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中国＿＿公司代表 ＿＿国＿＿公司代表
【名称】 7. THE CONTRACT FOR SINO-FOREIGN EQUITY JOINT VENTURE
【题注】
【章名】 Whole Doc.
【章名】 Chapter 1 General Provisions
In accordance with the Law of the People's Republic of China on Joint
Ventures Using Chinese and Foreign Investment (the "Joint Venture Law")
and other relevant Chinese laws and regulations, __________Company and
___________ Company, in accordance with the principle of equality and
mutual benefit and through friendly consultations, agree to jointly invest
to set up a joint venture enterprise in ________of the People's Republic
of China.
【章名】 Chapter 2 Parties of the Joint Venture
Article 1
Parties to this contract are as follows: ___________Company (
hereinafter referred to as Party A), registered with __________ in China,
and its legal address is at ___________ (street) __________ (district)
___________ (city) ___________China.
Legal representative: Name:
Position:
Nationality:
__________Company (hereinafter referred to as Party B), registered
with __________. Its legal address at ___________.
Legal representative: Name:
Position:
Nationality:
(Note: In case there are more than two investors, they will be called
Party C,D...in proper order).
【章名】 Chapter 3 Establishment of the Joint Venture Company
Article 2
In accordance with the Joint Venture Law and other relevant Chinese
laws and regulations, both parties of the joint venture agree to set up
_____________joint venture limited liability company ( hereinafter
referred to as the joint venture company).
Article 3
The name of the joint venture company is __________Limited Liability
Company.
The name in foreign language is __________.
The legal address of the joint venture company is at __________street
___________(city)___________ province.
Article 4
All activities of the joint venture company shall be governed by the
laws, decrees and pertinent rules and regulations of the People's Republic
of China.
Article 5
The Organization form of the joint venture company is a limited
liability company. Each party to the joint venture company is liable to
the joint venture company within the limit of the capital subscribed by
it. The profits, risks and losses of the joint venture company shall be
shared by the parties in proportion to their contributions to the
registered capital.
【章名】 Chapter 4 The Purpose, Scope and Scale of Production and Business
Article 6
The goals of the parties to the joint venture are to enhance economic
co-operation technical exchanges, to improve the product quality, develop
new products, and gain a competitive position in the world market in
quality and price by adopting advanced and appropriate technology and
scientific management methods, so as to raise economic results and ensure
satisfactory economic benefits for each investor.
(Note: This article shall be written according to the specific
situations in the contract).
Article 7
The productive and business scope of the joint venture company is to
produce __________ products; provide maintenance service after the sale of
the products; study and develop new products.
(Note: It shall be written in the contract according to the specific
conditions).
Article 8
The production scale of the joint venture company is as follows:
1. The production capacity after the joint venture is put into
operation is __________.
2. The production scale may be increased up to ____________ with the
development of the production and operation. The product varieties may be
developed into ___________.
(Note: It shall be written according to the specific situation).
【章名】 Chapter 5 Total Amount of Investment and the Registered Capital
Article 9
The total amount of investment of the joint venture company is RMB
___________ (or a foreign currency agreed upon by both parties).
Article 10
Investment contributed by the parties is Renminbi __________, which
will be the registered capital of the joint venture company.
Of which: Party A shall pay ____________ Yuan, accounting for
__________%; Party B shall pay ___________Yuan, accounting for
__________%.
Article 11
Both Party A and Party B will contribute the following as their
investment:
Party A: cash __________Yuan
machines and equipment __________Yuan
premises __________Yuan
the right to the use of the site __________Yuan
industrial property __________Yuan
others __________ Yuan, __________ Yuan in all.
Party B: cash __________Yuan
machines and equipment __________Yuan
industrial property __________Yuan
others __________Yuan, __________Yuan in all.
(Note: When contributing capital goods or industrial property as
investment, Party A and Party B shall conclude a separate contract to be a
part of this main contract).
Article 12
The registered capital of the joint venture company shall be paid in
___________ installments by Party A and Party B according to their
respective proportion of their investment.
Each installment shall be as follows:
(Note: it shall be written according to the concrete conditions).
Article 13
In case any party to the joint venture intends to assign all or part
of his investment subscribed to a third party, consent shall be obtained
from the other party to the joint venture, and approval from the
examination and approval authority is required.
When one party to the joint venture assigns all or part of his
investment, the other party has preemptive right.
【章名】 Chapter 6 Responsibilities of Each Party to the Joint Venture
Article 14
Party A and Party B shall be respectively responsible for the
following matters:
Responsibilities of Party A:
Handling of applications for approval, registration, business license
and other matters concerning the establishment of the joint venture
company from relevant departments in charge of China;
Processing the application for the right to the use of a site to the
authority in charge of the land;
Organizing the design and construction of the premises and other
engineering facilities of the joint venture company;
Providing cash, machinery and equipment and premises ... in accordance
with the provisions of Article 11;
Assisting Party B to process import customs declaration for the
machinery and equipment contributed by Party B as investment and arranging
the transportation within the Chinese territory;
Assisting the joint venture company in purchasing or leasing
equipment, materials, raw materials, articles for office use, means of
transportation and communication facilities etc.;
Assisting the joint venture company in contacting and settling the
fundamental facilities such as water, electricity, transportation etc.;
Assisting the joint venture in recruiting Chinese management
personnel, technical personnel, workers and other personnel needed;
Assisting foreign workers and staff in applying for entry visas, work
licenses and handling their travel procedures;
Responsible for handling other matters entrusted by the joint venture
company.
Responsibilities of Party B:
Providing cash, machinery and equipment, industrial property ... in
accordance with the provisions of Article 11, and responsible for shipping
capital goods such as machinery and equipment etc. contributed as
investment to a Chinese port;
Handling the matters entrusted by the joint venture company, such as
selecting and purchasing machinery and equipment outside China, etc.;
Providing necessary technical personnel for installing, testing and
trial production of the equipment as well as the technical personnel for
production and inspecting;
Training the technical personnel and workers of the joint venture
company;
In case Party B is the licensor, it shall be responsible for the
stable production of qualified products of the joint venture company in
the light of design capacity within the specified period;
Responsible for other matters entrusted by the joint venture company.
(note: It shall be written according to the specific situation).
【章名】 Chapter 7 Transfer of Technology
Article 15
Both Party A and Party B agree that a technology transfer agreement
shall be signed between the joint venture company and Party B (or a third
party) so as to obtain advanced production technology needed for realizing
the production and operation purpose and the production scale specified in
Chapter 4 of the contract, including product design, manufacturing
technology, means of testing, materials prescription, standard of quality
and the training of personnel etc.
(Note: It shall be written in the contract according to the concrete
conditions).
Article 16
Party B offers the following guarantees on the transfer of technology:
(Note: Article applies only when Party B is responsible for
transferring technology to the joint venture company).
1. Party B guarantees that the overall technology such as the
designing, manufacturing technology, technological process, tests and
inspection of products (Note: The name of the products shall be written)
provided to the joint venture company must be integrated, precise and
reliable. It is to meet the requirement of the joint venture's operation
purpose, and be able to obtain the standard of production quality and
production capacity specified in the contract;
2. Party B guarantees that the technology specified in this contract
and the technology transfer agreement shall be fully transferred to the
joint venture company, and pledges that the provided technology should be
truly advanced among the same type of technology produced by Party B, the
model, specification and quality of the equipment are excellent and it is
to meet the requirement of technological operation and practical usage;
3. Party B shall work out a detailed list of the provided technology
and technological service at various stages as specified in the technology
transfer agreement to be an appendix to the contract, and guarantee its
performance;
4. The drawings, technological conditions and other detailed
information are part of the transferred technology and shall be provided
on time;
5. During the term of the technology transfer agreement, Party B shall
provide the joint venture company with any improvements in the technology
and the improved information and technological materials in time, and
shall not charge separate fees;
6. Party B shall guarantee that the technical personnel and the
workers in the joint venture company can master all the technology
transferred within the period specified in the technology transfer
agreement.
Article 17
In case Party B fails to provide equipment and technology in
accordance with the provisions of this contract and the technology
transfer agreement or in case any deceiving or concealing actions are
found, Party B shall be responsible for compensating the direct losses to
the joint venture company.
Article 18
The technology transfer fee shall be paid in royalties. The royalty
rate shall be ___________% of the net sales value of the products.
The term for royalty payment is the same as the term for the
technology transfer agreement specified in Article 19 of this contract.
Article 19
The term for the technology transfer agreement signed by the joint
venture company and Party B is ___________ years. After the expiration of
the technology transfer agreement, the joint venture company shall have
the right to use, research and develop the imported technology
continuously.
(Note: The term for a technology transfer agreement is generally no
longer than 10 years, and it shall be approved by the Ministry of Foreign
Trade and Economic Cooperation or other examination and approval
authorities entrusted by the Ministry of Foreign Trade and Economic
Cooperation).
【章名】 Chapter 8 Selling of Products
Article 20
The products of joint venture company will be sold both on the Chinese
and the overseas market, the export portion accounts for __________%,
__________% for the domestic market.
(Note: An annual percentage and amount for outside and domestic
selling will be written out according to practical situations, in normal
conditions, the amount for export shall at least meet the needs of foreign
exchange expenses of the joint venture company).
Article 21
Products may be sold on overseas markets through the following
channels:
The joint venture company may directly sell its products on the
international market, accounting for ___________%.
The joint venture company may sign sales contracts with Chinese
foreign trade companies, entrusting them to be the sales agencies or
exclusive sales agencies, accounting for __________%.
The joint venture company may entrust Party B to sell its products,
accounting for ______________%.
Article 22
The joint venture's products to be sold in China may be handled by the
Chinese materials and commercial departments by means of agency or
exclusive sales, or may be sold by the joint venture company directly.
Article 23
In order to provide maintenance service to the products sold both in
China or abroad, the joint venture company may set up sales branches for
maintenance service both in China or abroad subject to the approval of the
relevant Chinese department.
Article 24
The trade mark of the joint venture's products is __________.
【章名】 Chapter 9 The Board of Directors
Article 25
The date of registration of the joint venture company shall be the
date of the establishment of the board of directors of the joint venture
company.
Article 26
The board of directors is composed of __________directors, of which
___________shall be appointed by Party A, _________by Party B. The
chairman of the board shall be appointed by Party A, and its vice-chairman
by Party B. The term of office for the directors, chairman and
vice-chairman is four years, their term of office may be renewed if
continuously appointed by the relevant party.
Article 27
The highest authority of the joint venture company shall be its board
of directors. It shall decide all major issues (Note: The main contents
shall be listed in the light of Article 36 of the Implementing Regulations
for the Joint Venture Law) concerning the joint venture company. Unanimous
approval shall be required for any decisions concerning major issues. As
for other matters, approval by majority or a simple majority shall be
required.
(Note: It shall be explicitly set out in the contract).
Article 28
The chairman of the board is the legal representative of the joint
venture company. Should the chairman be unable to exercise his
responsibilities for any reason, he shall authorize the vice- chairman or
any other directors to represent the joint venture company temporarily.
Article 29
The board of directors shall convene at least one meeting every year.
The meeting shall be called and presided over by the chairman of the
board. The chairman may convene an interim meeting based on a proposal
made by more than one third of the total number of directors. Minutes of
the meetings shall be placed on file.
【章名】 Chapter 10 Business Management Office
Article 30
The joint venture company shall establish a management office which
shall be responsible for its daily management. The management office shall
have a general manager, appointed by Party _______, _______ deputy general
managers, _______by Party ______; _______by Party ________. The general
manager and deputy general managers whose terms of office is ________
years shall be appointed by the board of directors.
Article 31
The responsibility of the general manager is to carry out the
decisions of the board and organize and conduct the daily management of
the joint venture company. The deputy general managers shall assist the
general manager in his work.
Several department managers may be appointed by the management office,
they shall be responsible for the work in various departments
respectively, handle the matters handed over by the general manager and
deputy general managers and shall be responsible to them.
Article 32
In case of graft or serious dereliction of duty on the part of the
general manager and deputy general managers, the board of directors shall
have the power to dismiss them at any time.
【章名】 Chapter 11 Purchase of Equipment
Article 33
In its purchase of required raw materials, fuel, parts, means of
transportation and articles for office use, etc., the joint venture
company shall give first priority to purchase in China where conditions
are the same.
Article 34
In case the joint venture company entrusts Party B to purchase
equipment on the overseas market, persons appointed by the Party A shall
be invited to take part in the purchasing.
【章名】 Chapter 12 Preparation and Construction
Article 35
During the period of preparation and construction, a preparation and
construction office shall be set up under the board of directors. The
preparation and construction office shall consist of _________ persons,
among which ________ persons will be from Party A, _______ persons from
Party B. The preparation and construction office shall have one manager
recommended by Party _________, and one deputy manager by Party ________.
The manager and deputy manager shall be appointed by the board of
directors.
Article 36
The preparation and construction office is responsible for the
following concrete works: examining the designs of the project, signing
the project construction contract, organizing the purchase and inspection
of related equipment, materials, etc., working out the general schedule of
project construction, compiling the expenditure plans, controlling project
financial payments and final accounts of the project, drawing up
managerial methods and keeping and filing documents, drawings, files and
materials, etc., during the construction period of the project.
Article 37
A technical group with several technical personnel appointed by Party
A and Party B shall be organized. The group, under the leadership of the
preparation and construction office, is in charge of the examination,
supervision, inspection, testing, checking and accepting, and performance
checking of the project design, the quality of the project, the equipment
and materials and the imported technology.
Article 38
After approval by both parties, the establishment, remuneration and
the expenses of the staff of the preparation and construction office shall
be covered in the project budget.
Article 39
After having completed the project and finished the turning over
procedures, the preparation and construction office shall be dissolved
upon the approval of the board of directors.
【章名】 Chapter 13 Labor Management
Article 40
Labor contract covering the recruitment, employment, dismissal and
resignation, wages, labor insurance, welfare, rewards, penalties and other
matters concerning the staff and workers of the joint venture company
shall be drawn up between the joint venture company and the trade union of
the joint venture company as a whole, or the individual employees in the
joint venture company as a whole or individual employees in accordance
with the Regulations of the People's Republic of China on Labor Management
in Joint Ventures Using Chinese and Foreign Investment and its
Implementing Rules.
The labor contracts shall, after being signed, be filed with the local
labor management department.
Article 41
The appointment of high-ranking administrative personnel recommended
by both parties, their salaries, social insurance, welfare and the
standard of travelling expenses etc. shall be decided by the meeting of
the board of directors.
【章名】 Chapter 14 Taxes, Finance and Audit
Article 42
The joint venture company shall pay taxes in accordance with the
provisions of Chinese laws and other relative regulations.
Article 43
Staff members and workers of the joint venture company shall pay
individual income tax according to the Individual Income Tax Law of the
People's Republic of China.
Article 44
Allocations for reserve funds, expansion funds of the joint venture
company and welfare funds and bonuses for staff and workers shall be set
aside in accordance with the provisions of the Joint Venture Law. The
annual proportion of allocations shall be decided by the board of
directors according to the business situation of the joint venture
company.
Article 45
The fiscal year of the joint venture company shall be from January 1
to December 31. All vouchers, receipts, statistic statements and reports
shall be written in Chinese.
(Note: A foreign language can be used concurrently with mutual
consent).
Article 46
Financial checking and examination of the joint venture company shall
be conducted by an auditor registered in China and reports shall be
submitted to the board of directors and the general manager.
In case Party B considers it necessary to employ a foreign auditor
registered in another country to undertake annual financial checking and
examination, Party A shall give its consent. All the expenses thereof
shall be borne by Party B.
Article 47
In the first three months of each fiscal year, the manager shall
prepare the previous year's balance sheet, profit and loss statement and
proposal regarding the disposal of profits, and submit them to the board
of directors for examination and approval.
【章名】 Chapter 15 Duration of the Joint Venture
Article 48
The duration of the joint venture company is ___________ years. The
establishment date of the joint venture company shall be the date on which
the business license of the joint venture company is issued.
An application for the extension of the duration, proposed by one
party and unanimously approved by the board of directors, shall be
submitted to the Ministry of Foreign Trade and Economic Cooperation (or
the examination and approval authority entrusted by it) six months prior
to the expiry date of the joint venture.
【章名】 Chapter 16 The Disposal of Assets after the Expiration of the Duration
Article 49
Upon the expiration of the duration, or termination before the date of
expiration of the joint venture, liquidation shall be carried out
according to the relevant laws. The liquidated assets shall be distributed
in accordance with the proportion of investment contributed by Party A and
Party B.
【章名】 Chapter 17 Insurance
Article 50
Insurance policies of the joint venture company on various kinds of
risks shall be underwritten with the People's Republic of China. Types,
value and duration of insurance shall be decided by the board of directors
in accordance with the provisions of the People's Insurance Company of
China.
【章名】 Chapter 18 The Amendment, Alteration and Termination of the Con- tract
Article 51
The amendment of the contract or other appendices shall come into
force only after a written agreement has been signed by Party A and Party
B and approved by the original examination and approval authority.
Article 52
In case of inability to fulfil the contract or to continue operation
due to heavy losses in successive years as a result of force majeure, the
duration of the joint venture and the contract shall be terminated before
the time of expiration after being unanimously agreed upon by the board of
directors and approved by the original examination and approval authority.
Article 53
Should the joint venture company be unable to continue its operation
or achieve its business purpose due to the fact that one of the
contracting parties fails to fulfil the obligations prescribed by the
contract and articles of association, or seriously violates the provisions
of the contract and articles of association, that party shall be deemed to
have unilaterally terminated the contract. The other party shall have the
right to terminate the contract in accordance with the provisions of the
contract after approval by the original examination and approval
authority, and to claim damages. In case Party A and Party B of the joint
venture company agree to continue the operation, the party who fails to
fulfil its obligations shall be liable for the economic losses caused
thereby to the joint venture company.
【章名】 Chapter 19 Liability for Breach of Contract
Article 54
should either Party A or Party B fail to pay on schedule the
contributions in accordance with the provisions defined in Chapter 5 of
this contract, the party in breach shall pay to the other party _________%
of the contribution starting from the first month after exceeding the time
limit. Should the party in breach fail to pay after 3 months, __________%
of the contribution shall be paid to the other party, who shall have the
right to terminate the contract and to claim damages from the party in
breach in accordance with the provisions of Article 53 of the contract.
Article 55
Should all or part of the contract and its appendices be unable to be
fulfilled owing to the fault of one party, the party in breach shall bear
the liability therefor. Should it be the fault of both parties, they shall
bear their respective liabilities according to the actual situation.
Article 56
In order to guarantee the performance of the contract and its
appendices, both Party A and Party B shall provide each other with bank
guarantees for performance of the contract.
【章名】 Chapter 20 Force Majeure
Article 57
Should either of the parties to the contract be prevented from
executing the contract by force majeure, such as earthquake, typhoon,
flood, fire, war or other unforeseen events, and their occurrence and
consequences are unpreventable and unavoidable, the prevented party shall
notify the other party by telegram without any delay, and within 15 days
thereafter provide detailed information of the events and a valid document
for evidence issued by the relevant public notary organization explaining
the reason of its inability to execute or delay the execution of all or
part of the contract. Both parties shall, through consultations, decide
whether to terminate the contract or to exempt part of the obligations for
implementation of the contract or whether to delay the execution of the
contract according to the effects of the events on the performance of the
contract.
【章名】 Chapter 21 Applicable Law
Article 58
The formation, validity, interpretation, execution and settlement of
disputes in respect of, this contract shall be governed by the relevant
laws of the People's Republic of China.
【章名】 Chapter 22 Settlement of Disputes
Article 59
Any disputes arising from the execution of, or in connection with, the
contract shall be settled through friendly consultations between both
parties. In case no settlement can be reached through consultations, the
disputes shall be submitted to the Foreign Economic and Trade Arbitration
Commission of the China Council for the Promotion of International Trade
for arbitration in accordance with its rules of procedure. The arbitral
award is final and binding upon both parties.
Or
Any disputes arising from the execution of, or in connection with the
contract shall be settled through friendly consultations between both
parties. In case no settlement can be reached through consultations, the
disputes shall be submitted to __________Arbitration Organization in
__________for arbitration in accordance with its rules of procedure. The
arbitral award is final and binding upon both parties.
Or
Any disputes arising from the execution of, or in connection with the
contract shall be settled through friendly consultations between both
parties. In case no settlement can be settled through consultations, the
disputes shall be submitted for arbitration.
Arbitration shall take place in the defendant's country.
If in China, arbitration shall be conducted by the Foreign Economic
and Trade Arbitration Commission of the China Council for the Promotion of
International Trade in accordance with its rules of procedure.
If in ___________, the arbitration shall be conducted by ___________in
accordance with its rules of procedure.
The arbitral award is final and binding upon both parties.
(Note: When formulating contracts, only one of the above-mentioned
provisions can be used).
Article 60
During the arbitration, the contract shall be observed and enforced by
both parties except for the matters in dispute.
【章名】 Chapter 23 Language
Article 61
The contract shall be written in Chinese and in ___________. Both
language versions are equally authentic. In the event of any discrepancy
between the two aforementioned versions, the Chinese version shall
prevail.
【章名】 Chapter 24 Effectiveness of the Contract and Miscellaneous
Article 62
The appendices drawn up in accordance with the principles of this
contract are integral parts of this contract, including: the project
agreement, the technology transfer agreement, the sales agreement etc.
Article 63
The contract and its appendices shall come into force commencing from
the date of approval of the Ministry of Foreign Trade and Economic
Cooperation of the People's Republic of China (or its entrusted
examination and approval authority).
Article 64
Should notices in connection with any party's rights and obligations
be sent by either Party A or Party B by telegram or telex, etc., the
written letter notices shall be also required afterwards. The legal
addresses of Party A and Party B listed in this contract shall be the
posting addresses.
Article 65
The contract is signed in ___________, China by the authorized
representatives of both parties on __________, __________.
For Party A For Party B
(Signature) (Signature)
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