in Stockholm, Sweden.

17.4. The arbitration award is final and binding on both parties. The arbitration fee shall be borne by the losing party or determined by the arbitration institution.

Article 18 Force Majeure

18.1. In the event of an uncontrollable event or situation, the parties shall be considered a force majeure event, but not limited to fire, wind, flood, earthquake, explosion, war, rebellion, riot, infectious disease and plague. If any party is unable to perform its obligations under this contract due to a force majeure event, the time for performance of the performance of this contract shall be extended for a period of time equal to the delay of the event of force majeure.

18.2. Any party affected by the event of force majeure shall immediately notify the other party of the event of force majeure by telegram or telex, and then send it to the other party within 14 days by a registered certificate of force majeure confirmed by the relevant government authority or department. One party. If the delay caused by force majeure exceeds 90 days, it shall be determined through friendly negotiation to continue the implementation of the agreement or terminate the agreement in advance.

Article 19 Contract Text and Language

19.1. This contract includes the principal and subsidiary files, and its subsidiary files and main components have the same legal effect. If there is a contradiction between the terms of the subsidiary file and the corresponding terms of the contractual principal, the principal of the contract shall prevail.

19.2. The amendment to this contract shall be discussed and approved by both parties to form an official file. After examination and approval by the competent department, the file after examination and approval is an integral part of the contract.

19.3. The headings written in this contract are only for the eye-catching list and do not affect the meaning and interpretation of the terms.

19.4. This contract and its accompanying files are written in Chinese and English, and both languages ​​have the same legal effect.

19.5. All important files of the company are written in both Chinese and English. Both texts are equally authentic.

19.6. Both parties agree to use Chinese and English as their working languages.

Article 20 text

The Chinese text and the original English version of this contract are in duplicate, and each text has two copies.

Article 21 Other

21.1. From the effective date of this contract, both parties have previously signed all the files related to this contract and will be void.

21.2. Any provision of this contract or any file relating to this contract, except for provisions that are contrary to applicable law, unlawful or unenforceable, shall be enforced if any remaining, valid or lawful, enforceable contract May not be affected or weakened.

21.3. This contract is hereby signed by the representatives authorized by both parties on the date indicated on the first page.

Article 22 Notice

22.1. The company will send the notification file to the other party in either direction, and send it at the following address. It is deemed to have been delivered on the date of receipt:

person A person B:___________
Address: ________________ Address: ___________
Mailbox: ________________ Mailbox: ___________
Phone: ________________ Phone: ___________
Telegram: ________________ Telegraph: ___________
Telex: ________________ Telex: ___________

22.2. During the period of the company's effective period, both parties have the right to change their respective addresses at any time, but the change should be notified to the other party one month in advance.

_________________________________

Note: The establishment of a Sino-foreign joint venture shall be subject to the relevant laws of China, and shall be subject to commercial registration procedures in accordance with the contract signed by both the competent authority and the approval department. Joint ventures are co-investment, joint operation, sharing of risks, and common losses. The joint venture partners share profits and share risks according to the proportion of registered capital. The term of the joint venture, business autonomy, tax incentives, etc. must be clearly defined in the contract.