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How to resolve your business partnership dispute in China

When two or more people go into business together, they have effectively formed a “partnership”.  Technically, the terms “partner” or “partnership” are usually limited to an entity known as general partnership or limited partnership, but for simplification we will use them to describe shareholders in a closely held corporation, or members in a small Limited Liability Company (LLC).

The worst thing partners can do is establish a business or enter into some form of joint venture without a clear agreement what their rights and responsibilities are to each other.  Better yet, this agreement should be reduced to writing to avoid any ambiguities or misunderstandings about these responsibilities.

With or without a written partnership agreement, disputes do occur.  When they do, each partner needs effective legal representation to protect their interests.  If an informal resolution cannot be reached, litigation or alternative dispute resolution (ADR) may become necessary.  While litigation is never pretty, the consequences of not enforcing your rights may be far worse.  Say, for example, you are a minority shareholder in a closely held corporation.  Your partners (the majority shareholders) refuse to let you view the company’s financial reports.  How can you possibly know whether or not you are getting your rightful share of the company’s profits?  Or, if you do see the financials, they may show a lack of profits but also show the majority shareholder is taking out an exorbitant salary.  The cost of doing nothing may be tens or hundreds of thousands of dollars of lost profits to you over the years.

 

Protecting your trade secret in China

As a business owner or executive, you want to protect your company’s confidential information so as to prevent it from being used by or to benefit your competition.  This confidential information can be as famous as the heavily-guarded Coca-Cola ? formula, or as discrete as your customer list.  In any event, you need this information protected.

A “trade secret” is defined in China Anti-competition Law, and generally means information that has independent economic value which the company takes reasonable means to keep confidential.  The best thing any company can do is to only disseminate trade secrets to those who have a need to know the information.  For most businesses, their most common trade secret is their customer list.  Thus, you shouldn’t leave it laying around for the janitor to see, nor should you publish it in the form of a comprehensive reference list for the world to view.  Next, your employees and outside vendors and consultants should sign a carefully drafted trade secrets acknowledgement which clearly specifies which information your company deems confidential and what the consequences are of misappropriating that information.  As used above, “carefully drafted” means by an attorney who is familiar with trade secret protection (and we are).

 

How attorney fees are calculated in China?

What is the Basis for a Legal Fee?

Attorney's fees are generally a matter of agreement between the client and the attorney. There are no recommended fee schedules. While fees vary from attorney to attorney, the basic ingredient is the amount of time spent on a particular problem. Clients are often unaware that the advice given to them in a few minutes or the few pages of a document prepared for them are products of much time and effort by the attorney and often by others in the office such as legal assistants and secretaries.

How We Compute Our Fees?

There are four usual methods of calculating legal fees;

(1) Hourly fee arrangements

(2) Contingency fee arrangements

(3) Flat fee arrangements

(4) Percentage fee arrangements

Hourly Fee Arrangements:

An hourly rate depends on the circumstance of the case and the experience and expertise of the lawyer. Under this arrangement, the client is generally responsible for the out-of-pocket expenses (filing fees, transcripts, sheriff's costs) as well as for the time spent performing the legal work (meetings, research, drafting documents, phone calls).

 

How to seek a trademark attorney in China

China trademark attorney

Foreign corporations and individuals are increasingly aware the importance of protecting their intellectual property rights in China, where piracy is deemed as a major problem when they are doing business in China.

Trademark law is a niche area of law with many unique principles and requirements. Consequently, the service of an attorney who specializes in trademark law is required for many situations, such as to file a trademark application, evaluate a trademark search or trademark a product name.

Yet how should you choose a trademark attorney? To begin with, never pick your trademark attorney based solely upon a lawyer referral service or advertising. Lawyer referral services generally do not evaluate the abilities of the attorneys in their listings, but simply accept any attorney willing to pay the membership dues of that referral service. The referral service then refers clients to these "trademark attorneys" on a rotating basis. It is almost always the attorney's own subjective determination that he or she is a "trademark attorney," yet this attorney may have little experience and knowledge of trademark law.

 

Official Regulations on How to Set up a Representative Office in China for a Foreign Company

I often receive consultation on how to set up a representative office in China. I usually cite the following regulation to answer these questions. Now I attach the regulation for your reference. However, if you have any questions regarding the following regulation, please contact me for information.

The Regulations on Administration of Registration of Resident Offices of Foreign Enterprises Decree of the State Council of the People’s Republic of China

No. 584

The Regulations on Administration of Registration of Resident Offices of Foreign Enterprises, which was adopted at the 132nd executive meeting of the State Council on November 10, 2010, is hereby promulgated and shall enter into effect as of March 1, 2011.

Premier Wen Ji.ab.ao

November 19, 2010

Regulations on Administration of Registration

 

of Resident Offices of Foreign Enterprises

 
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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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This China Lawyer Blog is aiming at providing better knowledge and understanding of Chinese law for foreigners. Should you have any legal issue in China, do not hesitate to contact China Lawyer Blog for consultation. Preliminary consultation is free. Further legal service, however, will be charged in due rate and in due course.

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.