Initial Public Offer & NEEQ, Issuance of legal opinions of Indian Subsidiary
1. The importance of verification of subsidiaries in India
The issuance of legal opinions by foreign lawyers against
(planned) listed companies and (planned) new third board companies' main
overseas affiliates has become a routine verification method. As the China
Securities Regulatory Commission and the nationwide share transfer system
become more stringent in review, it is relatively safe for (planned) listed
companies and (planned) new third-board companies to hire foreign lawyers to
issue legal opinions on overseas entities.
In recent years, as the political and economic relations between China and India have become better, the "Made in India" and "One Belt One Road" policies have set off an upsurge of Chinese-funded enterprises investing in India.
For Chinese-funded enterprises
that have landed or intend to land on the capital market in China, in the
process of applying for listing or listing on the NEEQ, as well as major issues
such as listed companies, NEEQ companies’ annual reports, major asset
restructuring, etc. The legal opinion of the subsidiary or other major related
parties of the company in India is very important.
2. Scope of legal opinions issued by Indian lawyers
The process of issuing legal opinions by Indian lawyers
involves the verification of many aspects of the main company in India. According
to Chinese laws and regulations and the requirements of intermediary agencies
for diligence, legal opinions can cover the following:
i. Basic information
Company name, registration number, domicile, directors, date
of establishment, share capital, etc.
2. Subject qualification
The company is a legal entity established and legally
existing in accordance with local laws. There is no need to terminate in
accordance with laws, articles of association or other matters, and it has the
right to independently enjoy civil rights and assume civil obligations.
3. Business qualifications
a. Business scope and main business description, whether its
previous changes since its establishment comply with local laws, regulations
and the company's articles of association.
b. The compliance status of the company's business (whether
it has obtained the qualification certificates required to conduct the business
and the permission and approval of the local government or competent
authority).
4. Ownership structure
a. A description of the company’s equity structure (names or
names of shareholders, their respective capital contributions, capital
contributions, share types) and the evolution of the company’s equity structure
since its establishment.
b. The shareholder's description of the formation process
(new establishment or transfer) of the company's capital contribution should
cover whether the establishment or transfer procedure is effective, whether
sufficient capital contributions or consideration have been paid, and whether
all necessary government approval and registration procedures have been
completed .
c. Whether the shareholder enjoys this part of the company’s
equity in accordance with local laws, and whether he can exercise shareholder
rights in accordance with local laws and the company’s articles of association.
d. The burden of the rights of the company’s equity held by shareholders (whether there is a pledge, custody or other third-party rights)
5. Foreign investment
Description of the company's branches and long-term foreign
investment
6. Assets
The major assets owned by the company (quantity, model, net
value, date of acquisition), the ownership of these assets (whether they are
legally owned or leased by the company, and whether there are other third-party
rights such as mortgages and guarantees).
7. Employment situation
Whether the company’s number of employees, wage standards, and social insurance payment status are in compliance with local labor and employment laws and regulations.
8. Other business compliance status
Whether the company complies with environmental protection, taxation, foreign exchange and customs supervision requirements, whether it has obtained approval documents from relevant government departments, and please comment on this one by one.
9. Major claims and debts
The company's current loans, loans and external guarantees
during the performance period
10. Litigation, arbitration or administrative punishment
Whether there are current or potential lawsuits, arbitrations, government penalties, government investigations or other related procedures against overseas companies. If it exists, please give details.
11. Lawyers' Opinion
Other matters that require lawyers to express opinions on their legal compliance in accordance with local laws and regulations or regulatory requirements.
12. Taxation
According to Indian law, tax registration and other compliance details, as well as whether there are tax litigation, tax authority review details (if any)
13. Environment
Whether the company’s production or business nature complies with Indian environmental protection laws and regulations; whether there are penalties issued by local authorities (if any)
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