The Legal Question Research Of Foreign Merchant Contributive Assignment In Chinese-Foreign Co-operative Enterprise

In this paper, I start with an overview of the basic theory of the capital transfer. Then I analyzed the three legal issues related to the foreign-funded transferand make relevant countermeasures. As a common method of transactions in the market, capital transfer can help effectively utilize market resources, optimize the allocation of resources and improve efficiency. Although researches on capital transfer have been comprehensive and detailed, there remains a lot of study on foreign-funded capital transfer. Compared to general capital transfer, foreign-funded capital transfer involves more legal issues. It is crucial to find out corresponding measures so that the foreign-funded transfer can be legalized, thus protecting China’s legitimate interests and maintaining the stability of market.Based on previous researches on the foreign-funded transfer, I proposed two new perspectives in this paper. To start with, a certain time limit should be applied to foreign-funded transfer. Generally, as long as the capital transfer complies with the law, party autonomy regarding to time arrangement is acknowledged without many legal restrictions. However, I insist that foreign capital transfer should be time-limited and should not allow random sale for the following three reasons. Firstly, it will put Sino-foreign joint ventures under huge risks if foreign vender can transfer capital easily when companies encounter obstacles or difficulties. This irresponsible behavior might result in bankruptcy, which is against the original goal of introducing foreign funding. Secondly, foreign funding should not be able to be transferred if the foreign venture hasn’t fulfilled its obligation according to the contract provisions. This way, we can make sure that China’s assets are not misappropriated. Thirdly, if the foreign funder is granted the decision-making authority, they are likely to transfer the funding to a third party which is not conductive to the Chinese partner. This will badly affect the company’s security and interests of the Chinese partner.The second viewpoint I indicate in this research is that re-evaluation of intangible assets is necessary during foreign-funded transfer. Foreign-funded intangible assets include advanced technology and trademark rights. It’s inevitable to avoid wear and tear of technology after years in use. Moreover, what’s originally considered advanced technology will be outdated with the innovation of new technologies. It should also take into consideration whether a brand can stay survive and stay strong in the competitive and changing. Because of these, it is necessary to reevaluate the intangible assets during capital transfer.I also examine legal problems in foreign capital transfer from an economic point of view, which is effective in explaining the crux of China’s loss in foreign capital transfer. Based on the results, I will further propose more targeted legislation recommendations and suggestions.