Article 21 Chinese and foreign partners shall distribute income or products and shall bear the responsibility for risks or losses in accordance with the provisions stipulated in the co-operative enterprise contract.
When the Chinese and foreign partners agree in the co-operative enterprise contract that, on the expiry of the duration of the term of co-operation, all the fixed assets of the co-operative enterprise shall revert to ownership by the Chinese partner, methods to allow the foreign partner to recover its investment w i t h the term of co-operation may be stipulated in the co-operative enterprise contract.
If a co-operative enterprise contract stipulates that the foreign partner shall recover its investment before paying income tax, an application shall be submitted to the finance and taxation organs which shall examine and determine an approval of the matter in accordance with the relevant State provisions on taxation.
When the foreign partner recoups its investment within the period of co-operation according to the provisions of the previous paragraph, the Chinese and foreign partners shall be responsible for the liabilities of the co-operative enterprise in accordance with the provisions of the relevant laws and the stipulations of the co-operative enterprise contract.
Article 22 Dividends remaining after a foreign partner has fulfilled all obligations as prescribed in the laws and regulations and the stipulations of the co-operative enterprise contract, and other legal income and funds distributed by the co-operative enterprise at the termination of co-operation may be remitted abroad in accordance with the law.
Income in the form of wages or other legal earnings of employees of foreign nationality of a co-operative enterprise may be remitted abroad after payment of individual income tax in accordance with the law.
Article 23 On the expiry or premature termination of the term of a co-operative enterprise, assets, claims and debts shall be liquidated in accordance with legal procedures. Chinese and foreign partners shall determine ownership of co-operative enterprise property in accordance with the stipulations of the co-operative enterprise contract.
On the expiry or premature termination of the term of a co-operative enterprise, the procedures for the cancellation of registration shall be carried out with the administration for industry and commerce and the taxation organ.
Article 24 The duration of the term of co-operation of a co-operative enterprise shall be determined through a consultation by the Chinese and foreign partners and specified in the co-operative enterprise contract. If the Chinese and foreign partners agree to extend the term of co-operation, an application shall be submitted to the examining and approving organ 180 days before the expiry of the term of co-operation. The examining and approving organ shall decide whether or not to approve the application within 30 days of receipt.
Article 25 If a dispute arises between Chinese and foreign partners over the implementation of a co-operative enterprise contract, the matter shall be resolved through consultation or mediation. If the Chinese and foreign partners are unwilling to use consultation or mediation to resolve the dispute or if consultation or mediation fail to produce a result, the matter may be submitted to a Chinese arbitral body or another arbitral body for arbitration in accordance with the provisions on arbitration in the cooperative enterprise contract or an arbitral agreement concluded in writing after the dispute has arisen.
If the Chinese and foreign partners have not included provisions on arbitration in the co-operative enterprise contract and fail to conclude a written arbitral agreement after a dispute has arisen, a suit may be filed in a Chinese court.
Article 26 The State Council department in charge of foreign economic relations and trade shall formulate implementing rules in accordance with the provisions of this Law, to be implemented following their approval by the State Council.
Article 27 This Law shall take effect from the date of promulgation. |
