According to the provisions of the Foreign Investment Law,as of January 1,2020,the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures,the Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures,and the Law of the People's Republic of China on Wholly Foreign-Owned Enterprises were simultaneously repealed.The law also stipulates a five-year transition period,that is,from January 1,2020,to December 31,2024.During these five years,the original foreign-invested enterprises can continue to retain their original organizational forms and structures,but they need to complete the changes in organizational forms,structures,etc.within the transition period to comply with the provisions of the Foreign Investment Law and the Company Law.

Up to now,the five-year transition period has expired.What impacts may Chinese-foreign equity joint ventures,Chinese-foreign contractual joint ventures,and wholly foreign-owned enterprises(hereinafter referred to as the"original three types of foreign-funded enterprises")that have not changed their organizational forms and structures in accordance with the Company Law and the Partnership Enterprise Law face?

There may be obstacles when handling the change of registration items.

Article 44 of the Regulations for the Implementation of the Foreign Investment Law stipulates that as of January 1,2025,for existing foreign-invested enterprises that have not adjusted their organizational forms,structures,etc.in accordance with the law and handled the change of registration,the market supervision and management department will not handle other registration items applied for by them and will publicize the relevant circumstances.According to this regulation,when the original three types of foreign-funded enterprises subsequently handle the changes of registration items such as directors,supervisors,senior management personnel,legal representatives,domiciles,business scopes,etc.,they may face obstacles from the market supervision and management department.

The validity of the company's resolutions is in an uncertain state,affecting the security and stability of the company's external transactions.

Currently,there is a controversy in practice regarding whether the original three types of foreign-funded enterprises should directly apply the provisions of the Company Law and other regulations or the provisions of the original articles of association after the expiration of the transition period.If the provisions of the Company Law are directly applied,the highest authority of the original three types of foreign-funded enterprises will automatically change from the board of directors to the shareholders'meeting,and the board of directors will have no right to exercise the powers that should be exercised by the shareholders'meeting as stipulated in the Company Law.At this time,the resolutions made by the board of directors still in accordance with the provisions of the original articles of association will be invalid due to violating the mandatory provisions of the Company Law.If the provisions of the original articles of association are applied,the validity of the resolutions made by the shareholders'meeting in accordance with the provisions of the Company Law is in an uncertain state.The invalidity or uncertainty of the company's resolutions will inevitably affect the security and stability of the company's external transactions.

The publicity of relevant information may affect the business reputation of the enterprise and the evaluation of the enterprise by potential customers.

Article 44 of the Regulations for the Implementation of the Foreign Investment Law stipulates that for the original foreign-invested enterprises that have not adjusted their organizational forms and structures in accordance with the law,in addition to not handling the change of other registration items,the relevant circumstances will also be publicized.The publicity of this information may affect the evaluation of the enterprise by potential customers and affect the enterprise's bidding,commercial financing,and normal business operation order.

Based on the above impacts,it is recommended that foreign-invested enterprises that have not adjusted their organizational forms and structures within the transition period(1)complete the changes in organizational forms,structures,etc.in a timely manner;(2)conduct a compliance review of the company's articles of association in combination with the provisions of the Company Law,the Foreign Investment Law,etc.to ensure compliance with relevant laws and regulations;(3)strengthen communication with government departments such as the market supervision and management department to ensure that all materials such as the resolutions made by the company comply with the legal provisions and the specific requirements of the regulatory authorities.