Fuling Technology Co., Ltd. ***Domestic individuals borrow foreign debtsYes, there isRegistration channel
Legal Summary:
At present, only the foreign debt business of domestic institutions is registered under the capital account of the foreign exchange administration department, and there is no registration channel for domestic individuals to borrow foreign debts, and there is no registration path at the practical level. Therefore, there are flaws in the registration of foreign debts due to the inability to register personal overseas loans at the practical level, but the relevant regulations do not explicitly prohibit individuals from borrowing foreign debts, and there is no violation of mandatory provisions of the law in personal overseas loans.
Disclosures:
According to Article 21 of the Measures for the Administration of Individual Foreign Exchange, "domestic individuals who provide loans, borrow foreign debts, provide external guarantees and directly participate in overseas commodity and financial derivatives transactions shall comply with the relevant regulations and go through the corresponding registration procedures with the foreign exchange bureau". According to Article 23 of the Detailed Rules for the Implementation of the Measures for the Administration of Individual Foreign Exchange, "according to the process of RMB capital account convertibility, the management of domestic individuals providing loans, borrowing foreign debts, providing external guarantees, and directly participating in overseas commodity and financial derivatives transactions shall be gradually liberalized, and the specific measures shall be formulated separately." ”
According to the intermediary agency** consulting the Zhejiang Branch of the State Administration of Foreign Exchange, the foreign exchange administration department currently only registers the foreign debt business of domestic institutions under the capital account, and there is no registration channel for domestic individuals to borrow foreign debts, and there is no registration path at the practical level. Therefore, there are flaws in the registration of foreign debts due to the inability to register personal overseas loans at the practical level, but the relevant regulations do not explicitly prohibit individuals from borrowing foreign debts, and there is no violation of mandatory provisions of the law in personal overseas loans.
In view of the fact that the above-mentioned overseas loans have been settled in February 2021 through debt credits of all parties, more than two years ago, and that the previous capital increases and equity transfers of Fuling Co., Ltd. have been legally approved and foreign exchange-related procedures, the above-mentioned personal overseas loans have not caused foreign exchange loss, and meet the statutory conditions for mitigating and mitigating penalties stipulated in the Measures for the Discretion of Administrative Fines for Foreign Exchange Administration, according to the Discretionary Range of Fines The applicable fine is small (if the statutory mitigating or mitigating circumstances are applied, a fine of less than 10,000 yuan shall be imposed on the individual);At the same time, according to the Discretionary Range of Fines, the acts punished under Article 48 of the Regulations of the People's Republic of China do not have a discretionary range of fines with "serious circumstances" and are not serious violations. Therefore, there is less risk of the founding shareholder being subject to administrative penalties for failing to register foreign debts for personal overseas loans, and if the founding shareholder is punished by the foreign exchange authorities for the above-mentioned matters, it is not a material violation.
In summary, the overseas loans provided by Huang Qijun to the shareholders of the issuer did not involve interest payments, and there was no violation of relevant tax laws and regulations. In view of the fact that the overseas borrowing funds of Fulin Plastics and the founding shareholders are used to pay for the capital increase, The equity transfer proceeds or the return of overseas loans, the relevant funds have been remitted to China through legal foreign exchange approval procedures, the relevant overseas loans have been settled, and there has been no loss of foreign exchange, and the relevant borrowing of foreign debts has been more than two years ago, and the borrowing of foreign debts by the founding shareholders has not violated the mandatory provisions of the law, so the risk of administrative penalties for the above-mentioned foreign exchange registration defects is small, and if it is punished by the competent foreign exchange authority, it is not a material violation;Moreover, Fulin Plastics is a past shareholder of the issuer and has withdrawn from its shareholding for many years, so even if it is subject to administrative penalties, it has nothing to do with the issuerAll the founding shareholders of the issuer have issued an undertaking to bear all contingent losses caused by the above-mentioned foreign debt borrowing;Therefore, the above matters will not constitute a substantial obstacle to the issuer's issuance and listing.
Link Regulations:
Measures for the Administration of Individual Foreign Exchange(Effective 1 February 2007).
Article 21Domestic individuals who provide loans, borrow foreign debts, provide external guarantees and directly participate in overseas commodity and financial derivatives transactions shall comply with relevant regulations and go through the corresponding registration procedures with the foreign exchange bureau.
Detailed Rules for the Implementation of the Measures for the Administration of Individual Foreign Exchange(Revised on March 23, 2023).
Article 23According to the process of RMB capital account convertibility, the management of domestic individuals providing loans, borrowing foreign debts, providing external guarantees, and directly participating in overseas commodity and financial derivatives transactions will be gradually liberalized, and specific measures will be formulated separately.
Brite Semiconductor (Shanghai) Co., Ltd. ***Is the highest authority of a foreign-funded enterprise still the board of directors?
Legal Summary:
The Regulations for the Implementation of the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, which came into force, stipulate that the board of directors is the highest authority of a joint venture and decides all major issues of the joint venture.
The Foreign Investment Law of the People's Republic of China came into effect on January 1, 2020, and the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-Funded Enterprises, and the Law of the People's Republic of China on Chinese-Foreign Cooperative Joint Ventures are repealed at the same time. organizational structure, etc., and handle the change of registration in accordance with law, and may also continue to retain the original organizational form and organizational structure of the enterprise.
Disclosures:
1) From January 2020 to February 2021, the board of directors is the highest authority, and SMIC has no control over the board of directors of Brite Limited.
According to the Articles of Association and its amendments in effect at that time, the Board of Directors was the highest authority of Brite Limited from January 2020 to the stage of changing Brite Limited as a whole to the stage of share ***.
According to the provisions of Article 6 of the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures (hereinafter referred to as the "Sino-Foreign Equity Joint Venture Law") in force at that time, "a joint venture shall establish a board of directors, the composition of which shall be determined in the contract and articles of association through consultation between the parties to the joint venture, and shall be appointed and replaced by the parties to the joint venture." The chairman and vice chairman of the board of directors shall be determined by the parties to the joint venture through consultation or elected by the board of directors. If one of the Chinese and foreign joint ventures serves as the chairman of the board, the other party shall serve as the vice chairman. The Board of Directors decides on the major issues of the joint venture on the basis of the principle of equality and mutual benefit. The functions and powers of the board of directors are to discuss and decide on all major issues of the joint venture in accordance with the articles of association of the joint venture: enterprise development plan, production and operation activity plan, income and expenditure budget, profit distribution, labor wage plan, business closure, as well as the appointment or employment of the general manager, deputy general manager, chief engineer, chief accountant and auditor, as well as their powers and benefits. ”
According to Article 30 of the Regulations for the Implementation of the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, which was in force at that time, "the board of directors is the highest authority of the joint venture and decides all major issues of the joint venture. ”
As a Sino-foreign joint venture, Brite Co., Ltd.'s articles of association comply with the provisions of the Sino-Foreign Equity Joint Venture Law, which are analyzed as follows:
In summary, the provisions of Brite Limited's articles of association were in line with the provisions of the Law on Sino-Foreign Equity Joint Ventures in force at that time.
On January 1, 2020, the Foreign Investment Law of the People's Republic of China came into effect, and the Law on Sino-Foreign Equity Joint Ventures was repealed, but according to Article 44 of the Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China, "according to Article 44 of the Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China, which came into effect on January 1, 2020, before the implementation of the Foreign Investment Law, the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-Funded Enterprises, and the Law of the People's Republic of China on Foreign-Funded Enterprises Within 5 years after the implementation of the Foreign Investment Law, a foreign-invested enterprise established by the Law of the People's Republic of China on Chinese-Foreign Cooperative Joint Ventures may, in accordance with the provisions of the Company Law of the People's Republic of China, the Partnership Enterprise Law of the People's Republic of China and other laws, adjust its organizational form and organizational structure, and go through the change of registration in accordance with the law, and may also continue to retain the original organizational form and organizational structure. ”
Within 5 years after the implementation of the Foreign Investment Law of the People's Republic of China, the original Sino-foreign joint venture may continue to retain the original organizational form and structure. Accordingly, the Company has maintained the Board of Directors as the supreme authority from the implementation of the Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China on January 1, 2020 to February 2021, when it was changed to a joint-stock company as a whole, in accordance with the provisions of the above-mentioned laws and regulations.
Therefore, from August 2017 to the stage when the company as a whole was transformed into a joint-stock company, Brite Limited's organizational form and structure complied with the provisions of the Law on Sino-Foreign Equity Joint Ventures and the Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China. At this stage, Brite has never convened a shareholders' meeting, and the highest authority is the board of directors, and all major decisions of Brite are made by the board of directors, and the board of directors, as the highest authority of Brite Limited, complies with the law.
Link Regulations:
Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China(Effective January 1, 2020).
Article 44Foreign-invested enterprises established in accordance with the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-Funded Enterprises, and the Law of the People's Republic of China on Chinese-Foreign Cooperative Joint Ventures (hereinafter referred to as "existing foreign-invested enterprises") established before the implementation of the Foreign Investment Law may adjust their organizational forms in accordance with the provisions of the Company Law of the People's Republic of China, the Partnership Enterprise Law of the People's Republic of China and other laws within 5 years after the implementation of the Foreign Investment Law. organizational structure, etc., and handle the change of registration in accordance with law, and may also continue to retain the original enterprise organizational form, organizational structure, etc.
From January 1, 2025, the market regulation departments will not handle other registration matters applied for by existing foreign-invested enterprises that have not adjusted their organizational forms and structures in accordance with the law and changed their registrations, and will publicize the relevant circumstances.
Fujian Tietuo Machinery Co., Ltd. ***The commercial justification of entering into two sales contracts for the same equipment
Legal Summary:
Under the financial leasing model, the end customer and the issuer first sign a sales contract to ensure that the transaction can be carried outThe parties then confirm whether to use the financial leasing method for settlement, and if the financial leasing method is agreed to be adopted through negotiation, the issuer, the end customer and the financial leasing company shall sign a tripartite sales contract according to the requirements of the financial leasing model.
As far as the issuer and the end customer are concerned, the tripartite sales contract and the original sales contract are the main contract and supplementary agreement, and the rights and obligations of both parties are changed and supplementedAs far as the issuer, the end customer and the financial leasing company are concerned, only the provisions of the tripartite sales contract shall prevail. The above-mentioned model is in line with the practice of the financial leasing industry and is reasonable.
Disclosures:
1.3. Explain the commercial reasonableness of the issuer signing a sales contract with the end customer and a tripartite sales contract with the financial leasing company and the end customer under the financial leasing model, that is, signing two sales contracts for the same equipment.
1) Under the financial leasing model, the parties sign the contract.
The financial leasing business model includes direct leasing, sale-leaseback, entrusted leasing and other forms, and the issuer realizes sales business through financial leasing, and the financial leasing company adopts the direct leasing model, which is one of the more common main models in the financial leasing industry. Under the direct leasing model, there is a sequence of commercial negotiations and contract signing between the parties, as follows: first, the end customer and the issuer conduct commercial negotiations (at this time, the financial leasing company does not intervene in the transaction), and after the two parties determine the configuration of the sales equipment, the issuer and the end customer sign an equipment sales contract, and the contract stipulates two ways for the payment of equipment: one is that the financial lease is not used to pay for the equipment (the parties have not reached a consensus on the financing terms, If the financial leasing company fails to approve the loan and other reasons), it will continue to perform in accordance with the equipment sales contract signed between the issuer and the end customer and the agreed payment methodSecond, if the financial lease is used to pay for the equipment, the end customer shall pay the equipment payment in accordance with the financial lease. After the contract between the issuer and the customer is signed, the end customer and the financial leasing company negotiate the financial lease settlement matters, and if the agreement is reached, the issuer, the financial leasing company and the end customer will sign a tripartite sales contract according to the financial leasing method, and the financial leasing company and the end customer will sign the financial lease contract and make payment accordingly. The specific business process and contract signing are as follows:
1. The issuer signs a sales contract with the end customer.
The issuer obtains the equipment procurement needs of the end customer through market development, conducts business negotiations with the end customer, negotiates and determines the configuration of the equipment, delivery conditions, payment methods and other specific conditions, and the two parties sign a sales contract.
2. The issuer signs a tripartite sales contract with the financial leasing company and the end customer.
If the end customer intends to pay the purchase price by means of financial leasing settlement according to its own capital arrangement and financing cost considerations, it shall negotiate with the financial leasing company after signing the sales contract with the issuer. According to the Interim Measures for the Supervision and Administration of Financial Leasing Companies (CBIRC [2020] No. 22), under the direct leasing model in financial leasing business, the financial leasing company shall be the buyer of the equipment, enjoy the ownership of the equipment, and lease the equipment to the end customer after purchase. Therefore, the issuer, the financial leasing company and the end customer need to sign a tripartite sales contract, in which the issuer is the seller of the equipment, the financial leasing company is the buyer, and the end customer is the lessee.
3. The financial leasing company signs a financial leasing contract with the end customer.
2) The relationship between the sales contract and the tripartite sales contract.
According to the chronological order of the signing of the sales contract and the tripartite sales contract, the signing entity and the content of the contract, the sales contract is signed first, the tripartite sales contract is signed later, and the issuer and the end customer are the subjects of the two contractsIf the financial leasing company is the first to sign the tripartite sales contract, and if the rights and obligations of the financial leasing company are involved, all parties shall prevail in the tripartite sales contract. At the same time, the tripartite sales contract has clearly stipulated: "If the issuer and the end customer sign other relevant contracts due to the purchase of equipment, and the relevant contract is inconsistent with the tripartite sales contract, the tripartite sales contract shall prevail."If there is no agreement in the tripartite sales contract, the issuer and the end customer shall execute it in accordance with the original relevant contract. ”
The reason for signing the two contracts is mainly based on the certainty of the transaction between the issuer and the end customer and the customer's own financing needs, the issuer and the end customer sign the sales contract to determine the transaction in advance, so as to facilitate the subsequent production and operation arrangements of both parties, the issuer can plan production and purchase raw materials in accordance with the sales contract, and the end customer can plan the deposit and production land planning according to the sales contract. The Interim Measures for the Supervision and Administration of Financial Leasing Companies and other provisions only affect the payment method and do not affect the certainty of the transaction.
To sum up, the legal effect of the sales contract and the tripartite sales contract is clear, and if it involves the rights and obligations of the issuer, the end customer and the financial leasing company, it shall be performed in accordance with the tripartite sales contract, and if it involves the rights and obligations of both parties between the issuer and the end customer, if there is an agreement in the tripartite sales contract, the agreement in the tripartite sales contract shall prevail, and if there is no agreement, it shall be performed in accordance with the sales contract. The ownership of the equipment sold by the issuer belongs to the financial leasing company, and there is no dispute or dispute over the ownership of such equipment, and there is no situation of "one thing for two sales".
3) The signing of sales contracts and tripartite sales contracts is in line with the practice of the financial leasing industry.
Link Regulations:
Interim Measures for the Supervision and Administration of Financial Leasing Companies(Effective May 26, 2020).
Article 2The term "financial leasing company" in these measures refers to a limited liability company or shares engaged in financial leasing business, excluding financial leasing companies).
The term "financial leasing business" in these measures refers to the transaction activities in which the lessor purchases the leased object from the seller according to the lessee's choice of the seller and the leased object, provides it to the lessee for use, and the lessee pays the rent.
Article 14The financial leasing company shall legally obtain the ownership of the leased property.