The New Year is coming up fast, and it’s the season for China companies to conduct their required year-end review. This time of year is busy for China Law firms as we are asked to perform yearly reviews of client’s internal and external operations and policies. These reviews are vital tools for our client’s often overseas in the USA or Europe, to understand what is going on with their China company, and what may need to be changed.
The firm is able to assist our clients in review and revision of internal corporate compliance and management policies, including the companies, Business continuity Plan and Disaster Recovery Plan, Corporate Social Responsibility Policy, Health and Safety Policy, and others to ensure that those policies are in compliance with current Chinese laws and regulations and effectively address the unique risks faced by the company in China. Often these policies from our overseas clients are tailored to the legal and business environment and are unable to effectively address China related problems.
We also recommend a yearly review of the company’s employer-employee relationship. This helps to identify any employment contracts which may have recently expired and must be renewed, or to identify those which will expire in the upcoming year to better enable the company to prepare ahead of time.
A thorough review of company document and chop management procedures may come in handy in securing appropriate access to critical company seals and official document. Misuse of these items in the wrong hands can cost the company dearly.
A detailed review of the company’s property arrangements, including real property leasing and ownership arrangements, and intellectual properties, is important to secure the companies safe operations over the coming year.
While we understand clients conduct a lot of business out of sight form their lawyers, it is recommended that any major transactions or contracts are reviewed annually to identify any latent risks. Often changes in law or regulations may slide under the radar at a company, and a contract that was once airtight can now be compromised due to the change. An annual review by our China lawyers will help prevent this.
If there are any ongoing litigation matters or arbitrations, well, we hope you have engaged lawyers early on, but if you haven’t it is always advisable to let a professional China lawyer take a look at the issues and the evidence to see if they may have a different approach.
Accounts Receivable should be reviewed to determine whether there are any potential claims at risk of expiring under China’s laws time barring claims.
As China is stepping up regulatory enforcement against domestic and foreign companies alike, the way to prevent major problems for your China company is to be involved and knowledgeable about its operations and potential problems. The end of the year presents the opportunity to step up your involvement and identify problems before they become a “big problem”.