In The News

SPC Issues 5th Interpretation of Company Law

GC Agenda China

05/30/2019

In the May edition of GC Agenda China, Tim Blakely shared his opinions on the Provisions on Several Issues Concerning the Application of the Company Law of China (V) that was recently issued by the Supreme People's Court. According to Tim: “The fifth interpretation is responsive to the perceived need to better support shareholder rights under Chinese law and practice. Importantly, by clarifying and facilitating the ability to bring a derivative action to challenge connected transactions that harm a company, the fifth interpretation addresses particular challenges faced by minority shareholders. Shareholder rights are promoted more broadly by clarifying the right of shareholders to remove directors (and limiting directors to a remedy in damages), clarifying rules favouring the timely distribution of corporate profits, and encouraging courts to resolve shareholder disputes through mediation on terms that could help avoid the need to dissolve a company.”

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