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Corporate restructuring support in China.

Acclime is a recognised leader in providing corporate financial restructuring & turnaround solutions to under-performing enterprises in China.

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Company secretary in Hong Kong

How Acclime
can help

Acclime is a recognised leader in providing corporate financial restructuring and turnaround solutions to under-performing enterprises. Our broad base of expertise and international experience sets the benchmark by which turnaround firms manage their most difficult commercial challenges in China.

If your investment is not achieving sufficient returns and is at risk of insolvency, we can assist you in quickly analyzing the decisive factors that affect your firm’s survival and implement critical change to halt the losses and put the company back on the road to recovery. Steps taken often include:

  • Asset sales
  • New lines of credit
  • Capital injections
  • Debt repayment
  • Operational restructuring and expense reduction
  • Job elimination
  • Inventory reduction
  • Product line renewals and overhauls

Reach out for corporate
financial restructuring support.

Dedicated attention

Acclime’s senior partners take an active role in analysing the company and its issues and work with you to suggest optimum solutions.

Agreed objectives

Our senior partners take responsibility to help you in stabilizing the the company, approving the recovery plan and monitoring its execution.

Continued support

We work together with management to maximize the value of your enterprise as it returns to operational efficiency, cash sufficiency and profitability.

Coporate restructuring

Restructuring consulting and support.

Our restructuring services.

  • Early stage crisis management

    Our team of experts takes early action to assist troubled companies avoid bankruptcy and liquidation. Specific measures include:

    • Emergency financial controls to prevent shut-down
    • Interim management to take over CEO, CFO, or other critical positions
    • Trade receivable recovery to ameliorate collection-induced cash crunch

    These services require the distressed company to be committed to recovery. At this stage, we assist management in setting a strategy and in executing a plan of reorganization. Each plan of reorganization plan is based on a company’s unique situation and will usually include some of each of the following components:

  • Turnaround management / restructuring

    • Financial turnaround: Debt refinancing (help secure RMB loans), equity injection
    • Operational turnaround: Improve internal operations (bus process review/recommendations)
    • Strategic turnaround: Asset divesture, valuation, strategic advice to reposition company
    • Financing: Assist companies secure the funds necessary to finance the turnaround until positive cash flows can be generated
    • Interim management: Outside senior management take over during critical phases

  • Bankruptcy & liquidation

    When it has been determined that maximum value can be achieved for shareholders only through the cessation of commercial activity, we will lead the company through the liquidation process. Our focus here would involve:

    • Pre-liquidation planning: advise/planning to resolve issues b4 entering liquidation
    • Pre-liquidation audit: statutory audit
    • Liquidation process: guide client thru statutory process & advise along the way
    • Asset valuation
    • Asset disposal advise or take active role in asset disposals
    • Post-liquidation audit: statutory audit
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FAQ

Common questions.

Can losses be carried forward in China?
Chinese regulations allow losses to be carried forward for up to five years. Losses are not however allowed to be carried back.
Is a foreign invested enterprise (FIE) treated any differently than a domestic company?
Yes. FIEs are controlled through the Catalogue for the Guidance of Foreign Investment Industries revised in 2011, which classifies various industries into: (1) the encouraged, (2) the permitted, (3) the restricted and (4) the prohibited.
What community pressures do companies in China often face?
Externally there are industrial and community-relations issues. This includes stronger labour unions and more litigious employees, who now are less likely to hesitate to protest in cases of down sizing. Since companies are more and more expected to demonstrate social responsibility and corporate citizenship, it is important to implement changes well and promote good communication within the company. A good start is to receive expert labour law input when forming for example the joint venture and other contracts.
I set up a representative office for my international company in China, but things have not worked out. How do I go about closing the office down and discontinuing my business?

Closing down a representative office in China can be a lengthy process if it is not handled in the correct way, particularly if the office was not originally established entirely in accordance with the law, but rather through “back-door” connections. China’s legal system is becoming more and more transparent and administrative bodies are increasingly enforcing the law, so it pays to do things the right way. Simply walking out of the country is not the way to go!

There are several steps required to close down an office.

Firstly, tax payment certificates and receipts from the national and local tax bureaus must be given to the authority responsible for closing the office, along with a brief statement about the settlement of debts and credits. The Tax Bureau will require the closure audit report to be approved by a Certified Public Accounting firm.

Secondly, various documents need to be prepared and given to the relevant authorities. Cancellation forms need to be submitted to the Industrial and Commercial Bureau, along with a detailed explanation as to why the office is closing. Both Chief Representative and the authorised person of the parent company must sign the forms. A separate application also needs to be made by the holding company’s letterhead, and must be stamped with the holding company’s seal. There must also be a board resolution that agrees to the closure of the office or a statement expressing the company’s wish to close the office, signed by the chairman of the parent company. The Certificate of Incorporation must be returned to the Industrial and Commercial Bureau.

Furthermore, the bank must provide a notice that confirms the cancellation of the office’s bank account. The official seal and financial seal should be returned to Public Security Bureau. If all the necessary documents are provided and taxes have been paid, the closure procedure should take roughly 9 to 18 months.

When restructuring a company, how do I transfer part of the employees into one of our affiliate companies? Do I need to compensate the employees for terminating them?
In order to do this, you need to first terminate employment with the employees and then invite them to enter into another labour contract with the affiliate company. If they agree, then you do not need to pay them any compensation. However, you must make sure that the employees can enjoy the same or better benefits after being transferred to another company. If after the transfer, the employee benefits in the new company are actually inferior to those enjoyed in the former company, then they may refuse to enter into a labour contract with the affiliate company. In that case, according to related regulations, you must pay compensation for their unemployment.
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