Company investments & joint ventures – Hong Kong
We have extensive experience of advising in relation to all types of company investment in Hong Kong and joint ventures in Hong Kong, including corporate joint ventures, partnerships, contractual joint ventures, collaboration and co-operation agreements and strategic alliances. We advise across a wide range of industries, such as natural resources, technology, health, telecommunications and broadcasting, film and entertainment, travel and tourism, shipping, food and restaurants.
Clients receive smart and pragmatic advice from multidisciplinary lawyers with broad transactional experience across joint ventures in Hong Kong and foreign direct investment, capital markets, M&A, competition law, intellectual property licensing, employment law and management incentive schemes. We aim to understand the business drivers and objectives underlying a proposed investment in Hong Kong or joint venture in Hong Kong, working with other professional advisers to set up investment and joint venture structures that meet clients’ legal, operational, accounting, financing and tax needs.
We provide an insightful and highly personalised service to clients, advising on all aspects of investment in Hong Kong and joint ventures in Hong Kong including initial contributions and on-going funding requirements, board composition and management arrangements, profit extraction, restrictive covenants, minority protections, deadlock resolution (for 50-50 joint ventures), lock-ups, pre-emption rights, tag along and drag along, duration and termination, employee issues and regulatory requirements.
We negotiate and draft all investment and joint venture documentation, from preliminary terms sheets, confidentiality and exclusivity agreements, to subscription agreements, constitutional documents, shareholder or partnership agreements, as well as ancillary documents that may be required, such as employment contracts, asset transfers, intellectual property licences, and marketing, distribution, licensing and supply agreements.
Shareholders’ agreements or articles of association may grant to certain shareholders the right to nominate and elect directors which are typically seen as representing and acting in the interests of the nominating shareholder. It is important however for such directors to be aware of their obligations owed to the company as a whole as opposed to acting solely in the interests of the nominating shareholder. Directors’ duties and obligations derive from numerous sources including the company’s articles of association, common law and applicable legislation, including the Companies Ordinance and the Securities and Futures Ordinance; for listed companies, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Companies contained therein; the Code on Takeovers and Mergers and the Code on Share Buy-backs; the directors’ Declaration and Undertaking to the Exchange; and the Companies Registry’s Guide on Directors’ Duties.
In this respect directors failing to comply with their obligations, which derive from the articles of association, common law and legislation, may be subject to civil and/or criminal proceedings. The Hong Kong Companies Registry has set out the following 11 non-exhaustive principles for directors to consider:
- Duty to act in good faith for the benefit of the company as a whole
- Duty to use powers for a proper purpose for the benefit of members as a whole
- Duty not to delegate powers except with proper authorisation and duty to exercise independent judgement
- Duty to exercise care, skill and diligence
- Duty to avoid conflicts between personal interests and interests of the company
- Duty not to enter into transactions in which the directors have an interest except in compliance with the requirements of the law
- Duty not to gain advantage from use of position as a director
- Duty not to make unauthorised use of company’s property or information
- Duty not to accept personal benefit from third parties conferred because of position as a director
- Duty to observe the company’s constitution and resolutions
- Duty to keep accounting records
Charltons has extensive experience of advising in relation to all types of company investment in Hong Kong and joint ventures in Hong Kong. We can advise on directors’ duties and obligations.