Global M & A – Know the differences btw PRC and foreign company law

• Date: 05 June 2019
• Published date: 05 June 2019
• Author: Yong Kaichang,Jackie Yu
• Subject Matter: International Economic Law

2020/11/4 Global M&A – Know the differences btw PRC and foreign company law | China Law Insight

https://www.chinalawinsight.com/2019/06/articles/corporate-ma/global-ma-know-the-differences-btw-prc-and-foreign-company-law/# 1/9

CHINA LAW INSIGHT

Global M&A – Know the differences btw PRC and

foreign company law

By King & Wood Mallesons on June 5, 2019

By Yong Kaichang, Jackie Yu

In today’s global corporate world, many conglomerates have complex and layered

shareholding structures with multiple entities in various jurisdictions. Each entity must

function as part of a cohesive whole within the larger global group, but will still be

governed by company laws or other laws of its respective local jurisdiction. In international

M&A deals, parties sometimes approach the corporate governance of a foreign entity

(and correspondingly, negotiations of shareholders agreements, joint venture agreements

and other matters) by using principles and concepts that they are familiar with in their

domestic jurisdiction.

These cultural differences can cause misunderstandings, complicate negotiations, and

create friction during post-completion integration. In this article, we briefly compare some

key differences between PRC companies and common law companies.[1]

Types of Companies

In common law jurisdictions, companies commonly seen in the corporate world are either

private companies limited by shares or public companies limited by shares. Companies

can also take other less common forms such as: (a) private unlimited companies with a