O'Melveny Authors Two New Articles on Complex China-Inbound Transactions

Given the increasing importance of the China market and Chinese companies, international corporations and investors now encounter Chinese companies in two very different contexts.

First, they often have Chinese-incorporated companies as subsidiaries. Because of the very strong authority given by Chinese law to anyone using a company "chop" and to the company's "legal representative," there are serious traps for the unaware in this area.

Second, international companies and investors must often deal with Chinese companies as counterparties, both inside and outside of China, and again Chinese corporate procedures for authorizing contracts are different from those in the West.

In both contexts it is very important to know who in a Chinese company has authority to act on behalf of the company, and what procedures are necessary (depending on the context) to restrict such authority.