国际商法英文笔记.doc

_Lesson 1I. Obligation and contractA. DefinitionAn obligation is a legal link between two persons: according to one becomes the debtor and a creditor. There are two kinds of obligations: - A binding obligation: something you need to comply with- A non-binding obligation: you may finish the contract without any consequences. All contracts (legal relationship) are based on the free will. Obligation are an undertaking to give or to not give, to do or to do not do. Contract is a legal act, which materialised the exchange of two consents.The first thing you have to do is to check by the legal regime, which is applicable: is it the Chinese or the French law. You have to wonder what the date of effectiveness of the contract. A contract can be materialised by any means: oral, emails.Everything is a matter of evidence in a contractual relationship. The consent should be clear without any reserve or without any conditions. If you undertake to do something in a contract you are the debtor and the other party is a creditor. If you have several creditors it can become complicated: if they are three buyers for your house. Who is the real creditor? In this case the contractors can be jointly liable by obligation. For instance if three people buy a house and one of them is doing a renovation: the three contractors are jointly liable by obligation. B. Defining the right partyDefining the proper party is a big issue. For example when you are renting a house, you have to check who is the real landlord. Relative effect of the contract: contract only binds the people who have signed the contract: the other people are called third party. If you are signing a contract with a subsidiary of the holding, which has no money: the subsidiary may not be able to respect the contract. Indeed a contract with a subsidiary Creating a company in Hong Kong takes one week. You can thus create a small company (an investment vehicle) in Hong Kong to protect your interests with new contractors.Normally third parties have no right to claim the effect of the contract, except if you ask the third party to be a co-contractor.An other person who may be concern by a contract is a decedent. C. Formalism of a contractMost of the time the formalisation of a contract are not compulsory. But more and more companies ask you to sign legal agreement. You must check if there is a formalism to the contract.Indeed the issue is to prove the content of the agreement. But writing a contract can be quite useful when you want to negotiate.For instance you can also write down the steps of the conversation, in order to formalize the consent of the two parties. Understanding the consent of the other party can be really difficult especially in an other country. You may have a system in oder to be sure that the other party understands what you want. Indeed you have to check that the consent of the other party has not been fooled. You have also to check the requirements. Trading gold is regularised by special laws. A contract can be not valid the required formalism.In some case your signature is not always enough, you need sometimes a third party. The tax regime can totally changes with a third party. Contract between two people have several requirements:- The capacity of the contractors- The consent must be free- In some countries there must be full awarenessA franchising contract: you can decide to create a shop of a big brand if the company agrees. You pay and in exchange the big company gives you some knowledge on how their shop work and so one.Disclosure: dollD. Conditions of the validity of a contract.There are several conditions of the validity of a contract. 1) The legal capacity is a condition of the validity of a contract. The legal capacity may be a physical capacity, or mental capacity. You are legally empowered for a company if you are the position legal representative of a company. You have the capacity to sign the contract in the name of the company. The management by fact: in some cases even though you are not the legal representative, you may sign the contract and the company will be forced to fulfil the contract. For example, if the contractor could not know that you were the legal representative. When you are signing a contract with a company the companies needs to be established. For human the age of majority is a legal capacity. A contract can be nul and void. 2) Define the object of the contractPricing: the price is not always fixed in a contract, you can ask a third party to determine the price. Sometimes it is hard to determine the price of an object, you need an expert. In English law you need a cause for the contract. You need to check how the consents can be expressed in a contract. 3) The object has to be legal.4) The language of the contract is a condition of the validity of the contract. E. Contracts principlesContract may not be cancelled by one party. You can terminate the contract in several cases:- open term contract can be finished at any time by one of the party because the length of the contract is not determinate. Since the abolition of slavery, you can finish the relationship whenever you want. Contract for life are usually nul and void apart from certain case like VIGThere are several kind of termination of the contract: - Termination of the contract for the future- Termination of the contract for the past. F. The end of a contractTermination of the contract for the future.The retroactivity is the fact to put the two parties in the same position before the signature of the party. In the case of the breach of a contract you can ask the contractor to pay you back. G. Legal regimeLegal regime are really significant as it determinates the law of which country is applicable. H. The content of a contractContracts create rights and obligations for several parties. 1) Sinegmalatic or reciprocal contract: the obligation to one party is linked to the obligation of the other party. For example party, one party has the obligation to pay and the other one to deliver a service. 2) Unilateral contract: the obligation is only for one party. Contract may be for free or against payment. Payment can be provided by money, exchange, or services. Contract can be binding without condition or undercondition. You have two kinds of obligation. - The condition precedent : if the condition is fulfilled there is a new obligation: the trigger event that enable you to go forward. I agree to pay the rent of the house, until the death of the owner. The issuance of share is provided with certain conditions. - The condition subsequent (condition rsolutoire): when the condition is realized the contract is finished. There are two kind of contract- Contract with an open term (CDI)- Contract with a fix term (CDD)- Instance performance contract: some contracts are effective immediately. You buy a bike you are directly the owner of the bike- Successive performance contract. However some contracts needs several steps. You build a house, there are several steps. Successive performance contract enables you to negociate. Difference between civil contract/ administrative contract/ commercial- Administrative are subjective courses. In most countries laws protect consumers. - Commercial contract are subjective to commercial courts where there are no professional judges (you can be judge by your competitors for instance).- Civil contractSpecific contracts with specific rules depending on the countries. I. The different types of contract1. Labour contractIn some countries the protection of the employees are really strict in terms of hours. It is important to know the tax regime. The labour contract has to be drafted in the country where the company is and they are submitted to public regulation. 2. The wedding contractThe wedding contract organise the goods of the couple: the couple can decide to share or not their patrimony. There are several regimes: Separation regime3. The agency contractYou represent a party on its name and its behalf: you give obligation to a third party.The agency contract is usually used in distribution. There are specific contracts of termination depending on the country.4. Logistic contractLogistic contract: agreement according to which one person agrees to transport people or goods on your behalf. J. Lease agreementLease agreement: the owner of an asset is renting a good in exchange of a rental fee which is defined by the two parties. The renter has to give back the good to the landlord in the same state as the origin. K. Consulting/ service agreementA person is providing a service to the benefit of the principle. It is not the same as a labour contract: the employee needs to give protection to its employees. A service provider can organise his work as he wants, whereas a worker is under the subordination of its employee. Withholding tax system: Public order regulation has always to be checked. L. How to make a contract?You have to check what are the market practices of this contract: indeed sometimes you need to do preliminary negotiation. There are several steps: 1) There are preliminary steps for the negotiation: you want first to determine the main principles. 2) Assigning 3) Closing: they check if all the elements have been realized or not1. The different steps of a contract1) Identifications of the parties,2) Definition of the termsIn the recitals we explain the elements of the contract: the object, the cause, the offer, the acceptance. Guarantees can take different forms:- third parties guaranty- bank guaranty: best guaranty- mortgage : you borrow money from someone and if you dont pay you will have to give the mortgage back. - lean:The termination clause: modalities ways to end (pravis).The defaulting party has to pay the fix amount to repair the damages. Force majeure close: the agreement close in which there is a natural disaster all the parties will suspend their obligation. Arbitration: is an alternative mode of resolution of conflicts in some sensitive case. M. Signature Appendice to give the parties the basis of their consences N. Corporate companyA company is a legal person: it has the legal capacity to enter in a contract. Affectio societatis: the willingness to persue a common goal. A person is also a legal entity. A limited liability company: if a company goes bankruptcy, nobody can seize your goods. You are only force to pay at first the capital in order to create the company. 1. To set up a company- Name of the company- Select the place of registration- Define the out cover needs of the company: The registered capital: the amount and the stock that the company needs to reach the break even, to be profitable, to be - You have to define how you are going to bring the capital: cash contribution, contribution in kind (to transfer the ownership of some equipment, and intangible assets (franchising), industry contribution.- The schedule of the capital. - To choose the manager. - To prepare a contract between the shareholders. II. Company lawA. The different types of companies (the example of France)Some companies are intended to carry out a professional activity. The most used social forms in France are as follows:1. Limited Liability companies SARL/EURL: limited liability companyWFOE: a company close to the EURL with only one member of the companyJoint venture: Chinese + Foreginer SA: Corporation SAS/ SASU: Simplified company by shares2. Unlimited liability companies SNC : “socit en collectif” (joint and several liability of the partners). B. How to chose the legal form of the company?1) Each legal form is subject to a different regime. We must take into account, for example: The minimum amount of capital required for each type of company The number of shareholders Liability of the shareholders Applicable tax rules2) Giving a legal framework consistent with the business constraints of the company. Certain types of companies have a better image among others: for the SA or SAS, for example, the number of partners and a larger registered capital will generate confidence. Nowadays crowd founding has become a fashionable way to invest money, however it raises also liability problems. An offshore status: you dont need a company on site to open a bank account. It is a situation where your companies dont do business where their bank account is located: this status gives you 0% tax regime. But you have to take care the taxation regime based on treaty. The registered capital is the protection of the creditor. C. How to choose the place of registration of the company1. The choice of location related to the activity of the company that will be created Need/ requirement to charge in the country where the activity is carried on Hire staff on site Access to finance / credit: Access to government support for business creation2. Rules constraints different in each country Time of incorporation: time to create a company and to open a bank account. Minimum capital Conditions relating to payment of capital Cost of administration, through the services of a Company Secretary Use the services of an outside accounting firm or accounting internally maintenance cost, Legal fees, deposit accounts, any other formalities. D. How to finance the development of a company? Personal funds Bank loan Debt Fund raising / venture capital: shareholder loan: apport en compte courant. Financing by debt: provide a loan, pay interestFinancing by equity (capital): taking risks, a part of the capital, become an investorSeed financing: to launch the business (seed= graine).Loan taker risk takerE. Venture capital1. What is venture capital? Venture capital is the term used when investors buy shares of a company. A venture capitalist invest money in a company with a high risk but which provides a potential high growth. The venture capitalist is betting on people/ on a team. The goal is to achieve high profitability and the investment is generally made for a limited period of time. The financing can take the form of a participation in the capital or by convertible debts.2. To whom is it possible to raise funds?There are three kinds of private investors: Love Money: people close to you, that are ready to give money for you but they dont expect anything in return. Business Angels: they are professional investors who enter the capital at the really first stages of the company. Private equity funds: different rounds of private equity funds through private meeting (that still not a public offer)F. Structuration of a fund raising in China. G. Fund raisingThe main stages of the fundraising: Preparation of the business plan Presentation to potential investors (road show) Negotiation with the investor(s) Finalization of the agreement/ signing/closing Post-closing Exit First, second, third round Due diligence: audit by an investor (if the company is already in operation). He will check the accounting, the social, the corporate organisation, to check the risk. Negotiation on the valuation of the company and the conditions for the dilution of the founder(s) and the existing shareholder(s) Negotiation on the voting rights of the investors Execution of the Term Sheet. 1. Right negotiated by the investors Difference between Ordinary Shares et Preferred Shares. Liquidation Preference: a right given to a class of preferred shares allowing that share to received proceeds in a liquidation in advance of other classes of shares. Dividends: most companies funded by a fundraising keep their capital for development and not for distribution to share holders. Investors usually discourage the distribution of dividends. Anti-dilution Rights: a price protection for investors. This is accomplished by effectively repricing an investors shares to a lower price per share in the event that the company completes a financing at a lower valuation than a previous financing round. They are two kinds of way for employees to be remunerated. - investment by equity can be dangerous because of the dilution - The bonus is calculated on the profit of the company.Right negotiated by the investor: Representations by the company and sometimes the individual management members: authorization to hire a manager at this salary or not. Seats on the board of directors: it is where the power of the company is located. Redemption rights: an investor will ask the company to be paid back the amount of shares he invested and to leave the company. Conversion rights: to convert one share into several shares Right of first Refusal: pre-emption right. Right in commercial relationship: to give the right to someone to distribute your product in China, and then the distributer will have the right to be the first person you talk to if you want to develop you business in Hong Kong for instance. Right in shares: To substitute yourself to a third party as long as you are proposing the same term than the other party. For instance, if a third party want to buy shares for that price, and you have the right of first