We provide technology legal advice and assist technology clients in all stages of development from early stage, high potential growth businesses to listed technology conglomerates. We advise businesses at every stage of the investment process, from start-up funding through initial and subsequent preferred investor rounds, pre-IPO investment and listing, Charltons offers technology legal advice and support for business within the sector. We also work closely with angel and strategic investors, venture capital / private equity funds and investment banks that finance companies in the technology sector.
We provide practically oriented advice to clients, such as negotiating which information and supervisory rights and operational vetoes, board representation, the extent of restrictions on founders (for example, non-compete undertakings, and restrictions on transferring equity), anti-dilution protection and issues to consider on “down” rounds, the warranties to be given by founders and any limitations on liability for breaches of those warranties. With our extensive experience of M&A and IPO transactions, we can advise whether the investment structure will facilitate a subsequent liquidity event such as a trade sale or IPO. We can also assist in pre-IPO planning and structuring (including due diligence, Hong Kong Stock Exchange compliance, pre-IPO investments, and group reorganisations).
We can also advise emerging companies on alternative financing arrangements to suit their particular needs, such as working capital loans and other debt financings, including equity-linked or convertible debt securities.
Our services also include general commercial and corporate advice on incorporation and group structures, employee compensation and incentive schemes, negotiation of service contracts with key managers and intellectual property matters. We also advise clients on collaboration with other businesses, through joint venture, R&D, IP licensing, commercialisation, co-promotion, marketing and distribution arrangements.
Charltons also provides legal support for business on day-to-day operational activities such as software licensing, website development and web hosting, Internet advertising, linking and co-branding, privacy and data protection, website terms and conditions and e-commerce.
Charltons has can offer technology legal advice and has experience providing legal support for business in the technology sector.
Regulation of value-added telecommunications services in the Mainland China
The major laws and regulations governing the value-added telecommunications services in the Mainland China include, inter alia, the PRC Telecommunications Regulations (Order No. 291 of the State Council) (the “Telecom Regulations”), the Administrative Measures on Telecommunications Services Operation (Order No. 5 of the Ministry of Industry and Information) (the “Telecom Operation Administrative Measures”), and the Administrative Provisions on Foreign-funded Telecommunications Enterprises (Order No.333 and Order No. 534 of the State Council) (the “Foreign-funded Telecom Enterprises Administrative Provisions”).
Telecommunication related businesses in the Mainland China are categorised under the PRC Telecommunications Regulations as (i) basic telecommunication businesses; or (ii) valued-added telecommunication businesses. Value-added telecommunications business, in general, means the provision of telecommunications and information services with the use of public network infrastructure. The Telecom Regulations require all value-added telecommunications services providers to obtain telecommunications business licence from the relevant State Council department which is responsible for the regulation of information industries or the telecommunications administrations in the relevant province, region or municipal. The Telecom Operation Administrative Measures set out the types of licences required and the qualifications and procedures for obtaining such licences. Further, the business scope and the allowed period of operation will be prescribed in the telecommunications business licence.
According to the Catalogue for the Guidance of Foreign Investment Industries promulgated by the Ministry of Commerce of the PRC which was amended in 2011, industries in the Mainland China are divided into three categories with respect to restrictions on foreign investments, namely, “encouraged”, “restricted” and “prohibited”. Value-added telecommunications services are categorised as “restricted” business under such Catalogue. The Foreign-funded Telecom Enterprises Administrative Provisions further provide that foreign investment in a value-added telecommunications services provider is limited to 50%. Furthermore, the major foreign investors of a foreign-invested telecommunications services provider are required to demonstrate that they have good results and operation experiences in the value-added telecommunications industry.
Charltons has can offer telecommunications and technology industry advice and has experience of PRC telecommunications regulations and provides legal support for business in the technology sector.
*The above is for general reference only and does not constitute legal advice. Specific advice should be sought in relation to any particular situation.