In today's global corporate world, many conglomerates have
complex and layered shareholding structures with multiple entities
in various jurisdictions. Each entity must function as part of a
cohesive whole within the larger global group, but will still be
governed by company laws or other laws of its respective local
jurisdiction. In international M&A deals, parties sometimes
approach the corporate governance of a foreign entity (and
correspondingly, negotiations of shareholders agreements, joint
venture agreements and other matters) by using principles and
concepts that they are familiar with in their domestic
jurisdiction. These cultural differences can cause
misunderstandings, complicate negotiations, and create friction
during post-completion integration. In this article, we briefly
compare some key differences between PRC companies and common law
companies. 1
