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Joint Venture Success in China: Deadlock Prevention and Countermeasures



Joint ventures (JVs) present investors with a unique advantage in a new market or prime a business for continued long-term success. However, often inadequate thought is given to the possibility of a corporate deadlock, which bears a clear risk for business operations.

According to publicly available information from adjudication documents, over half of the more than 20,000 corporate related disputes in China’s Mainland in 2021 were related to company management and governance. Such disputes, including disputes over shareholders' right to know, the legality of internal resolutions and procedures, and the damage to corporate interests by shareholders and executives, can undermine the trust among shareholders, hinder the long-term stability of a company’s operations, and can lead to a corporate deadlock.

As a shareholder of a JV, how can you exercise your shareholder rights and supervise the normal operation of it to avoid the loss of control and the occurrence of a deadlock? What measures can you take to protect your legitimate interests when a deadlock is inevitable?

In this webinar, Chenchen Liu, Assistant Manager of Business Advisory Services, and Ivy Gu, Manager of Audit and Corporate Accounting Services, explains what leads to a JV deadlock, and what countermeasures shareholders could take to resolve the situation.

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