other relevant regulations. Article 43
Staff members and workers of the joint venture company shall pay individual income tax according to the “ Individual Income Tax Law of the People’s Republic of china ”. Article 44
Allocations for reserve funds, expansion funds of the joint venture company and welfare funds and bonuses for employees shall be set aside in accordance with the stipulations in the “ Law f the People’s republic of China on Joint Ventures Using Chinese and foreign Investment ”. The annual proportion of allocation shall be decided by the board of directors in light of business performance of the joint venture company. Article 45
The fiscal year of the joint venture company shall be from January 1 to December 31. All vouchers, receipts, statistics statements and reports, accounts books shall be written in Chinese. English can be used concurrently in case where Party B insists , but Party B shall bear the expenses thus incurs.
Article 46
Financial review of the joint venture company shall be conducted by an auditor registered in China and reports shall be submitted to the board of directors and the general manager.
In event where Party B considers it necessary to engage a foreign auditor registered in other country to undertake annual financial review, Party A shall give his consent, but all expenses thereof shall be borne by Party B. Article 47
In the first three month of each fiscal year, the manager shall prepare previous year’s balance sheet, profit and loss statement and proposal for disposal of profits, and submit them to the board of directors for examination and approval.
Chapter 15 Duration of the Joint Venture Article 48
The duration of the joint venture company is thirty years. The incorporation of the joint venture company shall start from the date on which the business license of the joint venture company is issued.
An application for the extension of the duration, proposed by one party and unanimously approved by the board of directors, shall be submitted to the Ministry of Foreign Economic Relations and Trade six months prior to the expiration date of the joint venture.
Chapter 16 The Disposal of Assets after the Expiration of the Duration Article 49
Upon termination of the joint venture before contracted expiry date of the joint venture, liquidation shall be carried out in accordance with to relevant laws and rules. The liquidated assets shall be distributed in proportion to investment contributed by both parties.
Chapter 17 Insurance Article 50
The amendment of the contract or other appendices shall come into force only after the written agreement signed by both parties and approved by the original examination and approval authorities. Article 52
In case of inability to perform the contract or to continue operation due to heavy losses in successive years as a result of force majeure, the duration of the joint venture and the contract shall be terminated before the contracted expiry date after unanimously agreed upon by the board of directors and approved by the original examination and approval authorities. Article 53
Should the joint venture company be unable to continue its operations or achieve the business purpose stipulated in the contract due to the fact that one of the contracting parties fails to fulfill the obligations specified by the contract and articles of associations, or seriously violate the stipulations of the contract, the other party, apart from claiming damages, shall be in the position to terminate the contract in accordance with the provisions of the contract after it is approved by the original examination and approval authority. In case where both parties to the joint venture agree to continue the operation, the party that fails to fulfill the obligations shall be liable for the economic losses thus caused to the joint venture company.
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