{"id":108,"date":"2020-04-01T20:27:57","date_gmt":"2020-04-01T12:27:57","guid":{"rendered":"http:\/\/charltonsnaturalresources.com\/?page_id=108"},"modified":"2021-03-03T14:56:16","modified_gmt":"2021-03-03T06:56:16","slug":"documentation-approval-timing","status":"publish","type":"page","link":"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/documentation-approval-timing\/","title":{"rendered":"Documentation, Approval Process and Timing"},"content":{"rendered":"[et_pb_section fb_built=&#8221;1&#8243; custom_padding_last_edited=&#8221;on|desktop&#8221; admin_label=&#8221;ContentWrapper2&#8243; module_id=&#8221; &#8221; module_class=&#8221;content-wrapper2&#8243; _builder_version=&#8221;4.0.5&#8243; background_color=&#8221;#ffffff&#8221; custom_padding=&#8221;0px||0px|||&#8221; custom_padding_tablet=&#8221;50px|0|50px|0&#8243; custom_padding_phone=&#8221;&#8221; transparent_background=&#8221;off&#8221; padding_mobile=&#8221;off&#8221; make_fullwidth=&#8221;off&#8221; use_custom_width=&#8221;off&#8221; width_unit=&#8221;on&#8221;][et_pb_row column_structure=&#8221;2_3,1_3&#8243; use_custom_gutter=&#8221;on&#8221; gutter_width=&#8221;1&#8243; module_class=&#8221;main-content2&#8243; _builder_version=&#8221;4.4.3&#8243; width=&#8221;100%&#8221; max_width=&#8221;100%&#8221; z_index_tablet=&#8221;500&#8243; box_shadow_horizontal_tablet=&#8221;0px&#8221; box_shadow_vertical_tablet=&#8221;0px&#8221; box_shadow_blur_tablet=&#8221;40px&#8221; box_shadow_spread_tablet=&#8221;0px&#8221;][et_pb_column type=&#8221;2_3&#8243; _builder_version=&#8221;3.0.47&#8243; custom_padding=&#8221;|||&#8221; custom_padding__hover=&#8221;|||&#8221;][et_pb_text admin_label=&#8221;Breadcrumbs&#8221; module_class=&#8221;breadcrumb-wrapper&#8221; _builder_version=&#8221;3.27.4&#8243;]<div class=\"breadcrumb\">\r\n<ul><li><a href=\"\/\">Home<\/a><\/li><li><a href='https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/' title='M &#038; A'>M &#038; A<\/a><\/li><li><a href='https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/' title='Acquisitions in the PRC'>Acquisitions in the PRC<\/a><\/li><li><span>Documentation, Approval Process and Timing<\/span><\/li><\/ul>\r\n<\/div>\r\n[\/et_pb_text][et_pb_text admin_label=&#8221;Section Title&#8221; _builder_version=&#8221;4.4.3&#8243; global_module=&#8221;229966&#8243;]<h2 class=\"section-title\">M &#038; A<\/h2>\r\n[\/et_pb_text][et_pb_text admin_label=&#8221;ContentMenuBar1&#8243; _builder_version=&#8221;4.4.3&#8243;]<div class=\"content-menubar\">\r\n<div class=\"page-menu-panel\">\r\n<h3>M &#038; A<\/h3>\r\n<span class=\"hamburger\"><\/span>\r\n<\/div>\r\n<ul class=\"cm-parent\"><li class=\"page_item page-item-95\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/private-international-acquisitions\/\">Private International Acquisitions<\/a><\/li>\n<li class=\"page_item page-item-96 page_item_has_children\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/\">Acquisitions in the PRC<\/a>\n<ul class='children'>\n\t<li class=\"page_item page-item-107\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/approval-processes\/\">Governmental Approval Processes for PRC Acquisitions<\/a><\/li>\n\t<li class=\"page_item page-item-108\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/documentation-approval-timing\/\">Documentation, Approval Process and Timing<\/a><\/li>\n\t<li class=\"page_item page-item-109\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/foreign-exchange-issues\/\">Foreign Exchange Issues<\/a><\/li>\n\t<li class=\"page_item page-item-110\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/additional-information-for-listed-companies\/\">Additional Information for Listed Companies<\/a><\/li>\n<\/ul>\n<\/li>\n<li class=\"page_item page-item-97 page_item_has_children\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/due-diligence\/\">Due Diligence<\/a>\n<ul class='children'>\n\t<li class=\"page_item page-item-115\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/due-diligence\/acquisition-of-exploration-project-or-joint-venture-partnership\/\">Acquisition of Exploration Project or Joint Venture Partnership<\/a><\/li>\n\t<li class=\"page_item page-item-116\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/due-diligence\/acquisition-of-producing-properties\/\">Acquisition of Producing Properties<\/a><\/li>\n<\/ul>\n<\/li>\n<li class=\"page_item page-item-98\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/public-market-offers\/\">Public Market Offers &#8211; Hong Kong<\/a><\/li>\n<li class=\"page_item page-item-99 page_item_has_children\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/\">Reverse Takeovers<\/a>\n<ul class='children'>\n\t<li class=\"page_item page-item-119\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/rtos-under-the-hong-kong-stock-exchange-listing-rules\/\">RTOs under the HKEX Listing Rules<\/a><\/li>\n\t<li class=\"page_item page-item-120\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/exchanges-discretion\/\">HKEX\u2019s Discretion<\/a><\/li>\n\t<li class=\"page_item page-item-121\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/how-does-the-exchange-look-at-change-in-control\/\">How does the Exchange look at \u201cChange in Control\u201d?<\/a><\/li>\n<\/ul>\n<\/li>\n<li class=\"page_item page-item-100\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-or-disposals-by-hong-kong-listed-companies\/\">Acquisitions or Disposals by Hong Kong Listed Companies<\/a><\/li>\n<\/ul>\r\n<\/div>[\/et_pb_text][et_pb_text admin_label=&#8221;Title&#8221; _builder_version=&#8221;4.4.3&#8243;]<h1 class=\"content-title\">Documentation, Approval Process and Timing<\/h1>[\/et_pb_text][et_pb_text admin_label=&#8221;Content&#8221; _builder_version=&#8221;4.9.0&#8243; background_size=&#8221;initial&#8221; background_position=&#8221;top_left&#8221; background_repeat=&#8221;repeat&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<p><strong>Direct Equity Acquisition<\/strong><\/p>\r\n<p>In the case of a direct acquisition in the PRC, the main documentation includes:<\/p>\r\n<ul>\r\n<li>An agreement for the transfer of or subscription for the target\u2019s registered capital.<\/li>\r\n<li>Where the target is converted into a joint venture (\u201cJV\u201d) or a multi-investor wholly foreign owned enterprise (\u201cWFOE\u201d) upon completion of the transaction, a new joint venture contract (for a JV) or shareholders\u2019 agreement (for a multi-investor WFOE) may be necessary.<\/li>\r\n<li>Unanimous board resolution of the target enterprise, consent from existing investors in the target and waiver of their pre-emptive rights to purchase the equity transferred, or shareholders\u2019 unanimous resolution in case of acquisition of domestic companies.<\/li>\r\n<\/ul>\r\n<p><strong>Asset Acquisition<\/strong><\/p>\r\n<p>In the case of a direct acquisition in the PRC, the main documentation includes:<\/p>\r\n<ul>\r\n<li>An appropriate asset transfer agreement for the primary transaction.<\/li>\r\n<li>The resolution of the seller of the assets approving the sale of assets.<\/li>\r\n<li>Notification to creditors, or staffing plans.<\/li>\r\n<\/ul>\r\n<p><strong>Governmental Procedures for Acquisitions by Foreign Investors<\/strong><\/p>\r\n<p>Apart from acquisitions that are regulated under the Negative List for foreign investment, which are subject to special administrative measures for foreign investments, equity and asset acquisitions by foreign investors are no longer subject to the approval\/filing procedures. Instead they are only required to be reported to the commerce department. According to the new regime, an equity or asset acquisition by foreign investors shall be subject to an information report obligation stipulated under <em>Measures for the Reporting of Foreign Investment Information (\u201cReporting Measures\u201d)<\/em>. Reporting Measures require the foreign investors to report relevant investment information to commerce departments through the enterprise registration system and the National Enterprise Credit Information Publicity System. Particularly, a foreign investor that acquires a PRC enterprise by equity acquisition shall submit an initial report through the enterprise registration system when undergoing modification registration of the acquired enterprise.<\/p>\r\n<p>It is worth noting that although the market access approval\/filing requirements have been abolished, the requirements of the Development and Reform Commission on project approval\/filing are still applicable to both foreign invested enterprises and domestic companies.<\/p>\r\n<p><strong>Non-Governmental Consents and Approvals<\/strong><\/p>\r\n<p>In the case of an acquisition, certain other non-governmental consents and approvals may be required before the transaction can be completed, including: the consent of the seller; consents and waivers from other shareholders; board approval; contractual obligations (for example, bank loans or security agreements may contain provisions requiring lender approval for any change of control of a borrower).<\/p>\r\n<p>In the case of an asset acquisition, public announcements and creditor notifications will also be required. A domestic company selling its assets should notify its creditors and make a public announcement within 10 days of the date on which its board passes the relevant resolution to sell the assets. Any creditors will have the right to demand that the seller provide commensurate security. If the target company is to be dissolved pursuant to an asset transaction, all creditors should be notified within 10 days of receiving an initial approval reply from the approval authority, pursuant to the PRC liquidation and dissolution procedures.<\/p>[\/et_pb_text][et_pb_text admin_label=&#8221;SubM-sibling&#8221; _builder_version=&#8221;4.4.3&#8243;]<div class=\"page-submenu\"> \r\n<ul><li class=\"page_item page-item-107\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/approval-processes\/\">Governmental Approval Processes for PRC Acquisitions<\/a><\/li>\n<li class=\"page_item page-item-108\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/documentation-approval-timing\/\">Documentation, Approval Process and Timing<\/a><\/li>\n<li class=\"page_item page-item-109\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/foreign-exchange-issues\/\">Foreign Exchange Issues<\/a><\/li>\n<li class=\"page_item page-item-110\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/additional-information-for-listed-companies\/\">Additional Information for Listed Companies<\/a><\/li>\n<\/ul>\r\n<\/div> [\/et_pb_text][et_pb_text admin_label=&#8221;News Title&#8221; module_class=&#8221;content2-news-title&#8221; _builder_version=&#8221;4.4.3&#8243;]<h1 class=\"content-subtitle\">Read our latest News<\/h1>[\/et_pb_text][et_pb_blog fullwidth=&#8221;off&#8221; posts_number=&#8221;6&#8243; include_categories=&#8221;23&#8243; show_author=&#8221;off&#8221; show_categories=&#8221;off&#8221; show_excerpt=&#8221;off&#8221; show_pagination=&#8221;off&#8221; admin_label=&#8221;News Thumbs&#8221; module_class=&#8221;cu-blog&#8221; _builder_version=&#8221;4.4.2&#8243;][\/et_pb_blog][et_pb_text admin_label=&#8221;Click more news&#8221; _builder_version=&#8221;4.4.2&#8243;]<div class=\"bottom-click-more\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/news\/\">Click here to read more News<\/a><\/div>[\/et_pb_text][\/et_pb_column][et_pb_column type=&#8221;1_3&#8243; _builder_version=&#8221;3.25.3&#8243; custom_padding=&#8221;|||||false&#8221; custom_padding__hover=&#8221;|||&#8221;][et_pb_image src=&#8221;\/legal\/m-and-a\/acquisitions_in_the_prc.jpg&#8221; admin_label=&#8221;Side Hero&#8221; module_class=&#8221;side-hero-wrapper&#8221; _builder_version=&#8221;4.4.3&#8243;][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section]","protected":false},"excerpt":{"rendered":"<p><ul><li><a href=\"\/\">Home<\/a><\/li><li><a href='https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/' title='M &#038; A'>M &#038; A<\/a><\/li><li><a href='https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/' title='Acquisitions in the PRC'>Acquisitions in the PRC<\/a><\/li><li><span>Documentation, Approval Process and Timing<\/span><\/li><\/ul> M &#038; A M &#038; A <ul class=\"cm-parent\"><li class=\"page_item page-item-95\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/private-international-acquisitions\/\">Private International Acquisitions<\/a><\/li>\n<li class=\"page_item page-item-96 page_item_has_children\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/\">Acquisitions in the PRC<\/a>\n<ul class='children'>\n\t<li class=\"page_item page-item-107\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/approval-processes\/\">Governmental Approval Processes for PRC Acquisitions<\/a><\/li>\n\t<li class=\"page_item page-item-108\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/documentation-approval-timing\/\">Documentation, Approval Process and Timing<\/a><\/li>\n\t<li class=\"page_item page-item-109\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/foreign-exchange-issues\/\">Foreign Exchange Issues<\/a><\/li>\n\t<li class=\"page_item page-item-110\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-prc\/additional-information-for-listed-companies\/\">Additional Information for Listed Companies<\/a><\/li>\n<\/ul>\n<\/li>\n<li class=\"page_item page-item-97 page_item_has_children\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/due-diligence\/\">Due Diligence<\/a>\n<ul class='children'>\n\t<li class=\"page_item page-item-115\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/due-diligence\/acquisition-of-exploration-project-or-joint-venture-partnership\/\">Acquisition of Exploration Project or Joint Venture Partnership<\/a><\/li>\n\t<li class=\"page_item page-item-116\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/due-diligence\/acquisition-of-producing-properties\/\">Acquisition of Producing Properties<\/a><\/li>\n<\/ul>\n<\/li>\n<li class=\"page_item page-item-98\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/public-market-offers\/\">Public Market Offers &#8211; Hong Kong<\/a><\/li>\n<li class=\"page_item page-item-99 page_item_has_children\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/\">Reverse Takeovers<\/a>\n<ul class='children'>\n\t<li class=\"page_item page-item-119\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/rtos-under-the-hong-kong-stock-exchange-listing-rules\/\">RTOs under the HKEX Listing Rules<\/a><\/li>\n\t<li class=\"page_item page-item-120\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/exchanges-discretion\/\">HKEX\u2019s Discretion<\/a><\/li>\n\t<li class=\"page_item page-item-121\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/reverse-takeovers\/how-does-the-exchange-look-at-change-in-control\/\">How does the Exchange look at \u201cChange in Control\u201d?<\/a><\/li>\n<\/ul>\n<\/li>\n<li class=\"page_item page-item-100\"><a href=\"https:\/\/charltonsnaturalresources.com\/en\/mergers-and-acquisitions\/acquisitions-or-disposals-by-hong-kong-listed-companies\/\">Acquisitions or Disposals by Hong Kong Listed Companies<\/a><\/li>\n<\/ul> Documentation, Approval Process and TimingDirect Equity Acquisition In the case of a direct acquisition in the PRC, the main documentation includes: An agreement for the transfer of or subscription for the target\u2019s registered capital. Where the target is converted into a joint venture (\u201cJV\u201d) or a multi-investor wholly foreign owned enterprise (\u201cWFOE\u201d) upon completion of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":96,"menu_order":1,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"<!-- wp:heading -->\r\n<h2>Direct Equity Acquisition<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>In the case of a direct acquisition in the PRC, the main documentation includes:<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list -->\r\n<ul><li>\u00a0An agreement for the transfer of or subscription for the target's registered capital.<\/li><li>Where the target is converted into a joint venture (\"JV\") or a multi-investor wholly foreign owned enterprise (\"WFOE\") upon completion of the transaction, a new joint venture contract (for a JV) or shareholders' agreement (for a multi-investor WFOE) may be necessary.<\/li><li>Unanimous board resolution of the target enterprise, consent from existing investors in the target and waiver of their pre-emptive rights to purchase the equity transferred, or shareholders' unanimous resolution in case of acquisition of domestic companies.<\/li><\/ul>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:heading -->\r\n<h2>Asset Acquisition<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>In the case of a direct acquisition in the PRC, the main documentation includes:<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list -->\r\n<ul><li>An appropriate asset transfer agreement for the primary transaction.<\/li><li>The resolution of the seller of the assets approving the sale of assets.<\/li><li>Notification to creditors, or staffing plans.<\/li><\/ul>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:heading -->\r\n<h2>Approval Process and Timing<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>Upon receipt of all necessary documents for either a direct acquisition or an asset acquisition in the PRC, the approval authority will review the substance of the Chinese versions of the documents, and may request changes to them. The time for obtaining the necessary approvals can range from several weeks to more than a year, even assuming that the approval authority has raised no issues during the approval process.<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:heading -->\r\n<h2><br>Non-Governmental Consents and Approvals<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>In the case of an acquisition, certain other non-governmental consents and approvals may be required before the transaction can be completed, including: the consent of the seller; consents and waivers from other shareholders; board approval; contractual obligations (for example, bank loans or security agreements may contain provisions requiring lender approval for any change of control of a borrower).<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>In the case of an asset acquisition, public announcements and creditor notifications will also be required. A domestic company selling its assets should notify its creditors and make a public announcement within 10 days of the date on which its board passes the relevant resolution to sell the assets. Any creditors will have the right to demand that the seller provide commensurate security. If the target company is to be dissolved pursuant to an asset transaction, all creditors should be notified within 10 days of receiving an initial approval reply from the approval authority, pursuant to the PRC liquidation and dissolution procedures.<\/p>\r\n<!-- \/wp:paragraph -->","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[27],"class_list":["post-108","page","type-page","status-publish","hentry","category-ma","cat-27-id"],"_links":{"self":[{"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/pages\/108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/comments?post=108"}],"version-history":[{"count":12,"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/pages\/108\/revisions"}],"predecessor-version":[{"id":232862,"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/pages\/108\/revisions\/232862"}],"up":[{"embeddable":true,"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/pages\/96"}],"wp:attachment":[{"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/media?parent=108"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/charltonsnaturalresources.com\/en\/wp-json\/wp\/v2\/categories?post=108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}