On The Application Of The Company In Joint - Venture Company Governance Structure

According to Article 218 of Company Law of the People's Republic of China, "This Law shall be applicable to foreign-invested limited liability companies and joint stock limited companies. Where the laws on foreign investment provide otherwise, such provisions shall apply." Focusing on Sino-Foreign Equity Joint Venture which is the most typical form of foreign-invested enterprises, this thesis discusses the application of Company Law to the corporate governance of Equity Joint Ventures. In the current Chinese legal system, Company Law and Foreign-Invested Enterprise Laws are applicable to Equity Joint Ventures simultaneously whereas the Foreign-Invested Enterprise Laws prevail.However, the regulations on corporate governance of Foreign-Invested Enterprise Laws are so far away from those of Company Law that there are few possibilities for the latter to be applied to Equity Joint Ventures. While the existing corporate governance structure of Equity Joint Ventures mainly based on Foreign-Invested Enterprise Laws has generated so much disadvantages that it is difficult to satisfy the demand of corporate governance and protection of investors' benefit of Equity Joint Venture. But the existing corporate governance is still worth reserving, and some modification can be made for its improvement. For example, the corporate governance structure of limited liability companies established by Company Law which is featured by an organization consisting of shareholder's board, board of directors and board of supervisors should be introduced to Equity Joint Ventures. In a long-term perspective, in order to maintain the consistency and seriousness of law, improve China's investment environment and develop social market economy, a gradual transition from dual application of Foreign-Invested Enterprises Laws and Company Law to consistent application of Company Law should take place for all the foreign-invested companies, including Equity Joint Ventures.