In a cooperative venture, the parties involved
may operate as separate legal entities and bear liabilities
independently rather than as a single entity. A cooperative venture
may also be registered as a limited liability entity resembling an
equity joint venture in operation, structure, and status as a
Chinese legal entity.
There is no minimum foreign contribution required
to initiate a cooperative venture, allowing a foreign company to
take part in an enterprise where they preferred to remain a minor
shareholder. The contributions made by the investors are not
required to be expressed in a monetary value and can include
excluded in the equity joint venture process can be contributed such
as labor, resources, and services. Profits in a cooperative venture
are divided according to the terms of the cooperative venture
contract rather than by investment share, allowing a more flexible
schedule for return on investment in cases where one investor
provides cash while the other party's investment is primarily in
kind.
Greater flexibility in the structuring of a
cooperative venture is also permissible including the structure of
the organization, management, and assets. There is no term for
unlimited terms in cooperative ventures, but also no provisions for
the term of the duration. The term of the cooperative venture
contract may be renewed subject to the consent of the parties
involved and approval from the examination and approval authorities.
The foreign investor is permitted to withdraw their registered
capital or a portion thereof from the cooperative venture during the
duration of the cooperative venture contract.
Because of the unique privileges and added
features offered to the foreign party in a cooperative venture,
trade unions must be allowed to represent the employees in
employment matters to protect the interests of the employees.
Please call us at +852 3583 9104 or send email to
info@yen.hk
for further information.
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