Intermediate Economic Law flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Three-year limitation period

Under the Civil Code, a claim must be brought within three years of knowing the right and obligor; the maximum period from infringement is twenty years, extendable by court approval.

Void versus voidable acts

Void civil juristic acts have no effect from the outset, such as malicious collusion harming others; voidable acts like fraud remain effective until challenged and rescinded within one year.

Apparent agency

When an agent acts without authority but the principal's conduct gave a good-faith third party reason to believe authority existed, the principal bears the legal consequences of the act.

General partner liability

General partners bear unlimited joint and several liability for partnership debts with personal assets, while limited partners risk only their subscribed capital contributions.

Limited partnership composition

A limited partnership needs at least one general partner and one limited partner; listed companies, wholly state-owned companies, and public-interest institutions cannot serve as general partners.

Unanimous consent matters

Amending the partnership agreement, admitting new partners, and dissolving the partnership require unanimous consent of all partners unless the agreement provides otherwise.

LLC shareholder cap

A limited liability company may have no more than fifty shareholders, and a joint stock company needs at least two promoters, half of whom must be domiciled in China.

Statutory reserve rule

A company must allocate ten percent of after-tax profit to the statutory reserve until it reaches fifty percent of registered capital; profits cannot be distributed before covering losses.

Piercing the corporate veil

A shareholder who abuses limited liability to evade debts and seriously harms creditors loses limited liability and bears joint personal liability for the company's debts.

Preference avoidance window

The administrator may avoid preferential repayments made within six months before bankruptcy acceptance, and within one year for repayments to related parties.

Claims payment order

Bankruptcy claims are paid in order: expenses and common-benefit debts, employee wages and social insurance, taxes, then ordinary claims; secured creditors are paid first from collateral.

Reorganization plan approval

A reorganization plan requires approval by each creditor class and court confirmation; a fair and feasible plan may be confirmed over a dissenting class without unfair discrimination.

Five percent disclosure rule

An investor reaching five percent of a listed company's shares must report and disclose within three days and may not trade during that period; each further five percent triggers the duty.

Thirty percent tender offer

When an investor's stake reaches thirty percent, a tender offer to all shareholders on equal terms is triggered, with an offer period of at least thirty days.

Insider trading prohibition

Insiders may not trade, tip, or advise others using material nonpublic information until two trading days after the information is publicly disclosed.

Standard-form clause control

Clauses that unreasonably exempt the drafter's liability, increase the other party's burden, or exclude main rights are void, and ambiguity is interpreted against the drafter.

Foreseeable loss rule

Damages for breach cover actual loss including lost profits but may not exceed the loss the breaching party foresaw or should have foreseen at contract formation.

Penalty adjustment threshold

A court may reduce an excessive penalty or increase an insufficient one; a penalty exceeding thirty percent above actual loss is typically treated as excessively high.

Real property registration

Real property rights transfer only on registration, while movable property rights transfer on delivery; mortgage rights over real property arise when registration is completed.

Default guarantee period

If no guarantee period is agreed, it defaults to six months from the due date of the principal debt, within which the creditor must claim against the guarantor.

Lienholder priority

A creditor lawfully possessing the debtor's movable property may retain it when the debt is due and unpaid, and has priority to be paid from its value.

VAT rate structure

VAT uses thirteen percent for goods, nine percent for transportation, construction, and real estate, six percent for modern services, and a three percent levy rate for small-scale taxpayers.

Input tax deduction limits

Input VAT is deductible only with valid special invoices or lawful vouchers; it is not deductible for simplified-tax items, exempt items, or collective welfare consumption.

Corporate income tax rate

Corporate income tax applies at twenty-five percent generally, fifteen percent for high-tech enterprises, and a reduced effective rate for small low-profit enterprises.

Comprehensive income taxation

Wages, labor remuneration, author's remuneration, and royalties are combined as comprehensive income, taxed at three to forty-five percent after a 60,000-yuan annual deduction.

Administrative reconsideration deadline

A citizen may apply for administrative reconsideration within sixty days of knowing an administrative act; the reconsideration organ decides within sixty days, extendable by thirty days.

Administrative litigation deadline

Administrative litigation must be filed within six months of knowing the administrative act; the defendant agency bears the burden of proving the act's legality.

Proportionality principle

Administrative measures must be necessary and cause the least harm to achieve the statutory purpose; excessive measures may be revoked or invalidated by a court.

Arbitration agreement requirement

Arbitration requires a written agreement designating an arbitration commission; without it, courts have jurisdiction, and awards are final and binding on the parties.

Setting aside an award

A party may apply to set aside an arbitration award within six months on statutory grounds such as no valid agreement, excess of authority, or procedural violation.

Appeal periods

A party dissatisfied with a first-instance judgment may appeal within fifteen days, or within ten days for a ruling; the appellate court may uphold, modify, or remand.

Burden of proof

The party asserting a fact bears the burden of proving it; evidence obtained illegally or not cross-examined may not be admitted as a basis for judgment.