No.162

Chinese Courts should reject shareholder’s profit distribution claims against their company without a related distribution plan or shareholder resolution unless shareholder rights are abused, causing the company unable to distribute its profits and causing damage to other shareholders. In other words, in principle, courts should reject shareholder’s profit distribution claims without a related shareholder resolution, unless in exceptional circumstances. Our lawyer Bai Lituan advised on a profit distribution action brought by shareholders against their company. In this case we represented the plaintiff who could not provide a related shareholder resolution and eventually succeeded in meeting the client’s purpose by providing a series of evidence in an organized way. Lawyer Bai gives a professional analysis of key issues and further discussion of this case.
2019-12-31 16:05:41

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Profit Distribution Claims Could Be Successful Without a Related Shareholder Resolution - Jin v. Shanghai JL Company Earnings Distribution Case 

 By Bai Lituan

The Regulations on Issues Concerning Application of the Company Law of the People’s Republic of China (IV) (Legal Interpretation IV of the Company Law) by the Supreme People’s Court on 1 September 2017 states that if shareholders claim the company should be distribute its profits without providing a related distribution plan or shareholder resolution, the court should reject the claim unless shareholder rights are abused, causing the company unable to distribute its profits and causing damage to other shareholders. In other words, in principle, courts should reject profit distribution claims of shareholders without a related shareholder resolution, unless in exceptional circumstances...............More


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You Could Really Be Imprisoned on Charges of Helping Your Customers Complain about False Information and Remove Postings

By Zhang Qianlin

A recent criminal case attracted much attention of the public relation sector and made the illegal business of paid removal of postings known to the public. Background of the case: The head of a public relation agency removed postings for its customers through an agent. In this case the defendant Jiang, president assistant and head of the big data center of the Beijing DIS Public Relations Consulting Co., Ltd. found on the internet Wu and other people who removed postings as a profession and asked them to remove and hide over 1800 postings in order to perform three Baidu search engine optimization contracts between DIS and Amway (China) Commodities Co., Ltd. Jiang paid to Wu over RMB 1,430,000 and DIS paid to Amway over RMB 5,840,000 for removal of the postings...............More


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1.Interpretation of Several Issues Connected with Application of Laws to Hearing Cases of Smuggling and Illegally Doing Business in and Using Dopes

Promulgated by the Supreme People’s Court

Document number: L.I. [2019] No.16

Promulgation date: 18 November 2019

Implementation date: 1 January 2020                            

The Interpretation states that government officials and personnel of organizations that exercise their powers to administer anti-doping rules will be convicted of crimes of position abuse and dereliction if they abuse or fail to fulfill duties of their position with powers to administer anti-doping rules, causing serious doping offenses and serious damage to the nation’s reputation or very bad social influence. (Source: Website of the Supreme People’s Court) 

http://www.court.gov.cn/fabu-xiangqing-200611.html   


2.Opinions on Taking Better Advantage of Foreign Investments

Promulgated by the State Council

Document Number: G.F.[2019] No.23 

Promulgation date: 7 November 2019

The Opinions is intended to protect legal rights of foreign investors, fully implement the foreign investment law, establish a fully developed mechanism of dealing with complaints from foreign funded companies, improve regulatory policy implementation standards, make preparations of administrative documents more transparent, protect intellectual property rights by law, improve the intellectual property right protection system, involve foreign funded companies in preparations of Chinese medical devices, food, medicine and other standards and treat all suppliers involved in government procurement equally. (Source: Website of the State Council)

http://www.gov.cn/zhengce/content/2019-11/07/content_5449754.htm                        


3.Notice on Rectification of APP Infringement of Users’ Rights 

Promulgated by the Ministry of Industry and Information Technology

Document Number: No.337 [2019] IM Notice from MIIT

Promulgation date: 6 November 2019

According to the Notice it is decided to carry out a campaign to rectify app infringement of users’ rights. The Notice states that the campaign focuses on eight tasks in four respects. First, in respect of non-complaint collection of users’ personal information, the focus is on “unauthorized collection of personal information”. Second, in respect of non-compliant use of personal information, the focus is on “information shared with third parties without authorization”. Third, in respect of unreasonable requests for users’ grant of rights, including “refusal to give access to users who do not grant specific right”. Fourth, in respect of account number cancellation obstructions, the focus is on “difficulties in account number cancellation”.. (Source: Website of the Ministry of Industry and Information Technology)

http://www.miit.gov.cn/n1146295/n1652858/n1652930/n3757020/c7506353/content.html                        


4.Temporary Regulations of Recalling Products

Promulgated by the State Administration of Market Regulation

Document number: No.19 Order of the State Administration of Market Regulation

Promulgation date: 14 November 2019

Implementation date: 1 January 2020

The Regulations require that the market regulation authority that has carried out a defect investigation and found that the subject products are defective should advise their manufacturer to recall the defective products. The manufacturer should immediately recall the products if it believes they are defective after receipt of the recall notice, or can advance an opposition and provide relevant materials to the authority that sent the recall notice within ten working days after receipt of the notice if the manufacturer believes that the products have no defect. (Source: Website of the State Administration of Market Regulation)

http://gkml.samr.gov.cn/nsjg/fgs/201911/t20191126_308824.html       

                  

5.Regulations of Online Audio and Video Information Services

Promulgated by the State Internet Information Office

Document number: G.X.B.T.Z.[2019] No.3

Promulgation date: 18 November 2019

Implementation date: 1 January 2020                            

The Regulations states that online audio and video information service providers should improve their management of audio and video information published by online audio and video information service users and arrange for and implement use of illegal, non-compliant and false audio and video identification technology, stop transmission of information prepared, published or transmitted by audio and video information service users violating law or regulation, take measures such as elimination to stop such information from being spread, retain related records and report to cyber communication, cultural, tourism, TV and radio broadcasting and other departments. (Source: Website of the Internet Information Office of China) 

http://www.cac.gov.cn/2019-11/29/c_1576561820967678.htm        

                    

6.Notice on Administration of Punishment for Trademark Offenses to Protect Well-Known Trademarks

Promulgated by the State Intellectual Property Office

Document number: G.Z.F.B.H.Z.[2019] No.229 

Promulgation date: 11 November 2019

Implementation date: 21 October 2019                            

The Notice states that companies can disclose facts relating to the recorded process of obtaining approval for using their trademarks as well-known trademarks in their business activities, but relevant authorities can administer punishment for any noticeable use of words “well-known trademarks” as award names in their product or service publicity or marketing activities. (Source: Website of the National Intellectual Property Office) 

http://www.cnipa.gov.cn/gztz/1143862.htm   


Picture of the month:

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Photographer: Lu Wangtao,lawyer

Caption:  Hokkaido,Japan,December 2019