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一月 18,2019

Measures for Implementing the Pilot Joint-Venture Partnership Project Among Hong Kong, Macao Law Firms and Mainland Law Firms in Shanghai (Trial)

Date published: 十月 31, 2018   |   Hits:8,193

 Chapter I: General Principles

 

Article 1 In order to carry out a pilot program of joint ventures among  Hong Kong and Macao law firms and the mainland law firms in Shanghai  in a standardized and orderly manner, and to further strengthen the cooperation among  Hong Kong, Macao and the mainland law  profession, these Measures are formulated according to the provisions of the supplemental agreement of the Mainland – Hong Kong Closer Economic Partnership Arrangement (CEPA), Mainland - Macau Closer Economic Partnership Arrangement (CEPA) (VIII), the agreement on trade in services of the Mainland – Hong Kong Closer Economic Partnership Arrangement (CEPA), Mainland - Macau Closer Economic Partnership Arrangement (CEPA) and the Circular  of the Ministry of Justice on Expanding the Geographical Scope of Partnerships among  Mainland Law Firms, Hong Kong and Macao Law Firms, in conjunction with the actual conditions of this Municipality.

Article 2 The term "joined joint venture" as used in these Measures refers to the rights and obligations stipulated by one or more Hong Kong or Macao law firms and a Mainland law firm in accordance with the provisions of these Measures and the agreement with the parties, to establish a law firm of partnership-based joint venture in the administrative region of this city and to provide law services and assume law responsibilities in the name of the law firm under joint venture.

The law firm of partnership joint venture is established in the form of a special general partnership.

Article 3 Hong Kong and Macao law firms and Mainland law firms shall conduct joint ventures in this city and engage in law service activities. They shall abide by the laws, regulations and rules of the Mainland, abide by professional ethics and practice discipline of lawyers, and shall not harm national security and social order and public interest, accept the supervision and guidance of the judicial administrative organs and lawyer associations of this city.

Article 4 Hong Kong and Macao law firms and Mainland law firms shall conduct joint ventures in this city, and the Municipal Judicial Bureau shall organize and implement them in accordance with these Measures.

 

Chapter II: Conditions of Partnership

 Article 5 Hong Kong and Macao law firms that meet the following conditions can apply for a partnership joint venture:

 (1) Having registered under the laws of Hong Kong or Macau and headquartered in Hong Kong or Macau;

(2) Having been engaged in law services in Hong Kong or Macao for 5 years with the qualification to apply for handling law affairs in Hong Kong or Macao;

(3) Having more than 3 practicing lawyers whose partners or responsible persons are the practicing lawyers registered in Hong Kong or Macau.

For Hong Kong or Macao law firms with more than 30 practicing lawyers, there should be  no less than 10% of the practicing lawyers in the two years prior to the submission of the application holding the  professional law qualification certificate in  Mainland China, and at least one of them is a partner;

(4) Within 3 years before applying for partnership, the firm has not been punished by regulatory agencies of lawyers in Hong Kong or Macao, and the representative offices in Mainland China have not been punished by supervision departments of lawyers in Mainland China.

Article 6 A Mainland law firm that meets the following conditions can apply for a partnership:

(1) A partnership-based law firm with a history of more than 5 years;

(2) There are more than 30 practicing lawyers;

(3) The firm is located in the city or in other provinces, autonomous regions and municipalities directly under the jurisdiction of central government but has established branches in the city;

(4) The firm and its branches have not received any administrative penalties and industrial sanctions within 3 years before applying for partnership.

Article 7 Hong Kong and Macao law firms and the mainland law firms shall conduct joint ventures, and the names of their associated law firms shall be composed of three parts of the “Joint venture trade mark + Shanghai + Associated Law Firm”.

Article 8 The amount of capital contribution of the parties to a joint venture shall not be less than RMB 5 million, and the mode of contribution shall be determined by the parties to the joint venture through negotiation. The proportion of Hong Kong and Macao law firms under the joint venture which is solely or collectively contributed shall not be less than 30% and shall not exceed 49%.

The parties to the joint venture can implement the subscription system, but the actual contribution of the parties at the time of applying for the partnership shall not be less than 30% of the subscription amount, and the remaining contributions shall be paid within three years after the partnership is approved.

Article 9 The total number of lawyers of the joint venture parties stationed in the joint venture law firm shall not be less than 10 persons. The number of lawyers stationed by the parties is determined by the parties to the joint venture through negotiation, and the total number of lawyers stationed in Hong Kong or Macao law firms to the joint venture shall not be more than the number of the lawyers stationed by the mainland law firms. The parties to the joint venture shall appoint a lawyer to take charge of the work from the stationed ones.  

The experience of the resident lawyers of the parties to the joint venture shall not be less than 3 years, and that they have not received any administrative punishment or industrial sanctions within 2 years before stationing.

The person in charge of the joint venture law firm shall be chosen from among the resident lawyers of the Mainland law firms, but shall be recognized by other parties concerned.

Lawyers stationed in Hong Kong and Macao law firms shall have the qualifications to practice in Hong Kong or Macau. A resident lawyer is not supposed to be a representative of the representative office of the firm in Mainland China at the same time, nor be employed by a representative office of a foreign law firm in China at the same time.  

Article 10 The joint venture law firm shall have fixed and independent office venue.

Article 11 Hong Kong and Macao law firms and Mainland law firms applying for partnerships can implement partnership joint ventures with their respective representative offices or branches established in the city.

If  Hong Kong and Macao law firms and the Mainland law firms applying for joint ventures place the representative office or branch they established in the city under the partnership joint venture as an investment, the representative office or branch office shall apply for the cancellation procedures within 15 days after the partnership is approved,.

During the practice of a partnership venture law firm, Hong Kong and Macao law firms, Mainland law firms and the joint venture law firms involved in the joint venture shall establish an interest conflict prevention mechanism.

Article 12 The parties applying for a partnership joint venture shall enter into a partnership joint venture agreement. The partnership joint venture agreement shall comply with relevant laws of Mainland China and the provisions of these Measures, reflecting the true will of the parties. The agreement shall state: the name of the parties to the joint venture, the proportion of capital contribution, the amount of capital contribution and the way  of capital contribution, the number of lawyers stationed and the person in charge of the joint venture law firm, the rights and obligations of the parties to the joint venture, and the decision-making and management mechanism of the joint venture law firm, , the income distribution method of joint venture, the method of sharing business expenses and the way of responsibility, the employment methods of the lawyers and other arrangements concerning personnel, the professional liability insurance and social insurance , the liability for the breach of contract, the assets after the expiration or termination of the joint venture period, and the settlement of creditor's rights and debts, the methods for dispute resolution, the duration of joint ventures, as well as  the conditions and procedures for the termination and extension of joint venture.  

The partnership joint venture agreement shall not stipulate that any party to the joint venture shall have the right to decide on the major issues of the joint venture law firm beyond its capital contribution ratio.

The duration of the partnership joint venture agreed by the parties concerned shall not be less than one year.

The partnership joint venture agreement is effective as of the date of the approval of the joint venture.

Article 13 A joint venture law firm shall establish a charter. The charter shall state the following items and cannot violate the joint venture agreement:  

(1) The name, responsible person and address of the joint venture law firm;

(2) The name of the law firm of the parties to the joint venture;

(3) The organizational form of the joint venture law firm;

(4) The business scope of the joint venture law firm;

(5) The proportion, amount and mode of capital contribution of the parties concerned to the joint venture;

(6) The rights and obligations of the parties concerned to the joint venture;

(7) The manner in which lawyers and other personnel are stationed by the parties to the joint venture;

(8) The decision-making and management mechanism of the joint venture law firm;

(9) The duties, production and change procedures of the person in charge of the joint venture law firm;

(10) Ways of distribution of income from joint ventures, ways of sharing business expenses, and ways of responsibility;

(11) The financial management system, personnel system and lawyer professional liability insurance arrangement of the joint venture law firm;

(12) The handling of assets, creditor's rights and debts at the end of the joint venture period or termination of the joint venture;

(13) Conditions and procedures for the change and termination of the joint venture law firm;

(14) Procedures for the revision of the articles of association of the joint venture law firm;

(15) The duration of the joint venture and the continuation procedure.

The articles of association take effect from the date of approval of the partnership.

 

Chapter III: Partnership Procedures

 

Article 14 In applying for a partnership, all parties intending to establish a joint venture law firm shall jointly submit an application to the Municipal Judicial Bureau and submit the following documents:

(1) Application for partnership joint venture;

(2) A partnership joint venture agreement;

(3) The articles of association of the joint venture law firm;

(4) The valid supportive documents of the law firms of the parties to the joint venture that meet the conditions stipulated in these Measures;

(5) A  list of lawyers to be stationed by the parties to the joint venture and their valid supportive  documents in accordance with the conditions stipulated in these Measures, the name of the person in charge of the joint venture law firm and the proof of his/her  experience;

(6) The supportive documents of the parties to the joint venture for subscribed capital contribution and the supportive documents of the joint venture law firm's residence.

If a Hong Kong and Macao law firms applying for joint venture submits the valid registration certificate of the firm and the copy of the resident lawyer's practice certificate as stipulated in Items (4) and (5) of the preceding paragraph, it shall be notarized by a notary or notary public authorized by the responsible department of Mainland China.

Application documents shall be in simplified Chinese, in triplicate. If any foreign language is used in the document, Chinese translation shall be attached.

Article 15 The Municipal Judicial Bureau shall, within 20 days from the date of receipt of the application documents for the joint venture from the applicant, make a decision to grant or disallow the joint venture and notify the applicant. If a decision cannot be made within 20 days, it can be extended for 10 days with the approval of the person in charge of the administrative organ, and the applicant shall be informed of the reasons for the extension.  

For those who meet the requirements  stipulated in these Measures, joint ventures shall be granted and joint venture licenses shall be issued; for those who do not meet the requirements  stipulated in these Measures, no joint ventures shall be allowed, and the applicant shall be notified in writing.

For lawyers stationed by Hong Kong and Macao law firms in the joint venture law firm, the Municipal Judicial Bureau shall issue the documents of approval for the practice in Mainland China; for lawyers stationed by mainland law firms, the Municipal Judicial Bureau shall reissue the lawyer's license in the reference of the resident lawyer management methods of the branch offices.

If partnership is allowed, the Municipal Judicial Bureau shall, within 30 days from the date of issuance of the joint venture license, submit the documents of approval and relevant documents for the joint venture to the Ministry of Justice for the recording.

Article 16 A joint venture law firm shall open its business within six months from the date on which the Municipal Justice Bureau makes a decision to grant joint ventures. Before the commencement of business, the joint venture law firm shall complete the preparatory work of stamp-carving, fund-issuing procedures, opening bank accounts, handling tax registration, and handling the procedures for Hong Kong and Macao lawyers to work in Mainland China in accordance with relevant regulations. The mold of the stamps, financial seal and the bank account of the joint venture law firm are reported to the Municipal Justice Bureau for the recording.  

Article 17 If the parties to a joint venture decide to change the person in charge of the joint venture law firm, name, articles of association, partnership agreement or change lawyers, they shall submit an application for change to the Municipal Judicial Bureau in the name of the joint venture law firm and submit relevant documents . If the Municipal Judicial Bureau approves it after review, it shall go through the relevant change procedures.  

If the joint venture law firm changes its domicile, it shall report it to the Municipal Justice Bureau for the recording within 15 days from the date of the change.

Where the parties to the joint venture or one of the law firms change their names or organizational forms, they shall report to the Municipal Justice Bureau for the recording within 30 days from the date of the change.

Article 18 If the duration of a partnership joint venture law firm is to be extended by the parties to the joint venture before the expiration of the joint venture period, the resolution document shall be reported to the Municipal Justice Bureau for the recording before the expiration of the joint venture period.

Article 19 In any of the following circumstances, the joint venture law firm shall terminate:

(1) The requirements for establishment as stipulated in these Measures cannot be maintained, and the rectification within the time limit is still not up to the requirements;

(2) Business has not been started within six months from the date on which the Municipal Judicial Bureau made the decision to grant the joint venture or business activities have been stopped for one year;

(3) The period of joint venture expires, and is not to be extended by the parties to the joint venture through resolutions;

(4) The circumstances in which the joint venture shall be terminated as stipulated in the joint venture agreement during the period of joint venture, or the joint venture shall be dissolved by themselves through resolutions;

(5) The joint venture law firm is revoked of the practice license by law;

(6) The law firm of the parties to the joint venture or one of the parties terminates in accordance with the law or cannot maintain the qualifications of the joint venture as stipulated in these Measures, and the rectification within the time limit is still not up to the requirements ;

(7) The law firm with other circumstances that shall be terminated by laws and administrative regulations.

After the termination of the joint venture law firm, the firm shall be liquidated in accordance with the provisions of Article 30 of the “Administrative Measures for Law Firms” of the Ministry of Justice, and the affairs of asset division and debt settlement shall be disposed of by  law, and shall be canceled by the Municipal Bureau of Justice.

 

Chapter IV: Partnership Rules

Article 20 The joint venture law firm can accept and undertake litigation and non-litigation legal affairs in the civil and commercial fields, and cannot accept or undertake law affairs involving criminal litigation or administrative litigation applicable to the laws of Mainland China.

Article 21 The practice scope of lawyers assigned by the parties to the partnership joint venture shall comply with relevant laws, regulations and rules of Mainland China. The scope of practice of the resident Mainland lawyers applies to the Provisions of the Law of Lawyers and the Administrative Measures for Practicing Law by Lawyers. The scope of practice of the resident Hong Kong and Macao lawyers applies to the Administrative Measures for Representative Offices of Law Firms in Hong Kong and Macao Special Administrative Regions in Mainland China, and cannot undertake law affairs in the Mainland.  

Article 22 The joint venture law firm shall uniformly accept business in the name of the joint venture law firm. The law  affairs in  Mainland China shall be handled by  lawyers stationed by the Mainland law firms; law  affairs in Hong Kong or Macao shall be handled by  lawyers stationed by Hong Kong or Macao law firms; law  affairs applicable to  Mainland laws and  Hong Kong and Macao laws shall be handled by  lawyers stationed by the parties through coordination and distribution of responsibilities in accordance with their respective practice areas; law  affairs concerning the application of foreign laws, especially those involving international treaties and international practices, shall be handled by  lawyers stationed by the parties through collaboration.  

Lawyers stationed by the parties to the joint venture law firm and those of the law firms of the parties involved in the joint venture cannot act as agents or provide law services for the parties with conflicts of interest in the same civil and commercial litigation or non-litigation law affairs.

Article 23 The qualifications for  Hong Kong and Macao law firms and  Mainland law firms participating in the partnership, such as establishment terms, work performance, etc., shall be jointly used as the basis for assessing the qualifications of the joint venture law firms in  mainland business.

Article 24 The joint venture law firm shall, in the name of the firm, uniformly charge the parties for the services of lawyers when carrying out its business activities. Those of law affairs in Mainland China shall apply to the regulations and standards for the management of fees for lawyers in Mainland China; those of law affairs in Hong Kong and Macao shall be charged according to the fees and services standards or practice of lawyers in Hong Kong and Macao; if foreign law affairs are involved, charges may be collected through negotiation with the parties related.  

The business fees of the joint venture law firm shall be settled in Mainland China.

Article 25 The joint venture law firm shall establish a unified financial management and accounting system. The distribution of income from joint ventures, the way of sharing business expenses, the wages and benefits of resident lawyers and other personnel, and social insurance, and related funds to be established shall be handled in accordance with relevant laws and regulations and the provisions of the partnership agreement and the articles of association.  

The partnership law firm shall pay taxes by law.

Article 26 The joint venture law firm can employ a lawyer according to business needs. If a Mainland lawyers is employed, it shall be in the name of a Mainland-based law firm involved in the joint venture and act as a resident lawyer; if a Hong Kong or Macao lawyer is employed, it shall be in the name of the Hong Kong and Macao law firms involved in the joint venture lawyer and act as a resident lawyer.  

The partnership law firm can accept a person applying for the lawyer position for an internship at the firm, and employ assistants, secretaries and other supportive staff. The employment of mainland personnel shall comply with the provisions of the Labor Contract Law; the employment of overseas personnel shall also abide by relevant provisions of Mainland China.  

Article 27 The joint venture law firm shall participate in the professional liability insurance of lawyers. According to the agreement of the parties to the joint venture, the professional liability insurance can be purchased in the name of the joint venture law firm. In the case of purchasing professional liability insurance in the name of their respective resident lawyers, the professional liability insurance purchased by Hong Kong and Macao law firms in Hong Kong and Macao shall cover their practice activities in Mainland China. The amount of specific insurance coverage shall be determined by the parties to the joint venture.  

Article 28 If a joint venture law firm and its resident lawyers cause loss to the parties due to illegal or wrong practice, they shall be responsible for their debts in accordance with the statutory liability mechanism of the special general partnership, and the way of sharing liabilities shall be determined according to the liability mechanism and ways as stipulated in the partnership agreement.

 Article 29 The head of the joint venture law firm shall exercise management responsibilities for the business activities and internal affairs of the firm.

A joint venture law firm can establish a management committee, and members shall be selected from the resident lawyers by the parties to the joint venture. The terms of reference and rules of procedure of the management committee shall be stipulated in the charter.  

Article 30 The joint venture law firm shall, in accordance with the Law of Lawyers and relevant management regulations of Mainland China, establish and improve the management over lawyer  practice, conflict of interest review, practice risk prevention, fees and financial management, personnel and distribution management,  investigation into complaints, annual assessment,  management over archives and other internal management systems, and supervise the compliance of professional ethics and practice disciplines of  resident lawyers of the parties in the practice.

Article 31 The law firms of the parties to the joint venture shall, in accordance with the partnership agreement, supervise the operation of the joint venture law firm and the practice activities of their respective resident lawyers, establish a decision-making mechanism for the major affairs of the joint venture, as well as communicate and solve the problems arising during the joint venture in a timely manner through consultation.

 

Chapter V: Supervision and Management

 

Article 32 The Municipal Judicial Bureau shall supervise and manage the joint ventures among Hong Kong and Macao law firms and Mainland law firms in accordance with the provisions of these Measures.

The City Bar Association shall implement industrial management of the practice of the joint venture law firms and their lawyers.

Article 33 Lawyers stationed in Mainland China in a joint venture law firm shall join the Bar Association. The resident Hong Kong and Macao lawyers in the joint venture law firm shall join the city bar association as a Hong Kong and Macao lawyer members, participate in the activities of the bar association, accept the supervision and guidance of the bar association, enjoy the membership rights, and fulfill the membership obligations.

The joint venture law firm shall join the City Bar Association as a group member.

Article 34 The joint venture law firm shall accept the annual inspection and assessment of the judicial administrative organ of this city and submit the following documents to the Municipal Justice Bureau in the first quarter of each year:

(1) A summary report of law service activities of the firm in the previous year;

(2) The annual financial statements and law tax payment certificates audited by an accounting firm or an audit firm;

(3) The changes in the lawyers and other personnel stationed by the parties and important changes of the firm;

(4) Execution of other circumstances as stipulated in these Measures.

Article 35 The Municipal Judicial Bureau shall, in accordance with the provisions of the Approach of Annual Inspection and Assessment of Law Firms, conduct an annual inspection and assessment of the joint venture law firm, and evaluate its practice and management.

Under the guidance of the City Lawyer Association, the joint venture law firm shall conduct an annual assessment of the practice of the resident lawyers to the parties.

Article 36 If the Municipal Judicial Bureau finds that the joint venture law firm has problems of illegal or irregular practice or internal management problems in the annual inspection and assessment and daily supervision, it shall order the latter to make corrections. If the circumstances are serious, it shall impose corresponding administrative penalties on the latter based on the provisions of the Law of Lawyers and the "Measures for the Punishment of Lawyers and Law Firms for Violations of Law".

The resident lawyers of Mainland China with illegal acts shall be punished in accordance with the Law of Lawyers and the Measures for Punishment of Lawyers and Law Firms for Violations of Law; the resident lawyers of Hong Kong and Macao with illegal acts shall be dealt with according to the provisions of the Administrative Measures for Representative Offices of Hong Kong and Macao Special Administrative Regions in Mainland China.

If the lawyers stationed by the parties to the joint venture law firm violate the professional ethics and practice disciplines of lawyers, the City Bar Association shall render corresponding industrial sanctions; for the resident lawyers of Hong Kong and Macao, Hong Kong and Macao lawyer industrial organizations can also be recommended to give the corresponding penalty.

Article 37 The Municipal Judicial Bureau and the City Bar Association shall provide the joint venture law firm with services of all aspects required by the Mainland policies, law consultancy and joint venture pilots, coordinate with relevant competent authorities to provide convenience in work, customs clearance, office space, residence and taxation and so on for joint venture law firms concerned and their resident lawyers.

 

Chapter VI: Supplementary Provisions

Article 38 The Municipal Justice Bureau is responsible for the interpretation of these Measures.

Article 39 These Measures shall be valid for two years and shall come into force on December 1, 2018 and terminate on November 30, 2020.