Management Of Foreign Invested Enterprises In China

Board of DirectorsMost Foreign Invested Enterprises (FIEs) are Rosetta Stone governed by a board of directors and senior management. An exception exists for Cooperative Joint Ventures that the parties have chosen not to incorporate (these are governed by a management committee).Powers: The Chairman, as the legal representative of the enterprise, has the power to legally bind the enterprise and bears significant responsibility for its acts andomissions. Most of the powers and functions of the board are set forth in the Articles of Association and in the Joint Venture Contract.Number of Directors: The board of directors of both Wholly Foreign Owned Enterprises (WFOEs) and Joint Ventures are required to appoint between 3 and 13 directors. FIEs with few shareholders may be able to convince the examination and approval authority to dispense with the board of directors and use an executive director.Membership: In an Equity Joint Venture (EJV), board membership must be proportionate to capital contributions. The board must have a Chairman, but need not have a Vice Chairman. If both are used, however, then if the foreign Rosetta Stone Arabic investor selects the Chairman, the Chinese party must select the Vice Chairman, and vice versa.Meetings: Joint venture board meetings must be held once a year, and a quorum is 2/3 of the directors. For Equity Joint Ventures, unanimous consent of the board is required for amendment of the Articles of Association, increase or reduction of the Registered Capital, merger or division, and termination and dissolution. The law is significantly more flexible for Wholly Foreign Owned Enterprises - board meetings and quorum requirements are governed by the WFOEs Articles of Association.Director Officer Liability: Director and officer liability law and enforcement is not as well-developed as in many Western nations. Correspondingly, the market for directors and officers liability insurance is not particularly well-developed either. The Chairmans role as the enterprises legal representative encumbers him with both civil and criminal liability for the acts and/or omissions of the enterprise. Directors can be held liable for board resolutions that are illegal or that contravene Rosetta Stone Italian the Articles of Association and cause losses to the company.

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