Restructuring made simpler

In recent years, the Chinese government has attached great importance to the promotion of transforming the economic growth mode and intensifying economic restructuring. It has promulgated a series of rules to implement these policies, including the Opinion on Promoting the Merger and Re-organisation of Enterprises (关于促进企业兼并重组的意见), dated 28 August 2010. As indicated by that document, merger and acquisition transactions for the purpose of restructuring are encouraged and will be supported by the relevant Chinese authorities.

Under Chinese laws, a company must file certain statutory corporate information with its local Administration for Industry and Commerce (AIC), including the company's shareholding structure, business scope, registered capital, corporate governance and etc. In the event such information changes for various reasons, the filing with the AIC must be updated accordingly within the statutory time limits. As the restructuring of a company by merger or split will often trigger a variety of changes to the corporate information filed with the AIC at different stages of the restructuring, it has become a time-consuming and complicated endeavour to update corporate registrations at the AIC. To make things worse, in absence of any clear guidance for handling registration updates for a restructuring company, the AIC itself may sometimes get confused and is thus reluctant to accept and handle applications to update the registered information of a restructuring company.