When sourcing from Quanzhou, overseas companies should consider not only the contract itself but also the type of local supplier, the surrounding supply chain and the nature of the goods or services involved. Quanzhou has a large export-oriented manufacturing base covering footwear, textiles, consumer goods and industrial products. Understanding this background can help a buyer identify potential problems at an earlier stage.
In China, if a court determines that a shareholder’s personal assets have been commingled with the company’s assets, the shareholder may be held personally liable for the company’s debts using their own personal assets. According to relevant precedents from China’s Supreme People’s Court, courts consider the following four factors when assessing whether such commingling exists:
Whether the shareholder used company assets or funds to repay personal debts or for the benefit of affiliated companies, without proper accounting records.
Whether there is commingling between the shareholder’s personal bank accounts and the company’s bank accounts.
Whether the shareholder’s personal income is indistinguishable from the company’s profits.
Whetherthe company assets have been registered under the shareholder’s personal name.
I’m Lyu Qiang, a PRC lawyer, China. If you find my video helpful, please like, follow, and share it!
What Foreign Buyers Should Know About Quanzhou Suppliers
The Quanzhou market includes businesses involved in footwear, textiles, consumer goods, machinery and export manufacturing. Common commercial problems can include quality disputes, production delays, OEM disputes, non-conforming goods and payment disputes. In a dispute, contracts, purchase orders, technical specifications, inspection records, invoices, payment records and correspondence may become important evidence. For footwear, textile, consumer-goods and machinery transactions, buyers should pay particular attention to exact product specifications, approved samples, production tolerances, inspection arrangements and the identity of the contracting entity.
The city’s position within Fujian and its connection with a dense network of export-oriented manufacturers and trading companies can provide useful commercial context when evaluating a supplier relationship. Local characteristics do not determine the outcome of a dispute.
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Before Taking Action Against a Supplier in Quanzhou
For an overseas buyer, a practical first step is usually to identify the correct Chinese contracting party and preserve evidence showing what was ordered, what was paid and what was delivered. Depending on the contract and dispute, the next step may involve a demand, settlement negotiations, arbitration, litigation or enforcement.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Laws and legal procedures may vary depending on the specific facts and applicable jurisdiction. No lawyer-client relationship is created by reading this article or contacting us through this website. For advice regarding a specific matter, please consult a qualified lawyer after a formal engagement has been established.
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Qiang Lyu
His practice also includes China company law, intellectual property matters, and commercial contract disputes involving foreign-invested businesses and cross-border commercial activities.