China’s SPC breaks new ground with draft rules on the PRC Company Law

On 12 April 2016, the Supreme People’s Court of the People’s Republic of China (the “SPC”) published draft rules (“Draft”) on certain aspects of the Company Law of the People’s Republic of China, last amended in 2013 (“PRC Company Law”), for a one-month consultation period.

The Draft provides guidance on certain provisions of the PRC Company Law and housekeeping affairs of PRC companies that have been the subject of legal disputes in recent years, drawing upon various cases and practices of local courts and elevating them into guiding principles for courts nationwide. Key areas covered by the Draft include the validity of shareholders’ and directors’ resolutions, transfers of shares in limited liability companies (not including listed and unlisted joint stock companies), and shareholders’ information and dividend rights.

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