In case of a de-merger of a company, the Enterprise Law 2020 does not make clear when will the de-merger of the new company from a de-merged company (or existing company) be considered as legally competed. However, it appears that a de-merger could be considered completed when (1) a new enterprise registration certificate of the new company is issued, and (2) assets and liabilities of the existing company are transferred to the new company in accordance with the de-merger decision of the owners/shareholders of the existing company. This is because the Enterprise Law 2020 provides that:

• after registration of the enterprise, the new company and the existing company are jointly liable for the obligations and liabilities of the existing company; and

• the new company will automatically inherit all rights and obligations allocated to it in accordance with the de-merging decision of the owners/shareholders of the existing company.

When determining who is a related person of a non-public joint stock company (JSC), as a routine, one would turn to Article 4.23 of the Enterprise Law 2020. Article 4.23 lists out the related persons of a company. However, Article 167.1 of the Enterprise Law 2020 on related party transactions (RPTs) applicable to JSCs suggests that the list of related persons under Article 4.23 might not be exhaustive.

Article 167.1 reads that: the General Meeting of Shareholders or the Board of Directors approve contract and transactions between the JSC and “the following related persons”:

(a) shareholders, authorized representatives of shareholders holding more than 10% ordinary shares and their related persons;

(b) members of the Board of directors, (general) director and their related persons; and

(c) enterprises that the members of the Board of directors, supervisory committee, (general) directors, and other managers of the company have an interests and must report to the JSC in accordance with Article 164.2 of the Enterprise Law 2020.

Article 13 of Decree 35/2020 sets out two different sets of merger filing threshold. In particular, the one provided under Article 13.2 (Special Threshold) applies to transactions involving regulated companies such as credit institutions, insurance companies, and securities companies (Special Company), whereas the remaining one under Article 13.1 (Regular Threshold) applies to transactions involving remaining types of companies (Regular Company). The two sets of different merger filing thresholds give rise to various uncertainties for a M&A transaction involving a Special Company.

First, in the case of a transaction involving a Special Company and a Regular Company, it is not clear if a merger filing must be made when:

• Situation 1: The Regular Company does not trigger the Regular Threshold but the Special Company triggers the Special Threshold; or

• Situation 2: The Regular Company triggers the Regular Threshold and the Special Company triggers the Special Threshold; or

• Situation 3: The Regular Company triggers the Regular Threshold but the Special Company does not trigger the Special Threshold.