MON
CONFIDENTIAL
Thus, for holders of preference and loan capital the potential rewards are,
generally speaking, less than for equity but the risks are correspondingly smaller due to the priority of repayment in a winding up and the right (in
most circumstances) to past but unpaid dividends or interest in such a
winding up.
3. HONG KONG EQUITY AND JOINT VENTURE LAW
/Basically like UK law/ /Schroders and FCO to advise/.
4.
CHINESE JOINT VENTURE LAW
China's joint venture law makes certain references to the benefits and
liabilities of joint venture partners which are as follows:
ARTICLE 1 Joint ventures are permitted on the principle of equality and
mutual benefit.
ARTICLE 4
A joint venture shall take the form of a limited liability
company.
ARTICLE 5
In the registered capital of a joint venture the proportion of
the investment contributed by the foreign participants shall
in general not be less than 25 per cent.
The profits, risks and losses of a joint venture shall be shared
by the parties to the venture in proportion to their contributions
to the registered capital.
Each party to the joint venture may contribute cash, capital
goods, industrial property rights etc as its investment to the
venture.
The various contributions shall be specified in the contract
•
and the value of each contribution
(excluding that of the site) shall be ascertained by the parties
to the venture through joint assessment.
4