Expertise/Russia–China Practice
Service
A company with Chinese participation is liquidated by decision of its participants after settlements with creditors and employees. When a branch or representative office is closed, its accreditation is terminated, while the obligations remain with the head office.
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The information on this website is provided for information purposes only and does not constitute a public offer.
Timing and fees are indicative and are confirmed when the engagement is agreed.
The closure procedure differs for a Russian company and for an accredited branch or representative office.
The liquidation of a company established with Chinese participation runs from the participants' decision to the entry of the liquidation in the Unified State Register of Legal Entities. The procedure depends on the state of the obligations and whether the assets are sufficient; it includes settlements with creditors and employees and the distribution of the remaining assets to the participants.
Closing the branch or representative office of a Chinese company involves notifications, completing settlements, terminating employment relationships, closing accounts, deregistration and termination of accreditation. The head office receives confirmation that the procedure has been completed.
The outcome of the service is the work performed within the scope agreed with the client.
Acting for the Chinese company
Challenge
A Chinese and a Russian partner were setting up a joint venture, and they had different legal traditions, expectations regarding management and views on the allocation of control.
What was done
The Chinese company was advised on the ownership structure, the management and exit mechanics, and the alignment of the parties' interests under Chinese and Russian law. The venture was launched on the agreed terms.
Parent company due diligence
Challenge
A Russian buyer was acquiring a Russian company whose parent was a Chinese company. Closing the transaction required due diligence of the Chinese parent company and its connection with the asset being sold.
What was done
Legal due diligence of the Chinese parent company was carried out, covering the group's corporate structure, the chain of ownership of the Russian subsidiary and the legal risks at the intersection of Chinese and Russian law. The acquisition of the Russian company went ahead with a legal picture that was clear to the parties.
Legal due diligence
Challenge
Independent legal due diligence of a Chinese company was required, covering its corporate structure and legal status at the intersection of Chinese and international law.
What was done
An opinion was prepared on the corporate structure, the chain of ownership and the related legal risks. The client obtained a clear legal picture for its further decisions.
Contract review
Challenge
Contracts for the international sale of goods between China and Russia carry risks of divergence in the governing law, delivery terms and dispute resolution mechanisms. Such contracts were reviewed on behalf of the Chinese company.
What was done
The governing law, delivery terms (Incoterms), currency and tax aspects and the dispute resolution procedure were analysed. The risks were identified and eliminated before signing.
With an assessment of the position: obligations and assets, current contracts, settlements with employees and the head office, accounting records and proceedings. A procedure started without such preparation is usually halted, and the overall timeframe increases.
The timeframe is made up of the preparation, the prescribed periods for settlements with creditors and the review of documents by the competent authorities. It is affected by uncompleted contracts, proceedings and preparing the head office's documents and having them apostilled and translated. An indicative timeframe is given after the position has been assessed.
The procedure depends on the composition of the debts and whether the assets are sufficient. Some obligations are settled before the procedure begins, including by agreeing terms with creditors. If the assets are insufficient, the liquidation procedure changes, and the consequences for the head of the company and the participants are assessed before a decision is taken.
Claims already asserted and pending proceedings as a rule prevent the procedure from being completed, and they are assessed before it begins. The options are compared: bringing the proceedings to an end before the procedure begins, or conducting the procedure with the asserted claims taken into account, which increases the overall timeframe.
What happens to the property is determined in advance: transfer to the head office, sale in Russia or transfer to a partner. Each option has its own documentation procedure and its own consequences, including tax consequences. For manufacturing projects, the export of equipment and the documents required for it are taken into account.
This option is considered alongside terminating operations and depends on the state of the obligations and assets and on buyer interest. The options, including scaling down operations and keeping the company with minimal turnover, are compared in terms of timing, costs and consequences, including liability for past operations.
An hourly rate, a fixed fee or a combined model is used; in some cases part of the fee depends on the outcome achieved. The fee is determined by the time actually spent, the complexity of the matter and the overall timeframe of the project, and is agreed before work begins.
Describe your matter and the circumstances in which it arose. The consultation establishes the possible structure of the work and the scope of legal support required.
