Monthly Archives: March 2015

Dangerous To Be the Head of Your PRC Company? (Part II)

Following the article last week, we will continue to discuss “How Much” potential legal responsibilities management personnel in charge of a PRC company may face.

What Types of Liabilities?

Generally speaking, “Person(s) in Charge” and/or “Person(s) Directly Responsible” may be held personally liable for the company’s breach of the mandatory legal requirements under the relevant administrative regulations or even the PRC Criminal Law. The specific liabilities depend on the nature of the violation and the seriousness of the consequences and may generally include the following:-

Dangerous To Be the Head of Your PRC Company? (Part I)

When the U.S. headquarter is enthusiastic about penetrating to the PRC’s seemingly lucrative market, you as a senior manager may in one day be asked to take a role in charge of the proposed PRC company. Not everybody is excited about being a regional boss as he or she may be told that such role means substantial personal risks and liabilities.


In the Beginning


On May 6, 1964, Berkshire Hathaway, then run by a man named Seabury Stanton, sent a letter to its shareholders offering to buy 225,000 shares of its stock for $11.375 per share. I had expected the letter; I was surprised by the price.

1964年5月6日,当时由 Seabury Stanton经营的伯克希尔哈撒韦向股东发出了一封信,提出以11.375美元/股的价格购买225,000股伯克希尔的股票。我猜到了这个信件,但却为价格感到惊讶。

PRC litigation proceedings

Nobody likes disputes just as nobody likes tax and death. However, disputes arising from business operation are inevitable in the long run, just like tax and death as well. This is especially true when you have substantive operation in China. You may find a statement of claims from your Chinese business partners plus summons from a PRC court on your desk before you realize things should have been better planned.

Therefore, unless you have previous consent written agreement on the dispute resolution mechanism (such as to submit the disputes to arbitration), it is advisable to know the basic procedural aspects of PRC court litigation proceedings in terms of its cost, time and burden. The following is exactly the brief summary of the same: