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Merger and Restructuring

Withdrawal of foreign clients(Please refer to the cancellation of company liquidation services)

①Withdrawal of foreign clients(Please refer to the cancellation of company liquidation services)

Merger

②Merger

Merger refers to one or more enterprises transfer all the assets and liabilities to another existing or newly established enterprise, the shareholders of the merged enterprise exchange for the equity of the merging enterprise, to achieve the legal merger of two or more enterprises.

Due to the demand of business development, enterprises may consider merging companies within the group or acquiring companies outside the group, to achieve integration of resources and cost-saving effect.

 General procedures
  • The consent of other shareholders when the merging or merged enterprise is a joint venture;
  • The Agreement of Merger and the Resolution of Board;
  • Opinions on the merged enterprise’s application with the original approval authority for consolidation and dissolution;
  • Submission to the original approval authority (Foreign Trade and Economy Bureau) for the preliminary approval of merger;
  • Announcement on the newspapers (after the preliminary approval) and notification to the creditors;
  • Submission to the original approval authority (Foreign Trade and Economy Bureau) for the second approval;
  • The change registration of the surviving enterprise at the industry and commerce department, the tax bureaus, the customs and other government departments after the final approval;
  • The cancellation and liquidation of the merged enterprise after the final approval.
 Precautions
  • Whether the merger could obtain the approval from relevant government departments or not;
  • Carry-over of tax-free equipment (if any);
  • Carry-over of surplus materials under handbook of processing trade (if any);
  • Whether the Corporate Income Tax applies to special tax treatment or not;
  • The pricing of assets after the merger;
  • The original tax preferences and losses make up of the merged enterprise;
 Our services 
  • Pre-merger analysis (e.g. relevant attentions, specific procedures, possibility of applying special tax treatment)
  • Tax health check on the merged enterprise;
  • Application for merger (including the establishment of the new company when consolidation, the change procedures of the merging party and the cancellation procedures of the merged party)
  • Filing of special tax treatment;
  • Consulting services during the merger.
Equity transfer

③Equity transfer

Equity transfer refers to the transaction that an enterprise purchases the equity of another enterprise in order to achieve the control of the acquired enterprise. The form of payment by the acquiring enterprise includes equity payment, non-equity payment or both.

Due to restructuring and other business purposes, enterprises may consider setting a holding company to re-hold part of the subsidiaries in China or equity acquisition / transfer with companies outside the group.

 General procedures (when both the transferor and the transferee are foreign-invested enterprises)
  • The consent of other shareholders when the acquiring enterprise or acquired enterprise is a joint venture;
  • The Resolution of Board and the Agreement on Equity Transfer;
  • Submission to the original approval authority (Foreign Trade and Economy Bureau) for the equity transfer application;
  • The procedures of equity change at the industry and commerce department;
  • The procedures of equity change and tax payment at the in-charge tax bureau;
  • The procedures of equity change at the quality supervision department, the finance department, the customs, the administration of foreign exchange and other departments if required.
 Precautions 
  • The determination of equity transfer price: evaluated price, net assets;
  • Whether the net assets contain undistributed profit or not;
  • Whether the Corporate Income Tax applies to special tax treatment or not;
  • The need of listing trade when involving China’s state-owned assets;
  • The pre-emption right of the joint venture party of the joint venture enterprise.
 Our services
  • Analysis before equity transfer (e.g. relevant attentions, specific procedures, possibility of applying special tax treatment)
  • Application for equity change;
  • Filing of special tax treatment;
  • Consulting services during the equity transfer.
Asset acquisition

④Asset acquisition

Asset acquisition refers to the transaction that an enterprise (hereinafter referred to as “the transferee enterprise”) purchases the substantially operating assets of another enterprise (hereinafter referred to as “the transferor enterprise”).The form of payment by the transferee enterprise includes equity payment, non-equity payment or both.

Due to the need by operating activities and other business purposes, enterprises may consider purchasing the assets of other enterprises to rapidly obtain required resources.

 General procedures 
  • The consent of other shareholders when the acquiring or acquired enterprise is a joint venture;
  • The Resolution of Board and the Agreement on Asset Transfer;
  • The payment by the transferee enterprise;
  • The transferor enterprise transfers assets to the transferee enterprise, declares and pays related China taxes.
 Precautions
  • If the asset acquisition involves technology import and export, the technology import and export registration at the local science and technology department is required;
  • If the asset acquisition involves the physical assets import, the payment of related import taxes (including tariff, VAT, consumption tax if applicable, etc.) is required;
  • Under general circumstance, if the asset transfer generates income from China, the transferor needs to pay Corporate Income Tax / Withholding Income Tax (if the transferor is a non-resident enterprise) in China. Turnover tax. As for turnover tax, if the asset transfer is regarded to be the taxable transfer according to China’s regulations on turnover tax, the transferor should pay the VAT, or the business tax and related additional taxes in China based on the property of the underlying assets. In addition, the asset transfer contract is generally subject to stamp tax.
 Our services
  • Analysis before assets transfer (e.g. relevant attentions, specific procedures, possibility of applying special tax treatment)
  • Filing of special tax treatment;
  • Consulting services during the asset transfer.
Debt restructuring

⑤Debt restructuring

Debt restructuring refers to the transaction that, when financial difficulties occur to the debtor, the creditor makes some concessions on the debt in accordance with a written agreement reached with the debtor or the court orders.

 General procedures 
  • The consent of other shareholders when the acquiring or acquired enterprise is a joint venture;
  • The Resolution of Board and the Agreement on Debt Restructuring;
  • The implement of the Agreement on Debt Restructuring;
  • Both sides of debt restructuring declare and pay related China taxes (if applicable) as required;
 Our services 
  • Analysis before debt restructuring (e.g. relevant attentions, specific procedures, possibility of applying special tax treatment)
  • Filing of special tax treatment;
  • Consulting services during the debt restructuring.