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2025-04

JC Master Research | Typical Cases in the Corporate Equity Change Phase — Equity Transfer Disputes 3

Mr. Yang was formerly a shareholder of a certain environmental engineering company and entered into a Share Transfer Agreement with Mr. Liu, under which the parties agreed as follows: First, Mr. Yang would transfer his 33% equity interest in the said environmental engineering company to Mr. Liu for a consideration of RMB 3.26 million; second, Mr. Yang undertook that, from the date the share transfer is completed, neither he personally nor any enterprise he controls or is affiliated with shall manufacture or operate any patented technologies or products owned by Mr. Liu or his enterprises, nor shall they manufacture or operate fiber‑bundle filtration technologies or related products, nor shall they engage in any conduct that infringes upon the interests of Mr. Liu or his enterprises. In the event of a breach of this undertaking, Mr. Yang would compensate Mr. Liu in the amount of RMB 2 million (hereinafter referred to as the non‑competition clause). Subsequently, Mr. Liu paid Mr. Yang a total of RMB 3.26 million in four installments for the share transfer. Both parties then filed an application with the company registration authority to effect the registration of the equity change, which was duly approved. Shortly thereafter, Mr. Yang, through a capital increase, became a shareholder of a certain water‑purification company, holding an 80% stake. Thereafter, the water‑purification company successively won, via its fiber‑bundle filtration products, both the procurement project for wastewater treatment equipment of a certain wastewater treatment company and the construction project for the plant facilities of another wastewater treatment plant. In the public announcement of the winning bids for these projects, the environmental engineering company was listed as the runner-up.

2025-04-23

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