THE CONTRACT FOR SINO-FOREIGN EQUITY JOINT VENTURE Whole Doc.
Chapter 1 General Provisions
In accordance with the Law of the People’s Republic of China on Joint Ventures Using Chinese and Foreign Investment (the "Joint Venture Law") and other relevant Chinese laws and regulations, __________Company and ___________ Company, in accordance with the principle of equality and mutual benefit and through friendly consultations, agree to jointly invest
to set up a joint venture enterprise in ________of the People’s Republic of China.
Chapter 2 Parties of the Joint Venture
Article 1
Parties to this contract are as follows: ___________Company (hereinafter referred to as Party A), registered with __________ in China, and its legal address is at ___________ (street) __________ (district) ___________ (city) ___________China.
Legal representative: Name:
Position:
Nationality:
__________Company (hereinafter referred to as Party B), registered with __________. Its legal address at ___________.
Legal representative: Name:
Position:
Nationality:
(Note: In case there are more than two investors, they will be called Party C,D...in proper order).
Chapter 3 Establishment of the Joint Venture Company
Article 2
In accordance with the Joint Venture Law and other relevant Chinese laws and regulations, both parties of the joint venture agree to set up _____________joint venture limited liability company ( hereinafter referred to as the joint venture company).
Article 3
The name of the joint venture company is __________Limited Liability Company.
The name in foreign language is __________.
The legal address of the joint venture company is at __________street __________(city)___________ province.
Article 4
All activities of the joint venture company shall be governed by the laws, decrees and pertinent rules and regulations of the People’s Republic of China.
Article 5
The Organization form of the joint venture company is a limited liability company. Each party to the joint venture company is liable to the joint venture company within the limit of the capital subscribed by it. The profits, risks and losses of the joint venture company shall be shared by the parties in proportion to their contributions to the registered capital.
Chapter 4 The Purpose, Scope and Scale of Production and Business
Article 6
The goals of the parties to the joint venture are to enhance economic co-operation technical exchanges, to improve the product quality, develop new products, and gain a competitive position in the world market in quality and price by adopting advanced and appropriate technology and scientific management methods, so as to raise economic results and ensure satisfactory economic benefits for each investor.
(Note: This article shall be written according to the specific situations in the contract).
Article 7
The productive and business scope of the joint venture company is to produce __________ products; provide maintenance service after the sale of the products; study and develop new products. (Note: It shall be written in the contract according to the specific conditions).
Article 8
The production scale of the joint venture company is as follows:
1. The production capacity after the joint venture is put into operation is __________.
2. The production scale may be increased up to ____________ with the development of the production and operation. The product varieties may be developed into ___________. (Note: It shall be written according to the specific situation).
Chapter 5 Total Amount of Investment and the Registered Capital
Article 9
The total amount of investment of the joint venture company is RMB ___________ (or a foreign currency agreed upon by both parties).
Article 10
Investment contributed by the parties is Renminbi __________, which will be the registered capital of the joint venture company.
Of which: Party A shall pay ____________ Yuan, accounting for __________%; Party B shall pay ___________Yuan, accounting for__________%.
Article 11
Both Party A and Party B will contribute the following as their investment:
Party A: cash __________Yuan machines and equipment __________Yuan premises __________Yuan the right to the use of the site __________Yuan industrial property __________Yuan others __________ Yuan, __________ Yuan in all.
Party B: cash __________Yuan
machines and equipment __________Yuan industrial property __________Yuan others __________Yuan, __________Yuan in all. (Note: When contributing capital goods or industrial property as investment, Party A and Party B shall conclude a separate contract to be a part of this main contract).
Article 12
The registered capital of the joint venture company shall be paid in ___________ installments by Party A and Party B according to their respective proportion of their investment.
Each installment shall be as follows: (Note: it shall be written according to the concrete conditions).
Article 13
In case any party to the joint venture intends to assign all or part of his investment subscribed to a third party, consent shall be obtained from the other party to the joint venture, and approval from the examination and approval authority is required. When one party to the joint venture assigns all or part of his investment, the other party has preemptive right.
Chapter 6 Responsibilities of Each Party to the Joint Venture
Article 14
Party A and Party B shall be respectively responsible for the following matters:
Responsibilities of Party A:
Handling of applications for approval, registration, business license and other matters concerning the establishment of the joint venture company from relevant departments in charge of China; Processing the application for the right to the use of a site to the authority in charge of the land; Organizing the design and construction of the premises and other engineering facilities of the joint venture company; Providing cash, machinery and equipment and premises ... in accordance with the provisions of Article 11; Assisting Party B to process import customs declaration for the machinery and equipment contributed by Party B as investment and arranging the transportation within the Chinese territory; Assisting the joint venture company in purchasing or leasing equipment, materials, raw materials, articles for office use, means of transportation and communication facilities etc.; Assisting the joint venture company in contacting and settling the fundamental facilities such as water, electricity, transportation etc.;
Assisting the joint venture in recruiting Chinese management personnel, technical personnel, workers and other personnel needed; Assisting foreign workers and staff in applying for entry visas, work licenses and handling their travel procedures;
Responsible for handling other matters entrusted by the joint venture company.
Responsibilities of Party B:
Providing cash, machinery and equipment, industrial property ... in accordance with the provisions of Article 11, and responsible for shipping capital goods such as machinery and equipment etc. contributed as investment to a Chinese port;
Handling the matters entrusted by the joint venture company, such as selecting and purchasing machinery and equipment outside China, etc.; Providing necessary technical personnel for installing, testing and trial production of the equipment as well as the technical personnel for production and inspecting; Training the technical personnel and workers of the joint venture company;
In case Party B is the licensor, it shall be responsible for the stable production of qualified products of the joint venture company in the light of design capacity within the specified period; Responsible for other matters entrusted by the joint venture company. (note: It shall be written according to the specific situation).
Chapter 7 Transfer of Technology
Article 15
Both Party A and Party B agree that a technology transfer agreement shall be signed between the joint venture company and Party B (or a third party) so as to obtain advanced production technology needed for realizing the production and operation purpose and the production scale specified in Chapter 4 of the contract, including product design, manufacturing technology, means of testing, materials prescription, standard of quality and the training of personnel etc. (Note: It shall be written in the contract according to the concrete conditions).
Article 16
Party B offers the following guarantees on the transfer of technology: (Note: Article applies only when Party B is responsible for transferring technology to the joint venture company).
1. Party B guarantees that the overall technology such as the designing, manufacturing technology, technological process, tests and inspection of products (Note: The name of the products shall be written) provided to the joint venture company must be integrated, precise and reliable. It is to meet the requirement of the joint venture’s operation purpose, and be able to obtain the standard of production quality and production capacity specified in the contract;
2. Party B guarantees that the technology specified in this contract and the technology transfer agreement shall be fully transferred to the joint venture company, and pledges that the provided technology should be truly advanced among the same type of technology produced by Party B, the model, specification and quality of the equipment are excellent and it is to meet the requirement of technological operation and practical usage;
3. Party B shall work out a detailed list of the provided technology and technological service at various stages as specified in the technology transfer agreement to be an appendix to the contract, and guarantee its performance;
4. The drawings, technological conditions and other detailed information are part of the transferred technology and shall be provided on time;
5. During the term of the technology transfer agreement, Party B shall provide the joint venture company with any improvements in the technology and the improved information and technological materials in time, and shall not charge separate fees;
6. Party B shall guarantee that the technical personnel and the workers in the joint venture company can master all the technology transferred within the period specified in the technology transfer agreement.
Article 17
In case Party B fails to provide equipment and technology in accordance with the provisions of this contract and the technology transfer agreement or in case any deceiving or concealing actions are found, Party B shall be responsible for compensating the direct losses to the joint venture company.
Article 18
The technology transfer fee shall be paid in royalties. The royalty rate shall be ___________% of the net sales value of the products. The term for royalty payment is the same as the term for the technology transfer agreement specified in Article 19 of this contract.
Article 19
The term for the technology transfer agreement signed by the joint venture company and Party B is ___________ years. After the expiration of the technology transfer agreement, the joint venture company shall have the right to use, research and develop the imported technology continuously. (Note: The term for a technology transfer agreement is generally no longer than 10 years, and it shall be approved by the Ministry of Foreign Trade and Economic Cooperation or other examination and approval authorities entrusted by the Ministry of Foreign Trade and Economic Cooperation).