The Reality of Company Dissolution in China

July 18, 2023 | BY

Susan Mok

Jue Li and Joel Evans of DaHui Lawyers look at the difficulties foreign investors face when divesting from China, in particular those associated with dissolution and non-bankruptcy liquidation.

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Summary

  • One means of exiting a joint venture is through dissolution and liquidation
  • However, the broad nature of the relevant Chinese legal provisions means this route can sometimes be difficult for foreign investors
  • Autonomous dissolution can involve long delays, while court-mandated dissolution in the event of company deadlock often involves numerous legal complications
  • Investors would be wise to think ahead when preparing their shareholders agreements in order to mitigate future difficulties