Chinese Company Law Amendment: Impact on Dispute Resolution

A Practice Note discussing the impact of the revised Company Law of the People's Republic of China (PRC) on matters from the angle of dispute resolution. The Note highlights contentious issues surrounding heightened shareholder liabilities on company capital adequacy, and major changes to shareholders' rights, such as the shareholder information right, share redemption right, double derivative actions, and forfeiture of shareholders' rights. It also addresses key issues arising from the changes to the corporate governance regime, such as matters concerning the resignation and removal of legal representative, the duty of loyalty and diligence, the controlling shareholders' heightened liabilities, and the use of audit committee as an alternative to the board of supervisors. Unless specifically stated otherwise, the changes discussed in the Note apply to both limited liability companies (LLCs) and companies limited by shares (CLSs, also known as joint-stock companies).