Legal Questions and Answers

What are the most common types of academic offences that university students can be accused of?

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• Plagiarism
• Cheating
• Fabrication
• Misrepresentation
• Tampering with grades
• Unauthorized collaboration
• Multiple submission
• Unauthorized possession of exams
• False citation
• Facilitating academic dishonesty

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What conduct is deemed as “Plagiarism” in the context of academic work?

Plagiarism involves using someone else’s work or ideas without proper attribution. This can include copying and pasting text from a source, paraphrasing without citation, or using someone else’s ideas without giving them credit.

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What conduct is deemed as "Cheating”?

Cheating involves gaining an unfair advantage in academic work. This can include looking at someone else’s answers during a test, using unauthorized materials during an exam, or collaborating with other students without permission.

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What conduct is deemed as “Fabrication”?

Fabrication involves inventing or falsifying information. This can include creating data for a research project, forging a signature on a document, or falsifying academic credentials.

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What conduct is deemed as “Misrepresentation”?

Misrepresentation involves providing false or misleading information. This can include lying on an application or resume, misrepresenting your academic record, or misrepresenting the work you’ve done on an assignment.

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What conduct is deemed as “Tampering with Grades”?

Tampering with grades involves changing or altering academic records. This can include hacking into a school system to change grades, altering a transcript, or altering a professor’s assessment of your work.

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What conduct is deemed as “Unauthorized Collaboration”?

Unauthorized collaboration involves working with others without permission. This can include collaborating on an individual assignment, collaborating on a group project without permission, or sharing work without permission.

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What conduct is deemed as “Multiple Submissions”?

Multiple submissions involve submitting the same work for multiple assignments without permission. This can include submitting the same essay for two different classes, submitting the same work for a resubmission without permission, or resubmitting someone else’s work as your own.

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What conduct is deemed as “Unauthorized Possession of Exams”?

Unauthorized possession of exams involves obtaining and using confidential information. This can include stealing an exam, sharing exam questions with others, or using an unauthorized copy of an exam.

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What conduct is deemed as “False Citation”?

False citation involves providing false or incorrect information about sources. This can include citing a source that doesn’t exist, citing a source that doesn’t support your argument, or using a fake source.

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What should I do if I am accused of academic misconduct as an international student?

If you are accused of academic misconduct, it is important to take the situation seriously and act quickly. Your first step should be to review your institution’s policies on academic misconduct to understand the process and your rights. You may also want to seek legal advice or guidance from your institution’s international student office.

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Can I be expelled from my program if I am found guilty of academic misconduct?

It is possible to be expelled from your program if you are found guilty of academic misconduct, but the severity of the penalty will depend on the nature of the offense and your institution’s policies. Some institutions may offer lesser penalties for first-time offenses or minor infractions.

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What are the consequences if an international student gets expelled due to academic misconduct?

If an international student gets expelled due to academic misconduct, they may face several consequences, including:

• Revocation of their student visa: International students are required to maintain their student visa status while studying in a foreign country. Expulsion due to academic misconduct can lead to the revocation of their student visa, which can make it difficult or impossible for them to continue studying or working in that country.
• Difficulty obtaining future visas: Expulsion due to academic misconduct can also make it difficult for international students to obtain visas for other countries in the future. Many visa applications require applicants to disclose any previous expulsions or academic misconduct, which can result in the denial of their visa application.
• Damage to their academic record: Expulsion due to academic misconduct can also have a negative impact on an international student’s academic record. This can make it difficult for them to be accepted into other academic programs or obtain employment in their chosen field.

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Should I consider using a lawyer if I am charged with academic misconduct?

It is recommended that you consider using a lawyer if you are charged with academic misconduct. A lawyer can help you understand the charges against you, your rights, and your options for defense. A lawyer can help you review or draft your explanation letter and can also represent you in any meetings or hearings related to your case.

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Should I draft an explanation letter to the university myself, or should I seek the help of a lawyer?

It is recommended that you seek the help of a lawyer to draft an explanation letter to the university if you are accused of academic misconduct. The explanation letter is an important part of your defense, as it provides you with an opportunity to explain your actions and defend yourself against the charges.

A lawyer can help you write a clear and effective explanation letter that addresses the allegations against you and highlights any mitigating circumstances or factors that may have contributed to the alleged misconduct. They can also help you ensure that your letter is respectful and professional and that it adheres to the policies and procedures of your institution.

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Does Brazil follow the "first to use" or "first to file" principle in trademark law?

Brazil follows the “first to file” principle in trademark law. This means that the first person or entity to file a trademark application with the Brazilian National Institute of Industrial Property (INPI) has priority in obtaining registration of the trademark.

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What can international businesses do to avoid trademark infringement and squatting in Brazil?

To avoid trademark infringement and squatting in Brazil, international businesses should conduct a comprehensive search for existing trademarks in Brazil before adopting and using a trademark. It is also recommended to register the trademark in Brazil as soon as possible to establish legal protection. Working with a local attorney who specializes in trademark law in Brazil can be beneficial.

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Can a Brazilian lawyer in one province represent a client in any court in Brazil?

Yes, a Brazilian lawyer who is licensed to practice law in Brazil can represent a client in any court in Brazil, regardless of the province where the court is located.

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Is international arbitration enforceable in Brazil?

Yes, international arbitration is enforceable in Brazil. Brazil is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which means that foreign arbitral awards can be enforced in Brazil. Additionally, Brazil has its own domestic arbitration law, which governs arbitration proceedings in Brazil and provides for the enforcement of arbitral awards issued in Brazil.

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How long is the liquidation process in China?

Liquidation can take up to 6 to 12 months or longer, depending on factors like the number of employees, local requirements, pending lawsuits, and unsettled debt or tax issues.

What's required to start the liquidation process in China?

A shareholders’ resolution is required, and the overseas holding company must approve the dissolution of the local subsidiary. A liquidation committee must also be formed.

What are the liquidation committee's responsibilities in China?

The committee must draft a liquidation plan, manage the termination of employees, liquidate assets, pay creditors, and conclude leases. It must also notify creditors of the business closure and draft a balance sheet.

What's a Pre-Liquidation Audit Report in China?

It’s a report to ensure the company’s accounts are in order prior to liquidation. An external provider can offer a more accurate investigation.

What happens after the issuance of the Audit Report in China?

The liquidation committee liquidates the company’s assets and sells them to pay off expenses, debts, fees, and taxes. If assets are insufficient, the company files for bankruptcy.

How can the requirement for notifying creditors be satisfied in China?

The company must make a public announcement, informing creditors about the liquidation and giving them time to declare their claims to the Liquidation Committee. A minimum of 45 days is required before proceeding to the next step.

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What is the most suitable legal structure for a new business in Canada?

The most suitable legal structure for a new business in Canada will depend on factors such as the business’s size, scope, and ownership structure. Common options include sole proprietorship, partnership, corporation, and cooperative.

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What is the difference between federal incorporation and incorporating a business at the provincial level?

Incorporating federally in Canada provides national recognition and the ability to do business across the country, while incorporating provincially provides recognition and legal standing in a specific province. The decision to incorporate federally or provincially will depend on factors such as the scope of the business and its growth potential.

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How do I incorporate a business in Canada?

First, prepare the Articles of Incorporation and file them with the government to register your business. If you want to name your corporation, complete a name search to ensure that your name is distinctive and available before reserving it for your registration.

After registration, file an initial return with the government to record the initial directors and officers of the company. Our vetted lawyers can help you throughout this process and ensure that your company is validly registered in Canada.

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How much does it cost to incorporate a business in Canada?

The cost to incorporate a business in Canada will vary depending on factors such as the legal structure, jurisdiction, and scope of the business. In general, fees may include government registration fees, legal fees, and other expenses associated with setting up a business.

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Can I incorporate a business by myself?

Yes, you can. However, we recommend that a qualified professional help you do it correctly from the start. The incorporation process involves setting up Articles of Incorporation, which could be complex for a layperson. If any details are incorrect, amending them later can be time and money-consuming. Having a professional take care of this work will save you significant time and expense.

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Do I need a lawyer to incorporate my business in Canada?

While it is possible to incorporate a business in Canada without the assistance of a lawyer, it is recommended to consult with a lawyer to ensure that the process is completed properly and to receive guidance on legal issues related to the incorporation process. Additionally, using a platform like Trustiics can provide access to vetted lawyers and make the incorporation process more streamlined and affordable.

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What is a numbered company?

In Canada, a numbered company is a type of corporation assigned a unique number by the government, rather than using a name chosen by the company. The number is used to identify the company for legal and administrative purposes.

Numbered companies are often used by entrepreneurs who are just starting a business and have not yet decided on a name, or who prefer to keep their business activities private.

Once registered, the numbered company has the same legal rights and responsibilities as any other corporation in Canada.

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How do I choose a business name?

Your proposed names must be distinctive and cannot cause confusion with other existing businesses, corporations, or trademarks.

Numbered Company: If you choose not to name your company, the government will automatically assign a number as the name of your company, e.g., “12345678 Canada Inc.” You cannot pick the number.

Company Name Search: Instead of having a numbered company, you can choose to name your company. Please note that if you name your company, it may take a little longer for the lawyer to complete the registration because name searches must be done first to confirm the availability of your proposed names.

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What is the “Residency Requirement” for directors?

At least 25 percent of the directors of a Canadian federal corporation must be resident Canadians, either a citizen or a permanent resident in Canada if a corporation has fewer than four directors. However, at least one of them must be a resident Canadian. Provincial incorporations in BC, Quebec, Ontario, and Alberta do not have this requirement.

In addition, corporations operating in sectors subject to ownership restrictions (such as airlines and telecommunications) or corporations in certain cultural sectors (such as book retailing, video, or film distribution) must have a majority of resident Canadian directors.

You should indicate whether a named director is a Canadian resident, regardless of whether they are a citizen or permanent resident.

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What does the term “classes of shares” mean?

Your corporation can issue one or more classes of shares, with each class having different rights, privileges, restrictions, and conditions. Preferred shares, for example, often have special rights or privileges, such as priority in receiving dividends or assets in the event of a liquidation. You should let the lawyer know if you only have common shares or if you will also have preferred shares, which is optional.

There is no limit on the number of classes of shares that can be set out in the articles of incorporation. If there is only one class of shares, those shares must, as a minimum, have the right to vote, the right to receive dividends (if the board of directors has declared any), and the right to receive the remaining property of the corporation after it is dissolved.

If there is more than one class of shares, each of the three rights must be assigned to at least one class of shares, but one class does not need to have all three. Also, each right can be given to more than one class. It’s important to clearly define the rights and restrictions of each class of shares in the articles of incorporation.

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What does “register a company” means after its incorporation?

You need to register your federal corporation in a province when your business expands to that province. This includes, for example, when you have employees, offices, operations, or other substantial assets in that province.

Simply making sales in that province does not necessarily mean you need to register in that province. If you are not sure whether you need to register in a particular province, the vetted lawyers on Trustiics can help you with that.

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What are the ongoing compliance requirements for incorporated businesses in Canada?

Ongoing compliance requirements for incorporated businesses in Canada may include filing annual reports and financial statements, maintaining proper record-keeping, and complying with federal and provincial tax laws. Failure to meet these requirements can result in penalties or legal consequences.

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What are the benefits of using Trustiics for incorporation services?

With Trustiics, you can get customized incorporation services from vetted lawyers across Canada, all at a transparent fixed service fee. Our lawyers have the expertise you need to make informed decisions about the legal structure, cost, and compliance requirements for your business. Plus, our online platform is convenient and easy to use, allowing you to manage your legal matters from anywhere. Trustiics is the smart choice for anyone who wants to incorporate a business in Canada with confidence.

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What are some key considerations for drafting a contract that will be enforceable in China?

Here are the key considerations for drafting a contract that will be enforceable in China presented as bullet points:

• Use clear and precise terms in the contract
• Avoid using legal concepts that aren’t accepted by Chinese courts
• Use Chinese law as the governing law if it is a mandatory requirement in China
• Include dispute resolution clauses that comply with Chinese law
• Ensure that the contract is properly executed according to Chinese legal formalities, which may include the use of an official seal
• Work with experienced legal professionals who are familiar with both Chinese and North American contract law to comply with Chinese legal requirements.

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How much does a "Contract Drafting" legal service typically cost?

The cost of a contract drafting legal service can vary depending on the complexity of the contract. For example, drafting a simple contract such as a non-disclosure agreement (NDA) may cost around a thousand dollars, while more complex contracts, such as joint venture agreements or IP licensing agreements, can cost several thousand dollars.

Trustiics offers fixed-price legal services that you can browse to see if any of the available services fit your needs. The customized drafting services available on Trustiics are competitive in the market.

To get a free quote for a customized contract drafting service, you can use Trustiics’ request for proposal feature. Select a lawyer based on their expertise and describe the contract that needs to be drafted, including details such as the type of contract, the number of parties involved, and the business intention of the parties. After submitting your request, your selected lawyer will provide a fee quote and inform you of the cost for the contract drafting.

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How important is it to make sure the Chinese language version and the English language version are consistent if we have confirmed that the English language version is the governing one?

Even if the English language version of a contract is the governing one, it’s still important to make sure that the Chinese language version is consistent with it. Chinese courts may look to the Chinese language version in interpreting the contract’s terms, so inconsistencies between the two versions can lead to confusion, misunderstandings, and disputes.

To avoid these issues, both versions of the contract should be reviewed and translated by qualified professionals to ensure that the language is clear, precise, and consistent. This will help ensure that both parties understand the terms of the contract and reduce the risk of disputes arising in the future.

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What are the key differences between Chinese Contract Law and contract law in the Common Law legal system?

Chinese contract law differs from North American contract law in several key ways. These include:

• Contracts must generally be executed in writing in China.
• Companies in China should have an official seal, and electronic signatures may not be recognized in practice.
• Chinese law places more emphasis on the formalities of contract execution.
• Courts in China may be more likely to strictly interpret the terms of a contract.
• Non-compete clauses may face more restrictions in China than in North America.

To ensure compliance with Chinese law, it’s important to work with legal professionals who are familiar with local laws and can help draft contracts that meet Chinese legal requirements.

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What are some common contract disputes that arise when doing business in China, and how can I avoid them?

Common contract disputes in China can include issues such as non-payment, delivery of defective products, late payment, late delivery of products, non-compete, ownership of IPRs, the scope of confidential information, and breaches of contracts. To avoid these issues, it’s important to negotiate and draft contracts carefully, with input from legal professionals who are familiar with local laws and regulations. Clear and ongoing communication with Chinese business partners is also important, as this can help prevent misunderstandings.

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Why is it important to have a contract reviewed by lawyers in China before signing it with a Chinese company?

It is important to have a contract reviewed by lawyers in China before signing it with a Chinese company because Chinese law can be different from laws in North America, and there can be language barriers, cultural differences, and market practice differences that can create misunderstandings. A Chinese lawyer can help identify any ambiguous or vague language that could be interpreted differently by Chinese courts, which can help avoid disputes down the road. Additionally, having a contract reviewed can ensure the enforceability of the contract in case of future disputes.

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What are the main aspects of a contract that the China Contract Review service would typically review?

A China Contract Review service would typically review all aspects of a contract, including:

• Clauses related to the primary contract rights and obligations of the signing parties, such as Payment, Delivery / another type of obligation/consideration
• Clauses related to warranties, covenants, and conditions, such as Confidentiality, Non-competition, Representations and warranties, Indemnification
• Clauses related to dispute resolution, such as Governing law, Method of dispute resolution, and Venue
• Other miscellaneous but important clauses, such as Language, Version, Revision, Notice, Term, Termination, Force Majeure, Assignment, and delegation

By reviewing these aspects thoroughly, lawyers in China can help ensure that the contract you will be signing with a Chinese company is well-drafted, legally compliant, and enforceable in case of any future disputes.

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How much does a "Contract Review" legal service typically cost?

The cost of a Contract Review legal service can vary depending on the complexity of the contract. Typically, a simple contract review can cost a few hundred dollars, while more complex contracts can cost several thousand dollars.

It’s easy to get a free quote on Trustiics. Simply select a lawyer based on her expertise and describe the contract that needs to be reviewed when you submit a request for proposal, including details such as the type of contract, the number of parties involved, and the length of the contract. You can also upload a copy of the contract to be reviewed if available. After submitting your request, your selected lawyer will provide a fee quote and let you know how much the cost would be for the contract review.  

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What are the important but often overlooked clauses that should be reviewed by a lawyer in China before signing?

Certain clauses in contracts are often overlooked but can have significant financial and legal consequences. It’s important to have a China-based lawyer review the following clauses before signing:

• Clauses related to the term and early termination of the contract. Decisions about how long the contract lasts and under what circumstances one party can terminate the contract should be made at the beginning of the business relationship.
• Clauses related to revisions to the contract, which should be clearly defined to avoid ambiguity and potential disputes. Parties may need to make changes as situations change, and having both certainty and flexibility is important.
• Clauses related to the calculation of penalties. It’s crucial to be clear about how to calculate damages and any limitations on damages.

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What is cybersquatting, and how does it relate to the domain name squatting in China?

Cybersquatting is the practice of registering, using, or selling a domain name with the intention of profiting from the goodwill of someone else’s trademark. Domain name squatting is a type of cybersquatting that involves registering domain names that are identical or similar to a company’s trademark or business name. In China, cybersquatting is a common issue, and it can cause significant harm to businesses that operate in the country.

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What are some common tactics used by cybersquatters in China?

Cybersquatters in China may use a variety of tactics to profit from someone else’s trademark or business name, such as:

• Registering domain names that are identical or similar to a well-known brand or product name
• Registering domain names that contain misspellings or variations of a brand or product name
• Holding domain names hostage and demanding payment in exchange for releasing them
• Using a domain name to redirect web traffic to a competitor’s website
• Using a domain name to impersonate a company or steal customer information

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What are the legal remedies available to businesses that have been affected by cybersquatting in China?

Businesses that have been affected by cybersquatting in China may pursue legal remedies such as domain name arbitration or litigation. Domain name arbitration is a cost-effective and efficient way to resolve disputes over domain names. In China, domain name arbitration is usually conducted by the Asian Domain Name Dispute Resolution Centre (ADNDRC).

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How long does the domain name arbitration process typically take in China?

The domain name arbitration process in China typically takes between 2 to 5 months, depending on the complexity of the case and how well prepared the parties are. However, the timeline may be longer if the case is appealed or if there are other factors that prolong the process.

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Can businesses prevent cybersquatting in China?

Yes, businesses can take proactive steps to prevent cybersquatting in China, such as:

• Registering their trademarks and business names with the China Trademark Office
• Registering domain names that are identical or similar to their trademarks and business names
• Monitoring their trademarks and business names to detect any instances of cybersquatting or trademark infringement
• Taking legal action against cybersquatters and trademark infringers to protect their rights and prevent further harm to their business.

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How can Trustiics help North American eCommerce merchants and small businesses with cybersquatting issues in China?

Trustiics provides a platform for businesses to connect with experienced IP lawyers in China who can help them with issues related to cybersquatting and domain name arbitration. Through Trustiics, businesses can get a free quote from their selected legal expert and access a range of legal services at a cost-effective rate. The estimated cost for a domain name arbitration is between US$3,000 – US$4,000.

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What is a Demand Letter?

A Demand Letter is a formal notice usually prepared by a lawyer on behalf of a client requesting another party to take a specified action or stop specified wrongdoing before a specific date.

The purpose of a Demand Letter is to inform another party that it or he has breached a contract or otherwise violated the sender’s rights. It is a step before a more serious legal action such as litigation to resolve the dispute in a more collaborative way.

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When should a demand letter be used?

A demand letter should be used when your counterparty breaches the contract and ignores or refuses your request for performance.  

For example, a demand letter should probably be served by a lawyer on your behalf in the following situations:

• A Chinese seller has not shipped your order or responded to your requests after paying the down payment; or
• A Chinese seller sent you the wrong products or delivered the products to the wrong location but has not responded to your request for correcting the error; or
• A Chinese buyer has not made the full payment according to the contract after you delivered the goods; or
• A Chinese distributor, agent, or OEM has not performed the contract as agreed nor corrected their mistake after you requested.

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What goal does this Demand Letter serve?

A Demand Letter requests the party in default to perform the contract or correct the wrongdoing.  It contains specific behests, usually with clear deadlines.

It signals to the other party that additional formal actions such as litigation will be the next step if they do not take the situation seriously.

A Demand Letter can also:

• kick-off negotiations between the parties, leading to settlement and resolution
• suggest alternative requests to help you get fair compensation
• act as a pre-step to litigation – usually a “must-have” before you file a lawsuit against the other party. In such a situation, the demand letter can be used as evidence in your favour in court.

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Can I use a template Demand Letter downloaded from the internet?

You can download a template demand letter and send it on your own. But it would be much less effective, if at all, in terms of getting the serious attention of the party in default, especially when the defaulting party has already known they are in default. Sometimes, the template might make the situation worse because you might unintentionally admit or agree to something that you do not want when using a template.

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Should a Demand Letter be prepared and delivered by a lawyer?

Yes, it is better prepared and sent out by a lawyer on behalf of a client. It is especially true when a Demand Letter is addressed to a foreign party in the international business context. Otherwise, the foreign party might not believe the demand was as serious.

A well-crafted Demand Letter sent by a lawyer licensed to practice in a foreign jurisdiction can be a powerful tool to persuade the foreign party in default to correct its mistake and perform under the signed contract.

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Can I have a lawyer in my home country draft and send the Demand letter to a company in China?

You can have a lawyer in your home country prepare the Demand Letter. It is recommended to have a China-qualified lawyer who has first-hand experience in the local market to review the legal document and then send it out on your behalf. Having an experienced local lawyer send out the Demand Letter on your behalf puts more pressure on the other party to respond. In addition, lawyers practicing in that country can customize your demand based on the local practice and provide insights on possible reactions from the other party.

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What is a Distribution Agreement in the context of international trade with China?

A distribution agreement in the context of international trade with China is a commercial contract between you and your Chinese distributor. The agreement will set out the key terms and conditions for the distribution of your products or services in China.

The distribution agreement typically outlines the responsibilities and obligations of both parties, including the rights and obligations of the distributor to market, sell, and distribute the products or services in the agreed-upon territory or market segment in China. The agreement also includes provisions for payment terms, delivery and shipping terms, intellectual property rights, warranties, and dispute resolution mechanisms.

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What are the typical situations in which I would need a customized distribution agreement for China?

Here are a couple of examples where we suggest having a lawyer qualified in China to draft a customized agreement tailor-made for you:

• If you plan to distribute your products in China through a distributor, a customized distribution agreement is necessary;
• If you plan to enter into a joint venture with a Chinese company for the distribution of your products, a customized distribution agreement should be drafted; and
• If you plan to license intellectual property to a Chinese distributor or licensee, a customized distribution agreement is necessary.

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Why do I need a lawyer to draft the Distribution Agreement instead of using a template?

A well-drafted contract should be based on the applicable law to be valid and enforceable against the counterparty. It will help protect your rights and ensure the due performance of the contract is consistent with the market practice and legal requirements. A lawyer is able to customize the contract to make it suitable for your specific situation, taking into consideration the relationship between the parties, your goals, and your interests.

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Why do I need a China-qualified lawyer to prepare a distribution agreement with a distributor in China?

If you are doing business with a distributor in China, it is important to have a China-qualified lawyer prepare the distribution agreement. This is because Chinese law has specific regulations and laws that can be different from those of other countries. By using a lawyer who is familiar with Chinese law, you can ensure that the agreement is valid and enforceable against the distributor in case any disputes arise.

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Can I use the Chinese translation of our distribution agreement used in other countries, such as the U.S.?

You can do it if your distribution agreement is governed by U.S. laws. If your agreement is governed by Chinese law, you should have a China-qualified lawyer prepare a customized distribution agreement for you.

Even if you and your counterparty agree to use a U.S. law-governed agreement, it is recommended to have a China-qualified lawyer review or translate your agreement to ensure two things: (i) it does not contain anything that is invalid or unenforceable in China; (ii) the accuracy of the translation.

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What should we do if the Chinese counterparty insists on signing a distribution agreement drafted by their lawyer?

If your situation does not permit using your own agreement (e.g. the distributor insists on using their version), you should have a Trustiics-vetted lawyer review the agreement to ensure your key business interests are protected. In addition, if your distributor only provides a Chinese language version, you should insist on having it translated by a lawyer or legal translator, and then have your lawyer confirm that the English version and Chinese version are the same. You can find qualified and competent lawyers or legal translators on Trustiics to help you with such a job.

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Are non-compete agreements enforceable in China?

Yes, non-compete agreements are enforceable in China, but they must meet certain requirements to be valid. Specifically, the scope, duration, and geographical area of the non-compete clause must be reasonable, and the employee must receive reasonable compensation in exchange for agreeing to the non-compete clause.

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Can an employer prevent a former employee from working for a competitor in China?

Yes, if the non-compete agreement is valid and enforceable, an employer can prevent a former employee from working for a competitor in China. However, if the non-compete agreement is deemed unreasonable or the employer does not offer reasonable compensation, a court may declare the agreement invalid.

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What are some legal considerations for terminating employment contracts in China?

In China, there are specific labor laws and regulations that businesses must comply with when terminating employment contracts. These include providing notice to employees, paying severance, and obtaining government approval for mass layoffs. It is important to seek legal guidance from experienced professionals to ensure compliance and avoid potential legal issues.

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Are there any legal requirements for calculating and paying severance pay in China?

Yes, employers are required to provide a written calculation of severance pay to the employee at the time of termination. Additionally, the employer must pay severance pay to the employee within the time frame specified in local labor laws.

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What factors are considered when calculating severance pay for terminated employees in China?

The amount of severance pay in China is generally based on the employee’s years of service and their last monthly salary. However, other factors such as whether the employee was terminated due to business closure or restructuring, whether they were terminated with or without cause, and whether the employee has reached retirement age can also affect the amount of severance pay owed.

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Are there any scenarios in which employers in China cannot terminate an employee's contract?

Yes, there are certain scenarios in which employers in China cannot terminate an employee’s contract, such as during pregnancy or maternity leave, during medical treatment for a work-related injury or illness, during a period of military service, or if the employee has a labor dispute pending with the employer.

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Can an employer in China terminate an employee's contract without cause?

Employers in China are generally required to have a valid reason for terminating an employee’s contract, such as poor performance or serious misconduct. However, in some cases, an employer may be able to terminate an employee’s contract without cause if it is done in accordance with local labor laws and the employee is provided with appropriate compensation.

How can employers protect their intellectual property rights (IPR) when terminating employees in China?

Employers can take several steps to protect their IPR when terminating employees in China, such as requiring employees to sign a confidentiality agreement or non-disclosure agreement, conducting an inventory of all company property in the employee’s possession, and restricting access to confidential information and trade secrets. Additionally, employers should seek legal advice before terminating employees who have access to sensitive IPR.

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What is an EOR service provider and how can it be used in China during the liquidation process?

An EOR (Employer of Record) service provider is a company that handles all legal employment responsibilities for a business. In China, if a business still intends to maintain some sort of operations after the liquidation process, key employees can be hired through an EOR service provider.

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Can an international business keep some local employees in China during the liquidation process?

Yes, it is often preferable to keep some employees to help and support the liquidation process. However, it is important to identify which employees should be kept and to ensure that key employees return any company property before leaving.

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Why is it important to sign a legally binding Severance Agreement with departing employees in China?

There is no “at-will employment” in China.  Improper termination of employment contracts often results in disputes and sometimes wrongful termination compensations.

Employment arbitration in China is time-consuming and likely to result in favour of employees rather than the business. Therefore, should terminations arise, it is prudent for companies to have written agreements that comply with local regulatory requirements and avoid labour disputes.

An agreement prepared by an experienced lawyer assures compliance with the local employment regulations, which usually can be very complicated.  It also clarifies the rights and obligations of both the employer and the employee so that the employee will not sue the employer.

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What are the typical situations where business executives need a customized severance agreement?

When you run into the following situations, the Trustiics service of customized drafting of a severance agreement will come in handy for you.

(1) the company plans to close a subsidiary in China and, as a result, needs to lay off the local employees;

(2) the company plans to terminate the employment contract of one or multiple individual employees in China;

(3) one or multiple employees in China resign;

(4) any other situation where the employee is subject to certain statutory rights or there is potential litigation or reputational harm; or

(5) you are a lawyer advising a client that is closing its China business and laying off local employees.

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Is an Employee Termination and Severance Agreement the same as a Severance Agreement?

Yes, they are the same.

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Will “severance pay” be covered by the Severance Agreement?

Yes. “Severance pay” which refers to the financial compensation to be received by the terminated employee and how it is calculated; these are important clauses to be included in a Severance Agreement.

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Can't I just use a Chinese translation version of my standard Severance Agreement from my own country, such as my previous ones in the U.S.?

No, it is not a good approach. The reason is that each country has its own employment law, you will need to use China-law governed Severance Agreement when you terminate employees in China.

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Can I use this Severance Agreement to lay off employees in different regions in China?

Yes, you can use the same Severance Agreement to lay off or terminate employees in different regions in China. However, it is strongly suggested to inform the service lawyer to be aware of each city or province where you will dismiss employees. The reason is that the lawyer will take specific local employment regulations into consideration if they vary when drafting the agreement for you.

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Why do I need a lawyer to draft the Severance Agreement instead of Googling a template?

There are two significant benefits to engaging an experienced lawyer qualified in China to draft the Severance Agreement:

• Validity and Enforceability: A customized Severance Agreement prepared by a locally qualified lawyer will ensure it is valid and complies with local employment law (such as restrictions on non-compete arrangements). It will therefore be legally binding and enforceable, even if a signing party changes his mind in the future; and
• Regulatory Compliance: The agreement will be up to date and reflect any recent changes in employment rules and regulations, and therefore satisfy all your internal and external compliance requirements.

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What are some common types of scams or fraudulent activities that buyers may encounter when purchasing products from China?

Some common types of scams or fraudulent activities that buyers may encounter when purchasing products from Chinese exporters include fake or counterfeit products, misrepresentation of product quality or quantity, hidden or unexpected fees, fraudulent shipping arrangements, and phishing or other forms of online fraud.

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How can buyers verify the legitimacy of a Chinese exporter before making a purchase?

Buyers can verify the legitimacy of a Chinese exporter by engaging a local lawyer to conduct due diligence at the beginning of cooperation as well as on a regular basis.  Due diligence should at least include researching the company’s registration and licensing information, authorized signatories, shareholders’ information, bankruptcy record (if any), and major pending litigations (if any).

Trustiics offers a quick 72-hour legal due diligence service and it has been welcomed by North American small businesses and online merchants that import from the Chinese market.

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What legal recourse do buyers have if they fall victim to a scam or fraudulent activity by a Chinese exporter?

If a buyer falls victim to a scam or fraudulent activity by a Chinese exporter, they may have legal recourse under Chinese or international law, depending on the circumstances. Possible legal remedies may include breach of contract claims, fraud or misrepresentation claims, filing of civil lawsuits or reporting of potential crimes.

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What steps can buyers take to minimize their risk of being scammed or defrauded when buying products from China?

Buyers can minimize their risk of being scammed or defrauded when buying products from China by conducting thorough due diligence on potential exporters, using secure payment methods and shipping arrangements, requiring written contracts and agreements, and staying alert for warning signs of fraud or scams by having a regular follow-on due diligence once a while, e.g. every 6 months.

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In the event of a dispute with a Chinese exporter, what is the process for resolving the issue through legal channels, and how can buyers best prepare for this possibility?

The process for resolving a dispute with a Chinese exporter through legal channels may vary depending on the specific circumstances and the applicable laws and regulations.  However, buyers can best prepare for this possibility by documenting all communications and transactions with the exporter, seeking legal advice early on in the process, and being prepared to negotiate or pursue legal action if necessary. It is important to agree on the dispute resolution method in the Sales Contract or other agreement to be signed with the Chinese exporter.

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What is an IP Infringement Cease & Desist Letter?

An attorney’s intellectual property (IP) Infringement Cease & Desist Letter is a formal letter written by an attorney on behalf of a client that demands that the recipient stop engaging in activities that infringe upon the client’s IP rights. Cease & Desist Letters are often used as a first step in addressing IP infringement and can be an effective tool for protecting IP rights.

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What does an IP Infringement Cease & Desist Letter do?

• It stops the recipient(s) from infringing: a Cease & Desist Letter demands that the recipient(s) stop using your IP to prevent further harm.
• It serves as a warning: a Cease & Desist Letter warns the recipient(s) that their actions are illegal and that you will take further steps to protect your IP if needed.
• It deters future infringement: a Cease & Desist Letter makes it clear that you are willing to take action to protect your IP, which can prevent future infringement.
• It can avoid the need for litigation: In many cases, a Cease & Desist Letter can help resolve the issue without going to court.
• It can establish a record and also serve as evidence: A Cease & Desist Letter serves as proof of your efforts to stop the infringement and can be used as evidence in court.

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When should I use the IP Infringement Cease and Desist letter service in China?

You should use a qualified lawyer in China to prepare and send a customized Cease and Desist Letter in situations where:

• Someone in China is using your trademark or patented technology without your permission,
• A partner or employee (or former employee) in China is using or disclosing your confidential information,
• Someone in China is attempting to register an IP very similar to yours, or
• Any business partner or distributor in China is using or making products based on your IP without your consent.

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What are the different types of IP infringement in China?

There are five main types of intellectual property (IP) infringement that can happen in China:

• Trademark infringement: When someone uses a registered trademark without the owner’s permission.
• Copyright infringement: When someone uses a copyrighted work without the owner’s permission.
• Patent infringement: When someone uses or sells a patented invention without the owner’s permission.
• Trade secret misappropriation: When someone uses someone else’s trade secrets without permission.
• Unfair competition: When someone uses deceptive or fraudulent practices that harm another party’s business or reputation.

It’s essential to remember that IP infringements can take various forms and can be committed by individuals or businesses.

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What is a Designated Organization and how can I find one to support my Start-up Visa application?

Designated Organizations are business groups, angel investor groups, or venture capital funds that have been approved by IRCC to support foreign entrepreneurs. You can find a list of Designated Organizations on the IRCC website.

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Can I apply for the Start-up Visa Immigration Program if I already have a business in my home country?

Yes, you can apply for the Start-up Visa Program if you have an existing business, but it must be a new start-up in Canada with growth potential and the ability to create jobs in Canada.

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How long does it take to get a Letter of Support from a Designated Organization?

The time it takes to get a Letter of Support can vary depending on the Designated Organization and their screening process. Some organizations may take several months to make a decision, while others may take longer.

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What happens if my Start-up Visa application is refused?

If your application is refused, you may have the option to appeal the decision or reapply with a different business idea. It is important to consult with an immigration lawyer for guidance on your options.

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Can my family members come with me to Canada under the Start-up Visa Immigration Program?

Yes, the Start-up Visa Program allows up to 5 applicants and their respective families, including spouses and dependent children, to apply for permanent residency in Canada.

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Is there any requirement or restriction on the industrial sector of the business for the Start-up Visa Program?

There is no specific requirement or restriction on the industrial sector of the business for the Start-up Visa Program. However, the business must be innovative with growth potential and have the ability to create jobs in Canada.

The Designated Organization will assess the business idea based on various factors such as market potential, competition, and scalability. It’s important to note that certain industrial sectors, such as those related to national security or public health, may require additional screening or approval from government agencies.

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Can I apply for the Start-up Visa Program if I am already in Canada on a temporary visa?

Yes, you may be eligible to apply for the Start-up Visa Program if you are in Canada on a temporary visa, but you must meet all the eligibility criteria and obtain a Letter of Support from a Designated Organization.

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What happens if my Start-up Visa business fails after I receive permanent residency in Canada?

There is no specific penalty or consequence if your Start-up Visa business fails after you receive permanent residency in Canada. However, if you obtained your permanent residency based on false information or misrepresentation, your status may be revoked.

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What are my options if a China importer defaults on payment for my goods or services?

The first step is to review your contract and assess your rights and obligations. Depending on the circumstances of the default and your contract signed, you may be able to negotiate a payment plan or settlement with the importer, pursue legal action in a Chinese court, or file a claim with an arbitration organization, such as the China International Economic and Trade Arbitration Commission, or the Hong Kong International Arbitration Centre.

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Can I sue a China importer for non-payment in a foreign court?

While it is possible to sue a China importer for non-payment in a foreign court, it may not always be the most practical or effective option. Chinese law generally requires that disputes related to contracts with Chinese parties be resolved in Chinese courts or through arbitration in China, except if the parties agreed differently in their contract. It’s worth noting that even if you obtain a judgment from a foreign court, you will eventually need to enforce the judgment in the location where the defaulting party has assets.

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How can I protect myself from currency exchange risks when doing business with a China importer?

To protect yourself from currency exchange risks when doing business with a China importer, consider including currency clauses in your contract that address the exchange rate and currency conversion issues. Additionally, it’s a good idea to work with a bank or financial institution that can provide hedging options to minimize currency risks.

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How can I avoid the payment defaults of a China importer?

To avoid payment defaults by a China importer, conduct due diligence on the importer’s good standing and solvency. You can also request references from the importer and review their financial statements. Ask for a significant down payment to ensure that the importer can make payment and there are no government foreign exchange controls in place. Finally, make sure to have clear payment clauses in the contract, including the time of payment, currency, and payment terms.

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What are some common types of scams or fraudulent activities that North American exporters may encounter when selling to the Chinese market?

Some common types of scams or fraudulent activities that North American exporters may encounter when selling to the Chinese market include non-payment or delayed payment, fake or fraudulent payment instruments, fraudulent shipping arrangements, and phishing or other forms of online fraud.

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How can North American exporters verify the legitimacy of a Chinese importer before shipping their products?

North American exporters can verify the legitimacy of a Chinese importer by engaging a local lawyer to conduct due diligence at the beginning of cooperation as well as on a regular basis.  Due diligence should at least include the Chinese importer’s registration and licensing information, authorized signatories, shareholders’ information, bankruptcy record (if any), and major pending litigations (if any).  

Trustiics offers a quick 72-hour legal due diligence service and it has been welcomed by North American small businesses and online merchants that import from the Chinese market.

Additionally, using secure payment methods and requiring written contracts and agreements can help mitigate the risk of fraud or scams.

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What legal recourse do North American exporters have if they fall victim to a scam or fraudulent activity by a Chinese importer?

If a North American exporter falls victim to a scam or fraudulent activity by a Chinese importer, they may have legal recourse under Chinese or international law, depending on the circumstances. Possible legal remedies may include breach of contract claims, fraud or misrepresentation claims, filing of civil lawsuits, or reporting of potential crimes.

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How does a letter of credit work in international trade with China? Are there fraudulent activities involving the letter of credit?

A letter of credit is a payment instrument that offers a level of protection for both the importer and the exporter. The importer’s bank issues a letter of credit to the exporter’s bank, promising to pay a certain amount upon the fulfillment of specific conditions. The exporter can use the letter of credit as a guarantee of payment and ship the goods with confidence.

While a letter of credit can provide a degree of security for both the exporter and importer, there are also potential risks and fraudulent activities associated with it. For example, a fraudulent importer may provide a fake or invalid letter of credit to the exporter, or the exporter may ship goods that do not conform to the terms and conditions of the letter of credit, which can result in non-payment or disputes. To minimize these risks, it is important for North American exporters to carefully review and understand the terms and conditions of the letter of credit, and to work with reputable banks and financial institutions that have experience in international trade.

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Is requiring full payment or advance/down payment something worth considering?

Requiring a full payment or a large advance/down payment from Chinese importers can be a risk mitigation strategy for North American exporters. However, it is important to balance the need for payment security with the need to maintain a competitive position in the market. Requesting a partial advance payment, often 30% to 50%, with the remaining balance due upon shipment or delivery, is a more common practice. The specific payment terms should be negotiated and agreed upon in the sales contract or purchase order.

Additionally, the exporter should also take steps to verify the legitimacy of the Chinese importer before accepting any payment.

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Is the trademark law in India the same as the trademark law in the United States or the European Union?

India follows the “first to use” trademark system, which is similar to the trademark system in the United States. This means that the person or entity that is the first to use a trademark in commerce in India generally has priority over others who may seek to use or register the same or similar trademark later.

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What can North American businesses do to avoid trademark infringement and squatting in India?

North American businesses can take several steps to avoid trademark infringement and squatting in India, including conducting a trademark search, registering their trademark with the Indian Trademark Registry, monitoring their trademark in the Indian market, taking legal action when necessary, and working with local experts.

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What should American companies do to ensure the enforceability of their NDA in India?

To ensure that their confidential information is protected and enforceable in India, American companies should consider using an NDA that has been specifically drafted for use in India. This can be done by consulting with an Indian attorney who has experience with drafting and reviewing NDAs.

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Can an Indian lawyer in one province represent a client in any court in India?

In general, an Indian lawyer who is licensed to practice law in one province may appear in any court in India, subject to certain limitations and restrictions.

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When is it necessary to conduct legal due diligence?

Legal due diligence should be conducted before signing a business contract, initiating a lawsuit, making an investment in a company, or lending money to a business client. This will help protect your business interests and ensure compliance.

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What should be covered in a minimum legal due diligence?

To protect your business interests and avoid financial loss, you should at least conduct legal due diligence to answer the following questions about your potential business partner or counterparty:

• Is it a real company, and is it in good standing?
• Has it filed for bankruptcy?
• Who are the main shareholders, and are they owned by the government?
• Who are the CEO / General Manager with signing authority?
• Do they have credibility issues? For example, have they been named on the list of “dishonest people subject to judicial enforcement” in China?
• Does their registered business scope cover what they do?

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Why should I hire a lawyer to verify a company in China instead of an agent?

Lawyers in China have access to a wider range of company information than other agents. They have access to Chinese company registries, bankruptcy status, and records of default under judicial judgments from the Chinese court system. Some sources are available only to legal practitioners. In addition, Trustiics vetted lawyers will also provide legal risk analysis and recommendations based on their professional experience.

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Is due diligence necessary even after starting a business with a Chinese company?

If you have a long-term business relationship with a Chinese company, it is recommended to conduct a due diligence service on your business partner regularly to ensure the up-to-date status. This is especially important if there have been any signs, such as delayed payments or debt repayments, or if there is any negative news about the company or its controlling shareholders.

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What do "non-disclosure," "non-use," and "non-circumvention" mean in an NNN Agreement?

“Non-disclosure” means that the counterparty cannot disclose any confidential information you provide. “Non-use” means that the counterparty cannot use your intellectual property for any purposes other than for your benefit under the contract. “Non-circumvention” means that your manufacturing contractor may not circumvent you and sell to your customers directly, usually at a lower price.

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What is the goal of an NNN Agreement?

An NNN Agreement aims to prevent the local manufacturer, OEM, or supplier from disclosing your intellectual property or design to a third party, using your intellectual property to benefit themselves without your permission, or bypassing you to do business directly with your customer.

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What is the difference between an NDA and an NNN agreement, and when should I use each one?

An NDA (non-disclosure agreement) prohibits one or more parties from disclosing confidential information to third parties, while an NNN (non-disclosure, non-use, and non-circumvention) agreement not only prohibits the disclosure of confidential information but also prevents the other party from using that information for their benefit or bypassing you to do business directly with your customers.

You might use an NDA if you only need to protect against the disclosure of confidential information, whereas an NNN Agreement may be more appropriate if you are outsourcing manufacturing or production to a third party, as it can provide broader protection against the misuse of your intellectual property.

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Who typically uses NNN Agreements?

NNN Agreements are commonly used by businesses that outsource manufacturing, production, or other services to third-party suppliers or vendors, particularly in countries like China where intellectual property protection may be weaker. They are often used in industries such as electronics, fashion, and consumer goods.

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Can you provide some examples of situations where an NNN Agreement would be useful?

An NNN Agreement can be useful in a variety of situations. For example, if you are a fashion designer who wants to have your designs manufactured in China, you might use an NNN Agreement to prevent your manufacturer from copying your designs or selling them to other companies.

Similarly, if you are a technology company that wants to outsource the production of a new product, you might use an NNN Agreement to prevent your manufacturer from stealing your proprietary technology or selling it to your competitors.

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Why do I need a China-qualified lawyer to draft a China NNN Agreement instead of using an internet template?

While internet templates may seem like a quick and easy solution, they are often generic and may not be tailored to your specific business needs. Using an internet template may result in an agreement that lacks the necessary legal language to ensure enforceability in China.

To ensure that your China NNN Agreement is properly customized and provides maximum protection, it’s best to work with a China-qualified lawyer who has first-hand experience in the region. They will be able to provide invaluable expertise in creating an agreement that is enforceable in Chinese courts and can protect your business interests. A China-qualified lawyer can also help you navigate the complex legal system in China and can assist you in enforcing your NNN Agreement if necessary.

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What is an NDA and what is it for?

A Non-Disclosure Agreement (NDA), also referred to as a confidentiality agreement, protects your trade secrets, proprietary knowledge, technical expertise, intellectual property, and other sensitive and confidential information from becoming public.

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When should an international business sign an NDA in the context of doing business with China?

The protection of valuable confidential information is critical in business dealings with China and many other countries. You should sign an NDA at the beginning of most business relationships, before disclosing non-public information.

You are recommended to have an NDA signed when you:

• Expect to disclose non-public information to a potential buyer, licensee, distributor, or vendor in China;
• Engage a Chinese Original Equipment Manufacturer (OEM) to manufacture your products in China based on your design and requirements (in such a case, you may want to consider signing an NNN Agreement instead);
• Enter into a joint venture arrangement with another company;
• Expect to disclose any non-public information to any employee, representative, or agent.

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How long is an NDA effective?

The parties should agree upon the term of the contract.

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Are NDAs enforceable in China?

Yes, a duly signed non-disclosure agreement with a Chinese party is enforceable in China.

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Why do I need a lawyer to draft my NDA instead of an internet template?

A well-drafted contract is the foundation of your business’ success. A clear and enforceable agreement under local law helps build a smooth business relationship and prevent future disputes. Having an experienced local lawyer draft and translate your contracts provides an invaluable measure of assurance and protection. Lawyers also have the expertise to customize the agreement based on your business and transaction.

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Can I use the same NDA in the U.S. or other countries?

It would be much better if you could use an NDA tailor-made for a particular country where it is intended to be enforced in the future.  An NDA drafted by an experienced lawyer in China can make sure your NDA signed with a Chinese company is enforceable against that company at a Chinese court if anything goes wrong.

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Do I have to sign a Chinese version of an NDA signed with a Chinese company?

There is no legal requirement to sign a Chinese language version of an NDA. But it is advisable to have a Chinese version and make sure the Chinese version is consistent with the English version so that both parties share the same understanding and what they agree to are precisely the same as what you expect them to be bound with.

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Is there a different type of NDA if I’m the information provider or the information recipient?

Yes, as any other contract, an NDA can be drafted very differently in favor of the information provider or in favor of the information recipient.  You should let the lawyer know whether you are the information provider or recipient or both. If both parties provide their confidential information, the parties will need an NDA containing bilateral confidentiality obligations. Otherwise, it will contain clauses only imposing confidentiality obligations on one party, the information recipient.

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What legal steps can I take to protect my intellectual property when outsourcing production to China?

To protect your intellectual property (IP) when outsourcing production to China, you should consider taking the following legal steps:

• Register your IP in China: This can help you establish legal ownership and make it easier to enforce your rights in case of infringement.
• Conduct due diligence on potential suppliers and partners: You should research any potential suppliers or partners to assess their IP compliance and history of IP infringement.
• Include strong IP protection clauses in your contracts: When negotiating contracts with Chinese suppliers, it’s important to include provisions that protect your IP, such as non-use, non-disclosure, and non-circumvention clauses. You may also want to specify the ownership and use of your IP, including trademarks, patents, and copyrights.

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How can I verify the qualifications of a Chinese supplier?

To verify the qualifications of a Chinese supplier, you should consider taking the following steps:

• Request documentation of their licenses and certifications: Chinese suppliers should be able to provide documentation of their business licenses, permits, and certifications. You should review these documents carefully and verify their authenticity with the relevant authorities.
• Conduct on-site inspections: Visiting a supplier’s facilities in person can give you a better understanding of their capabilities, quality control processes, and overall business practices. You should look for signs of compliance with local laws and regulations, as well as any red flags that may indicate fraud or other issues.
• Check with industry associations and regulatory agencies: Industry associations and regulatory agencies can provide information about a supplier’s reputation, compliance history, and any complaints or enforcement actions that have been taken against them.

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What should I do if I discover that a Chinese supplier has committed fraud?

If you discover that a Chinese supplier has committed fraud, you should consider taking the following steps:

• Gather evidence: You should gather as much evidence as possible to support your claims, such as documentation of fraud, communication records, and financial records. This evidence will be crucial if you decide to pursue legal action.
• Consult with a legal expert: You should seek the advice of a qualified legal expert who is familiar with Chinese law and has experience dealing with supplier fraud. They can help you assess your options and develop a strategy for pursuing your claim.
• Consider filing a lawsuit or demand letter to recover damages: Depending on the severity of the fraud and the amount of damages you have suffered, you may choose to file a lawsuit or send a demand letter to the supplier. A legal expert can help you assess the merits of your case and determine the best course of action.

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What are some common scams or fraudulent practices to watch out for when outsourcing production to China?

Some common scams or fraudulent practices to watch out for when outsourcing production to China include:

• Bait-and-switch tactics: This refers to a situation where a supplier promises to provide a certain product or service, but then switches it for a lower-quality or different product or service once the contract is signed.
• Product substitution: This occurs when a supplier provides a product that is different from what was agreed upon in the contract, often without the buyer’s knowledge or consent.
• Counterfeiting: This involves the production and sale of fake or unauthorized copies of branded products or goods. In other words, the supplier produces and sells counterfeit versions of your product, often using stolen or replicated designs and intellectual property. This is a serious issue in China and can lead to significant financial losses and reputational damages.

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Can I use my own contract template when outsourcing production to China?

We don’t recommend using your own template because Chinese contract law has unique requirements and provisions that may not be included in your template. Instead, we recommend that you have a local lawyer draft a tailor-made contract that takes into account the specific requirements and considerations of your production arrangement. If you do decide to use a template contract, it’s important to have a legal expert review the contract and ensure that it complies with Chinese law and includes necessary protections.

Both contract drafting and contract review services are provided by vetted lawyers on Trustiics.

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What agreements should I sign when planning to outsource production to China, and what functions will each agreement help to achieve?

There are two primary agreements that may be relevant when outsourcing production to China:

1. The China NNN Agreement: It aims to safeguard your intellectual property, confidential information, and quality control processes. This agreement includes non-use, non-disclosure, and non-circumvention clauses, which prevent unauthorized use or disclosure of your confidential information. Additionally, the China NNN Agreement may specify the ownership and use of your intellectual property, including patents, trademarks, and copyrights.
2. Manufacturing Agreement: A contract that sets out the terms of the manufacturing arrangement, including the scope of work, quality standards, payment terms, and delivery schedule. This agreement may also include dispute resolution mechanisms to resolve any disagreements that may arise during the production process.

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The China NNN Agreement serves the function of protecting your intellectual property and confidential information, while the Manufacturing Agreement focuses on the specific terms of the production process. By having two separate agreements, you can ensure that all relevant issues are addressed and that your interests are protected. In addition, including quality control, IP ownership, and dispute resolution provisions in the Manufacturing Agreement can help to streamline the outsourcing process and avoid potential disputes or misunderstandings.

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How many types of business secrets are there, and what can be deemed as a business secret?

There are several types of business secrets, including technical know-how, trade secrets, customer and supplier lists, financial information, marketing and advertising strategies, and business plans. In general, a business secret can be any confidential information that gives a company a competitive advantage, is not publicly known, and has value to the company. This could include anything from manufacturing processes to customer lists to future product plans. To be considered a business secret, the information must also be subject to reasonable efforts to maintain its secrecy, such as using non-disclosure agreements, password-protecting electronic files, or limiting access to certain employees.

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What are some common ways that foreign companies steal business secrets from other companies?

Foreign companies may use a variety of tactics to steal business secrets, including hacking, cyber espionage, bribery, and employee espionage. It’s important to take steps to protect your confidential information when doing business with foreign partners or suppliers. This applies not only to China but to other markets as well.

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Can I protect my business secrets in China through intellectual property rights (IPR) registration?

While registering your IPR in China is important, it may not be enough to fully protect your business secrets. It is important to take additional steps to safeguard your trade secrets and confidential information. These steps can include using non-disclosure agreements (NDAs), non-use, non-disclosure, and non-circumvention agreements (NNN agreements), limiting access to sensitive information, and conducting thorough background checks on employees and business partners. Working with a local lawyer who understands the legal landscape and culture in foreign markets can help you develop a comprehensive strategy for protecting your business secrets and intellectual property.

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Can I use NDAs to protect my business secrets when doing business in China?

Yes, NDAs can be a useful tool to protect your business secrets when working with Chinese partners or suppliers. However, it’s important to ensure that the NDA is properly drafted and enforceable in China. A local lawyer can help you with this. Additionally, you may want to consider using an NNN agreement, which is specifically designed to prevent Chinese manufacturers from misusing or misappropriating your confidential information. A well-drafted NNN agreement can help you protect your intellectual property rights and prevent your Chinese manufacturers or suppliers from competing with you using your confidential information.

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How can I ensure that my local employees don't steal my business secrets?

To prevent employee theft of business secrets, you can take a variety of steps, such as requiring employees to sign confidentiality agreements, conducting thorough background checks before hiring, and limiting access to sensitive information to only those who need it.

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What should I do if I suspect that a foreign company has stolen my business secrets?

If you suspect that a foreign company has stolen your business secrets, you should contact a lawyer with local experience in intellectual property law to discuss your options. You may be able to take legal action to protect your intellectual property rights and seek damages.

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What is a Sales Contract in the context of international trade?

When you buy from or sell to a foreign market, you need a Contract for the International Sale of Goods or a Sales Contract. It is one of the most commonly used commercial contracts in international trade. It clarifies the rights and obligations of the seller (exporter) and the buyer (importer), defines how the contract should be executed, and ensures that each party’s rights will be enforceable against the other in any defaulting party’s home country.

In more detail, a sales contract with a Chinese party typically includes details such as the parties’ information, a description of the goods or services to be purchased, the price of the goods or services, the delivery date and method, the payment terms, the warranty and guarantee, governing law, and the dispute resolution clauses.

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What are the typical situations in which I would need a customized sales contract for China?

Here are a couple of examples where we suggest having a lawyer qualified in China to draft a customized agreement tailor-made for you:

• You plan to sell your products in China;
• You plan to import from China;
• You will enter into a supply arrangement with a Chinese manufacturer/exporter;
• You currently don’t have a contract in place to govern your rights and obligations with your trading partner in China; or
• Other third parties (such as insurance companies or banks that provide funding to your business) require to see your contract with the Chinese party.

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Why do I need a lawyer to draft the Sales Contract instead of using a template?

A well-drafted contract should be based on the applicable law to be valid and enforceable against the counterparty. It will help protect your rights and ensure the due performance of the contract is consistent with the market practice and legal requirements. A lawyer is able to customize the contract to make it suitable for your specific situation, taking into consideration the relationship between the parties, your goals, and your interests.

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Why do I need a China-qualified lawyer to prepare a sales contract?

If you are doing business with a Chinese importer, exporter, or distributor, it is important to have a China-qualified lawyer prepare the sales contract. This is because Chinese law has specific regulations and laws that can be different from those of other countries. By using a lawyer who is familiar with Chinese law, you can ensure that the contract is valid and enforceable in case any disputes arise.

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Can I use the Chinese translation of our sales contract used in other countries (e.g. the U.S.) for a Chinese deal?

You can do it if your contract is governed by U.S. laws. If your contract is governed by Chinese law, you should have a China-qualified lawyer prepare a customized contract for you.

Even if you and your counterparty agree to use a U.S. law-governed contract, it is recommended to have a China-qualified lawyer review or translate your contract to ensure two things: (i) it does not contain anything that is invalid or unenforceable in China; (ii) the accuracy of the translation.

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What should we do if the Chinese counterparty insists on signing a sales contract drafted by their lawyer?

If your situation does not permit using your own contract (e.g. the other side insists on using their version), you should have a Trustiics-vetted lawyer review the contract to ensure your business interest is protected. In addition, if your counterparty only provides a Chinese language version, you should insist on having it translated by a lawyer or legal translator, and then have your lawyer confirm that the English version and Chinese version are the same. You can find qualified and competent lawyers or legal translators on Trustiics to help you with such a job.

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What is the Start-Up Visa Program?

The Canada Start-up Visa program, a.k.a. the SUV immigration program, allows foreign entrepreneurs and a start-up company’s team members to obtain permanent residency (PR) in Canada.

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What are the qualifications for applicants of Start-up Visa program?

To be eligible, a successful application (which may include up to 5 applicants and their respective families) must satisfy certain criteria, including (not limited to):

• The business is an innovative start-up with growth potential and can potentially create jobs in Canada.
• The applicants must obtain a commitment certificate and letter of support from a Designated Organization approved by the Immigration, Refugees and Citizenship Canada (IRCC).
• Each applicant must demonstrate language proficiency in English or French through a standardized language test, with a minimum score required.

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What are the main differences between Angel stream and Incubator stream from the perspective of Start-up Visa application and stage of projects?

The Angel Stream and Incubator Stream are two different options for foreign entrepreneurs who want to apply for a Start-up Visa in Canada. The main difference between the two streams is the type of support that applicants receive from their designated organization.

Under the Angel Stream, applicants receive letters of support from a Designated Organization that is an angel investor group.  The angel investor group must commit to investing a minimum of $75,000 in the applicant’s start-up company to be founded in Canada.

Under the Incubator Stream, applicants receive letters of support from a designated business incubator that does not need to commit any capital to the applicant’s start-up.

The stage of the project is also an important factor to consider. Generally, the Angel Stream is better suited for early-stage start-ups that have passed the MVP stage and have proven their business model.  The Incubator Stream is better suited for start-ups that have a promising business idea and may or may not start business operations.

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Are there any requirements for a specific industrial sector for a qualified business plan under the Start-up Visa program?

There are no specific requirements for the industrial sector for a qualified business plan under the Start-up Visa program. However, the business idea should have the potential for high growth and be innovative in nature.

The business must also be able to create jobs in Canada, and the applicants must demonstrate that they have the skills and experience necessary to successfully operate the business.

It is important to note that the designated organization providing support to the applicants may have their own preferences or requirements regarding the type of businesses they are interested in supporting. Therefore, it is advisable to research and carefully select a designated organization that is a good match for your business idea.

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Can I apply for an open work permit through the Start-Up Visa Program?

Yes, if you are an essential applicant in a qualified Start-Up Visa application, you may be eligible for an open work permit that allows you (and your family) to move and live in Canada to work for your start-up business in Canada.

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Does Trustiics offer services related to the Start-up Visa Immigration Program?

Trustiics partners with the most reputable Designated Organizations approved by IRCC for both Angel Investor and Incubator Start-up Visa streams.

Sign up for free and book a free call on your dashboard to see if your business plan can potentially be accepted by the Designated Organization.

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What is the typical process for your Start-up Visa service?

The typical Start-up Visa case Trustiics has worked on will go through the following process before the PR applications are submitted to IRCC:

• Pre-assessment
• Business Plan
• Deal Screening
• Investment Roadshow
• Deep Dive
• Due Diligence
• Issue Letter of Support by Designated Organization
• Designated Organization submits SUV application
• Immigration Lawyer’s submission of the family immigration application
• Receipt of Confirmation of PR
• Landing in Canada

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What is a trademark?

A trademark can be a word(s), sound, or symbol used to represent a business or product.

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Do I need to register my trademark in different countries after registration in my home country?

Registering your trademark can help protect you against others using your trademark without your consent. Be reminded that trademark registration is a country-by-country system.  Registration in your home country (e.g. in the U.S. or Canada) does not give you the right to the same mark in another country (e.g. China). It’s imperative that you register your IP in all countries where you’ll be doing business.

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Do I need to care if my trademark is registered by someone else in China if my company does not have any business there?

Yes, you should care if your trademark is used or registered by someone else without your permission.

First of all, selling goods and services online, e.g. through Amazon, increases the possibility of others noticing and squatting your trademark in a foreign jurisdiction.

Even if you don’t have any business dealings with the Chinese market, your brand value could potentially be affected if someone else registered or squatted your trademark over there. The cost to get your squatted trademark back in the future is unreasonably high and time-consuming.  Sometimes, businesses even have to change their mark when they later expand their business to China.

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Why do I need to “search” before I register my trademark in China?

Before registering your trademark in any country, it is a necessary step to first search your trademark to see if it has already been registered by someone else. The search result will then determine the next steps you take to obtain registration of your trademark, whether it is to proceed with filing directly if your mark is still available or to file an opposition or invalidation application if someone has registered your mark.

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What is considered as a ‘Class’ for trademark registration?

The Nice Classification (NCL), established by the Nice Agreement, is an international classification of goods and services applied for the registration of marks.

Under the international classification, goods and services are divided into classes and subclasses for trademark filing purposes (https://www.wipo.int/classifications/nice/nclpub/en/fr/)

Goods (such as “furniture” or “musical instruments”) belong to Class 01 – Class 34, and Service (such as “treatment of materials” or “education”) belongs to Class 35 – Class 45.

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How do I decide the Classes to be covered in a trademark search?

The search should cover the key business activities of the service(s) and/or product(s) of your company.  You can use this website of the Canadian government to find out what class(es) your service(s) and/or product(s) cover: https://www.ic.gc.ca/app/scr/ic/cgs/ext/home.html

If you have registered the trademark in your home country, your trademark search in China should probably cover the same classes.

If you are not sure about which classes your goods or services fit in or are associated with, please describe your products and their purposes in more details when you book this service. The trademark agent or lawyer can provide you with suggestions regarding the appropriate classes to search.

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When do I need to search for my trademark in China?

You should search for your trademark in China when:

• You are expanding or may expand your business to China
• You want to register and protect your trademark in China
• Someone is trying to register a trademark identical or very similar to yours in China
• Someone is asking you to buy back your trademark which is being squatted at an extortionate price

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Who can benefit from a China Trademark Search service?

Any company or individual in any of the aforementioned situations and a lawyer who represents such a company or individual.

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Why should a trademark search in China be handled by a licensed China IP agent/lawyer?

There are some key differences between North America’s IP protection laws, and the laws in China — for example, China has a First to File Trademarks policy, rather than a First to Use one. While China’s trademark classification is based on the Nice Classification system which is widely used in Western countries, China further divides each class into subclasses which added complexity and difficulty for foreigners.

A professionally prepared trademark search report by a reputable and experienced Trustiics trademark agent or lawyer will help you avoid misses and mistakes. He/she will also be able to assist you down the road by advising you on possible actions to take and helping you assess the possibility of success to register your trademark.

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What is trademark squatting in China?

Trademark squatting in China refers to the act of registering a trademark owned by another company or individual with the intent of profiting from it. Squatters in China may register trademarks similar to those already owned by others and then attempt to sell them back to the rightful owners. This practice has become a serious problem in China, especially for international businesses that don’t have a presence in China.

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How can I protect my trademark in China?

To protect your trademark in China, you should consider registering it with the Chinese Trademark Office as soon as possible. This will give you legal protection in China and help prevent others from registering your trademark in bad faith. It’s also important to monitor the Chinese trademark database for any potential infringing trademarks, so you can take legal action if necessary.

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What legal options do I have if my trademark has been squatted in China?

If your trademark has been squatted in China, you have several legal options. You can challenge the registration through legal proceedings, negotiate with the squatter to buy back the trademark, or use administrative remedies. However, the legal process can be complex and time-consuming, so it’s advisable to seek legal counsel from a local Chinese lawyer.  Even if you agree to buy back the trademark, you need to consult the local lawyer first to identify the right approach.

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What evidence do I need to prove that my trademark is being squatted in China?

To prove that your trademark is being squatted in China, you will need to provide evidence of your prior use or registration of the trademark in your home country, as well as evidence of the squatter’s bad faith or intention to profit from the registration. This may include evidence of the squatter’s use of the trademark or attempts to sell it back to you at an inflated price.

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Can I sue a trademark squatter in China if I'm based in North America?

Yes, you can sue a trademark squatter in China even if you’re based in North America. However, it’s important to hire a local Chinese lawyer who can represent you in the legal proceedings and navigate the complexities of the Chinese legal system. The lawyer can help you gather the necessary evidence, file the lawsuit, and negotiate with the squatter.

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What are the potential penalties for trademark squatting in China?

Trademark squatting is illegal in China and can result in fines, confiscation of infringing goods, and even criminal penalties in serious cases. Additionally, the squatter may be ordered to transfer the trademark registration to the rightful owner. If the squatter’s actions have caused significant damages to your business, you may also be able to seek compensation through a civil lawsuit.

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What can I do if a squatter has registered my trademark in China?

If a squatter has registered your trademark in China, you can file for invalidation of their registration through an administrative procedure at the China Trademark Office. If their application for a trademark is still in process, you can file for opposition to prevent their registration. These legal options can help you reclaim your trademark rights in China.

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Should I consider using a lawyer if I am charged with academic misconduct?

It is recommended that you consider using a lawyer if you are charged with academic misconduct. A lawyer can help you understand the charges against you, your rights, and your options for defense. A lawyer can help you review or draft your explanation letter and can also represent you in any meetings or hearings related to your case.

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What is an LLC, and what are the advantages of forming one?

An LLC is a type of business structure in the United States that combines the benefits of a partnership or sole proprietorship with the limited liability of a corporation. Some of the advantages of forming an LLC include limited liability protection, pass-through taxation, flexible management structure, and easier access to funding.

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What happens if I don't register my trademark in the United States?

If you do not register your trademark in the U.S., you may still have some limited common law rights to use the mark in the geographic area where you do business. However, these rights are typically less extensive than those provided by federal registration, and it can be more difficult and expensive to enforce them in court. Additionally, if someone else registers your mark in the U.S. before you do, they may be able to prevent you from using the mark or may demand that you pay licensing fees to use it. It is therefore highly recommended that you register your trademark in the U.S. to protect your brand and avoid potential legal issues.

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Can I use the same NDA in the U.S. and other countries?

It would be much better if you could use an NDA tailor-made for a particular country where it is intended to be enforced in the future.  An NDA drafted by an experienced lawyer in a particular country can make sure your NDA is enforceable against the counterparty in the local jurisdiction if anything goes wrong.

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Who needs a work permit to work in Canada?

Most foreign workers require a work permit to work in Canada, with some exceptions for certain types of jobs or workers from certain countries. It’s important to check if you need a work permit before starting work in Canada.

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Can I work in Canada without a work permit?

No, it is illegal to work in Canada without a valid work permit. If you are caught working without a work permit, you could face consequences such as deportation or being barred from entering Canada in the future.

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Can I apply for permanent residency while on a work permit?

Yes, many temporary foreign workers are eligible to apply for permanent residency through various immigration programs. It’s important to check your eligibility and start the application process as soon as possible.

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Can my family come with me on a work permit?

Yes, your spouse or common-law partner and dependent children may be eligible to come with you to Canada on a work permit as your accompanying family members. They may also be eligible to apply for study permits or work permits themselves.

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What is a closed work permit, and what is an open work permit?

A closed work permit is tied to a specific employer and job offer. This means that you can only work for the employer listed on your work permit and in the job specified in your application. If you want to change employers or jobs, you would need to apply for a new work permit.

An open work permit allows you to work for any employer in Canada, with some exceptions. This means that you don’t need a job offer from a specific employer to apply for an open work permit, but you still need to meet the eligibility criteria.

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When can I apply for an open work permit?

You may be eligible for an open work permit if you are in one of the following situations:

• You are a spouse or common-law partner of a student or worker in Canada.
• You have applied for permanent residency in Canada through a special program, such as the Start-up Visa program.
• You are a refugee or protected person in Canada.

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What are the potential benefits of obtaining legal assistance for work permit issues in Canada?

By obtaining legal assistance for your work permit issues, you can better navigate the complex Canadian immigration system, avoid common mistakes, and increase your chances of a successful outcome. Working with an experienced immigration lawyer can also ensure that your rights are protected and that you have the best possible chance of achieving your goals.

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